Nature of “voucher” business under Vietnamese law

In Vietnam, vouchers are now not only used as a method of promotion, but also as a kind of “product” sold by many e-commerce platforms. In particular, a voucher trader could sell vouchers to its users, which could be used for certain goods or services provided by certain suppliers. The users will then use the voucher to obtain the goods or services from the suppliers usually at a discounted price. As our analysis below will show, the legal nature of voucher business under Vietnamese law is unclear, and therefore business models based on trading of voucher could give rise to certain risks.

Voucher is not a kind of good or service

Although the law is silent on this matter, Vietnam governmental authorities seem to take the view that voucher is neither goods nor service:

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Written by Nguyen Quang Vu On In ,

Uncertainty for Vietnamese real estate companies doing business in an industrial zone

There is inconsistency between the Land Law 2013 and the Law on Real Estate 2014 regarding the ability of a local real estate company, who sub-leases land from an industrial zone developer (IZ Developer), to sell building or other construction works built on such land. In particular,

  • According to Article 149.3 of the Land Law 2013, a local real estate company, who sub-leases land from an IZ Developer to conduct business in an industrial park is entitled to, among others, transfer building or construction works attached to such land to others; and

  • However, under Article 11.1 of the Law on Real Estate Business 2014, the scope of real estate business of a local enterprise does not include the scenario where the real estate company sub-leases land from an IZ Developer. The most relevant scenario is the scenario where a real estate company leases from another organisation for leasing business. But that scenario does not include sale of building and construction works.

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Written by Nguyen Quang Vu On In

New guidance on foreclosure of shares and other securities registered with the Vietnam Securities Depository

On 26 August 2020, the Vietnam Securities Depository (VSD) issued Decision 154/QD-VSD (Decision 154/2020) to allow a lender who has taken a mortgage over shares or other securities registered with the VSD (Public Securities) to request the VSD to transfer the mortgaged or pledged Public Securities to a third party designated by the lender, if the mortgage or pledge agreement allows the lender to do so.

Previously, the VSD only transfers the Public Securities to the lenders when the lenders take actions to enforce a mortgage or pledge over Public Securities. Accordingly, the old regulations could cause problems for lenders who are subject to restrictions in directly holding the relevant Public Securities (e.g., ownership limit or other investment conditions).

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Written by Nguyen Quang Vu On In ,

New Procedures to Coordinate Various Business Commencement Steps for Vietnamese Companies

In October 2020, the Government issued the new Decree 122/2020 on the coordination between various separate procedures relating to the business commencement steps of a company in Vietnam including enterprise incorporation procedures, employee usage declaration, social insurance registration code, and registration of tax invoice. In particular,

  • Decree 122/2020 provides for a company registration application which also includes information necessary for tax and invoice registration, social insurance registration, and employee usage declaration. Previously, the company registration application only include company registration information and tax registration information; and

  • The Enterprise Registration Authority will act as the single contact point to receive the application submitted by the relevant company’s founders and will electronically transfer necessary information to the tax authority, social insurance authority, and labour authority.

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Written by Nguyen Quang Vu On In ,