New Decree 153/2020 on Corporate Bond Issuance in Vietnam

In December 2020, the Government issued Decree 153/2020 regulating, among others, the private placement of corporate bonds by Vietnamese issuers. Decree 153/2020 does not regulate public offering of corporate bonds. Decree 153/2020 has the following notable points regarding corporate bond issuance in Vietnam:

  • Corporate guarantee for bond issuance - Decree 153/2020 allows a private issuance of corporate bond to be guaranteed by a corporate guarantee as opposed to a bank guarantee under Decree 163/2018.

  • Less conditions for private placement of corporate bonds – Decree 153/2020 no longer requires a company to have at least one year of operation. The requirement of no overdue payment under previous bonds is removed if the issuer plans to issue bond to a selected finance organization.

  • Bond purchasers – Purchasers of corporate bonds in a private place are limited to “professional investors” and, in case of convertible bonds, professional investors and strategic investors. Decree 153/2020 also impose express obligations on bond purchasers to study the bond terms, the bond issuers, and be responsible for its investment decision. Trading of bond is also limited to professional investors. It is not clear if this means strategic investors are not permitted to sell its convertible bonds.

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Written by Nguyen Quang Vu On

Enforceability of agreement on liquidated damages under Vietnamese law

Summary. Vietnamese law does not have a clear concept of liquidated damages. There are strong legal provisions supporting for the use of liquidated damages. However, due to the lack of clear legal ground for liquidated damages, it appears that in practice, relying on certain provisions on calculation of damages, some courts in Vietnam appear to have not recognised and enforced an agreement on liquidated damages.

We discuss below the arguments supporting an agreement on liquidated damages and the enforceability of such an agreement in a commercial dispute under the law of Vietnam.

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Written by Nguyen Quang Vu On In ,

New Decree Implementing the Vietnam Labor Code 2019

On 14 December 2020, the Government issued a new decree to implement the regulations on labor conditions and labor relationship under the Labor Code 2019 (Decree 145/2020). Decree 145/2020 will take effect as from 1 February 2020. We list below some notable changes to labor regulations under Decree 145/2020. This post is written by Nguyen Hoang Duong and Le Vo Thuy Tien.

New method for labor usage declaration

The employer now can include its first declaration of labor usage in a company registration application in accordance with new procedures for coordinating various business commencement steps of a company under Decree 122/2020.

Regarding the periodical reports on change to the labor usage, the employer now can submit its declaration formulated in prescribed form to the labor authority via National Public Service Portal.

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Written by Nguyen Quang Vu On

New Decree on Enterprise Registration in Vietnam

The Government recently issued Decree 1/2021 which takes effect from 4 January 2021 and replaces Decree 78/2015 in terms of enterprise registration procedures. There are certain new regulations and changes under Decree 1/2021 in relation to registration and notification of enterprise information as follows:

  • Decree 1/2021 clarifies “person submitting the application” including the person having the authorization to sign the application (Authorized Signatory) and the person being authorized by the Authorized Signatory.

  • ID number issued to a branch or representative office of an enterprise is specified as tax identification code of such branch or representative office.

  • Language of the application - Enterprise registration application must be prepared in Vietnamese. The translation of documents in a foreign language must be notarized. In case the application is made in the bilingual language of English and Vietnamese, the Vietnamese version will be used for registration procedures. That means, although parties may agree that the English version will prevail as between the parties, parties must take care of the Vietnamese version/translation to avoid any inaccuracy as the authority only review the Vietnamese version of the application.

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Written by Nguyen Quang Vu On In