Certain issues regarding taking security over listed shares in Vietnam

Under Decree 155/2020, from January 2021, registration of security interests over listed shares in Vietnam will be made at the Vietnam Securities Depositor Center (VSD) instead of the National Registration Agency of Secured Transaction (NRAST). Following the issuance of the Decree 155/2022, the Ministry of Finance (MOF) and VSD have issued detailed regulations on registration of security interests over listed shares. The detailed guidance has streamlined the registration and enforcement of security interests over listed shares. For example, the VSD is now able to transfer the listed shares without consent of the securing party as long as the security agreement clearly provides that the lender can take over or sell the secured shares without consent of the securing party. This is different from the previous procedures which requires written consent of the securing party in the transfer dossiers.

However, the regulations on taking security over listed shares do not appear to address the following issues properly:

· Security over associated rights: The regulations on taking security over listed shares (such shares, secured shares) do not clearly cover taking security over rights attached to listed shares (e.g., rights to receive dividend, rights to subscribe for new shares, or rights to vote). Technically, unless such rights are considered as “securities” under securities regulations, the regulations on taking security over listed shares may not apply to security interests created over such rights.

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Written by Nguyen Quang Vu On In ,

Decree 53/2022 implementing the Law on Cybersecurity in Vietnam

In August 2022, the Government issued Decree 53/2022 to implement various provisions of the Law on Cyber Security 2018 (LCS 2018). We summarise below certain key points of Decree 53/2022:

  • Data localization: Decree 53/2022 provides more detailed guidance on data localization in Vietnam. Please see our separate blog on this issue here.

  • Using cryptography (“mật mã”) to protect network information: If necessary for the national security, safety and order of society or protecting legitimate rights and benefit of others, the authority could request related individuals/organizations to encrypt information not considered as State secret before storing, transmitting on the Internet;

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Written by Nguyen Quang Vu On In ,

Decree 53/2022 - Further guidance on data localisation in Vietnam

Introduction

In August 2022, the Government issued Decree 53/2022 providing, among other things, further guidance on data localization requirements in Vietnam. Article 26.3 of the Law on Cyber Security 2018 (LCS 2018) provides for a general data localization requirement. However, due to the lack of implementing regulations, such provision is not enforced in practice for several years. The new guidance under Decree 53/2022 will likely make the law enforceable in practice from 1 October 2022. In this post, we discuss some salient points of the data localization requirements under Decree 53/2022. This post is written by Trinh Phuong Thao and edited by Nguyen Quang Vu.

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Written by Nguyen Quang Vu On In ,

Injection of increased capital into DICA of foreign invested companies in Vietnam after expiry of contribution time limit

Under Circular 6 of the State Bank of Vietnam dated 26 June 2019 guiding the forex management on direct foreign investment into Vietnam (Circular 6/2019), foreign and Vietnamese investors (Investors) of a foreign invested enterprise (FIE) are required to inject capital contributions to the FIE through its direct investment capital account (DICA) opened at a bank in Vietnam. This article will discuss whether the Investors can inject the increased charter capital (Increased Capital) into the DICA if the time limit for making the capital contribution under the IRC already expired.

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Written by Lawyers VNLaw On In