Can the Board of a joint stock company make a decision if it cannot maintain the meeting quorum at the time of voting?

Under Article 157.8 of the Enterprise Law 2020, a meeting of the Board will be conducted where three quarters (3/4) or more of the total Board directors are in attendance. However, it is not clear whether (1) this quorum only needs to be satisfied at the beginning of the meeting or (2) this quorum must be maintained from the beginning to the end of Board meeting. If interpretation (1) is adopted then a decision approved by more than half of attending Board directors at the Board meeting is still valid even when the quorum is lost during the meeting (e.g. a director leaves the meeting).

Arguments supporting interpretation (1) include:

  • Article 157.8 of the Enterprise Law 2020 could be interpreted to mean that the quorum applies only at the beginning of a Board meeting. The Enterprise Law 2020 only provides that a Board decision will be passed if it is approved by more than half of the attending Board directors. There is no specific requirement that the quorum must be satisfied at the time of the voting or throughout a Board meeting. 

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Written by Nguyen Quang Vu On In , ,

Can the agenda of a meeting of the Board of a Vietnamese Joint Stock Company be changed during the meeting?

Under the Enterprise Law 2020, the General Shareholder Meeting (GSM) of a joint stock company (JSC) can decide to change its agenda and approve the new agenda when the meeting commences. There is no such provision with regard to a Board meeting. Accordingly, it is not clear if the Board can decide to change the agenda of a Board meeting during the meeting. That said, it is reasonable that the Board should be entitled to do so.

In particular, the Board could decide to change the agenda of a Board meeting based on the following grounds:

  • the Enterprise Law 2020 does not prohibit the Board from changing the agenda of a Board meeting at the meeting;

  • it is reasonable that the provisions concerning a meeting of GSM could apply to a meeting of the Board by analogy. In such case, the Board should have the right to change the agenda of a Board meeting as the GMS does; and

  • in practice, allowing the Board to change the agenda of a Board meeting will make the operation of a JSC more efficient. Since instead of scheduling for another meeting, the Board could decide on the relevant matter immediately at the current meeting. 

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Written by Nguyen Quang Vu On In , ,

Comments on Draft Law on Telecom in Vietnam

In this post, we provide our comments to the draft Law on Telecom provided to us recently. The comments are prepared by Nguyen Quang Vu and Trinh Phuong Thao.

1.        Data center services and cloud computing services should be excluded from Law on Telecom

Position under the draft Law on Telecom

The draft Law on Telecom:

  • considers data center services and cloud computing services to be telecommunication services;

  • requires onshore providers of data center services and cloud computing services to obtain a telecom license; and

  • requires offshore providers of cross-border data center services and cloud computing services to sign a contract with a Vietnamese telecommunication service provider or to set up a representative office in Vietnam.

If adopted as currently drafted, immediately when the amended Law on Telecom becomes effective:

  • all onshore providers of server leasing service will need to obtain a telecom license;

  • all onshore software providers who deliver software over the internet (e.g. Google App Store or Apple App Store) will need to obtain a telecom license;

  • all onshore e-commerce apps or software which operate in the model of client-server will need to obtain a telecom license; and

  • all offshore service providers of cross-border software, software as a services (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS) or e-commerce services will need to sign a commercial contract with a Vietnamese telecommunication service provider or establish a representative office in Vietnam.

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Written by Nguyen Quang Vu On In ,

New Decree on Protection of Personal Data in Vietnam and Comparison with GDPR

Please click here to download the pdf version.

On 17 April 2023, the Government issued Decree 13 on personal data protection (Decree 13/2023). Decree 13/2023 marks a significant milestone as the first comprehensive legal document that governs the protection of personal data in Vietnam. As compared to the draft decree on personal data protection (Draft Decree), Decree 13/2023 has been significantly improved to incorporate key aspects necessary to protect personal data to align with the General Data Protection Regulation (GDPR). In this post, we will discuss key issues under Decree 13/2023 while comparing it to the Draft Decree and GDPR. This post is written by Trinh Phuong Thao and edited by Nguyen Quang Vu.

1.         Things to be done by 1 July 2023

Ideally, before 1 July 2023, both onshore and offshore entities involving in collecting and/or processing personal data of Vietnamese individuals or foreign individual residing Vietnam should do the following:

  • having proper consents from the relevant data subject (see 7);

  • if it is a data controller, having a contract with the relevant data processor (see 4);

  • determining whether it deals with basic personal data or sensitive personal data;

  • preparing and submitting an assessment of the impact of personal data processing to the Ministry of Public Security (MPS) (see 10);

  • preparing and submitting an assessment of the impact of offshore transferring personal data to the MPS (see 11);

  • setting up system to protect the safety and confidentiality of the personal data which it collects or processes; and

  • setting up a personal data protection department and a data compliance officer if it deals with sensitive personal data.

Decree 13/2023 only exempts small and medium enterprises or start ups from complying with certain requirements until 1 July 2025.

One key missing ingredient though is the potential penalty which may apply in case of non-compliance. Accordingly, currently, Decree 13/2023 has no teeth in enforcing the above requirements. Unlike Decree 13/2023, the GDPR has clear penalties and fines applicable to violations of the GDPR.

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Written by Nguyen Quang Vu On In ,