Looking Back: 2022 and Gazing Into: 2023
Looking Back: 2022
2022 was a pivotal year, as it tested Vietnam’s resilience and road to economic recovery following the country’s COVID-19 lockdowns and global disruptions to the manufacturing and supply chains. Critical to Vietnam’s recovery is its comprehensive transition from its “zero COVID” policy to its “living with the virus” strategy.
Vietnam’s future power development plans (including the extent of the country’s reliance on clean energy) remained in limbo, with investor patience being tested as the long overdue National Power Development Plan VIII remains pending. It still remains to be seen when and in what form the plans would take.
Nevertheless, for some investors, some level of comfort was provided as the Government passed regulations to set feed-in-tariffs (FiTs) for certain transitional power plants. Investments in this space continued to be driven by environmental, social, and governance (ESG) targets or initiatives.
In the real estate sector, there was a considerable slowdown in transaction activity. This was a result of a combination of the pandemic, governmental red tape, and severe tightening of credit. Recovery of industry growth was further rocked by the 2022 nationwide scandals concerning Tan Hoang Minh and Van Thinh Phat. Legislation-wise, the Government had issued Decree 02/2022/ND-CP which would materially impact doing business in the real estate sector – both from investment and operations perspectives.
The Government has continued to push for revamp of its existing legislation to align with its digital economy plans and to regulate online content. The year saw the long-awaited guiding decree on the Law on Cybersecurity, as well as drafts of the new Law on E-Transactions and Law on Telecommunications. It also saw the enactment of the new Law on Cinema.
The foreign investment space also saw significant developments, such as the enactment of legal instruments relating to:
- the issuance of corporate bonds; and
- tightened supervision over foreign investment.
Gazing Into: 2023
The renewable energy sector and technology sector are likely to see much legislative activity in 2023.
For the renewable energy sector, many await the passage of the National Power Development Plan VIII, as well as the development of a legal framework for certain clean energy initiatives, e.g. transactions involving private offtakers. Nevertheless, investment interest in the space is uncertain because while environmental, social and governance (ESG) targets remain a key driver, investors have been challenged by low anticipated returns in the face of rocketing valuations, uncertain feed-in-tariffs (FiTs) treatment and subsisting curtailment issues.
The technology sector is also likely to see legislative developments in 2023, building upon draft legislations made in 2022 in the fields of electronic transactions, internet services and online content, personal data protection and telecommunications.
The challenges faced by Vietnam’s real estate sector are likely to continue into 2023. Nevertheless, the country has taken efforts to revamp its Law on Land – a draft of which was made available in August 2022. Slated for enactment in 2023, the Law in Land intends to align with the current market trends and refine many administrative processes.
Another area that is likely to see development is in the financial sector, with regulations concerning financial technology (“FinTech”), electronic money and anti-money laundering (“AML”) to be further refined. The Government has been developing a sandbox scheme for FinTech for the past several years, and 2023 could potentially see this sandbox come into fruition – providing a legal framework for these companies to operate. In the AML space, the new Law on Anti-Money Laundering will take effect from March 2023 (and guiding regulations may be passed in furtherance to this law). Non-cash payments remains a topic of considerable interest to banks and non-bank players in the financial sector who await the Government’s directions as to how it would further refine its regulations on non-cash means of payment (including the use of “mobile money”).
Full Report
Click on the link below for the full report which provides summaries of the key legal developments related to the above areas.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
