New Work Permit Rules under Decree 70/2023/ND-CP
On 18 September 2023, the Government enacted Decree 70/2023/ND-CP (“Decree“) to amend and supplement Decree 152/2020/ND-CP. The Decree, which came into effect from the same date of its enactment, notably amends certain procedures concerning the hiring of foreign workers in Vietnam.
The Decree now requires foreigners with Vietnamese spouses to apply for a work permit exemption with the labour authorities. In the past, such foreigners were exempt from this requirement.
It also introduces a requirement for employers to, at least 15 days before seeking approval for use of foreign labour, publish a job application notice for Vietnamese employees on the electronic portal of the Employment Department of the Ministry of Labor, Invalids and Social Affairs (MOLISA) or a qualified job service centre. This requirement was introduced to ensure that foreign workers were only being hired for positions which Vietnamese employees are unable to fill.
Singapore and Vietnam Deepen Collaboration with New Partnerships
On 28 August 2023, the Singapore Ministry of Trade and Industry (“MTI“) announced the conclusion of several agreements between Singapore and Vietnam which will further deepen their collaboration in the green economy, digital economy and innovation.
Upgrading of Bilateral Economic Partnership
Singapore and Vietnam have exchanged Side Letters effecting the Upgrade of the Framework Agreement on Singapore-Vietnam Connectivity (“CFA“). The Upgraded Connectivity Framework Agreement (“CFA“) expands the scope of the bilateral economic cooperation between the two countries. This is the first upgrade of the CFA since its signing in 2005. The previous six sectors of cooperation have now been expanded to cover five pillars of cooperation in 11 areas, including (i) Energy Connectivity; (ii) Sustainability; (iii) Infrastructure; (iv) Digital and Innovation; and (v) Connectivity (Education, Finance, Information Technology and Telecommunications, Investment, Tourism, Trade and Services, and Transport).
Supporting Innovation Talent Exchange
Singapore and Vietnam also signed a Memorandum of Understanding on the Innovation Talent Exchange (“ITX“) Programme. This will enable Singaporean professionals to be employed in eligible innovation-related work areas in Vietnam, and vice-versa. The qualifying criteria, application process and launch date of the ITX Programme will be circulated in due course.
Addressing Climate Change Challenges
In their bid to address climate change challenges, Singapore and Vietnam exchanged a letter of intent which emphasised the substantive conclusion of the negotiation of the Implementation Agreement pursuant to Article 6 of the Paris Agreement (“Implementation Agreement“). Both countries undertake to agree on the text of the legally binding Implementation Agreement and submit recommendations for the signing of this agreement. As stated in the Press Release, “[t]he Implementation Agreement seeks to unlock additional climate mitigation activities and will facilitate the transfer of Article 6-compliant carbon credits that are correspondingly adjusted between Singapore and Vietnam. This will enable both countries to meet their Nationally Determined Contribution (NDC) and open up a new stream of trading activity in Article 6-compliant credits.”
New Regulations on Foreign Lending under Circular 08/2023/TT-NHNN
On 30 June 2023, the State Bank of Vietnam passed Circular 08/2023/TT-NHNN (“Circular“) to prescribe eligibility requirements for taking foreign loans that are not guaranteed by the Government. The Circular, which came into force from 15 August 2023, introduces significant changes to borrowings by Vietnamese companies from overseas.
The Circular prescribes more restrictions on the purpose for which foreign loans can be taken:
- For short-term foreign loans, these can only be taken out to restructure the borrower’s foreign debt and for payment of short-term payables.
- For medium or long-term foreign loans, these can only be taken out to finance investment projects, business plans or other projects of the borrower, or to refinance existing foreign debt. However, unlike its predecessor, the Circular no longer permits borrowers to take out foreign loans to finance projects or business plans of the borrower’s affiliates.
The Circular also now allows debts of foreign loans to be recorded in Vietnamese Dong (but disbursed and repaid in foreign currency). In such case, the foreign lender may record such a loan as a Vietnamese Dong loan.
New Law on Electronic Transactions
On 22 June 2023, the National Assembly passed the new Law on Electronic Transactions No. 20/2023/QH15 dated 22 June 2023 (“LOET“). The LOET will replace the current Law on Electronic Transactions that was enacted in 2005. It will take effect from 1 July 2024.
The LOET prescribes more detailed regulations concerning the use of electronic signatures in Vietnam. However, what remains unclear in the LOET is the extent to which common means of indicating assent (e.g. use of scans or images of wet signatures) or digital signatures (e.g. DocuSign) will be recognised in Vietnam.
The LOET also prescribes specific obligations for administrators of information systems that serve electronic transactions, including digital platforms. These include reporting requirements to the Ministry of Information and Communication.
For more information, click here to read our Legal Update.
New Law on Consumer Rights Protection
On 20 June 2023, the National Assembly of Vietnam passed the new Law on the Protection of Consumer Rights (“LPCR“). The LPCR will replace the current Law on the Protection of Consumer Rights that was enacted in 2010. It will take effect from 1 July 2024.
The LPCR was developed to track existing consumer transaction trends, with a focus on online transactions. As such, it introduces specific trader obligations and consumer rights regarding, among others, consumer information and transactions undertaken on digital platforms.
The LPCR also broadens protections to certain classes of vulnerable consumers, as well as increases the role that “social organisations” play in consumer protection.
It is made clearer in the LPCR that it will have extraterritorial effect, meaning both foreign and Vietnam-based traders will be expected to comply with its provisions.
For more information, click here to read our Legal Update.
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
