New Basic Salary under Decree No. 74/2024/ND-CP
On 30 June 2024, the Government issued Decree No. 74/2024 (“Decree No. 74/2024“) to increase the basic salary in Vietnam. The decree took effect on 1 July 2024.
Decree No. 74/2024 increases the basic salary across Vietnam’s different regions, with the new basic salary varying depending on the region. For example, in Region I (which includes major cities such as Hanoi and Ho Chi Minh City), the basic salary will increase from VND4.68 million to VND4.96 million. This means the contribution cap for each employee will be increased from VND93.6 million to VND99.2 million.
Although the basic salary applies to salaries for state officials, state employees and armed forces personnel, it is significant to the private sector because these wages are used as a benchmark for calculating statutory social and health insurance contributions for employees. These contributions are capped at a rate of 20 times the basic salary.
For companies that have a significant number of employees, the increase introduced by Decree No. 74/2024 will have a noticeable financial impact.
Standard Contracts and General Trading Conditions
On 20 June 2024, the Prime Minister issued Decision 07/2024/QD-TTg (“Decision 07/2024“), setting out the list of products, goods and services for which standard contracts and general trading conditions must be registered. This is issued in furtherance to the Law on Protection of Consumer Rights and Decree No. 55/2024/ND-CP.
Under Decision 07/2024, contracts for the following products, goods and services need to be registered:
- supply of water for living purposes;
- supply of electricity for living purposes;
- paid television;
- terrestrial mobile telecom services (voice, messaging and internet access services);
- terrestrial fixed telecom services (voice and internet access services);
- passenger air transport;
- passenger railway transport; and
- purchase and sale of apartments.
Decree No. 55/2024/ND-CP Elaborating the Law on Protection of Consumers' Rights
On 16 May 2024, the Government issued Decree No. 55/2024/ND-CP (“Decree“) to elaborate on the Law on Protection of Consumer Rights (refer to our earlier Legal Update here). The Decree took effect on 1 July 2024.
The Decree provides further details on certain provisions of the Law on Protection of Consumer Rights, including the definition of “large digital platforms”, additional consumer contract requirements, and model contracts and general trading conditions.
Under the Decree, “large digital platforms” are either (i) digital platforms that have a minimum of 3 million active user accounts annually in Vietnam; or (ii) large or very large intermediary digital platforms as prescribed in Vietnam’s electronic transaction laws. These “large digital platforms” will be subject to greater information transparency requirements (including for paid and sponsored content) and need to carry out statutory reporting obligations.
The Decree further imposes certain display and language requirements for consumer contracts (e.g. font sizes, display colour and “easy to understand” content).
Finally, the Decree sets out detailed procedures for registering model contracts and general trading conditions.
For more information, click here to read our Legal Update.
Decree No. 52/2024/ND-CP on Non-Cash Payments
On 15 May 2024, the Government issued Decree No. 52/2024/ND-CP (“Decree No. 52/2024“) on non-cash payments. Decree No. 52/2024 replaces Decree 101/2012/ND-CP on the same subject, which was passed nearly 12 years ago. The decree took effect on 1 July 2024.
While Decree No. 52/2024 maintains the intermediary payment service (“IPS“) licence requirements, it tightens the conditions for providing an IPS. It also enhances regulations in the field of international payments and introduces new concepts such as electronic money.
In terms of IPS licensing, more stringent conditions are imposed on those that provide financial switching or electronic clearing services. These service providers cannot engage in any other business operations. Furthermore, companies that seek to apply for an IPS licence in these services need to meet a minimum capital requirement of VND300 billion, which is much higher than the previous VND50 billion.
For international payments, Decree No. 52/2024 imposes further conditions on banks and foreign bank branches that participate in international payment systems. These include meeting certain qualitative criteria (e.g. concerning risk management) and obtaining approval from the State Bank of Vietnam.
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
