Vietnam - Important Legal Updates on June for Investors

Starting this month, many new policies have come into effect. Among these, most notably are updated conditions for businesses to be eligible for a loan, interest rate supporting methods of commercial banks, tax or accounting regulations, and so forth. Below are some prominent legal updates that investors may find noteworthy. 

Investment

Additional aviation services - price range set by the Ministry of Transport

On 27th May 2022, the Ministry of Transport issued Circular 06/2022/TT-BGTVT amending and supplementing some articles in Circular 36/2015/TT-BGTVT. The circular regulates price management of domestic air freight services and specialized aviation service prices. Accordingly, the ministry decides on the price brackets for several aviation services exploited by enterprises with a monopoly or dominant position in the market, including aircraft parking services, passenger check-in counter rental service, luggage carousel rental service, and aviation fuel refilling services, among many others. 

Circular 06/2022/TT-BGTVT shall come into effect starting from 15th July 2022. 

Conditions for businesses to be supported with a 2%/year interest rate loan

On 20th May 2022, the Government issued Decree 31/2022/ND-CP on interest rate support from the State budget for loans from businesses, cooperatives, and business households. 

Correspondingly, enterprises that want to enjoy the preferential interest rate of 2%/year must meet some critical prerequisites. For example, qualified debtors must use the loan capital for one of the regulated business sectors such as aviation, tourism, warehouse transportation, accommodation and catering services, and education, among others. 

What’s more, businesses and cooperatives are also required to use the supported loan to conduct social housing construction projects, housing for workers, or renovate old apartment buildings on the list announced by the Ministry of Construction. 

Supporting businesses and business households with loan interest rates from commercial banks

Also on 20th May 2022, the Governor of the State Bank of Vietnam issued Circular 03/2022/TT-NHNN guiding Decree 31/2022/ND-CP on interest rate support for loans of enterprises, cooperatives, and business households.

According to the Circular, at the interest repayment time, commercial banks may choose to support customers by two different methods. One of which is directly deducting the amount of loan interest payable equalling the supported interest rate amount.

Regulations on supporting innovative small and medium enterprises

Supporting SMEs is the scope of Circular 06/2022/TT-BKHDT starting from June 2022. Following this circular, trainees in SMEs will be sponsored to enjoy domestic and foreign intensive training. Sponsorship will include tuition fees, materials, meals, accommodation, and transportation. Moreover, SMEs' expenses participating in international competitions for innovative start-ups will also be subsidized. 

Mechanism to attract highly qualified foreign human resources in science and technology

On 11th May 2022, the Prime Minister released Decision 569/QD-TTg on the Strategy for Science, Technology, and Innovation Development until 2030. One of the tasks and solutions of the Strategy is to improve human resource quality for science and technology with high qualifications and creative capacity.

To achieve that, authorities will promote science and technology transfer, encouraging two-way human transfer between the public and private sectors. Particularly, the government will have mechanisms to support funding and facilitate entry or exit procedures, visas, or work permits to attract human resources from abroad and talented overseas Vietnamese. 

Building a capital-controlled city model 

This content is mentioned in Resolution 15-NQ/TW dated 5th May 2022, on directions to develop Hanoi Capital with a vision to 2045. To achieve set targets, authorities will build a model of a capital-controlled city in the Northern region (Dong Anh, Me Linh, Soc Son areas) and the Western Area (Hoa Lac and Xuan Mai). 

Simultaneously, Hanoi is researching to increase the proportion of land for urbanization, building a smart city for regional development on both sides of the Nhat Tan - Noi Bai axis. 

Tax - accounting 

Preventing loss of tax revenue in real estate transfer

On 28th April 2022, The Ministry of Finance issued Official Letter 3849/BTC-TCT on preventing tax loss in business activities and real estate transfer. Specifically, the Ministry requested that the People's Committees of provinces and cities direct the Department of Natural Resources and Environment to collaborate with relevant agencies, reviewing and suggesting adjustments to the land price list for each location. 

Extension of Corporate Income Tax (CIT), Personal Income Tax (PIT), and Value-added Tax (VAT) payment 

On 28th May 2022, the Government issued Decree 34/2022/ND-CP extending the deadline for CIT, PIT, VAT, and land rent payments in 2022. More specifically, enterprises, organizations, households, business households, and individuals participating in certain economic sectors are entitled to a tax payment extension in 2022. Some of the applicable industries are agriculture, food production and processing, electronic products manufacturing, drainage, education, and so forth. 

The Decree is effective from 28th May 2022 to 31st December 2022. 

Immigration

In May, Deputy Prime Minister Vu Duc Dam officially signed Official Dispatch No. 416-TTg on the suspension of the SARS-CoV-2 virus test requirement before entering Vietnam. With the new Dispatch in effect, starting from 0:00 on 15th May 2022, travelers entering Vietnam do not need to show proof of a negative COVID test. 

Updating new effective policies is critical for businesses to grow and adapt to changes in the industry. On the other hand, outdated information might put organizations at risk by failing to comply with new laws and regulations. 

The process might be exhausting and confusing as legal changes happen frequently. Thus, with the help of a professional team like Viettonkin Consulting, organizations can always keep up to date with new policies effortlessly. Contact Viettonkin now via our website for more insights about legal procedures businesses must abide by and what opportunities are currently being offered by supportive policies.