8 October, 2016
New Decree No. 73/2016/ND-CP Guiding the Law on Insurance Business
On 1 July 2016, the Government passed Decree No. 73/2016/ND-CP to detail the implementation of the Law on Insurance Business. The new decree sets forth new conditions that apply to investors who wish to set up an insurance business in Vietnam. The Ministry of Finance is currently in the process of drafting circulars to implement this decree.
Decree No. 73/2016/ND-CP brings forth some changes in the conditions applicable to prospective investors, compared to the former law. With respect to financial conditions:
The minimum capital required for an insurance company providing health insurance is now VND 300 billion (approx. US$13.5 million).
The minimum financial requirements have become more stringent for institutional investors. Vietnamese investors must have minimum total assets of VND 2,000 billion (approx. US$90 million) and foreign investors must have a minimum total assets of US$ 2 billion.
Draft Resolution on Tax Changes for SMEs
Earlier this year, the draft Law on SMEs was circulated for comments. The law regulates the contents, plans and programs designed to support SMEs in Vietnam. In July 2016, the Ministry of Finance published a draft resolution from the National Assembly setting forth a number of tax changes corresponding to the programs set out in the draft Law on SMEs.
Under the draft, a corporate income tax rate of 17% will apply to companies with revenue of less than VND 20 billion (approx. US$ 900,000) and start-ups for the period from 1 January 2017-31 December 2020. Furthermore, employees working in high-tech and the IT sector may have personal income tax reduced by up to 50%.
Law on Network Information Security
On 1 July 2016, the Law on Network Information Security came into effect. The Law aims to detail a number of prohibitions against compromises to network information, and regimes for maintaining security in this field. Currently, the law awaits further decrees to be passed by the Government for guidance and details on implementation.
The new law prohibits activities including phishing, spamming, unlawful disclosure of personal information, exploitation of bugs and spread of harmful software. Anti-spam regulations have also been promulgated, and now, commercial information may not be emailed to a recipient without his / her prior consent.
New Regulations on Public-Private Partnership (PPP)
On 20 September 2016, Circular No. 06/2016/TT-BKHDT (the "Circular") came into effect. This circular, passed by the Ministry of Planning and Investment in June 2016, brings greater clarity to the uncertain Public-Private Partnership ("PPP") regime in Vietnam. From 2015, investors had struggled with the lack of details to Decree No. 15/2015/ND-CP, the primary legal basis on which PPP is implemented.
The Circular stipulates that projects that have been implemented by the State can now draw involvement from private corporations, through conversion into a PPP contract. Procedures for such involvement are set out in the Circular.
For further information, please contact:
Eng Beng SC, Partner, Rajah & Tann
eng.beng.lee@rajahtann.com
