Even though 2020 was a challenging year for all, the business environment in Vietnam managed to overcome difficulties achieving a growth rate of 2.91% in 2020, and remained one of only a few economies to achieve positive growth.
Vietnamese authorities have issued a wide range of new laws and decrees effective from the start of 2021, and investors are encouraged to ensure compliance by understanding how these new laws impact on their existing business and future plans in Vietnam. We have a prepared a summary of key impacts below.
Reminder: 2020 year-end lodgements and finalisations
This January 2021 publication of our Tax and Accounting Updates looks at 2020 year-end lodgements and finalisations; Decree 145 covering employment report requirements, labour relations, contracts and implementation of Vietnam’s new labour code for 2021; 2021 minimum monthly wage; Decree covering foreign individuals working in Vietnam and work permit provision; Decree 01/2021/ND-CP on enterprise registration; new circular on tax registration; and our regular review of recent Official Letters released by the Tax Authorities. Read the article here.
The New Labour Code 2019 and Decree 145, covering implications for employers and employees
With the introduction of the Labour Code 2019, which took effect on 1 January 2021 (and which replaced the Labour Code 2012), the issuance of this Decree provides required guidance for the implementation of the Law for employers, employees and the Labour authorities. It should be noted that although Decree 145 is extensive, foreign employees, Work Permits and related matters are to be covered by a separate Decree. Read the article here, and here.
Vietnam’s new law on investment 2020
The Law of Investment 2020 (“LOI 2020”) was approved by the National Assembly of Vietnam on 17 June 2020, and takes effect from 1 January 2021, replacing and supplementing the Law on Investment 2014 (“LOI 2014”). The LOI 2020 regulates activities related to business investment into Vietnam, and investment activities from Vietnam to other countries. This new law aims to simplify administrative procedures and conditional business lines, synchronise with international commitments in investment activities of which Vietnam is a member, and to better facilitate investment activities into Vietnam. Read the article here.
Vietnam’s new enterprise law 2020
In 18 June 2020, the National Assembly of Vietnam approved the new Enterprise Law 59/2020/QH14 (“Enterprise Law 2020”), which comes into effect from 1 January 2021. The Enterprise Law 2020 contains 10 Chapters and 218 Articles, and replaces the Enterprise Law 68/2104/QH1 (“Enterprise Law 2014”). This law guides the operations of companies and similar organisations in Vietnam, but does not apply to or cover “Household” (unincorporated) businesses. Read the article here.
Decree covering foreign individuals working in Vietnam and work permit provisions.
Decree 152/2020/ND-CP (“Decree 152”) was recently released by the Vietnamese Government, coming into effect from 15 February 2021, and covers foreign individuals working in Vietnam, along with Vietnamese employed by certain foreign employers. This Decree is introduced as part of the implementation of the new Labour Code that came into effect from 1 January 2021 (known as the Labour Code 2019). Read the article here.
Decree 126 on tax administration law.
The Vietnamese Government released Decree 126/2020/ND-CP (“Decree 126”) on 19 October 2020, to implement elements of the Law on Tax Administration 2019. The Decree is a comprehensive document, spanning 266 pages (including appendices), a covering broad range of tax administration and compliance in Vietnam. Read the article here.
For further assistance, reach out to our expert teams in Ho Chi Minh City, Hanoi and Danang.