Vietnam recently issued Decree No. 27/2018/ND-CP (“Decree 27”) which will amend and supplement the previous Decree No. 72/2013/ND-CP (“Decree 72”) that was issued in 2013, with regards to social networks, electronic information, and electronic gaming. The Decree 27 focuses on social network sites, information websites, and online gaming service providers. It removes 11 business registration conditions and 13 administrative procedures.
Legal & Regulatory
Vietnamese government recently issued Decree No. 22/2018/ND-CP (“Decree No. 22”), replacing Decree No. 100/2006/ND-CP with updated guidelines for numerous articles focusing on copyright under the Civil Code and Law on Intellectual Property. The decree will come into effect from 10 April 2018.
Vietnam’s Ministry of Health (MoH) issued Circular No. 01/2018/TT-BYT (Circular 01) on January 18, 2018, regarding regulations on labeling of pharmaceutical products. The Circular 01 will replace current regulation Circular No. 06/2016/TT-BYT (Circular 06) and will be in effect from June 1, 2018.
Vietnam has issued Decree 09/2018/ND-CP (Decree 09) regarding conditions on the establishment of retail outlets by a foreign-invested enterprise (FIEs). Effective as of 15 January 2018, the decree aims to provide a more transparent framework for foreign investors in the retail sector.
Vietnam’s Ministry of Industry and Trade issued Decree No.08/2018/ND-CP (Decree 08) with immediate effect on 15 January 2018, amending several decrees related to business conditions in various areas including franchising, to reduce administrative procedures. With respect to franchising, the Decree 08 amended Article 5, reducing the number of conditions on foreign franchisors to only one, namely, the business to be franchised must be operating for at least one year prior to franchising.
To further align itself with international IP norms, Vietnam has amended its Intellectual Property Laws in the form of Circular No. 16/2016/TT-BKHCN. It is already in effect from January 15, 2018. The amendments in patent procedures mostly relate to application rules, patent applications, and examination procedures. Patent applicants should take note of the amendments to avoid compliance risks.
In 2017, the Vietnamese government passed numerous laws which are going to come into effect in 2018. The laws primarily focus on sectors such as banking, agriculture, trade, and tourism. Most of the laws aim at improving the investment climate and reducing complexities in doing business in the country.
The Free Trade Agreement between Vietnam and the Eurasian Economic Union has been retrieved by Dezan Shira & Associates, translated into English, archived and is available for complimentary PDF download here.
The Eurasian Economic Union is a trade bloc that includes Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan, and is a significant player in terms of China’s OBOR ambitions. The agreement, which runs to 1,300 pages, is the first FTA agreed between the Eurasian Economic Union and an Asian country, and since its ratification in May 2015. Bilateral trade between Russia and Vietnam has risen from a base of close to zero to over US$10 billion since the treaty came into effect. Of particular interest within the document are provisions for lower taxes among agricultural and automotive trade.
Choosing an Effective Entry Model for Vietnam Investments, the latest publication from Dezan Shira & Associates, is out now and available for complimentary download through the Asia Briefing Publication Store.
In this issue:
- Understanding Vietnam’s Investment Landscape
- Considering Your Market Entry Options
- Optimizing Investments in Conditional Sectors
Foreign investors in Vietnam are realizing increasing profitable opportunities because of steady regulatory reform and the gradual expansion of market access to previously restricted sectors. While the market may be opening, many foreign investors still find it challenging to establish their operations effectively in Vietnam. Those who are ill prepared to act upon regulatory updates, revisions to investment restrictions, or other changes to Vietnam’s investment environment can quickly find the setup and expansion process to be an overwhelming experience.
By: Maxfield Brown
Vietnam is a significant target for companies in the consumer goods sector. The country’s blossoming middle class, shifting spending habits, and a sizable population of over 90 million is rapidly becoming the focal point for investors building up brand identity and sales networks throughout the Association of Southeast Asian Nations (ASEAN). As the fundamentals of the Vietnamese economy continue to fall into place, foreign companies who are able to develop and implement effective market-entry strategies will be well positioned to gain increasing market share in the years to come.
For the largest players, Vietnam’s demographics and proximity to other markets present an opportunity to establish localized production and to expand distribution networks through mergers and acquisitions. Small and medium sized players, however, for whom the costs of setting up can often be inhibitive, increasingly turn to third-party logistics providers to boost their sales and build brand identity within Vietnam.
In general terms, third-party logistics, or 3PL as it is commonly referred, involves the outsourcing of logistics functions – such as customs clearance, storage of products, and order fulfillment – to a third party. Depending on the 3PL provider and range of services utilized, third party logistics can completely remove the need for a foreign company to establish a market presence in Vietnam. Instead, all operations can be run out of a single regional management center where the costs and risks of doing business are lower.