Vietnam Regulatory Brief: Business Registration Fines, Lost and Damaged Bill Guidance, and Increased Scrutiny of Real Estate Loans
New sanctions announced for late business registration
Government officials have announced new penalties for late business registration. The sanctions were published under Decree 50/2016 / ND-CP and will be effective July 15, 2016. Late registrations of content change certificates will be fined up to US $671. The exact fine will depend on how late the registration is; the details of the sanctions are as follows:
- Fine between US $ 45 to US $ 224, if registration is delayed by 1-30 days.
- Fine between US $ 224 to US $ 447, if registration is delayed by 31-90 days.
- Fine between US $ 447 to US $ 671, if registration is delayed by more than 91 days.
Companies should ensure compliance with the latest regulations to mitigate the financial and reputational risk to their business. In addition, companies should note that the regulations in Vietnam are amended often. Enterprises that keep track of such regulations ensure that their business operations in Vietnam do not suffer.
New regulations announced for lost and damaged bills
The government issued Decree 49/2016 / ND-CP which announced new regulations for lost and damaged bills. The decree clarifies that rules for bills that are lost, burnt or damaged. If customers have not received the bills, a fine will be applicable dependent on a case-by-case basis. The fine will be between US $ 179 and US $ 358. This is a reduction from the current amount. The latest decree will come into effect on August 1, 2016.
If natural disasters, fires or any other unexpected event result in the loss of or damage to a bill, then the company that issues the bill must ensure the transaction is properly recorded and the associated taxes are paid. If such measures are taken, the government can wave off the fine or the minimum fine would be applicable. Companies that ensure proper bill preparation, invoicing and associated tax filings stand to avoid the fines for lost or damaged bills.
Central Bank to institute stricter rules for real estate loans in 2017
The State Bank of Vietnam (SBV) has announced stricter regulations for real estate lending starting from 2017. Released May 30, the bank circular increases the risk weights of loans for real estate businesses from 150 percent to 200 percent. The change will be effective January 1, 2017.
The SBV instituted new reals to prevent the risk of bubbles in the Vietnam’s real estate sector. The changes are not as strict as expected by market analysts. The country’s real estate market is heavily dependent on loans. The outstanding loans to the sector in 2015 were valued at US $ 17.42 billion. The new regulations should significantly insulate the Vietnamese real estate sector from the risks of bad debt. The changes also underline the importance of tracking legislations in Vietnam, as several agencies in Vietnam announce regulatory changes that would be applicable only several months down the line.
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