Vietnam Regulatory Brief: Domain Names, TPP Reforms, and New SME Incentives
This edition of Vietnam Regulatory Brief examines new regulations on internet domain names, reforms linked to the TPP trade deal, and a new circular on incentives for small-and-medium sized enterprises (SMEs).
New regulation to influence market for domain names
The private sector in Vietnam expects a new regulation to influence the market for website domain names in the country. The Vietnam Internet Network Information Center (VNNIC), state that only 182,000 of around 500,000 operational businesses have registered ‘.vn’ business names. The real figure is supposedly even lower, as a number of businesses have registered more than one domain name. The lack of detailed regulations and complicated procedures were reportedly responsible for making businesses shy away from registering ‘.vn’ domains. Local experts state that the absence of ‘.vn ‘domain names often spell reputational and economic risks for businesses. Consumers often find the absence of a professional domain name underhanded and suspicious at times.
News reports indicate that the Vietnamese authorities are mulling over a new regulation to ease procedures to register domain names. Dezan Shira & Associates recommends that companies keep track of the new regulations and register for domain names accordingly. The proposed regulatory changes come in the wake of a number of a number of disputes related to domain names. For instance, ebay.com.vn, heineken.vn and samsungmobile.vn recently faced dispute cases linked to domain names. Local reports indicate that corporations have had to buy back domain names at a premium from individuals, who speculatively registered domain names.
Reforms linked to Pacific Trade Deal may strengthen labor unions
Vietnam and the United States recently signed a bilateral pact to empower labour unions in Vietnam. The governments signed the pact known as the United States-Vietnam Plan for Enhancement of Trade and Labour Relations, as a side agreement to the Trans-Pacific Partnership (TPP). The agreement will legalize autonomous unions, permit labourers to strike and allow them to seek assistance from international labour organisations such as the American Federation of Labour and Congress of Industrial Organisations (AFL-CIO).
Vietnam constitutionally protects the rights of workers. However, in practice a very few laws have been codified to protect such worker rights. News reports quoting a partner from a prominent global law firm state that the impact the agreement has depends on the willingness of the Vietnamese government and bureaucracy to implement the pact. The proposed changes to the labour policies have not caused investor confidence in Vietnam to wane. Corporations that ensure compliance with the possible changes with the labour policies, in the event they are implemented, can effectively manage their operations in Vietnam.
New regulations announced on incentives for SMEs
Vietnam recently issued a new regulation to amend the kind of support offered to small- and medium- sized enterprises. The Ministry of Planning and Investment on 28 October announced the regulatory change through a circular. The circular clarifies the criteria for the allocation of the Development Fund for small- and medium-sized enterprises (SME). The policy will be in effect from 13 December.
SMEs must fulfill a set of conditions to be eligible for the funding. Companies must meet the official criteria to be listed as a small or medium enterprise. They must have investments or business plans to operate in agriculture, forestry, fisheries, industrial processing, manufacturing, water supply as well as management and disposal of waste wastewater. Corporations stand to receive funding if they fulfill at least one of the following criteria:
- In terms of output, they must produce high-quality products, new materials or new energy.
- Use innovation and build/utilize technical equipment to increase labour productivity.
- Have a good corporate governance and management history, along with a healthy credit history for the enterprise.
- Create employment and hire more female employees.
- Produce energy-saving products. Use clean and sustainable technologies.
Local experts state that small and medium enterprises planning to invest in Vietnam stand to gain from the new regulations. Investors that gain funding from the development fund can make themselves more cost competitive. The new regulations pave the way for the development of small medium scale enterprises in Vietnam.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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