We would like to bring to your attention key legal notifications that have been issued in Vietnam recently:
- Further guidance in naming a company
- Educational operation license required for foreign schools
- Mining right: commission fee from USD 100 to USD 600
- Suspension of temporarily importing wood from the Lao PDR and Cambodia into Vietnam
- Decrease of ceiling interest rates for short loans and deposits
1. How to name your company correctly
On 1 October 2014, the Ministry of Culture Sport and Tourism has issued Circular 10/2014/TT-BVHTTDL interdicting the naming of a company in such a way as to violate Vietnamese traditions, cultural, moral norms and Vietnamese habits and customs.
Names that would violate are, for example, names of renowned people, countries, places in the colonial period, historic villains, and words and symbols going against Vietnamese traditions, etc.
2. Educational operation license (“EOL”) required for foreign schools
On 15 October 2014, the Ministry of Training and Education has issued Circular No. 34/2014/TT-BGDDT on foreign investment and foreign cooperation in the education sector.
Foreign schools must obtain an EOL in addition to the Investment Certificate. Conditions for an EOL are: minimum invested capital (approx. USD 1,500 per child for kindergarten; USD 2.5M for high school; and USD 15M for university); the facilities, teaching staff and curriculum must meet the required standards.
If foreign schools already had an EOL granted before 15 December 2012, they must submit additional documents to the Department/Ministry of Education, depending on the type of school.
Circular 34 is effective from 1 December 2014.
3. Mining right: commission fee from USD 100 to USD 600
From 24 October 2014, according to Joint-Circular 54/2014/TTLT-BTNMT-BTC, the commission fee for mining bidding rights is from USD 100 to USD 600.
The winning bidder must pay at least VND 50 billion (USD 2.5 million) upfront before receiving a mining licenses. If the winning price is higher, the winning bidder must pay the balance within a maximum of five years.
4.Suspension of temporary importation of wood from the Lao PDR and Cambodia into Vietnam
From 8 December 2014, the Ministry of Industry and Trade suspends the activity of temporary importation of all woods under HS Code 44.03 and 44.07 from the Lao PDR and Cambodia into Vietnam for re-export to a third country, promulgated by Circular 37/2014/TT-BCT on 24 October 2014.
For contracts signed before 8 December 2014, the merchant is permitted to conduct such activities until 31 December 2014.
5. Decrease of ceiling interest rate for short term loans and deposits
On 28 October 2014, the State Bank of Vietnam has promulgated the ceiling interest rates for:
- Deposit interest (in USD): 0.25%/year applied for entities and 0.75%/year applied for individuals, provided by Circular 2172/QD-NHNN
- Deposit interest (in VND): 1%/month applied for all definite terms and indefinite terms, provided by Circular 2173/QD-NHNN
- Short term loans: 7%/year, except for the People’s Credit Fund or microfinance institutions that can apply 8%/year, provided by Circular 2174/QD-NHNN.
These interests are effective from 29 October 2014.