Non-legal entities no longer have legal capacity for purposes of civil transactions Law No. 91/2015/QH13 on the Civil Code was adopted by the National Assembly on November 24, 2015, and entered into force January 01, 2017 ("Civil Code 2015"). The Civil Code 2015 only provides for the legal capacity of legal entities (judicial persons) and individuals (natural persons) in civil transactions. Accordingly, Civil Code 2015 omits the legal capacity of non-legal entities to conduct any civil transaction. Among other things, this means many thousands of non-legal entities, including representative offices, business associations, branches of offshore enterprises, offices of foreign contractors and NGO offices, may no longer be able to engage in any civil transaction as a party to such transactions. Non-legal entities can no longer open/maintain bank account The State Bank of Vietnam ("SBV") has adopted the new, more limited approach of the Civil Code 2015 on legal capacity. An example is in Circular No. 32/2016/TT-NHNN dated December 26, 2016 ("Circular No. 32"), which amends Circular No. 23/2014/TT-NHNN dated August 19, 2014 on the guidelines for the opening and maintaining of current accounts at payment services providers. Circular No. 32 came into effect from March 01, 2017. As stipulated in Article 4 of Circular No. 32, non-legal entities are not allowed to open and maintain a bank account in their own capacity. This means all non-legal entities must either change the account holders, or close their bank accounts. Civil Code 2015 • From January 01, 2017 • No legal capacity for non-legal entities in civil transactions • Only judicial and natural person can conduct civil transactions Circular No. 32 • From March 01, 2017 • Non-legal entities cannot open/maintain bank accounts Circular No. 32 • By June 01, 2017 • Banks mut notify clients who are non-legal entities regarding the impact of the new law on their bank accounts Circular No. 32 • By March 01, 2018 • Non-legal entities must (i) close their bank accounts, or (ii) change their holders of bank accounts 2 Baker McKenzie. July 2017 Options for non-legal entities and their existing bank accounts Specifically, the SBV requires that, by March 01, 2018, in accordance with the instructions of their banks, non-legal entities must either (i) close their current bank accounts, or (ii) change their current bank accounts to the form of an individual bank account or a shared bank account with a legal entity (such as the parent company). The SBV also requires that as of June 01, 2017, banks and foreign bank branches had to review their client portfolios and then inform and assist their non-legal entity clients regarding the impact of the new regulations on their clients' bank accounts. The banking community has been reluctant to follow through on these requirements pending clarification of the many technical complications such a huge undertaking involves. For example, while guidelines have been provided for head offices of representative offices to authorize an account holder to open and maintain a bank account on its behalf, no guidelines have yet been agreed for business associations, NGOs, etc.