Looking Back on 2023
Over the last 12 months, Vietnam’s legal framework, business climate, and investment environment have seen considerable changes. In this article, we look back at 2023 and recap some of the most significant legislative reforms, market developments, and trade trends impacting enterprises and investors in Vietnam.
Power Generation, Real Estate, and Land Reform
Back in January, the Ministry of Industry and Trade (“MOIT”) published the long-awaited electricity generation price ranges for transitional solar and wind power projects. Decision No. 21/QD-BCT, dated 7 January 2023, applies to so-called ‘transitional’ solar and wind projects that have a signed Power-Purchase Agreement (“PPA”) with Electricity Vietnam (“EVN”) but no Commercial Operation Date to benefit from Feed-in Tariffs.
Later that month, the Prime Minister issued Decision No. 10/2023/QD-TTg to cut the cost of land rental. With Vietnamese real estate suffering from a pandemic-induced hangover, Decision 10 gave enterprises, households, and individuals leasing land under a land-lease decision, land-lease contract, or land-use rights certificate (“LURC”) a 30 per cent discount to boost the sector.
In quarter one, the Ministry of Natural Resources and the Environment (“MONRE”) launched a public consultation on the Draft Land Law. The two-month consultation, ending in March, included a public portal enabling people to comment on each individual article of the proposed new legislation including issues such as land use planning, land prices, and land fund development.
Anti-Money Laundering, Competition, and Personal Data Protection
In March, Vietnam’s new Anti-Money Laundering Law entered into force. The new law, issued in November 2022, aims to tighten up previous legislation (2012) and better align Vietnam with international standards and practices, such as through a broader definition of money laundering, and covering financial and non-financial entities operating in sectors sensitive to money laundering such as real estate.
Also in March, the Ministry of Construction (“MOC”) published a new Circular to guide a number of contents of construction contracts and provide templates of specific construction agreements. March also saw the government take action to improve liquidity in the bond market, issuing Decree No. 08/2023/ND-CP which amended and postponed the application of certain requirements of Decree 65.
Later, in April, the Vietnam Competition Commission was established. The Prime Minister appointed members to the commission, comprising of individuals from the Ministry of Industry and Trade (“MOIT”), experts, and scientists for a five-year term following a proposal from MOIT.
Quarter two also saw the long-awaited publication of Vietnam’s Personal Data Protection (“PDP”) Decree. Entering into force in July 2023, the PDP Decree introduced a standardised framework for personal data protection and imposed new requirements for organisations and individuals owning, controlling, and processing personal data in Vietnam. Covering both domestic and foreign entities operating in the country, the PDP Decree enshrines the concepts of ‘data controller’ and ‘data processor’ and includes specific requirements on both.
Power Development Plan 8 and New Borrowing Rules
In the Spring, the Prime Minister issued Decision No. 500/QD-TTg dated 15 May to approve the long-awaited Power Development Plan (“PDP”) 8. PDP 8 outlines the future of power development and consumption in Vietnam. Setting out the country’s roadmap to energy security, affordable electricity, and a reduction in fossil fuels, it includes targets for increasing the production and consumption of renewable power such as solar and wind as well as natural gas.
Moving into the Summer, the State Bank of Vietnam (“SBV”) issued a new Circular on non-government guaranteed foreign borrowing. Entering into force on 15 August 2023, Circular 08/2023/TT-NHNN (“Circular 08”) introduces certain restrictions on short-term foreign loans and outlines the circumstances in which borrowers can take out medium- and long-term foreign loans.
Just Energy Transition, Recruiting Foreign Workers, and E-Government
Highlights of the Autumn include the Prime Minister signing a Decision to approve a plan to implement the Just Energy Transition Partnership (“JTEP”) political declaration – a regional initiative to support a green energy transition throughout Southeast Asia. In total, the JTEP will mobilise over 15 billion dollars in public and private finance from partners including the US, EU, and Japan. It will also leverage technical assistance and policy advice to help Vietnam achieve its net-zero ambitions and ensure that the transition to a cleaner, greener economy is inclusive, sustainable, and affordable.
Meanwhile, in October, the Ministry of Labour, Invalids, and Social Affairs (“MOLISA”) provided more information on the implementation of Decree No. 70/2023/ND-CP. Decree 70 amends certain provisions of Decree No. 152/2020/ND-CP on the management of foreign workers and aims to simplify the procedures for recruiting international staff in Vietnam.
November saw the government approve a new development plan for a National Data Center. Following the approval of Resolution No. 175/NQ-CP, Vietnam will create a new data center to consolidate and share information from across government. This aims to deliver streamlined and simplified administrative procedures for enterprises and investors, while also delivering improved services for citizens through big-data solutions.
APFL & Partners would like to thank all our clients for their continued trust in 2023 and for instructing us to advise them on these and other issues which affect their business and investment plans in Vietnam. We look forward to working with our clients and partners in 2024 to help them understand the important changes in this fast-moving market and ensure that their companies continue to grow and thrive.
Disclaimer: This article and its content are for information only and are not given as legal or professional advice. they do not necessarily reflect all relevant legal provisions with respect to the subject matter. Readers should seek legal or professional advice before taking or refraining to take any action.