Monthly Legal Update - April, 2010

• New rules on enterprise registration
  

The Government has issued a new decree No. 43/2010/ND-CP on enterprise registration to improve the current Decree 88/2006/ND-CP on business registration.

The most remarkable point is a mechanism for enterprise registration through the Internet. In spite of application dossier on paper and long-time queuing up at the one-gate registrar, now applicants can save time by online registration procedure through the National Enterprises Registration Information Gate which takes the same effect as procedure on paper.

Another new point is that each enterprise shall have an enterprise code in an enterprise registration certificate which also serve as tax code. Consequently, in case of any corporate changes, enterprises shall have to carry out only one procedure to change enterprise registration certificate in spite of two procedures to change the business registration certificate and the tax code registration certificate, which helps in reducing burden of administrative procedures for enterprises.
The duration for issuing a new certificate for enterprises is shortened from 10 to 05 working days calculating from the date of submission.

Previously applicants who wish to establish a new enterprise shall have to avoid the same corporate name in province. Now it could be more difficult for enterprises to name the company not in the same with another name in the whole country. For enterprises which happened to have the same names in the past shall not be forced to change. The National Enterprises Registration Database is established for enterprise information search.

Another new point is that the Decree allows enterprise's name to include such letters as F, J, Z, W, although it was not possible previously.

• New Decree on the management of space, architecture and urban landscape

The Government newly issued the Decree No. 38/2010/ND-CP on management of space, architecture and urban landscape on 7 April to replace the Decree No. 29/2007/ND-CP on management of urban architecture dated 27 February 2007.

Under this Decree, large-scale public works, works required special architecture, having meaningful and important position in the urban must conduct competitive examination or selection of architectural design plans prior to the establishment of construction project. This Decree also encourages the organization activities of examinations, selection of architectural design plans for other projects in urban areas.

In additions, houses in the old street, villas in the list of urban conservation has to preserve the status quo image. Houses with the front street view which will be constructed must comply with the detail planning and the height and color of the contiguous houses. Regarding downgraded apartment building, the authority must have a plan on moving the people living in such dangerous areas in order to renovate or rebuild such buildings.

In respect of electric wire, telephone line, cable TV which currently create a very unsightly looking shall be replaced by combinations of the same technical features, approaching remove and place underground.

• Amended Regulations on VND loans with negotiable interest

Compared to Circular No. 07/2010/TT-NHNN dated February 26, 2010, the new Circular No. 12/2010/TT-NHNN of the Vietnam State Bank dated 14 April now extends the permission of negotiable interest to short-term loans regarding capital need for project, manufacture, business, services and development investment. When applying this mechanism, the credit institutions are required to publish the lending interest rate at a reasonable level based on the principle of supply and demand of the capital market, capital demand, and customers' credit; save operation cost and enable the customers to access loans for production and business development, especially in agricultural and rural areas, exporters, small and medium enterprises.

• Draft Amendment Law to the Law on Securities

The State Securities Commission of Vietnam published a draft Amendment Law to the Law on Securities on March 25, 2010 in a hope to keep pace with the new trend on the securities market recently.

The Draft expands its reach to private share placement, rather than focusing on public share offering. New provisions on private share placement are mainly taken from the recently issued Governmental Decree No.01/2010/ND-CP dated January 4, 2010 on private share placement. It is however silent on the fate of the Decree No.01 after the Amendment Law is passed.

The Draft proposes a provision that obliges issuing organizations to undertake listing or trading their shares on the organized securities market within 06 months from the completion of the issuance. This regulation aims to narrow the activities of OTC market and expand the organized one.
The Draft has for the first time recorded "real estate investment fund", which operates under the form of public fund and is allowed to invest over 20% of its total assets in real estate where it is a closed investment fund.

The Draft also regulates the obligation of the Securities Depository Centre on disclosure of information and revokes provisions on penalty of 1 to 5 times or from 1% to 5% of the illegal income, but instead specifies penalty amounts in currency, etc.

The State Securities Commission is inviting public opinions and comments regarding the Draft and expects to submit to the National Assembly for approval this year.

• Regulations on Liquefied Petroleum Gas (LPG) Agency

According to Circular No. 11/2010/TT-BCT of the Ministry of Industry and Trade dated 29 March 2010 promulgating the regulations on trading LPG, effectively on May 10, 2010, a LPG master distributor shall be entitled to determine wholesale and retail prices of LPG in their distribution system. Decision or notice on price changes must be sent prior to the implementation of new prices to all units within their system and to the Department of Industry and Trade of the provinces where their business establishments are located.

LPG principals would also be permitted to select and sign agency contracts with a maximum of three LPG traders which satisfied conditions required for a general agent, agent. On the other hand, an agent would be permitted to select and sign agency contracts with up to three wholesale traders or qualified general agents. At each LPG-selling point or car filled station of a general agent, an agent would be permitted to sell bottled LPG in bulk up to three wholesale traders or/and general agents pursuant to signed contracts.
Wholesale traders and general agents can sell directly to end-users at their own office or set up an agency system in accordance with the regulation for the purposes of direct sales to end-users. They shall be jointly liable for sales price, quality or quantity of LPG, according to fault.

The wholesale trader must register its agency system with the provincial Department of Industry and Trade in the province in which its agency is located within the first quarter of a year.