SUMMARY SOME OF NEW POINTS IN LAWS, CODES EFFECTIVE FROM 01/01/2021

From January 1, 2021, a number of important Laws and Codes take effect that directly affect investment and business activities of enterprises as well as rights and obligations of organizations and individuals. In the following article, DTD will give some important new points that businesses, organizations and individuals need to pay attention to.

1. Labor Code 2019

The Labor Code 2019 has a number of important changes that businesses and individuals should note as follows:

(i) There are only 2 types of labor contracts: The Labor Code 2019 only divides contracts into two categories, which are indefinite term and fixed-term labor contracts, removing the regulations on types of employment contracts for seasonal or specific jobs;

(ii) The employee has the right to unilaterally terminate the labor contract;

(iii) The employer must bear the cost of opening an employee's account if paying salary via bank account;

(iv) Increasing the retirement age of employees according to the roadmap: The retirement age is adjusted according to the roadmap until the age of 62 for male employees by 2028 and until the age of 60 for female employees by 2035;

(v) 02 cases that the employer has the right to unilaterally terminate the contract without prior notice;

(vi) Not applying probation to labor contracts of less than 01 month; The probationary period can be up to 180 days with the job of the business manager;

(vii) In more cases, the employee is allowed to take separate leave and receive full salary;

(viii) New regulations on interest rates when calculating compensation for late payment of wages to employees; The employer must bear the cost of opening an employee's account if paying salary via bank account.

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In addition to the notable new points mentioned above, employees and employers need to update with other new points outlined in the Labor Code 2019.

2. Enterprise Law 2020

The Law on Enterprises 2020 has the following notable new contents:

(i) Changing the concept of state-owned enterprises: State-owned enterprises include enterprises where the State holds more than 50% of the charter capital, the total number of shares with voting rights in accordance with the law;

(ii) Adding 03 groups of subjects that are not allowed to establish and manage enterprises;

(iii) Abolishing regulations on notification of enterprise seal sample before use;

(iv) Shortening the period of notification before business suspension: from 15 days before the date of business suspension to only 03 days before the date of business suspension.

3.  Investment Law 2020

As one of the laws directly affecting business investment activities of domestic as well as foreign investors, the Investment Law 2020 was issued with many new points as follows:

(i) Officially banning debt collection services;

(ii) Reducing the number of sectors in which investment and business are conditional: From 267 sectors to 227 sectors;

(iii) Supplementing many sectors and trades subject to investment incentives;

(iv) Additional investment incentives: Rapid depreciation, increase in deductible expenses when calculating taxable income;

(vi) The Government shall issue a list of industries and occupations with restricted market access for foreign investors;

(vii) There are 4 cases in which Investors do not have to deposit to secure the implementation of investment projects.

4. Securities Law 2019

Compared to the Law on Securities 2006, the Securities Law 2019 has some changes as follows:

(i) Establishing Vietnam Securities Depository and Clearing Corporation;

(ii) Adding some prohibited acts in securities and securities market activities such as: Using customers' accounts and assets without being entrusted by the customer or in contravention of the law or misuse of credit to appropriate customers' property; Lending another person an account for securities trading, taking the name of securities ownership on behalf of another person, leading to the act of manipulating securities prices;

(iii) Committing to and listing or registering for stock trading on the securities trading system after the end of the offering;

(iv) A public company may only offer additional shares to the public if its business activities in the preceding year are profitable.

5. Law on Investment under the public-private partnership mode 2020

For the first time, the National Assembly passed the Law on Public-Private Partnership to specifically and clearly define the contents related to investment activities under the public-private partnership (PPP) mode instead of regulating the Discrete provisions in different legal documents:

(i) Narrowing PPP investment sectors: PPP investment has narrowed from 8 areas under Decree 63/2018 / ND-CP to only 05 areas, including: (1) Transportation; (2) Power grids, power plants, except hydroelectricity plants and State monopolies in accordance with the Electricity Law; (3) Irrigation; clean water supply; drainage and wastewater treatment; waste treatment; (4) Health; educations; (5) Information technology infrastructure;

(ii) Provide detailed regulations on investor's eligibility under PPP method;

(iii) The project information must be publicized on the electronic Government procurement system;

(iv) Unifying the selection of investors under the Investment Law: Specifically, the investor selection methods applied in PPP investment include: (1) Open bidding; (2) Competitive negotiation; (3) Appointment of investor; (4) Investor selection in special case.

In addition to the Laws and Codes mentioned above, from January 1, 2021, some of the following Laws also take effect, including: the Amended Law on Youth 2020; the Law on Organization of the National Assembly 2020; the Amended Law on Promulgation of Legal Documents 2020; the Amended Law on Construction 2020; the Law on Mediation and Dialogue at Courts 2020; the Amended Law on Judicial Examination 2020. Organizations and individuals should update new legal documents for the accurate and effective application of the law.