Notable documents of Vietnam in the previous week (from May 8 to May 14, 2023)

1. Provincial People’s Committees to authorize district-level People’s Committees to decide specific land prices in Vietnam

This is a content of Resolution No. 73/NQ-CP dated May 6, 2023 on authorizing decisions on specific land prices.

According to the Resolution, People’s Committees of provinces and centrally affiliated cities shall, based on the Law on Local Government Organization, Conclusion No. 14-KL/TW dated September 22, 2021, and actual situations in their areas, authorize district-level People’s Committees to decide the specific land prices to:

+ Decide the specific land prices to determine indemnities when the State expropriates land;   

+ Collect land rental upon the allocation of resettlement land;

+ Determine the land use levy and land rental when the State allocates land, leases land, or permits the land use purpose conversion for households and individuals;

+ Determine the land price for areas exceeding the prescribed land use quota when the State recognizes the land use rights of households and individuals;

+ Determine the starting price for the auction of land use rights for households and individuals.

- Decide on the establishment of Land Price Appraisal Councils and the council members. A council includes:  

+ The President of the district-level People's Committee as the chairperson and heads of district-level financial agencies as standing members;  

+ Heads of natural resources and environment agencies and relevant district-level specialized agencies and Heads of commune-level People's Committees where lands are located;   

+ Organizations that provide land price advisory and determination services, or land price specialists and other members decided by the district-level People’s Committee. District-level Natural Resources and Environment Division shall assist the district-level People’s Committee in determining land prices.

See more details in resolution No. 73/NQ-CP, effective as if its date if signing and shall be implemented until the Law on Land (amended) approved by the National Assembly of Vietnam to replace the Law on Land 2013 comes into force.

2. Licensing conditions of mutuals providing microinsurance products in Vietnam

This is a content of Decree No. 21/2023/ND-CP dated May 5, 2023 on microinsurance promulgated by the Government of Vietnam

According to Decree No. 21/2023/ND-CP, mutuals providing microinsurance products shall meet the requirements prescribed in Article 149 of the Law on Insurance business. Specifically, according to Clauses 2, 3, and 5 of Article 149 of the Law on Insurance Business:

- The amount of capital contribution in VND must be at least 10 billion VND. Sources of capital to establish a mutual providing microinsurance products include:

+ Capital contributions of individuals who are founding members. Founding members shall not use loans or investment trusts from other organizations or individuals for capital contribution;

+ Support from members that are entities;

+ Sponsorship from sponsors, international organizations, or programs and projects;

+ Other legal sources as per law.

- Any nominee for a Chairperson of the Managing Board, Director or General Director, legal representative or actuary of microinsurance products must meet the conditions and standards prescribed in Article 25 and Article 25 of Decree No. 21/2023/ND-CP.

- The draft charter must be in line with business objectives of the mutual providing microinsurance products and comply with Article 8 of Decree No. 21/2023/ND-CP.

See more details in Decree No. 21/2023/ND-CP, effective as of May 5, 2023.

3. Standards of fixed assets of state agencies in Vietnam from June 10, 2023

On April 25, 2023, the Minister of Finance of Vietnam promulgated Circular No. 23/2023/TT-BTC on guidelines on regulations on the management and calculation of the depreciation of fixed assets of agencies, organizations, and units and fixed assets assigned by the State to enterprises for management, excluding state capital components at enterprises.

According to the Circular, standards of fixed assets of state agencies from June 10, 2023 are as follows:

- Asset identification:

+ An independent assess is identified as a fixed asset.

+ A system of joint independent assets for the implementation of one or more specific functions, which must have a sufficient number of components for operation, is identified as a fixed asset.

+ Regarding a system of joint independent assets, with each asset having different useful life and independent operational functions subject to separate management of each asset component, such an asset component is identified as a fixed asset.

+ Regarding draught animals and/or animals serving production, each animal is identified as an asset.

+ An independent perennial garden or each independent perennial plant is identified as a fixed asset.

+ The right to use lands for each land plot or area assigned to an agency, organization, or unit is identified as a fixed asset.

+ The intellectual property right registered or established according to each certificate of registered copyright, certificate of registered related rights, protection title to industrial property of a subject matter, or protection title to plant varieties is identified as a fixed asset.

+ Each software application is identified as a fixed asset.

+ A brand of a public service provider is identified as a fixed asset.

- Assets prescribed in Clause 1 Article 3 of Circular No. 23/2023/TT-BTC (except for assets prescribed in Clause 3 of Article 3 thereof) are identified as fixed assets when the following 2 requirements are met simultaneously:

+ The useful life is 1 year or more.

+ The cost is 10.000.000 VND or higher.

- Assets prescribed in Clause 1 Article 3 of Circular No. 23/2023/TT-BTC at public service providers ensuring their recurrent expenses and investment expenses, assets at public service providers subject to inclusion of depreciation of fixed assets in their service prices as per law, and assets at public service providers fully used for business operations, leasing, and joint venture without establishing new juridical persons as per law, are identified as fixed assets when the following 2 standards are simultaneously met:

+ The useful life is 1 year or more.

+ The standard of costs of fixed assets applied to enterprises as per regulation is met.

See more details in Circular No. 23/2023/TT-BTC, which comes into force as of June 10, 2023 and replaces Circular No. 45/2018/TT-BTC.

4. Preferential loan interest rates for purchasing social housing in Vietnam, applicable until December 31, 2024

This is a content of Decision No. 486/QD-TTg dated May 10, 2023 on interest rates of preferential loans at the Vietnam Bank for Social Policies applicable to loans with outstanding debts for purchasing or renting social housing or constructing or renovating housing promulgated by the Prime Minister of Vietnam

According to the Decision, the interest rate for preferential loans at the Vietnam Bank for Social Policies applicable to loans with outstanding debts for purchasing or renting social housing or constructing or renovating housing according to Article 16 of Decree No. 100/2015/ND-CP (amended by Decree No. 49/2021/ND-CP) is 4,8% per year.

Decision No. 486/QD-TTg is effective from May 10, 2023 until December 31, 2024.

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