January 01, 2021, is also the date on which a series of legal documents take effect. Lawnet would like to present to our customers and members 13 significant policies that come into effect from January 01, 2021 in Vietnam.
Article table of contents
An overview of 13 prominent policies taking effect from January 1, 2021 in Vietnam (Illustrative image)
1. Significant Changes in Employment Contracts among Parties from January 1, 2021 in Vietnam
According to the 2019 Labor Code, an employment contract concluded through electronic means in the form of data message as stipulated by the law on electronic transactions is considered equivalent to a written employment contract. Parties may enter into an oral employment contract for contracts with a term of less than 01 month, except for cases involving employees under 15 years old, domestic helpers, and contracts entered into with an authorized representative of a group of employees aged 18 and older. (Under current regulations, parties may enter into an oral employment contract for terms of less than 03 months.)
2. More cases where employees are entitled to personal leave with full pay in Vietnam
According to the 2019 Labor Code, employees are entitled to personal leave with full pay and must notify the employer in the following cases:
- Marriage: 03 days;
- Biological children or adopted children’s marriage: 01 day;
- Death of biological father, biological mother, adoptive father, adoptive mother of the employee or of the spouse; spouse; biological children, adopted children: 03 days.
Thus, it is evident that the 2019 Labor Code has included 02 additional cases where employees can take personal leave with full pay, specifically when an adoptive father or adoptive mother passes away. Additionally, it clearly specifies cases where employees are entitled to personal leave with full pay, such as: Child's marriage includes both biological and adopted children; the death of a parent-in-law or biological parent includes both biological and adoptive parents of the spouse; the death of a child includes both biological and adopted children.
3. Increase in Retirement Age and Announcement of Retirement Age Increase Schedule in Vietnam
Article 3 of Decree 135/2020/ND-CP stipulates that the retirement time is at the end of the last day of the month in which the retirement age is reached as prescribed. For employees who continue to work after reaching the prescribed retirement age, the retirement time is when the employment contract is terminated.
Note: The pension commencement time is from the first day of the month immediately following the retirement time. If the employee's record does not specify the day and month of birth but only the year of birth, January 1 of the birth year shall be taken as the basis for determining the retirement time and pension commencement time.
Notably, Article 4 of Decree 135/2020/ND-CP specifies, detailing paragraph 2 of Article 169 of the 2019 Labor Code, that from January 1, 2021, the retirement age for employees in normal working conditions is 60 years and 03 months for males and 55 years and 04 months for females; thereafter, each year increases by 03 months for males until reaching 62 years by 2028 and each year increases by 04 months for females until reaching 60 years by 2035.
4. From January 1, 2021, there will be 02 National Day holidays (September 2) in Vietnam
According to paragraph 1 of Article 112 of the 2019 Labor Code:
Article 112. Public holidays and New Year holidays
1. Employees are entitled to leave work and receive full pay on the following public holidays and New Year holidays:
a) New Year's Day: 01 day (January 1 in the Gregorian calendar);
b) Lunar New Year: 05 days;
c) Victory Day: 01 day (April 30 in the Gregorian calendar);
d) International Labor Day: 01 day (May 1 in the Gregorian calendar);
dd) National Day: 02 days (September 2 in the Gregorian calendar and 01 day immediately before or after);
e) Hung Kings Commemoration Day: 01 day (March 10 in the lunar calendar).
Thus, from January 1, 2021, Vietnamese officials and public employees and employees will have a total of 11 public holidays annually, including 02 days for National Day on September 2.
Moreover, according to Notice 4875/TB-BLDTBXH, the Ministry of Labor, Invalids, and Social Affairs announces the Lunar New Year 2021 and National Day 2021 holidays as follows:
- For officials and public employees and workers in administrative agencies, public services, political organizations, and socio-political organizations:
- Lunar New Year: 07 consecutive days from Wednesday, February 10, 2021, to Tuesday, February 16, 2021 (from December 29, Canh Ty year to January 5, Tan Suu year);
- National Day: 04 days from Thursday, September 2, 2021, to Sunday, September 5, 2021. This includes 02 public holidays and 02 weekends.
- For workers not in the above categories, employers will decide on the holiday plan as follows:
- Lunar New Year: 01 day at the end of the Canh Ty year and 04 days at the beginning of the Tan Suu year, or 02 days at the end of the Canh Ty year and 03 days at the beginning of the Tan Suu year;
- National Day: 02 days, including Thursday, September 2, 2021, and one of the following: Wednesday, September 1, 2021, or Friday, September 3, 2021.
5. Add provisions on probationary period for employees in vietnam
According to the 2019 Labor Code, the probationary period is agreed upon by both parties based on the nature and complexity of the job but can only be applied once for a job and must meet the following conditions:
- No more than 180 days for the job of an enterprise manager as prescribed by the Law on Enterprises; Law on Management and Use of State Capital Invested in Production and Business in Enterprises;
- No more than 60 days for jobs requiring professional and technical qualifications at the college level or higher;
- No more than 30 days for jobs requiring intermediate technical qualifications, skilled workers, or professional staff;
- No more than 6 working days for other jobs.
Thus, the 2019 Labor Code has added a probationary period for enterprise managers, specifying that it shall not exceed 180 days.
6. Enterprises no longer need to notify stamp specimens
According to Article 43 of the 2020 Law on Enterprises, before using, enterprises are no longer required to notify the business registration authority about their stamp specimens to be publicly posted on the National Business Registration Portal as stipulated by current law.
This new regulation is progressive and aligned with the simplification of administrative procedures. It is welcomed and supported by the business community as it reduces their time and effort and also decreases the burden on the competent state agencies during the completion of procedures for enterprises.
7. Digital signatures are equivalent to enterprise stamps
According to Article 43 of the 2020 Law on Enterprises, the law recognizes the title of the regulation as "Enterprise Stamps," while Article 44 of the 2014 Law on Enterprises addressed this content under the title "Enterprise Stamps." This difference arises from the recognition of digital signatures under the law on electronic transactions as a new form of an enterprise stamp.
Clause 1, Article 43 of the 2020 Law on Enterprises stipulates 02 forms of enterprise stamps, including:- Stamps made at stamping facilities;- Stamps in the form of digital signatures following the law on electronic transactions.
Clause 6, Article 3 of Decree 130/2018/ND-CP detailing the implementation of the Law on Electronic Transactions concerning digital signatures and certification of digital signatures stipulates that "digital signatures" are a form of electronic signature created by transforming a data message using asymmetric cryptography, whereby those who receive the original data message and the public key of the signer can accurately determine:- The transformation mentioned above was created using the exact private key corresponding to the public key in the same key pair;- The integrity of the data message since the transformation mentioned above was undertaken.
Thus, from January 1, 2021, digital signatures are recognized as a form of an enterprise stamp.
8. Prohibition of investment and business activities related to debt collection services
Article 6 of the 2020 Law on Investment prohibits the following investment and business activities:
- Business of narcotic substances listed in Appendix I of the 2020 Law on Investment;
- Business of chemicals and minerals specified in Appendix II of the 2020 Law on Investment;
- Business of specimens of wild flora and fauna species sourced from nature, listed in Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); specimens of wild fauna and flora species, endangered aquatic species sourced from nature, specified in Appendix III of the 2020 Law on Investment;
- Prostitution business;
- Buying, selling people, organs, body parts, human fetuses;- Business activities related to human reproductive cloning;
- Business of explosive fireworks;
- Business of debt collection services.
Meanwhile, Appendix IV issued with the 2014 Law on Investment stipulates that debt collection services belong to the list of conditional business lines.
Thus, from January 1, 2021, investment in and the business of debt collection services will be officially prohibited.
9. Reduction of 41 conditional business lines
Appendix IV issued with the 2020 Law on Investment specifies the list of conditional business lines, listing 227 lines.
Meanwhile, Appendix IV issued with the 2014 Law on Investment, supplemented by Clause 2, Article 3 of the Law on Insurance Business, Intellectual Property Law (amended) 2019 lists 268 conditional business lines.
Thus, the 2020 Law on Investment has reduced 41 conditional business lines (from 268 lines to 227 lines). Consequently, as of January 1, 2021, will no longer be considered conditional business lines:
- Arbitration service activities of commercial arbitration organizations;
- Vocational training activities;
- Business of debt collection services;
- Franchise business;
- Logistic services;
- Coal business;
- ...
10. Investors establishing small and medium-sized start-up enterprises do not need an investment registration certificate
Article 22 of the 2020 Law on Investment stipulates that investors establishing economic organizations as per the following:
- Domestic investors establish economic organizations following the law on enterprises and relevant laws for each type of economic organization;
- Foreign investors establishing economic organizations must meet market access conditions for foreign investors as prescribed by law.
Especially, before establishing economic organizations, foreign investors must have investment projects and carry out procedures for obtaining or adjusting the investment registration certificate, except in cases of establishing small and medium-sized start-up enterprises and start-up investment funds as prescribed by the law on supporting small and medium enterprises.
Thus, foreign investors establishing small and medium-sized start-up enterprises and start-up investment funds under the law on supporting small and medium enterprises are not required to have investment projects and do not need to carry out procedures for obtaining an investment registration certificate (a completely new regulation).
Compared to the 2014 Law on Investment, the conditions for establishment of economic organizations under the 2020 Law on Investment are more relaxed, especially for small and medium enterprises. Additionally, the 2020 Law on Investment also abolishes the provisions on conditions of the economic organizations established by investors, including the ownership ratio of charter capital, investment form, and scope of project activities.
11. Many changes in the regulations for issuing normative documents
On January 1, 2021, the Amended Law on Promulgation of Legal Documents 2020 officially takes effect with several notable changes:
- Adding 03 more cases for the issuance of normative documents under simplified procedures;
- Adding many types of documents to the legal normative document system;
- Eliminating the issuance of Joint Circulars between Ministry ministers and heads of equivalent agencies;
- The Vietnam Fatherland Front shall conduct social critique on draft normative documents following this Law and the Law on the Vietnam Fatherland Front;
- A single normative document may be issued concurrently to amend, supplement, replace, annul content in several normative documents issued by the same agency in the following cases:
- To implement relevant international treaties to which the Socialist Republic of Vietnam is a member.
- The content to be amended, supplemented, replaced, or annulled is closely related to ensure consistency with the newly issued document.
- To implement a simplified administrative procedure plan that has been approved.
- Adding more responsibilities of the Ethnic Affairs Council in verifying the assurance of ethnic policies in law projects, ordinances, and draft resolutions.- ...
12. Must list or register stock transactions on the exchange after the public offering
According to point h, clause 1 of Article 15 of the 2019 Securities Law, one of the conditions for an initial public offering (IPO) of shares by a joint stock company is “having a commitment and carrying out the listing or registration of stock transactions on the securities trading system after the public offering.”
Similarly, for public offerings of bonds, the issuing organization must also have a commitment and perform the listing of bonds on the securities trading system after the public offering.
Additionally, from January 1, 2021, several policies regarding securities will also change, such as:
- Adding security and safety measures for the securities market.
- Adding 04 more prohibited acts in securities and the securities market.
- To offer securities to the public, compliance with 09 conditions is required, compared to the previous 03 conditions necessary to offer securities to the public.
- Similarly, for public offerings of bonds, compliance with 09 conditions is required, previously only 04 conditions were needed to offer bonds to the public.
- Insiders of public companies, public investment companies, public funds, and related persons to insiders are required to disclose information from January 1, 2021.
- ...
13. 07 cases where mediation and dialogue at court are not conducted
As prescribed in Article 19 of the Law on Mediation and Dialogue at Courts 2020, seven cases where mediation or dialogue at courts are not conducted, specifically as follows:
- Claims for compensation for damage to state property;
- Disputes arising from civil transactions violating the law or contrary to social ethics;
- Parties have been invited to attend mediation or dialogue twice but still absent without force majeure or objective obstacles or cannot attend mediation, dialogue for a valid reason;
- One party in a divorce dispute is a person who lost civil act capacity;
- One party requests not to conduct mediation or dialogue;
- One party requests to apply emergency measures under the Civil Procedure Code and the Administrative Procedure Law;
- Other cases as stipulated by law.
Additionally, some regulations on the conditions for appointing mediators and confidential information issues also have some changes according to the Law on Mediation and Dialogue at Courts 2020.
Le Vy
