04 important notes for businesses in 2018

Policies and guidelines effective from 2018 that have a major impact on businesses include:

Accordingly, business establishment registration will have changes in the composition of documents and content of application forms and declarations in the near future. Specifically:

• Abolish the application component “Copy of ID card, ID card, passport or other legal documents” when carrying out business establishment registration procedures.
• Replace some personal identification information with “personal identification number” in the content of forms and declarations in business registration procedures.

In addition, the Resolution also advocates abolishing the requirement for personal identification documents in a number of procedures for investing abroad and investing in Vietnam.

2. Policy to support small and medium enterprises

From January 1, 2018, the Law on Support for Small and Medium Enterprises 2017 officially took effect, regulating many support policies for small and medium enterprises. Specifically:

• Support access to credit: establish a Credit Guarantee Fund to provide credit guarantees for businesses;
• Tax and accounting support: applied for a limited period of time at a corporate income tax rate lower than the normal tax rate applied to other businesses.
• Support for production premises: arrange land fund to form and develop industrial clusters, agricultural, forestry and fishery processing zones; Support rental prices for premises in industrial parks, high-tech zones, and industrial clusters in the area.
• Technology support; Support incubators, technical facilities, common working areas: support innovation and technology development; exemption or reduction of land rent, non-agricultural land use tax and corporate income tax.
• Support market expansion: establish product distribution chain.
• Information, consulting and legal support: access to information through the National Business Support Portal; Exemption or reduction of consulting costs when using a consultant’s services.
• Support for human resource development: exemption or reduction of costs for participating in training courses on business and corporate governance.

In particular, the Law also stipulates specific support policies for businesses converting from household businesses and innovative small and medium-sized startups.

3. Abolish a series of business conditions

Decree 08/2018/ND-CP has cut and reduced a series of business conditions in the fields of petroleum, tobacco, electricity, franchise, e-commerce, chemicals, industrial explosives, and food. For example:

• Abolish some conditions on petroleum production and trading;
• Abolish conditions for franchisees in commercial franchising activities;
• Remove the requirement to have a “website with a valid domain name and comply with regulations on information management on the Internet” in the Conditions for establishing a sales e-commerce website and a website providing e-commerce services.

Decree 08 takes effect from January 15, 2018.

4. Conditions for granting new business licenses to foreign investors

Decree 09/2018/ND-CP, effective from January 15, 2018, has innovative regulations on conditions for granting business licenses to buy and sell goods to foreign investors. Specifically:

• Expanding subjects eligible for business licenses are foreign investors who are not part of countries or territories participating in international treaties of which Vietnam is a member (in the old regulations, it was only for foreign investors belonging to countries participating in international treaties of which Vietnam is a member).
• Expanding the subjects of goods and services that are granted business licenses to goods and services that have not yet been committed to international treaties to which Vietnam is a member (the old regulations were only for goods and services for which Vietnam has committed to open the market)

For each of the above cases, foreign investors must meet certain conditions and criteria.