The changes in Vietnam's regulations on Work Permit for foreign labours

Foreign labours working in Vietnam are increasing rapidly, from 12,602 people in 2004 to nearly 84,000 in 2019. The regulations of the country on Work Permit (WP) have been changed over time to both simplize the procedures and tackle the "illegal" working in Vietnam by some foreigners. This article shall illustrate on how the regulations on WP have been modified from 2013 to 2020.

Vietnam intends to closely supervise FDI projects’ progress

A draft version for a new decree intended to replace the current Decree on supervising and evaluating investment (No. 113/2009/ND-CP) has been publicized by Vietnam Ministry of Planning and Investment to obtain public opinions. What’s new in the draft? The intended new decree shall not only govern state-owned investment as previously but also cover the FDI and PPP sectors also. If approved and passed, the new decree would be an import legal instrument that foreign investors in Vietnam shall have to pay attention to.

What's new in Vietnam's Law on Enterprises 2014

The new Law on Enterprises (2014) was passed by the National Assembly in November 2014 and shall be effective as of 1^st July 2015. New and existing foreign investors in Vietnam may be curious to have a look at what’s new in the Law and how the regulatory changes shall affect their business operations in Vietnam. A news article from VCCI has noted major legal updates to come into effect in the next few months.

The new law is said to provide just a general frame governing the operations of enterprises; meanwhile it seems to let enterprises to decide many details of how to organize themselves and operate accordingly.

SOE equalization to fuel M&A activity

Experts forecast equitizing hundreds of State-owned enterprises (SOEs) between now and next year as ordered by the Government will lead to stronger merger and acquisition (M&A) activity in Vietnam, the Saigon Times Daily reported on August 12.

The M&A activity is also expected to accelerated by the fact that State business groups and corporations required to divest from non-core business areas (mostly including banking, real estate and securities investments) to focus on their respective core industries.  Thanks to that, SOEs will provide the market with a huge amount of capital via their divestments of non-core investments and equitation, and these are great opportunities for investors.

Sam Yoshida, senior managing director of Recof, an M&A consulting firm in Japan, was cited by the Saigon Daily as saying that more investors from this Northeastern Asian country in are keen on the Vietnamese market thanks to low labour cost, a plentiful supply of labour, political stability and great potential for growth.

It is expected that the target for 432 SOEs to go public by the end of 2015 is possible as the pace of SOE equalization in the past seven months of this year was fast, according to the Steering Committee for Enterprise Reform and Development. In the January-July period, State corporations and groups divested a total of 2.975 trillion VND, three times higher than that of last year, but the divestment process remained slow. There have been 76 enterprises restructured in the year to date, with 55 equitized, two dissolved, one sold, 15 merged and three filing for bankruptcy.

As of last month, the Prime Minister had approved the restructuring plans of 20 State groups and corporations, including Vietnam National Textile and Garment Group (Vinatex) which is scheduled to offer its initial public offering (IPO) on the Hochiminh Stock Exchange (HOSE) in September this year.

According to Vinatex’s equalization plan approved by the Government, the group has total chartered capital of 5 trillion VND. After the group goes public, the State will retain a 51% stake while 24% will be offered to strategic investors, 24.4% put up for auction and 0.6% sold to employees.

Another State corporation, Vietnam Airlines, is proceeding with a plan to launch an IPO later this year and sell shares to strategic investors around the end of this year. According to Decision by Minister of Transport, the value of holding company Vietnam Airlines was more than 57.1 trillion VND (over 2.7 billion USD) as of March 31 last year, with State capital making up more than 10.5 trillion VND. Vietnam Airlines wants to sell 25 percent of its chartered capital to investors at the IPO. Later, the State shares at this corporation will gradually lower to 65%.

Compiled from VNA & Saigon Daily