A. TELECOMMUNICATIONS
1. LAW ON TELECOMMUNICATIONS No. 24/2023/QH15 dated 24 November 2023 (“2023 Law on Telecommunications”)
On 24 November 2023, the National Assembly passed the 2023 Law on Telecommunications, which expands the regulatory scope to include several new services such as data center services, cloud computing services, and basic telecommunications services on the internet. This expansion aims to meet the demands arising from the digital transformation trend and to establish a “legal framework for next-generation telecommunications services”
Regulation of data center and cloud computing services
The 2023 Law on Telecommunications has established a new legal framework to regulate the activities of businesses providing data center and cloud computing services. Notably, investments in these service types will not be restricted by foreign ownership limits. This is a commendable “achievement” in implementing preferential policies and investment support for foreign investors, aimed at attracting capital as well as enhancing cooperative relationships with countries in the region and globally.
However, in addition to fulfilling obligations regarding service quality disclosure and compliance with applicable technical standards, data center and cloud computing service providers are responsible for preventing unauthorized access to and exploitation of information and data. They must also take necessary measures to prevent such illegal activities. It is evident that despite the focus on expanding investment and legalizing next-generation telecommunications services, the legal framework for information and data protection remains a priority.
Enhancing information security mechanisms and data protection
As previously mentioned, Vietnam’s legal framework for data protection has significantly improved. Accordingly, the 2023 Law on Telecommunications prohibits telecommunications service providers from disclosing personal information related to users, such as names, addresses, and subscription numbers, unless there is user consent or at the request from the competent authority. This regulation aims to effectively implement data security policies in cyberspace, contributing to the comprehensive digital transformation that Vietnam is striving to achieve.
Public-private Telecommunications connection and infrastructure sharing
Based on non-discriminatory principles across types of operations, the 2023 Law on Telecommunications permits private telecommunications networks to connect to public telecommunications networks, provided that technical standards and regulations are met.
Additionally, the 2023 Law on Telecommunications allows for the construction and installation of telecommunications facilities on public assets, promoting collaborative use of shared infrastructure among telecommunications projects and other technical initiatives. It also provides for infrastructure sharing between telecommunications companies and authorities, organizations directly serving national defense and security on the basis of ensuring the lawful rights and interests of all parties involved are protected.
Establishing a legal framework for next-generation telecommunications services is a positive measure that not only enhances the attractiveness of foreign investment but also ensures sustainable development amid the rapidly advancing digital industrial revolution.
B. COMMERCE – CONSUMERISM
2. Law on Protection of Consumers’ Rights No. 19/2023/QH15 enacted by the National Assembly on 20 June 2023 (“Law on PCR”)
The Law on PCR, taking effect from July 01, 2024, has introduced numerous new regulations aimed at “establishing a fair and transparent market while enhancing consumer protection”.
In this spirit, the Law on PCR imposes relatively stringent regulations to govern specific types of transactions, particularly remote transactions, in response to the demands of an increasingly popular online shopping market.
Moreover, the Law on PCR for the first time addresses the responsibilities of influencers in providing information about products and services. Influencers are defined as experts, reputable individuals, or those who attract public attention in specific fields; due to their significant impact on consumers’ purchasing decisions, they are required to be transparent and must notify consumers in advance if they are sponsored to provide product information.
Overall, the Law on PCR has introduced many new regulations that not only enhance the level of consumer protection but also gradually equip consumers with knowledge and skills to foster their proactive engagement. This aims to ensure a balance in civil transactions between consumers and businesses, thereby promoting the stable and sustainable development of society.
C. TAXES – FEES
3. Decree No. 72/2024/ND-CP on value-added tax reduction pursuant to Resolution No. 142/2024/QH15 enacted by the National Assembly on 30 June 2024 (“Decree 72”)
The regulations for reducing value-added tax (“VAT”) in Decree 72 reflect a continuation of the provisions established in Decree No. 94/2023/ND-CP dated 28 December 2023. Accordingly, goods and services currently subject to a 10% tax rate will be reduced to 8% from 01 July to 31 December 2024, with exceptions for sectors such as finance, banking, and real estate.
In general, the ongoing implementation of the VAT reduction policy during the last six months of 2024 aims to stabilize supply and demand for goods, support consumers, and enhance the competitiveness of domestic goods and services.
D. FINANCE – BANKING
4. Circular No. 11/2024/TT-NHNN on amending and supplementing certain provisions of Circular No. 16/2021/TT-NHNN regarding corporate bond trading of credit institutions and branches of foreign banks issued by the Governor of the State Bank of Vietnam dated 28 June 2024 (“Circular 11”)
In essence, Circular 16 was issued at the time the 2010 Law on Credit Institutions was still in effect. However, the 2024 Law on Credit Institutions has since been enacted to replace it. Consequently, the issuance of Circular 11 as a replacement is essential to refine the legal framework governing credit institutions’ activities in buying and selling corporate bonds in accordance with the provisions of the 2024 Law on Credit Institutions.
Accordingly, Circular 11 has added and abolished certain principles regarding the buying and selling of corporate bonds, specifically:
- Additional principle: The bond-issuing enterprise is obligated to provide credit institutions with information about related parties before the credit institutions purchase corporate bonds. Furthermore, credit institutions must utilize cashless payment services when buying or selling corporate bonds to align with the country’s digital transformation process.
- Abolition of principles limiting credit institutions in purchasing unlisted bonds issued in the same lot or issuance round as unlisted corporate bonds they have previously sold.
At the same time, Circular 11 has amended the regulations regarding the management of the total balance of corporate bond purchases. Specifically, the total balance of corporate bonds purchased, including those issued by the enterprise and related parties, will be counted towards the total credit limit for a single customer and its related parties, ensuring safety in the operations of credit institutions.
Particularly, in light of the significant decline in the corporate bond market following the violations by Tan Hoang Minh and Van Thinh Phat in 2021 and 2022, Circular 11 has added responsibilities for credit institutions when purchasing corporate bonds to further enhance transparency in the corporate bond market. Specifically, if a bond-issuing enterprise is found to be misusing funds raised from bond issuance, the credit institution must request that the enterprise repurchase the bonds prematurely. If the enterprise fails to comply, the credit institution is entitled to recover both the principal and interest on the bonds. In summary, Circular 11 has been issued with the hope of promoting the development of the corporate bond market, contributing to providing an additional investment tool and product to attract investment while still protecting investors participating in this relatively high-risk market.