LEGAL UPDATES VOL.07 (JULY 2021)

LEGAL UPDATES VOL.07
JULY, 2021

Dear Value Clients and Partners,

ADK Lawyers would like to introduce to you the Vietnam Law Legal Updates Vol.07 (July 2021) with new legal provisions with notable contents as follows:

1. Resolution to support employees and employers facing difficulties due to the COVID-19 pandemic.

Resolution No. 68/NQ-CP issued by the Government and takes effect on July 1, 2021 on a number of policies to support employees and employers facing difficulties due to the Covid-19 pandemic, specifically,

(i) For employees working under the regime of labour contracts who have to stop working due to the COVID-19 pandemic are supported of VND 1,000,000/person when meeting the following conditions:

- Being suspended from work due to a dangerous disease according to Article 99.3 of Labour Code 2019 and having to undergo medical isolation or being in a blocked areas at the request of a state agency for 14 days or more, from May 1, 2021 to the end of December 31, 2021; and

- Participating in compulsory social insurance up to the time immediately before having to suspend working.

(ii) For employees who are working at enterprises, cooperatives, public non-business units that self-finance recurrent expenditures or investment and recurrent expenditures, people-founded and private educational institutions level of preschool, kindergarten, primary school, junior high school, high school, vocational education which are suspended from operation at the request of the State to prevent, and control the COVID-19 pandemic, with:

- The period of suspension, unpaid leave within the term of the labour contract is from 15 consecutive days or more, from May 1, 2021 to the end of December 31, 2021, and the starting time of the suspension, unpaid leave from May 1, 2021 to the end of December 31, 2021; and

- Participating in compulsory social insurance up to the time immediately before the suspension, unpaid leave.

The Government support for the above case as follows: From 15 consecutive days or more up to less than 01 month is VND 1,855,000/person; from 01 month or more is 3,710,000 VND/person.

(iii) For people who have to be treated for Covid 19 infection (F0) and people who have to undergo medical isolation (F1):

- Food allowance of VND 80,000/person per day for the person who have to be treated for covid-19 (F0), from April 27, 2021 to December 31, 2021, the support time is calculated to actual treatment time but for up to 45 days.

- Food allowance of VND 80,000/person per day for the person undergo medical isolation (F1) according to the decisions of the competent state agency, from April 27, 2021 to December 31 2021 with the maximum support period 21 days.

2. Guidance on the initial sale of shares and the management and use of proceeds from equitization of State-owned enterprises and one-member limited liability companies with 100% charter capital invested by the State-owned enterprises converted into joint-stock companies

Circular 32/2021/TT-BTC issued by the Ministry of Finance guiding the initial sale of shares, the management and use of proceeds from equitization involving of state-owned enterprises and one-member limited liability companies invested by State-owned enterprises with 100% charter capital converted into Joint-stock companies, effective on July 1, 2021.

2.1 Subjects of application

- Enterprises in which 100% charter capital is held by the State, including: Single-member limited liability companies with 100% charter capital held by the State, which are the parent companies of economic groups, the parent companies of state corporations, parent companies in the group of parent companies - subsidiaries; An independent single-member limited liability company with 100% charter capital held by the State;

- Single-member limited liability companies with 100% charter capital invested by a tier-I enterprise;

- Owner’s representative;

- Other agencies, organizations and individuals involved in the transformation of enterprises in which 100% charter capital is held by the State into Joint-stock companies.

2.2 Method initial share sale

(i) Auctioning method shall be applied in the following cases:

- Holding the public auction of shares, including the number of shares that employees, trade unions in enterprises refuse to buy and all of shares offered for sale according to the approved equitization plan that strategic investors do not subscribe for;

- Auctioning shares to the strategic investors in the event that there are two (02) strategic investors who meet the selection criteria to register to buy shares and the total number of shares by strategic investors buy more than the number of shares expected to be sold to them according to the approved equitization plan.

(ii) Direct agreement method shall be applied in the following cases:

- Selling shares to the strategic investors in the event that there are only one (01) strategic investor who subscribes for shares; or strategic investors subscribe for the number of shares equal to or smaller than the number of shares expected to be sold to them according to the approved equitization plan;

- Selling the number of shares not yet sold out to the investors as prescribed in Article 37.4 of the Decree No. 126/2017/ND-CP, Article 1.19 of the Decree No. 140/2020/ND-CP ;

- Selling shares to employees and trade unions.

(iii) The underwriting method shall be applied when selling the initial sale of shares of equitized enterprises;

(iv) The Book – Building method.

2.3 Execute time

Within four (04) months from the date on which the equitization plan is approved, the equitized enterprise must complete the sale of shares according to the approved method. In case the equitization plan is adjusted, the time limit for the equitized enterprise’s sale of shares shall start from the date on which the decision on adjustment of the equitization plan is approved by the authority having competence in granting approval.

Learn more about Circular 32/2021/TT-BTC.

We hope you found this brief legal update informative.

Best regards.

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