According to Dau Anh Tuan (photo), Head of the Legal Department, Vietnam Chamber of Commerce and Industry (VCCI), the Law on Enterprises 2020 and the Law on Investment 2020 are about to take effect, but we must await implementation guidance documents to confirm whether these two laws have a big impact in practice.

Dau Anh Tuan, Head of Legal Department,
Vietnam Chamber of Commerce and Industry (VCCI) 

What has the Law on Enterprises with fouramendments changed positively for the business community up to now?

The Law on Enterprise 2020 also inherits the spirit of the previous Law on Enterprise, which has had many positive changes. For entering the market, this Law on Enterprises simplifiesprocedures on entering the market, especially creating a foundation for the process of market entry to be carried out on the interconnected network, linking different groups.

The second change andthe most important one of this Law on Enterprises is to help improve quality of corporate management. If the previous Laws on Enterprise mainly focused on removing barriers to enter market, the Law on Enterprise 2020 focused on strengthening corporate management. For example, this Law on Enterprises has increased the rights of minority shareholders. Previously, 10% of minority shareholders had the right to request documents and records in corporate management. But now this ratio has been lowered to 5%, increasing power for low-capital shareholders, creating an incentive to protect shareholders with small capital, helping these shareholders have more confidence to contribute more money and capital in the company.

In general, the Law on Enterprises 2020 may not create major changes in administrative procedure reform such as the Law on Enterprises 1999, 2005 or 2014, but this Law on Enterprises is towardsthe direction of further consolidation, continuing to complete corporate management framework, helping corporate management in Vietnam come in line with international standards.

How do you expect the impacts from the Law on Enterprise 2020 and the Law on Investment 2020 to be felt?

With each change of the Law on Enterprise andLaw on Investment, the business community andinvestors expect a stronger change in the advantages of the business and investment environment. I also have high expectations for the implementation of these two laws. However, until now, the Law on Enterprises 2020 and Law on Investment 2020 have been passed by the National Assembly and are setto take effect from January 1, 2021, but documents anddecrees guiding the Law on Enterprises, the Law on Investment have not been approved.

Meanwhile, guiding documents are very important, showing the continuation in the spirit of the Law on Enterprises, the Law on Investment 2020 or not. The Law on Investment 2020 offers many very good policies and procedures for investors, but whether the actual process, actual documents andactual settlement steps are in line with this spirit is important. The quality of the documents guiding the implementation of these two laws confirms whether these laws have a big impact in practice.

The promulgation of implementation guidance documents still remains in the context of many conflicts and overlaps among legal documents related to business investment procedures. But this Law on Investment has contributed to removing many overlaps. Per our statistics, at least 10 overlaps in the VCCI report sent to the National Assembly have been resolved in this Law on Investment. I hope the implementation of the Law on Enterprises and the Law on Investment together with the upcoming Law on Construction will minimize the overlap, conflicts of legal procedures and procedures in real projects.

By 2021, what should enterprises pay attention to implement these twonew laws?

For enterprises, the most important thing is they must grasp the new spirit of these two laws, to know important changes and to comply with the provisions of the law. Especially, investors who are in progress of investment projects must pay attention to the transfer among two legal systems. Because,inmy experience, for projects "related to" two laws, if investors and enterprises do not pay attention, they will face risks and legal problems.

The Ministry of Planning and Investment has consulted the draft decree detailing the implementation of some articles of the Law on Investment 2020. Many enterprises, lawyers, managers and experts have evaluated highly thedraft decree in solving difficulties andthere are many improvements to reduce administrative procedures for investors, especially handling problems for investors in projects in the transition period, projects under bidding or auction of land use rights but investor selection resultshavenot yet been obtained.

Along with that, the Ministry of Planning and Investment is collecting comments on a draft Decree detailing and guiding the implementation of some articles of the Law on Enterprises 2020 according to the summary order and procedures. The draft includes 16 articles and is not divided into chapters, sections, guidelines on social enterprises, State-owned enterprises, parent companies and subsidiaries, the control board, controller, and State management for enterprises. Along with that, related agencies have also issued documents to collect comments for related circulars such as: enterprise registration, information disclosure of state-owned enterprises.