Vietnam Regulatory Brief: Updated Vehicle Codes, Netflix in Hot Water, and What to Make of Loosening Gambling Restrictions

New law on fire extinguishers in vehicles opposed

Vietnamese authorities issued a new law which states that fire extinguishers must be installed in vehicles with four to nine seats effective 6 January. Vehicles that do not comply with the order will be fined US $13-22. In addition, as per regulations outlined in Circular 57, the fire extinguishers must be checked and maintained every six months.

As of May 2015, there were more than 950,000 such vehicles which would fall under the new law. However, the Ministry of Public Security has ordered the police not to fine vehicles until further discussions. The authority said that several factors have to be considered before fines are imposed, though it will allow the police to educate drivers about the new regulation.

The ministry further stated the new regulation will affect a large number of people and will take into account questions and feedback from people and will then take steps on enforcement. The authorities have reinforced that the decree has been issued to ensure the safety of people in vehicles and to minimize any damage.

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Authorities question legality of Netflix in Vietnam

On January 6th, Internet television network Netflix launched it services in more than 130 countries including Vietnam. In response, the Vietnamese Ministry of Information and Communications has stated that the service needs to obtain permission before operating in the country. The US based company offers on-demand video and media services to TVs; however, the ministry considers it as a pay TV provider which requires permission to operate.

Netflix will be required to get a license and ensure that the content it provides complies with Vietnamese law. As per current regulation, a pay TV provider is defined as “an entity that is licensed to operate as a media agency in Vietnam’s TV sector.” The ministry’s inspector Ngo Huy Toan stated that if Netflix does not comply, regulatory measures including technical intervention will be applied to stop its services in the country.

Toan also stated that all foreign firms that do not register their business in Vietnam are violating laws. At present, the government allows foreign firms to partner with Vietnamese companies to provide pay TV services. Such firms must register their business and pay taxes in the country. In addition, since Netflix provides services across the border it has to follow Decree No 72 which states that “.Foreign organizations, enterprises, and individuals that provide public information across the border that is accessed by Vietnamese people or through people in Vietnam must comply with Vietnam’s law”. Netflix is likely to face regulatory hurdles in the foreseeable future in the country where such content is heavily regulated. It will have to make changes, possibly to its business model, if its wants to continue.

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Proposed Casino Bill likely to Attract Investment

New changes are being planned to a Casino bill which is expected to be officially issued in March. While the full text has not been made public, a draft is being internally circulated among experts and other state institutions of the country. Media sources have provided some information about the draft. For instance, it is likely that Vietnamese citizens over 21 years old, are able to show evidence of financial stability and afford the entrance free at casinos will be allowed to gamble. Currently, Vietnamese nationals are not allowed to gamble. If this change is made, it will also bode well for foreign cruise ships that were recently allowed to keep their casinos and duty-free shops open when they arrive at ports in the country. Another proposed change is that minimum investment required in a casino could be reduced to half to US $2 billion from the current $4 billion. Further ideas are also being proposed for the government to consider. However, if the aforementioned changes are made to the Casino bill, it’s likely to attract foreign investment and make gambling for locals and foreigners alike.

Import and Export: A Guide to Trade in Vietnam
In this issue of Vietnam Briefing Magazine, we provide you with a clear understanding of the current business trends related to trade in Vietnam, as well as explaining how to set up your trading business in the country. We also attempt to give perspective on what will be Vietnam’s place in the Association of Southeast Asian Nations (ASEAN) in 2015, and look at some of the country’s key import and export regulations.

Using Vietnam’s Free Trade & Double Tax Agreements 
In this issue of Vietnam Briefing we explore how Vietnam’s Free Trade Agreements – and especially those via its membership in ASEAN – will affect foreign investment into Vietnam. We also go a step further and examine the specific, bilateral Double Tax Agreements that Vietnam has enacted, and how these can be further used to minimize profits and withholding taxes that would otherwise be levied upon foreign investors.

Developing Your Sourcing Strategy for Vietnam In this issue of Vietnam Briefing Magazine, we outline the various sourcing models available for foreign investors – representative offices, service companies and trading companies – and discuss how to decide which structure best suits the sourcing needs of your business.

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