Vietnam News Brief: Information Security, Venture Capital Regulations, and New Tariff on Steel Imports

Information Security Law to Take Effect

Vietnam’s Information Security Law will take effect on July 1, 2016. Passed by the National Assembly in November 2015, the law is comprehensive and consolidates previous data-security regulations that were scattered across different laws such as the Law on Information Technology and Law on Telecommunications. The Information Security Law includes prohibited acts such as collecting, using, distributing, and illegally trading personal information of other persons, or taking advantage of security flaws in information systems to collect personal information. Officials at the Department of Information and Communications have stated that cyber-attacks have increased and pose a significant risk, underscoring the importance of this legislation. Sources of cyber-attacks have come from China, Taiwan, US, Russia, India, and inside Vietnam.

Cybercriminals mainly target small to medium size businesses as well as individuals in attempts to steal financial information or target social network users for phishing and fraud purposes. In addition, the state run websites of planning and investment, health, and justice in Ho Chi Minh City were also targeted; online portals were hit 2.5 million times. Authorities hope the new law will provide a legal framework on information security and protect the rights and interest of organizations engaged in security. The law is a move in the right direction as it aims to protect companies and individuals from cybercriminals.

RELATED: Dezan Shira & Associates’ Corporate Establishment Services

New Law on Venture Capital Likely

In a boost to the start-up ecosystem in the country, authorities are working on an official venture capital (VC) policy. The law is likely be compiled from the existing security laws to prevent duplication. The proposal was put forward by the local technology ministry. Changes in the law will include tax incentives and a proper legal environment to attract bigger international enterprises into the country. This is expected to further boost venture inflows for domestic startups. VC firms have complained that while the county’s start-up environment is progressing, the lack of regulatory framework, a smaller market size, and tough exit environment have deterred VC firms from entering.

Analysts have stated that many funds – including private equity and investment funds – are domiciled in other countries, such as Singapore, which have a preferential taxation system. The Ministry of Planning and Investment has taken steps to institute some reforms – such as new regulations to promote the development of technologies with small businesses – as part of the upcoming law on supporting small and medium sized companies. Foreign VC firms should watch this space as the new law is likely to benefit them.

 RELATED: Public Private Partnerships in Vietnam – Part 1: Industry and Contract Structure

New Tariff on Steel Imports

Imported steel products will be subject to additional tariffs as announced by the Ministry of Industry and Trade on March 8. The ministry will impose duties of 23.3 percent on steel billets and 14.2 percent on long steel products for a maximum of 200 days as stipulated in Decree No 762/QD-BCT. However, the duties will not be apply to Cambodia and Indonesia whose steel exports are less than 3 percent into Vietnam. The Vietnam Competition Authority (VCA) stated that it will prevent products imported from China, Hong Kong, and South Korea from being dumped in the local market.

Authorities have issued such tariffs to protect the local steel industry. Government officials say that the recent surge in steel imports has damaged the local production of steel billets and long steel products. Local steel producers have also complained that imports from other countries are hurting their profits. In addition, the Ministry of Industry and Trade also decided to carry out an anti-dumping investigation on coated steel sheets imported from China and South Korea, which is expected to be completed in a year. Collectively, these policies are likely to discourage foreign steel companies from exporting and investing in the country.

Annual Audit and Compliance in Vietnam 2016
In this issue of Vietnam Briefing, we address pressing changes to audit procedures in 2016, and provide guidance on how to ensure that compliance tasks are completed in an efficient and effective manner. We highlight the continued convergence of VAS with IFRS, discuss the emergence of e-filing, and provide step-by-step instructions on audit and compliance procedures for Foreign Owned Enterprises (FOEs) as well as Representative Offices (ROs).

Navigating the Vietnam Supply Chain
In this edition of Vietnam Briefing, we discuss the advantages of the Vietnamese market over its regional competition and highlight where and how to implement successful investment projects. We examine tariff reduction schedules within the ACFTA and TPP, highlight considerations with regard to rules of origin, and outline the benefits of investing in Vietnam’s growing economic zones. Finally, we provide expert insight into the issues surrounding the creation of 100 percent Foreign Owned Enterprise in Vietnam.

Tax, Accounting and Audit in Vietnam 2016 (2nd Edition)
This edition of Tax, Accounting, and Audit in Vietnam, updated for 2016, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who must navigate Vietnam’s complex tax and accounting landscape in order to effectively manage and strategically plan their Vietnam operations.

• Previous Article Public Private Partnerships in Vietnam – Part 1: Industry and Contract Structures
• Next Article Public Private Partnerships in Vietnam – Part 2: The Tendering Process