The year 2022 marks the time when Vietnam’s economy recovers from the Covid-19 pandemic, and bright spots are preferential policies and support for businesses, including foreign direct invested (“FDI”) enterprises on taxes, fees, and other supporting policies. From that, FDI enterprises have made a comeback and are on the way to recovery after the extremely difficult years of the Covid-19 pandemic.
Following 2022, in order to support FDI enterprises in Vietnam, the Government has issued new policies that will take effect in early 2023 to attract investment capital and help FDI enterprises continue to recover and contribute to Vietnam.
First of all, it has to be mentioned that the Law on Insurance Business No. 08/2022/QH15 was passed on June 16, 2022, at the third session, of the XV National Assembly and took effect on January 1, 2023. Accordingly, if the previous Law on Insurance Business was not based on the specificity of each enterprise, the new taking-effect Law is evaluated to have changed the method of financial management allowing the determination of capital or management on the business according to the specific risks of each enterprise. Therefore, insurance businesses can have more strong corporate governance to develop and achieve a good financial position, especially FDI enterprises with poor financial and risk management have the opportunity to obtain a better adjustment on the management.
Moreover, having clear regulations on information disclosure helps the insurance market to be transparent and develop fairly. In addition, in compliance with WTO commitments and Free Trade Agreements that Vietnam has joined and signed, the Law on Insurance Business has added provisions thereby allowing foreign investors to own 100% of the charter capital in insurance companies. The Law on Insurance Business also minimizes unnecessary administrative procedures, especially abolishing the requirements to approve the opening, closing, and changing locations of branches and representative offices as well as replacing these requirements into the form of notification to the Ministry of Finance before these changes occur. This creates convenience for FDI enterprises when carrying out procedures with state agencies, avoiding inconsistencies in the application which used to lead to barriers and difficulties for insurers.
Another highlight of the Law on Insurance Business is to create favorable conditions for insurers to design and create insurance products with only having to register with the Ministry of Finance the method and basis for charging insurance premiums, life insurance, health insurance, and motor vehicle insurance (except compulsory insurance). Accordingly, this is one of the bright spots of the Law on Insurance Business to help insurance businesses, including FDI enterprises, avoid difficult barriers and increase their initiative to enhance their own insurance products with the purpose of developing their own business.
One of the other issues that foreign investors care about when investing in Vietnam is intellectual property rights. Accordingly, the revised Law on Intellectual Property was approved by the 15th National Assembly at its 3rd session, on June 16, 2022, and took effect from January 1, 2023, as well as the regulation on the protection of trademarks as sound signs took effect from January 14, 2022. In particular, the revised Law focuses on 7 major policies, including policies affecting the intellectual property rights of FDI enterprises in Vietnam.
Accordingly, the Law continues to improve the provisions related to procedures, and reduce the components of documents and the taken time when registering intellectual property rights, even in the case of automatic establishment of rights without having to register as in the area of copyright or related rights. This makes the registration process quicker, more convenient, and more transparent which encourage FDI enterprise to increase intellectual property rights registration in Vietnam. Accordingly, becoming more transparent and in compliance with international commitments is a solid basis for FDI enterprises when investing in Vietnam to protect, exploit and enforce their IP rights against acts of infringements and violations. Therefore, some notable provisions such as allowing organizations and individuals to register copyright or related rights through the online system; or adding regulations relating to simplifying industrial design descriptions when conducting the registration procedure.
Besides, in the previous time, goods such as fake goods and imitation goods entered much more into the Vietnamese market, causing detrimental damage to large, medium, and small enterprises, including FDI enterprises. Currently, with the newly revised Law on Intellectual Property, the customs authority is entitled to take the initiative in taking action if, during the course of the inspection, supervision, and control, they find clear grounds to suspect that exported or imported goods are illegal and counterfeit goods on intellectual property. This helps to improve the efficiency and feasibility of IP protection activities.
In general, Vietnam has joined and signed many international agreements such as CPTPP and EVFTA, whereby the amendment of the Intellectual Property Law with many additional regulations such as some contents related to sound trademark protection; termination of the validity of the protection title for the mark; or the rights and responsibilities of an enterprise providing intermediary services in the Internet and telecommunications network environment; the obligation to proactively suspend customs procedures for imported and exported goods suspected of being counterfeit intellectual property goods, etc. play an important role in ensuring strict and full enforcement of the international commitments to attract investment and support the protection of intellectual property assets of foreign investors when investing in Vietnam.
In addition to amending the two major laws mentioned above, in the spirit of the Law on Supporting Small and Medium Enterprises and Decree 55/2019/ND-CP on legal support for small and medium enterprises, in 2023, the Ministry of Transport develop a plan to provide legal assistance to these enterprises, including FDI enterprises, with the aim of: (i) Providing legal information to enterprises; disseminating and fostering business law knowledge for enterprise managers; fostering business legal skills and operations; (ii) Ensure the initiative and consistency in the direction, administration, implementation and coordination of effective implementation of legal support activities for enterprises; (iii) Fully support the basic content of current legal provisions and the application of legal documents in production and business activities; create fundamental changes in awareness, awareness and habit of complying with the law; limit risks and legal problems in business activities of enterprises. This can help small and medium-sized enterprises have a sustainable development orientation, obtain a deep knowledge of the legal regulations to avoid the risk of violations, and properly manage the business.
The above are outstanding policies in 2023 to support FDI enterprises, especially insurance enterprises and small and medium enterprises, in navigating and recovering in 2023 after the severe effects of the Covid-19 epidemic.