Asia Counsel Insights provide an overview of the key trending legal and business issues in Vietnam and how they may impact your business. Please enjoy your read.

Deal Updates:

• Assisted the project owner with the divestment of a 50MW solar power project in Ninh Thuan Province.

• Assisted a ride sharing operator in raising a series seed round.

• Assisted a provider of online education services in its bridge funding round.

Public Private Partnerships

The Vietnamese Government has proposed a draft law to supplement Decree No 63/2018/ND-CP on PPP investment. The draft law will permit PPP projects in a wider range of sectors, allow for greater assumption of risk by the State, and set the minimum investment amount to US$4.4 million for healthcare and education projects in remote and extremely disadvantaged areas, and US$8.8 million in other sectors and areas.

Investors in PPP projects will be required to have at least 15% equity, and the projects must have a single purpose. Contracting state agencies will be permitted to guarantee certain levels of project revenue and foreign exchange balance.

If passed, this new law will promote greater investment in Vietnamese infrastructure projects. The World Bank estimates that Vietnam will need US$25 billion of annual infrastructure investment in the coming years.

Competition Law

Last month we examined Decree 35/2020/ND-CP, detailing the regulations of provisions in the Competition Law (“Decree 35”) and focused on when notifications are required in relation to a merger or economic concentration. In this edition, we focus on abuse of dominant position and anti-competitive agreements.

Decree 35 sets the factors that the National Competition Commission will consider on whether an enterprise or a group of enterprises will have substantial market power. These factors include:

• the comparative market shares of enterprises in the relevant market.

• financial strength including access to capital, number of employees, production scale and distribution network

• barriers to market entry including legal and financial barriers, initial costs, consumption habits, business practice and infrastructure access.

• Ability to switch sources of supply and demand to other relevant goods or services including the costs and time for consumers to switch to an alternative.

Decree 35 also details the factors the NCC will use to assess any agreement in restraint of trade that will have a substantial anti competitive effect on the market. The decree elaborates on the list of factors that already appear in
Article 13 of the 2018 Law on Competition.

Decree 35 also provides that an agreement is deemed not to have any significant restraint of trade include (a) an agreement between enterprises in the same relevant market but their combined market share is below 5%; and (b) any vertical restraint of trade agreements whereby the enterprises’ market share in the relevant market is below 15%.

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