In April 2024, Vietnam’s Ministry of Finance published a draft circular concerning securities transactions, clearing and settlement of securities transactions, activities of securities companies, and information disclosure on the securities market (the “Draft Circular”) for public feedback. The Draft Circular, if adopted, will amend several regulations impacting public companies and the securities market. Some of the more notable amendments are discussed below. Relaxing Pre-Funding Requirement for Foreign Institutional Investors To place orders to purchase securities, investors are currently required to have sufficient cash in their securities trading accounts to pay 100% of the cost of the transaction, except in cases of: Margin trading (applicable to Vietnamese investors only); and Transactions in which there is a settlement guarantee or confirmation from the custodian bank on accepting the settlement request. The Draft Circular allows foreign institutional investors (“FIIs”) to purchase securities without 100% pre-funding their securities trading accounts, based on a signed agreement with a securities company. However, the State Securities Commission of Vietnam (“SSC”) has the right to temporarily reinstate the 100% pre-funding requirement if measures for securities market stabilization are required. The Draft Circular also specifies that securities companies must (i) assess the capacity of FIIs to determine the pre-funding requirement under relevant agreements signed between them, and (ii) be responsible to settle the shortfall of a securities purchase order through their proprietary trading account(s) if the FIIs are unable to fully pay for such securities purchase order, except in certain circumstances. Further, a securities company cannot directly exempt or authorize other entities to exempt an FII from the 100% pre-funding requirement if the FII purchases securities of (i) such securities company, (ii) a company in which such securities company is a majority shareholder, or (iii) the parent company of such securities company. The 100% pre-funding requirement for FIIs

Vietnam’s new Law on Credit Institutions will take effect on July 1, 2024, replacing the current Law on Credit Institutions issued in 2010, and aims to strengthen banking operations and enhance transparency in this sector.

On January 18, 2024, Vietnam’s National Assembly passed a new Land Law (“Land Law 2024”) that is scheduled to take effect on January 1, 2025, replacing the current Land Law 2013. To mitigate challenges faced by the real estate market, in late May 2024, the government proposed amendments to the Land Law that would move the effective date up five months, to August 1, 2024, pending approval by the National Assembly. One of the key sectors to be impacted by the Land Law 2024 is the energy sector, which requires large land areas for power plants and infrastructure, especially given Vietnam’s 2050 net zero emissions commitment. Below are highlights of how the new Land Law 2024 will affect Vietnam’s energy sector. Annual payment of land rental Under the Land Law 2013, investors implementing energy projects (e.g., solar power projects) are entitled to choose to lease land with either (i) an annual rental payment or (ii) a single upfront payment for the entire term of use. Under the Land Law 2024, these investors are only allowed to use land in the form of an annual rental payment. As the annual land rental is calculated in five-year cycles, based on the land price table decided by the state, this new restriction means that investors in energy projects will face an additional risk of a sudden increase in land rental, disrupting their financial planning. Investors using land sites leased with annual rental payments are also not allowed to mortgage their land-use rights, but can only mortgage assets attached to the land, at credit institutions licensed to operate in Vietnam. Accordingly, this may affect the ability of energy projects to obtain financing during the development stage, because they no longer have assets that can be mortgaged. Obtaining land Under the Land Law 2024,

Tilleke & Gibbins’ project finance specialists in Vietnam have contributed the Vietnam chapter to Project Finance 2024 from The Legal 500. The guide, which is part of The Legal 500’s Country Comparative Guides series, furnishes investors and businesses with key information related to project finance in jurisdictions around the world. Each Q&A-style chapter provides in-depth details on the legal regimes affecting a wide range of project financing topics, including: Ownership structures and corporate governance; Security interests, regimes, and enforcement; Regulatory requirements and consents; Foreign exchange considerations; Environmental, social, and governance (ESG) issues; Public-private partnerships; Foreign judgments; Tax considerations; Common funding structures; and Insurance law principles. Tilleke & Gibbins also authored the Thailand chapter of Project Finance 2024. The Vietnam chapter of the guide is available as a PDF through the button below, courtesy of The Legal 500. The full guide is accessible for free on The Legal 500 website.