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  • Writer's picturePham Ba Thien

Noteworthy regulations and policies coming into effect in May 2024

Minh Thien Law is pleased to present our legal update summarizing some regulations and legal policies effective in May that you may be interested in.

For more information, please contact us at:

▪ Email: info@minhthienlaw.com  Phone number: 0913 865 900 ; 09 77 33 77 99

▪ Address: Floor 19, Room 1901, Saigon Trade Center, No. 37 Ton Duc Thang, Ben Nghe Ward, District 1, Ho Chi Minh City

A. NEW REGULATIONS ON THE MECHANISM FOR ADJUSTING THE AVERAGE RETAIL ELECTRICITY PRICE

Decision 05/2024/QĐ-TTg dated 26 March 2024, on the mechanism for adjusting the average retail electricity price, signed by the Deputy Prime Minister of the Government, will take effect on 15 May 2024 ("Decision 05"). According to this, the adjustment of the retail electricity price must adhere to the following principles:


1. Principle of annual adjustment of the average electricity sale price

Annually, after reviewing the production and business costs of electricity for year N-2 by Vietnam Electricity (“EVN”), the average electricity price for year N is considered and adjusted based on objective fluctuations in input parameters across all stages (electricity generation, transmission, distribution - retail, system operation and electricity market transaction management, auxiliary system services and industry management and administration) and the allocation of other costs not yet included in the electricity price ("Current Average Electricity Sale Price").


2. Mechanism for adjusting the average electricity sale price annually

  • If the calculated average electricity sale price decreases by 1% or more compared to the Current Average Electricity Sale Price, EVN is responsible for reducing the average electricity sale price accordingly.

  • If the average electricity sale price needs to be adjusted up by 3% to under 5% compared to the Current Average Electricity Sale Price, EVN decides to adjust the average electricity sale price accordingly.

  • If the average electricity sale price needs to be adjusted up by 5% to under 10% compared to the Current Average Electricity Sale Price, EVN is allowed to adjust the average electricity sale price accordingly after reporting and obtaining approval from the Ministry of Industry and Trade.

  • If the average electricity sale price needs to be adjusted up by 10% or more compared to the Current Average Electricity Sale Price or affects the macroeconomic situation, based on the electricity pricing proposal submitted by EVN, the Ministry of Industry and Trade takes the lead in inspecting, reviewing, and soliciting opinions from the Ministry of Finance and other ministries and agencies. Based on the feedback from the Ministry of Finance and other ministries and agencies, the Ministry of Industry and Trade consolidates and reports to the Prime Minister for consideration and opinion. Accordingly, EVN is only allowed to adjust the average electricity sale price once all related approvals have been obtained from the Prime Minister and relevant ministries.


3. Minimum duration for adjusting the average electricity sale price

The minimum time for adjusting the average electricity sale price as stipulated in Decision 05 has been reduced from 06 months to 03 months compared to the current regulations in Decision 24/2017/QĐ-TTg.


B. NEW REGULATIONS ON INDUSTRIAL CLUSTERS


Decree 32/2024/ND-CP dated 15 March 2024, on the management and development of industrial clusters, officially took effect on 01 May 2024 ("Decree 32"). Specifically, it provides regulations on the development plans for industrial clusters; the establishment and expansion of industrial clusters; investment in construction of technical infrastructure and production and business activities within industrial clusters; incentive policies and support for the development of industrial clusters and state management of industrial clusters.


Some notable regulations in Decree 32 include:

1. Conditions for establishing industrial clusters

  • Included in the approved list of industrial clusters in the provincial area; having land funds compatible with the land use planning at the district level;

  • Having businesses, cooperatives, or organizations with legal status and capacity to invest in the construction of technical infrastructure proposing to be the main investor in constructing the technical infrastructure of the industrial cluster;

  • In cases where an industrial cluster has already been established in the district area, the average fill rate of the industrial clusters must be over 50%, or the total industrial land fund not yet leased from the industrial clusters must not exceed 100 hectares.


2. Conditions for expanding industrial clusters

  • The total area of the industrial cluster after expansion must not exceed 75 hectares; having land funds compatible with the land use planning at the district level;

  • Having businesses, cooperatives, or organizations with legal status and capacity to invest in the construction of technical infrastructure proposing to be the main investor in constructing the technical infrastructure of the industrial cluster;

  • Achieving a fill rate of at least 60% or the demand for industrial land lease within the industrial cluster exceeding the current industrial land area of the cluster;

  • Completion of construction and utilization of essential shared technical infrastructure facilities (including internal roads, water supply, wastewater collection, and treatment) according to the approved detailed plan.


3. Industries and business lines encouraged to invest and relocate to industrial clusters

  • Agricultural processing and manufacturing industries; mechanical industry; supporting industries; textile, garment, and footwear industries;

  • Information technology and telecommunications industry, electronics industry; smart energy industry; digital technology, automation, high-end equipment, new materials, biotechnology industries;

  • Industrial and handicraft sectors at the local level that need to be preserved and developed; warehousing services, packaging, goods transportation, repair and maintenance of industrial machinery and equipment, and other services directly supporting industrial and handicraft production of the locality with a total area not exceeding 10% of the industrial cluster area;

  • Other industrial sectors with high technology, clean, low energy consumption, high added value, sustainable development;

  • Industrial and handicraft production establishments causing pollution or at risk of pollution in craft villages and residential areas are encouraged to relocate to industrial clusters.


4. Investment incentives

According to Decree 32, the 2020 Investment Law, and other relevant guiding documents, industrial clusters are located in areas with difficult socio-economic conditions, whereby:

  • Investment in the construction of technical infrastructure of industrial clusters is a particularly incentivized industry;

  • The application of incentives for investment projects in constructing technical infrastructure of industrial clusters, and production and business investment projects within industrial clusters is carried out according to the regulations of land law, tax law, credit law, and other relevant legal regulations.

In cases where the law stipulates different levels of incentives, the highest level of incentive shall be applied.


C. ESTABLISHMENT OF BEN CAT CITY IN BINH DUONG PROVINCE, AND GO CONG CITY IN TIEN GIANG PROVINCE

Resolution 1012/NQ-UBTVQH15 on the establishment of An Dien Ward and An Tay Ward within Ben Cat town, and the establishment of Ben Cat City in Binh Duong Province, along with Resolution 1013/NQ-UBTVQH15 on the arrangement and establishment of wards within Go Cong town and the establishment of Go Cong City in Tien Giang Province, officially took effect on 01 May 2024.


Accordingly, from 01 May 2024, the Government and related State authorities will be responsible for implementing these Resolutions to establish Ben Cat City in Binh Duong Province, and Go Cong City in Tien Giang Province with the following basic information:

1. Ben Cat City

  • Is established based on Ben Cat town, covering an area of 234.35 km² with a population of approximately 364,600, comprising 7 wards: An Dien, An Tay, Chanh Phu Hoa, Hoa Loi, My Phuoc, Tan Đinh, Thoi Hoa, and Phu An commune.

  • Ben Cat City will border Tan Uyen City, Thu Dau Mot City, Bau Bang District, Bac Tan Uyen District, Dau Tieng District, and Ho Chi Minh City.


2. Go Cong City

  • Is established based on Go Cong town, spanning an area of 101.69 km² with a population of 152,000, consisting of 7 wards: Ward 1, 2, 5, Long Chanh, Long Hoa, Long Hung, Long Thuan, and 3 communes: Binh Đong, Binh Xuan, Tan Trung.

  • Go Cong City will border Go Cong Đong District, Go Cong Tay District, and Long An Province.


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