Vietnam Private Sector: Special Policies Planned for Development
08.07.2025
Vietnam has unveiled a series of resolutions aimed at fostering the growth of its private sector, focusing on tax incentives and streamlined administrative processes. The Ecovis Experts from ECOVIS AFA VIETNAM provide an outline, explaining what these changes mean for start-ups and SMEs.
Recently, Vietnam introduced three resolutions outlining special mechanisms and policies to promote the development of the private sector. These resolutions were accompanied by an implementation plan aimed at the relevant authorities. These measures reflect the government’s strong focus on tax incentives and administrative support to enhance innovation and business growth.
In early May 2025, the Politburo of the Communist Party of Vietnam issued the Resolution 68-NG/TW (“Resolution 68”), which primarily aims to address significant obstacles to the growth of Vietnam’s private sector. This includes institutional and policy reform, safeguarding ownership and property rights, ensuring business freedom, promoting fair competition within the private economy, and guaranteeing the enforcement of private contracts. This directive also serves as a framework for subsequent implementation plans. Subsequently, the Vietnamese government introduced two follow-up directives to guide the implementation of incentives for private economic development, including:
Resolution No. 198/2025/QH15 (“Resolution 198”), approved by the National Assembly on May 17, 2025, on special mechanisms and policies for private economic development; and
Resolution No. 139/NQ-CP (“Resolution 139”), dated May 17, 2025, detailing the Government’s plan to implement Resolution 198.
Notably, these dual resolutions include a number of tax and fee incentive policies aimed at fostering growth in the private sector, particularly for start-ups and small to medium-sized enterprises (SMEs). These incentives include:
Corporate Income Tax (CIT) exemptions for a maximum of 2 years, followed by a 50 percent reduction in CIT for the next four years, targeting innovative start-ups and funds supporting innovation.
Personal Income Tax (PIT) exemptions on capital gains and income for experts working in innovative start-ups and R&D centres for up to two years, with an additional 50 percent reduction for the next four years.
A three-year CIT exemption for newly registered SMEs starting from the date of registration.
Allowing larger enterprises to deduct training expenses incurred in support of SMEs within their supply chains.
The removal of business licence tax starting January 2026, aimed at reducing administrative burdens.
Fee waivers for reissuing certificates and permits during times of administrative restructuring.
The recent adoption of Resolutions 68, 198 and 139 by Vietnam marks a significant step toward empowering the private sector as the primary driver of the national economy. Businesses are encouraged to closely monitor the official implementation of these incentives through the expected policy updates this year.
The above content was researched and summarised by ECOVIS AFA VIETNAM from widely published legal documents and articles. If you need to discuss any issues in more depth, please contact us using the details below.
Guiding Businesses Through China’s Legal Landscape
07.07.2025
Duke Yu is a senior partner at K-Insight law firm – Member of ECOVIS International with over 18 years of legal experience. After seven years of legal study, he has developed strong expertise in commercial law, with a focus on contract law, company law, and bankruptcy.
Duke advises clients across a wide spectrum of industries—including real estate, trade, manufacturing, e-commerce, and solar energy—bringing a practical, cross-sector perspective to complex legal issues. His work reflects a strong understanding of how law intersects with business realities.
Duke’s services span strategic legal consulting, in-depth due diligence, and the drafting of detailed legal advice. He also represents clients in litigation and arbitration, safeguarding their interests throughout every stage of the legal process.
“A lot of legal problems can be avoided with the right advice early on,” says Duke. “I always encourage clients to see legal counsel not as a last resort, but as a strategic advantage.”
One of the common pitfalls that Duke helps clients avoid is entering into high-stakes transactions without first seeking legal advice. His clear, forward-looking guidance helps businesses navigate risk and make confident decisions from the outset.
What sets Duke apart is not just his technical expertise, but his commitment to building long-term relationships. For him, the most rewarding part of his work is seeing his clients succeed – and knowing he’s played a part in that journey.
Supreme Court Ruling Affects the Unterstanding of Equity Incentive Plans in Denmark
04.07.2025
In February 2025, the Danish Supreme Court issued a landmark ruling on how unvested options awarded as part of an equity incentive plan for employees shall be handled upon termination following significant legislative changes in 2019. The Supreme Court followed the arguments presented by ECOVIS Legal Denmark on behalf of a multinational company enabling companies to potentially avoid payments of unvested options (may cover various different kind of shares) to employees, who leave the company.
Introduction to the Case and Legal Framework
During their employment, two employees had been offered participation in an equity incentive plan under which they would either be awarded Restricted Stock Units or offered to purchase a share once the option had vested. Vesting was subject to the employees still being employed on specific vesting dates stated in the offer of participation, and any unvested options
would lapse upon termination.
The two employees were offered participation both before and after 1 January 2019. This is significant as a revised version of the Danish Stock Option Act (SOA) came into effect on that date. However, the transition rules from the SOA applicable prior to January 1, 2019 (2004 SOA) and the revised version (2019 SOA) were unclear, resulting in a lack of clarity as to which set of rules applied to their equity incentive plans.
The significance of whether the 2004 SOA or the 2019 SOA apply is the fact that the 2004 SOA granted employees a statutory protected right to receive unvested options after termination if they were good leavers. After the implementation of the 2019 SOA such legal protection no longer applied.
When the two employees ended their employment, they claimed that the 2004 SOA applied, entitling them to receive the unvested portion of their options, as they were good leavers. The company argued that the 2019 SOA applied, and the core of the dispute was consequently a legal interpretation of the transition rules from the 2004 SOA to the 2019 SOA.
Supreme Court Ruling
In the ruling, the Danish Supreme Court established that the decisive factor for whether the 2004 or the 2019 SOA applies, is at what point in time the actual and legally binding promise of participation in the option-based incentive plan has been made to the employee. If the promise was given before 1 January 2019, the 2004 SOA applies. If the promise was given after
1 January 2019, the 2019 SOA applies.
The Supreme Court further explained that the equity incentive plan did not constitute such an actual and legally binding promise in itself as it was merely the overall framework for grants and did not set out any promise of participation. Whether the 2004 SOA or the 2019 SOA applied therefore depended on when they received their individual offer of participation.
As the unvested options upon termination were all relating to offers granted after 1 January 2019, the 2019 SOA applied. Consequently, no statutory protected right to receive unvested options after termination applied, and the handling of the unvested options would therefore depend on what was agreed upon between the parties.
In this scenario, it meant that the employees did not have any entitlement to the unvested part of their options, as the 2019 SOA prescribes freedom of contract, and the company’s equity incentive plan and individual offers of participation prescribed that unvested options would lapse upon termination.
Key Legal Considerations
The Supreme Court ruling has now clarified what applies when an employee leave his or her position before all awarded options have vested, and it will consequently be easier for employers to handle unvested options upon termination correctly in the future.
Based on the ruling, companies can now limit economic exposure by limiting non-intended payments of unvested options to employees, who left the company, while still complying with the 2019 SOA. It is, however, important for companies to ensure that the transition to the 2019 SOA is handled correctly. Therefore, it is recommended for employers to consider whether
any amendments of their incentive schemes are desirable.
Navigating the complexities of equity incentive plans and the legislative changes can be challenging for both employers and employees. ECOVIS Legal Denmark’s Employment and Labour department is ready to assist, offering expert advice and pragmatic solutions in matters related to handling of equity incentive schemes in employment relationships.
Ecovis welcomes STROHAL LEGAL – Member of ECOVIS International as Exclusive Legal Partner in the United Arab Emirates (UAE).
16.06.2025
ECOVIS International is pleased to announce its new exclusive legal partner, STROHAL LEGAL – Member of ECOVIS International, headquartered in the United Arab Emirates (UAE).
With a strong presence in the UAE since 2005, STROHAL LEGAL is a pioneer in the region, being the first foreign-owned international legal consultancy licensed onshore in the Emirate of Ras Al Khaimah. Under the leadership of Jakob Kisser, the firm has become a trusted name in UAE business law, serving clients from across the globe.
Their areas of expertise include:
Corporate and Commercial Law
Mergers & Acquisitions (M&A)
Business Setups, Expansions, and Relocations
Employment, Labour Law & Immigration
Real Estate and Construction
Intellectual Property (IP) Rights
Dispute Resolution & Litigation
Tax Advisory & Structuring
STROHAL LEGAL advises a diverse international clientele, with a particular focus on clients from the DACH region (Germany, Austria, and Switzerland). Its multilingual team—trained in Austria, Germany, Egypt, South Africa, and Ukraine—combines civil law expertise with strong regional insight. This cross-jurisdictional approach enables the firm to deliver practical legal solutions across corporate, commercial, and regulatory matters in the UAE.
Commenting on the new affiliation, Managing Partner Jakob Kisser stated:
“We are honoured to join ECOVIS International, expanding our reach through a global platform that aligns with our commitment to practical, high-quality legal advice. This partnership connects us with an extensive network of professionals and enhances our cross-border capabilities, allowing us to better serve an increasingly international market and the vibrant growth in the UAE. We look forward to collaborating closely with our ECOVIS colleagues worldwide to deliver seamless, results-driven solutions for our clients.”
To learn more about STROHAL LEGAL, please visit their website or reach out to Jakob Kisser at jkisser@slglaw.cc.
We warmly welcome our new colleagues from the United Arab Emirates to the Ecovis network!
VAT refund China: A paradigm shift for foreign tourists
12.06.2025
Foreign tourists in China can receive an instant VAT refund on purchased goods at certain retail stores. With this nationwide real-time VAT refund system, the government aims to increase the attractiveness of the country for international visitors. The Ecovis experts explain the process.
Under the new rules issued by the State Taxation Administration (STA), foreign tourists who shop at certified tax-free retailers can receive their VAT refund on the spot, following a credit card pre-authorisation. Customs will later verify the purchase and traveller’s identity upon departure, at which point the refund becomes final. To qualify, the buyer must reside outside mainland China and stay no longer than 183 days.
The advantages of the VAT refund system
This new system offers clear advantages: no more lengthy refund queues at airports, no paperwork in many stores, and immediate liquidity – refunds are credited to the shopper’s account within minutes. Currently, in Zhejiang Province alone, over 120 stores already support this process. Feedback from travellers has been overwhelmingly positive, citing speed and convenience as key benefits.
Bring your passport with you when you go shopping and ask the retailer about the exact procedure. Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China
The reform is part of China’s broader strategy to stimulate inbound tourism and consumer spending. Compared globally, this policy places China alongside leading countries such as South Korea and Japan, which have also introduced point-of-sale VAT refunds.
For further information please contact:
Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China
Email: pingwen.hu@ecovis.cn
Transfer pricing: A comprehensive compliance guide for the Czech Republic, Hungary, Poland and Slovakia
05.06.2025
Transfer pricing has become a critical issue for multinational companies operating in the Visegrád Group (V4), which includes the Czech Republic, Hungary, Poland, and Slovakia. Ecovis experts from these countries have therefore developed a comprehensive guide to help companies correctly implement the requirements.
The alliance shares a rich historical and economic background, which has created close business ties and made the region an attractive destination for foreign investment. Nevertheless, the V4 maintain distinct legislative and regulatory environments, particularly in the field of transfer pricing, creating both opportunities and significant compliance challenges for companies.
OECD guidelines on transfer pricing in national legislation
The V4 countries, as members of the OECD, have incorporated the OECD transfer pricing guidelines and the BEPS (Base Erosion and Profit Shifting) framework into their national legislation. However, each member state interprets and applies the soft law differently, leading to a diverse and sometimes fragmented regulatory landscape.
Over the past few years, transfer pricing has attracted heightened attention from tax authorities across the region. The post-COVID era has seen a wave of legislative updates and stricter enforcement, with authorities leveraging transfer pricing audits as a key tool to address potential non-compliance. As a result, tax advisors must navigate not only national documentation requirements – such as Local Files and Country-by-Country (CbC) notifications – but also the small details of each jurisdiction’s approach to compliance, penalties, and audit procedures.
The complexity emerges further in documentation thresholds, language requirements, penalty regimes, and the use of databases for benchmarking. For example, the criteria for related-party definitions, the scope of documentation, and the treatment of low-value transactions vary significantly. Moreover, the increasing digitalisation of tax administration and the introduction of new reporting forms have placed additional pressure on taxpayers to maintain robust and up-to-date transfer pricing documentation.
What companies should do now
Given the dynamic regulatory environment and the growing scrutiny from tax authorities, companies operating in the V4 must be proactive in managing their transfer pricing risks. Accurate and country-specific documentation with a thorough understanding of local regulations is essential to avoid costly penalties and ensure compliance.
As the region continues to evolve its approach to transfer pricing, staying informed of legislative changes and audit trends will be crucial for businesses seeking to navigate the complexities of the V4 market.
Why is the Lithuanian Employment and Migration Framework Attractive for Foreign Investors?
04.06.2025
Lithuania offers a dynamic and business-friendly environment, characterized by an open economy and the advantages of membership in the European Union. Strategically located at the crossroads of Northern, Central, and Eastern Europe, Lithuania serves as an attractive hub for regional headquarters, fintech companies, shared service centers, and logistics providers. The country benefits from a highly educated, multilingual workforce and a well-developed digital infrastructure, including efficient public services, which together enhance its appeal to international investors and skilled foreign professionals.
The Lithuanian labor market is governed by the Labour Code of the Republic of Lithuania, which aligns with European Union directives and provides a comprehensive yet flexible framework for employment relationships. On of the main advantages of the Labour Code is that it covers a wide range of employment contracts, including indefinite-term, fixed-term, part-time, and temporary agency agreements, allowing employers and employees to tailor arrangements to their specific needs.
Lithuania also recognizes modern forms of work, such as remote work and hybrid models, which have become increasingly relevant in today’s global business environment. nd compensation.
Residence permits for qualified workers
Foreign nationals from outside the European Union or European Economic Area seeking to work or invest in Lithuania generally require a residence permit. The two primary categories involve permits granted either on the basis of employment or for business activities. Non-EU citizens with a confirmed job offer from a Lithuanian employer can apply for a temporary residence permit for employment. This requires that the hiring company has been active in Lithuania for at least six months and that the employment contract covers a minimum period (at least six months). The permit is typically issued for a period of two to three years and is renewable, provided the conditions continue to be met.
Highly qualified professionals may apply for the EU Blue Card, which offers a streamlined pathway to work and reside in Lithuania. Eligibility is contingent on holding a higher education degree or equivalent professional experience, particularly in sectors such as information and communication technologies (ICT). Employers must offer a salary that meets or exceeds definedthresholds..
For foreign investors and business owners, Lithuania offers residence permits tied to business activities. To qualify, the company must demonstrate real operations within Lithuania and maintain a workforce composed of full-time Lithuanian or EU/EEA employees with salaries amounting to at least twice the national average. In addition, minimum capital requirements and personal investments must be fulfilled, with the applicant holding a significant ownership stake or management role within the company.
Lithuania’s migration regulation also supports family reunification. Close family members of residence permit holders, including spouses and dependent children, may obtain temporary residence permits, typically granted for the same duration as the primary permit holder’s stay.
Lithuania’s transparent and efficient approach to employment and migration regulation, together with its strategic location and supportive business environment, make it an increasingly preferred destination for international investors and skilled professionals seeking growth opportunities in Europe.
For companies planning to expand their operations into Lithuania or relocate key talent from abroad, understanding the country’s employment and migration framework is essential.
Posted Workers in Romania: What EU Employers Need to Know
03.06.2025
As Romania continues to attract cross-border service providers, EU-based companies posting workers to Romania must comply with increasingly strict local and EU-level regulations. Directive (EU) 2018/957, amending the original Posted Workers Directive, has significantly reshaped the legal framework for postings across the EU.
What is a posted worker?
A posted worker is an employee sent by their employer to carry out a service in another EU country on a temporary basis. In Romania, such postings are governed by Law no. 16/2017, in conjunction with the Labour Code.
Key obligations for the home-country employer include:
Prior notification to the Romanian Labour Inspectorate (ITM) before the start of the posting, via the specific ‘Transnational Posting’ form.
Guaranteeing the minimum Romanian working conditions for the posted workers: including minimum wage[1], maximum working time[2], rest periods[3], health and safety standards.
Ensuring that employment documents (employment contract, payslips, records of working hours) are available at the workplace in Romania.
What are the risks of non-compliance?
Romanian labour authorities have stepped up inspections in key sectors such as construction, logistics, and industrial services. Fines can reach up to RON 200,000 for failure to notify ITM. In serious cases, authorities may suspend the company’s right to provide services in Romania.
How is this different from classic secondment?
Transnational posting is a distinct concept from secondment under the Romanian Labour Code (Articles 43–47). The maximum posting duration is 12 months (extendable to 18 months with justification). During the posting, the principle of ‘equal pay for equal work’ and the protection of the posted worker are strictly applied.
Practical steps to ensure compliance with Romanian regulations:
Submit the official notification of posting (in Romanian: formular de detașare transnațională) to the ITM territorial office where the service is provided, no later than the day before the effective activity begins.
Provide complete and accurate information in the notification: identity of the posted employee, duration, host company details, nature of services, and contact person in Romania.
Ensure the following documents are available at the Romanian worksite during the posting:
copy of the employment contract or equivalent document;
timekeeping records (daily timesheets);
payslips and proof of salary payment.
Designate a representative in Romania (a natural or legal person) to liaise with the authorities during inspections.
Monitor compliance with Romanian working time and remuneration rules, including meal vouchers or allowances where applicable.
Keep evidence of payment of wages and social security contributions in the country of origin.
Conclusion:
To mitigate legal and financial risks, EU companies posting workers to Romania should align with national rules and proactively manage documentation, reporting and local obligations in collaboration with legal and payroll professionals.
1 – As of January 1, 2025, the gross minimum monthly wage in Romania is 4,050 RON, equivalent to approximately €814
2 – Under Romanian Labour Code, the standard working time is 8 hours per day and 40 hours per week. The maximum legal working time, including overtime, cannot exceed 48 hours per week, calculated as an average over a 4-month reference period, unless a collective agreement provides otherwise
3 – Workers in Romania are entitled to: (a) a minimum daily rest period of 12 consecutive hours between two working days, (b) a minimum weekly rest period of 48 consecutive hours, typically on weekends, and (c) a lunch break (not counted as working time unless otherwise agreed) if the daily work exceeds 6 hours.
Tax policy Germany: New coalition agreement brings tax policy shifts
02.06.2025
The new German federal government has adopted tax changes for companies in its coalition agreement. These include corporate taxation, tax relief for work and income, as well as for electromobility and energy efficiency. The Ecovis tax advisors explain the details.
The new coalition of the Christian Democratic Union (CDU), Christian Social Union (CSU), and Social Democratic Party (SPD) has also set numerous goals in its coalition agreement to strengthen the economy and Germany as a business location.
Tax incentives for investment
The coalition agreement introduces several changes to corporate taxation, notably a 30% accelerated depreciation for certain business investments, limited to the years 2025-2027.This measure aims to encourage investments in new business assets, particularly in the technology and infrastructure sectors. In addition, tax breaks for research and development spending are to be expanded. The goal is to boost companies’ innovation power – this could be achieved in the future through expanded business expense deductions or targeted R&D bonuses.
Corporate taxation
The corporate tax rate will be gradually reduced by 1% each year starting in 2028, from the current rate of 15%. The solidarity surcharge will remain, and the minimum trade tax rate will increase from 200% to 280%, raising the tax burden on businesses in some regions. The introduction of an investment allowance for small and medium-sized enterprises (up to EUR 50,000 annually for future investments) is intended to make Germany an attractive location for business again. As things stand at present, there are no plans to increase income tax rates.
Tax relief in Germany would be a positive signal for companies and the location. Marion Dechant, Tax Advisor, ECOVIS Wirtschaftstreuhand GmbH Auditors, Munich, Germany
Energy taxes
In order to reduce energy prices, the electricity tax is to be reduced to the minimum level specified by European law. Also, tax exemptions for agricultural diesel engines are to be maintained, protecting farmers from additional costs.
Tax relief for work and income
A new provision could allow for tax-free overtime in certain sectors, which may reduce the overall tax burden for employees working overtime. Additionally, retirees may benefit from a EUR 2,000 tax-free monthly allowance if they continue working after reaching the official retirement age. This is intended to support older citizens, particularly those who wish to remain active in the workforce after retirement. The commuter allowance is expected to rise to EUR 0.38 per kilometre starting in 2026 (currently EUR 0.30). This change could make commuting more financially viable for individuals living in more remote areas.
Electromobility
Electric vehicles used as company cars are to receive tax incentives by increasing the gross price limit to EUR 100,000. In addition, special depreciation allowances are to be introduced for electric vehicles to promote the transformation of the transport sector. Furthermore, the motor vehicle tax exemption for electric vehicles will be extended until 2035.
