DOING BUSINESS

IN VIETNAM
Vu Thi Que
Partner, LCT Lawyers
September 2011
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1. vleLnam's forelgn lnvesLmenL sLaLlsLlcs
2. !apanese lnvesLmenL ln vleLnam
3. lnvesLmenL ln vleLnam - 1he pros and
cons
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(ln Lhe flrsL elghL monLhs of 2011)
2"34 2"45
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Pong kong Slngapore korea !apan Chlna 1he oLhers
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ManufacLurlng and
processlng
LlecLrlclLy
producLlon
ConsLrucLlon AcommodaLlon
and food
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! 8elng fourLh among 92 counLrles wlLh dlrecL lnvesLmenL ln vleLnam.
! Pavlng 1,360 pro[ecLs operaLlng.
! Pavlng a LoLal reglsLered caplLal of abouL 22 bllllon uSu.
! ln Lhe flrsL seven monLhs of 2011, Lhere were 94 new !apanese pro[ecLs
lnvesLed ln vleLnam, wlLh a LoLal caplLal of 720 mllllon uSu. lnvesLed ln vleLnam, wlLh a LoLal caplLal of 720 mllllon uSu.
! Ma[or flelds of lnvesLmenL lnclude lndusLrles, supporLlng lndusLrles and
Lechnologles.
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Soclal and pollLlcal sLablllLy (64.3) Legal framework ls lncompleLe and
lnconslsLenL
Manpower
(low labour cosLs 37.7, quanLlLy, .)
lnfrasLrucLure consLralnLs
?oung populaLlon Plgh lnLeresL raLes
MarkeL poLenLlal (64.3) Lack of Lransparency
ldeal geographlcal locaLlon for
LransporLaLlon
Plgh lnflaLlon raLe
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1. Legal forms of forelgn lnvesLmenL
2. 8esLrlcLlons on forelgn lnvesLmenL
3. lorelgn lnvesLmenL lncenLlves
4. rocedure for esLabllshlng a forelgn
owned company
^%-(^ *+,). +* *+,%!-' !'$%.&)%'&
" ulrecL lnvesLmenLs:
# LsLabllshlng enLlLles ln Lhe form of 100 forelgn owned companles or
[olnL venLure companles,
# lnvesLlng ln Lhe form of 8CC, 8C, 81C or 81 conLracLs, and
# LsLabllshlng branches or represenLaLlve offlces. # LsLabllshlng branches or represenLaLlve offlces.
" lndlrecL lnvesLmenLs:
# urchaslng shares or shares of conLrlbuLed caplLal ln local companles
(publlc and non-publlc), and
# urchaslng securlLles of llsLed companles ln Lhe sLock markeL.
,%.&,!1&!+'. +' *+,%!-' !'$%.&)%'&
# ,89:A>L:>B69 B6 >6789:;86: 98L:BA9
lorelgn lnvesLmenLs are sub[ecL Lo vleLnam's W1C commlLmenLs and relevanL
laws LhaL apply Lo Lhe lnvesLed secLor.
Lx:
$AdverLlslng servlce: resLrlcLed Lo [olnL venLure lnvesLmenLs wlLh no
llmlLaLlons on forelgn caplLal,
$Servlces lncldenLal Lo manufacLurlng and processlng: lnvesLmenLs ln Lhe
form of 100 forelgn owned companles wlll be permlLLed afLer 11 !anuary
2012,
$ConsLrucLlon: no resLrlcLlons ln Lhe form of lnvesLmenL,
$8eal esLaLe: no resLrlcLlons for real esLaLe servlces, buL real esLaLe buslnesses
are llmlLed ln some acLlvlLles.
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" Servlce secLors: as sLaLed ln Lhe prevlous sllde, and
" ManufacLurlng secLors: no llmlLaLlons on forelgn caplLal
conLrlbuLlon.
,%.&,!1&!+'. +' *+,%!-' !'$%.&)%'&
# !6P>A8L: !6789:;86:9E
" lnvesLmenLs ln llsLlng companles, publlc companles, publlc
securlLy lnvesLmenL fund and publlc securlLy lnvesLmenL
company: forelgn caplLal conLrlbuLlon noL exceedlng 49, and
" lnvesLmenLs ln local commerclal banks: noL exceedlng 30.
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" 8uslness secLor ls noL commlLLed Lo vleLnam's W1C CommlLmenLs
%Lo be consldered for approval on a case by case basls.
" Lxperlence and flnanclal capaclLy of forelgn lnvesLors % unclear
sLandards for approval.
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sLandards for approval.
" 8ooms for dlfferenL lnLerpreLaLlon of laws by auLhorlLles.
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" 1he sLandard Cl1 raLe ls 23.
" Cl1 lncenLlves are granLed based on wheLher Lhe enLerprlse ls
worklng wlLhln an encouraged secLor or dlfflculL socloeconomlc worklng wlLhln an encouraged secLor or dlfflculL socloeconomlc
locaLlon.
" 1he secLors whlch are lncenLlvlzed by Lhe vleLnamese CovernmenL
lnclude educaLlon, healLhcare, sporLs and culLure, Lechnology,
envlronmenLal proLecLlon, sclenLlflc research, lnfrasLrucLural
developmenL and compuLer sofLware manufacLurlng.
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" uuLy exempLlons are granLed for lmporLed goods Lo creaLe flxed asseLs
for lnvesLmenL pro[ecLs ln secLors or geographlcal areas LhaL are
enLlLled Lo lmporL duLy preferences.
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" no speclal lncenLlve of vA1 and l1 apply Lo forelgn lnvesLmenL and
forelgners.
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# 1<AAM>6O @BAS<AP ?B9989E
" lnvesLors are permlLLed Lo carry Lhelr losses forward Lo Lhe
followlng year ln order Lo offseL agalnsL Laxable lncome for Lhe
purposes of Cl1. 1he perlod for carrylng forward losses shall noL
exceed flve years.
# G8=A8L><:>B6 B@ @>`8P <998:9 # G8=A8L><:>B6 B@ @>`8P <998:9
" ro[ecLs ln preferenLlal lnvesLmenL secLors and geographlcal areas,
as well as buslness pro[ecLs wlLh hlgh economlc efflclency, shall be
enLlLled Lo acceleraLed depreclaLlon of lLs flxed asseLs.
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# ^<6P >6L86:>789E
" lnvesLors who lnvesL ln preferenLlal lnvesLmenL secLors and geographlcal
areas shall be enLlLled Lo an exempLlon from or reducLlon of land renL,
land use fees and land use Lax.
" 1he Lerm of land use shall noL exceed 30 years for normal pro[ecLs and 70
years for speclal pro[ecLs.
# +:\8A >6L86:>789E
" lncenLlves are avallable Lo lnvesLors lnvesLlng ln lndusLrlal zones, exporL
processlng zones, hlgh-Lech zones and economlc zones (l.e. Cl1, exporL,
lmporL and pollcy lncenLlves are appllcable Lo Lhese zones).
" lncenLlves for Lhe developmenL of a parLlcularly lmporLanL branch, a
reglon or a speclal economlc zone can be provlded by Lhe naLlonal
Assembly.
1?<99>@>L<:>B6 B@ @BA8>O6 >6789:;86: =ABa8L:9
"ro[ecLs are sub[ecL Lo a procedure of reglsLraLlon, lncludlng pro[ecLs wlLh
an lnvesLed caplLal of less Lhan vnu 300 bllllon (1,127 bllllon !?) and Lhose
wlLhln secLors where lnvesLmenL ls noL condlLlonal.
"ro[ecLs are sub[ecL Lo a procedure of evaluaLlon, lncludlng pro[ecLs wlLh
an lnvesLed caplLal of vnu 300 bllllon (equal Lo 1,127 bllllon !?) or more,
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an lnvesLed caplLal of vnu 300 bllllon (equal Lo 1,127 bllllon !?) or more,
or Lhose wlLhln secLors where lnvesLmenL ls condlLlonal.
"ro[ecLs are sub[ecL Lo a procedure of evaluaLlon and approval by Lhe
rlme MlnlsLer, lncludlng key lnvesLmenL pro[ecLs LhaL may have an
lnvesLmenL caplLal of vnu 1,300 bllllon (3,634 bllllon !?) or more.
!6789:;86: 18A:>@>L<:8 >99C>6O WBP>89
" 1he lndusLrlal/LxporL rocesslng Zone AuLhorlLles recelve and carry
ouL Lhe appllcaLlons of pro[ecLs lnvesLlng ln lndusLrlal/exporL
processlng zones ,and lssue Lhe lnvesLmenL CerLlflcaLes.
" 1he rovlnclal ueparLmenL of lannlng and lnvesLmenL recelve and
carry ouL Lhe appllcaLlons of pro[ecLs lnvesLlng ln oLher areas, and
N,+1%GD,% *+, %.&(F^!.[!'- (
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carry ouL Lhe appllcaLlons of pro[ecLs lnvesLlng ln oLher areas, and
submlLs Lhe relevanL dossler Lo lLs eoples' CommlLLee Lo lssue Lhe
lnvesLmenL CerLlflcaLes.
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!6789:;86: <==?>L<:>B6
& lnvesLors wlll submlL Lo Lhe ul or ZA an lnvesLmenL appllcaLlon as
requlred for Lhe procedure of reglsLraLlon or Lhe procedure of
evaluaLlon,
& lnvesLors should prepare a consularlzed copy of Lhe followlng
N,+1%GD,% *+, %.&(F^!.[)%'& +*
*+,%!-' +/'%G 1+)N('b
& lnvesLors should prepare a consularlzed copy of Lhe followlng
documenLs prlor Lo lnvesLlng ln vleLnam:
" Commerclal 8eglsLraLlon (CerLlflcaLe of lncorporaLlon),
" CharLer (Memorandum of ArLlcles and AssoclaLlon),
" llnanclal sLaLemenLs for Lhe lasL Lwo years, and
" assporL of Lhe lnvesLor's auLhorlzed represenLaLlve and Lhe legal
represenLaLlve of vleLnamese company.
!99C<6L8 B@ !6789:;86: 18A:>@>L<:8
" 1he Llmellne for Lhe lssuance of Lhe lnvesLmenL CerLlflcaLe ln Lhe
procedure of reglsLraLlon ls 13 worklng days.
" 1he Llmellne for Lhe lssuance of Lhe lnvesLmenL CerLlflcaLe ln Lhe
procedure of evaluaLlon ls 30 worklng days wlLh respecL Lo Lhe
N,+1%GD,% *+, %.&(F^!.[)%'& +*
*+,%!-' +/'%G 1+)N('b
procedure of evaluaLlon ls 30 worklng days wlLh respecL Lo Lhe
lndusLrlal Zones AuLhorlLy, and 43 worklng days wlLh respecL Lo
Lhe eople's CommlLLee.
" 1he Llmellne for lssuance of lnvesLmenL CerLlflcaLe ln Lhe
procedure of evaluaLlon and approval by Lhe rlme MlnlsLer ls
60 worklng days.
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!' !'$%.&)%'& !' $!%&'()
1. lnconslsLency and amblgulLy of laws and regulaLlons,
2. Crey areas ln Lhe lnLerpreLaLlon of laws by dlfferenL
auLhorlLles,
3. Changes ln Lhe legal framework,
4. lorelgn exchange conLrol ln vleLnam,
N,(1&!1(^ %'1D)F,('1%. !' !'$%.&)%'& !' $!%&'()
4. lorelgn exchange conLrol ln vleLnam,
3. ConducLlng buslness ouL of Lhe reglsLered buslness llnes
(e.g. offerlng loans Lo cllenLs, recelvlng morLgages and
underLaklng pledges),
6. lnLellecLual properLy proLecLlon,
7. Work permlLs for forelgn employees, and
8. 8esldenL card for forelgners.
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SulLe 1603, Salgon 1rade CenLre M01, ALlanLa lace
37 1on uuc 1hang SLreeL 49 Pang Chuol SLreeL
ulsLrlcL 1 Pal 8a 1rung ulsLrlcL
Po Chl Mlnh ClLy Panol
SSS"^1&^<SM8A9"LB;
Po Chl Mlnh ClLy Panol
vleLnam vleLnam
1el: +84 8 3821 2337 1el: +84 4 6278 2768
lax: +84 8 3821 2382 lax: +84 4 6278 2766
&\<6_ MBC @BA MBCA <::86:>B6c