CASINO BUSINESS UNDER STRICT REGULATIONS

On 20 January 2017, the Government issued a long-awaiting casino business decree No. 03/2017/ND-CP (Casino Decree). Although the issuance of the Casino Decree after almost 10 years of waiting opens a promising market to casino industry, foreign investors have been very hesitant and in the waiting mode for further clarification documents from competent authorities. Finally after more than six months since the Casino Decree’s effective date, on 05 October 2017, the Ministry of Finance issues Circular No. 102/2007/TT-BTC (Casino Circular) guiding the Casino Decree. The Casino Circular helps complete the regulatory framework for casino business in Vietnam and put the young industry in momentum growth.

Local Vietnamese eligible for gambling

Local Vietnamese will be permitted to gamble at specific casinos approved by competent authority on a 3-year trial basis (i.e. – calculating from the first day opening of the authorized integrated resorts). According to the public media, only 02 casinos are open to Vietnamese individuals on a 3-year piloting scheme, which are located within complex resorts in Phu Quoc District, Kien Giang Province (South Vietnam) and Van Don District, Quang Ninh Province (North Vietnam). A small likelihood that Ho Tram Resort would join the list.

Local players are permitted to enter casinos if they essentially satisfy the following conditions: (i) 21 years old or above; (ii) monthly salary of VND10 million or more (equivalent to approximately US$440); (iii) paying entrance fee of VND1 million (US$44)/24 hours/ person or VND25 million (USD1,100)/ month/ person; and (iv) not being objected in writing by siblings, spouses and/or biological and adopted parents to play at casinos. However, these conditions, especially the monthly income requirement, are complicated to prove and were not previously dealt with in the Casino Decree. The Casino Circular then substantiates this requirement as below:

– Having documents (tax declarations/ confirmation by tax authorities) proving taxable income at level 3 or above pursuant to the Law on Personal Income Tax;

– Notarized house/ assets lease contract, where the total monthly rent is VND 10 million or above;

– Notarized bank savings book or bank statement of savings with a term of one year or more and having monthly interest from VND10 million or above;

– Other documents proving that the usual monthly income of players being VND 10 million or above; or

– In case a single document mentioned above is not sufficient to prove the VND10 million monthly income, players can submit several documents to prove such total monthly income.

Casinos under strict supervision of tax authorities

Casino-operating enterprises must arrange a place in the casino with necessary means and equipment for state authorities to perform the casino management and surveillance directly or via electronic equipment and camera system. Transactions under supervision are monetary transactions and/ or tokens related ones. These transactions must also be recorded ad reported to the tax authorities.

In addition, state authorities also supervise, either directly or via electronic and camera system, the inventorying and calculation of transactions performed at cashier area and/ or areas for counting and storing cash and tokens.

Foreign currency control in casino business

Casino-operating enterprises must exchange Vietnamese Dong or other currencies for tokens and vice versa for players.

The exchange rates for Vietnamese Dong or other currencies to tokens and vice versa must be based on the purchasing rates on the transaction date announced by the licensed bank where the casino-operating enterprise’s specialized foreign currency account is opened. In case the transaction date falls on days off or public holidays, the exchange rates must be based on the rates announced on the previous transaction date.

A casino-operating enterprise may accept bank cards of players to exchange for tokens when they play in the casino. The transaction must be in Vietnamese Dong.

In case the Vietnamese players win the prizes, they are only allowed to receive the prize in Vietnamese Dong (whether in cash or by bank transfer). This is not the case for foreign players where they can also receive the prize in foreign currency.

Conclusion

The issuance of the Casino Decree and the Casino Circular timely open Vietnam’s young casino industry to attract foreign investment and limit foreign currency loss to other neighbouring countries. According to recent statistics, Vietnam loses about USD800 million in tax revenue annually from gamblers who cross the border to Cambodia. This is even more critical as many countries in the region already allows casino business such as Macau, Singapore, Philippines, Korea and recently Japan. In such scenario, the Vietnam Government still has a lot to do in order to not only retain Vietnamese players in the market but also attract foreign players who are already familiar with other casinos in the region.

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If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!

 

 

 

Lawyer in Vietnam Dr. Oliver Massmann – Solar Power – Payment mechanism from Vietnam Electricity (former Electricity of Vietnam, EVN) to Solar IPP – What you must know:

1. The periodicity of payment for energy sales by client (EVN) to IPP

The IPP and EVN will together read the metering result on a monthly basis on a mutually agreed date to determine the power delivered and received in a month. The IPP will record the result in writing and send it together with the invoice to EVN within 10 working days from the result reading date. The payment deadline for EVN is within 15 working days from the receipt of the IPP’s invoice.

2. Frequency of price adjustment such that payment in VND reflects equivalent USD value

It is not clear in both Decision 11 and Circular 16, but we understand that the adjustment will be made at the time of payment for grid connected projects. For on-grid rooftop projects, the adjustment is made annually. Provision have been included in previous power project documents.

3. Mechanism for price adjustment (e.g. is applicable price adjustment is weighted average of adjustment period such that seller is not exposed to changes to VND/USD exchange rate).

For on-grid projects, the adjustment is made at the time of payment. For on-grid rooftop projects, the adjustment is made annually. It means that the FiT for on-grid rooftop projects remains the same in a year. The FiT for on-grid rooftop projects for the next year will be adjusted based on the announced VND/USD exchange rate on the last working day of the preceding year.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above.

THANK YOU !

 

 

 

 

VIETNAM – MAIN ISSUES RESTRAINING INFRASTRUCTURE DEVELOPMENT AND OUTLOOK ON THE EUROPEAN UNION-VIETNAM FREE TRADE AGREEMENT (EVFTA)

Vietnam’s ability to continue expanding its economy is linked to competitiveness. It is clear that supporting institutional regulatory reform and infrastructure development will ensure economic growth in the country. In practice, this approach is feasible by promoting public-private partnership (PPP). This goal includes a long-term investment in infrastructure that harmonizes PPP investors and Vietnamese Government’s interests.

By way of illustration, State-owned enterprises (SOEs) remain dominated in Vietnam. However, due to budget pressure, the government is committed to reform SOEs. Accelerating the development of foreign investment requires new approach to create a favorable legal framework for PPP. The issuance of a long awaited Decision 58/2016/QD-TTg (Decision 58) on classification of SOEs, is expected to facilitate the process.

Another key aspect to consider is SOE equitization for revenue reasons. In 2016, the State received approximately USD800 million from equitization and allocated some of these funds to reduce budget deficit.[1] Although the equitization process started in 1992, only around 2,600 firms have been equitized in the first 13 years of that program.[2] Meanwhile, the goal during 2014-2015 was to equitize 432 SOEs.[3] According to Decision 58, it is expected to rearrange 103 SOEs and equitize 137 SOEs within 2016-2020 period.

The historic poor performance of SOEs equitization is about to change gradually. Furthermore, there are some questions to address from the investors perspective since the State plans to retain ownership from below 50% (in 106 enterprises), 50%- 65% (in 27 enterprises) and above 65% (in 4 enterprises) by 2020 across different sectors.

Despite the efforts to enhance investments in infrastructure and energy, many issues related to the implementation of current regulations that affect transparency and enterprise value remain unresolved, namely:

Share price

Currently share price as determined by the Government must be market price. There are cases when market price is determined based on the listed price or transaction price in the UpCom market. However, such market price determination is not fair and accurate when the shares are sold to strategic shareholders due to the nature of the participants in the securities markets (i.e., participants are mainly financial institutions and speculators) as well as the minority percentage of listed stock compared with the total shares of the listed companies. Indeed, share price when sold to strategic shareholders must be the lowest successful bid price in an IPO. In addition, share price of joint stock companies listed on UpCom market must not be within the price range of that securities code on the transfer date.

Public-private partnership (PPP)

Implementation of Decree 15 on PPP has shown certain limitations. Opening a new chapter of PPP requires further work in understanding strategic factors that make PPP effective and ensure that key risk minimizing solutions are undertaken properly.

Bankability is a crucial issue during the project structuring phase. The requirements for a project to be bankable differ from sector to sector or by jurisdictions. However, there are common factors that render the project bankability and raise its risk exposure such as restrictions on mortgaging land use rights to foreign lenders, complex investment approvals to investors (e.g., land acquisition process), and payment ability of an SOE off-taker. Therefore, practical preferential policies should be issued to strengthen PPP investment.

In addition, investment in the form of PPP is more complex than public investment. However, in the management of PPP projects, public investment laws and regulations have currently been applied, resulting in lengthy investment procedures. Furthermore, there is a problem regarding the limited resources allocated to authorized state agencies (ASAs). It is expected that Decision 522 on managing and using project development fund raised by Asia Development Bank and Agence française de développement (AFD) will help to support the ASAs in preparing for the project development.

With regard to infrastructure projects, the current legislation allows some flexibility regarding the use of incentives under the Investment Law. Nevertheless, the principle of the PPP framework is to develop highly-efficient projects through loans from private investors such banks or credit institutions and thus releasing the State from financial burdens. If local companies borrow from commercial state banks, this will not meet the PPP principle. In addition, the limited attractiveness of PPP framework also deter local and foreign non-State banks from offering loans.

It is worth considering a risk allocation framework that harmonizes with the general principle that risks should be allocated to parties that are in the best position to manage them or make reasonable determination of that risk.

Power project developments

One issue is project implementation timeline in Circular 43/2016/TT-BCT. Specifically, this legal instrument requires project development commitments from investors and requirements to seek the MOIT’s approval when there are delays in the project implementation. According to Circular 43, if a BOT project falls behind the agreed timeline, the adjustments will only be approved under limited exceptions such as (i) force majeure events; (ii) the misconduct of competent authorities or (iii) the misconduct of a third party. In practice, the schedule agreed between the MOIT and investors is difficult to meet as a result of complex project preparation process as well as involvement of many related parties.

Outlook on the EVFTA

The market access commitment in the EVFTA goes largely beyond both those in the WTO and other FTAs ratified by Vietnam, thereby giving EU enterprises the best possible access to the Vietnamese market. Accordingly, provisions on SOEs are considered the most ambitious disciplines that Vietnam has ever reached. Such rules will put private enterprises on an equal level with enterprises where the Government is the owner. Under the EVFTA, EU companies will be permitted to bid for contracts in infrastructure, power distribution, railway and healthcare projects the same as Vietnamese bidders.

Conclusion

Investment in infrastructure is considered as a strategic measure to reach sustainable development in Vietnam. Indeed, the government has improved the legal framework to support PPP model and privatization of energy and power sectors. However, it needs a much clearer plan in improving the quality of new regulations in order to ensure a fair and transparent process. Furthermore, the equitization progress seems to be disappointing since only 52 SOEs were equitized in 2016. In this context, to ensure the equitization efficiency, it is urgent to address the impact of these remaining issues on project’s viability and aim at the highest level of risk management. Finally, Decision 58 represents a good opportunity for EU companies to engage in large- scale PPP projects. However, investors need to carefully conduct a due diligence before any investment.

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you!

 

 

VIETNAM SOLAR POWER – THE FIRST OFFICIAL PPA – VIETNAM INVESTMENT REVIEW INTERVIEWING DR. OLIVER MASSMANN

1. Could you point out for me the good point of this solar PPA?

While the previous draft solar PPA does not require the Feed-in-Tariff (FiT) conversion between USD and VND be according to the exchange rate at the time of payment, this newly issued solar PPA repeats the language in Decision No. 11/2017/QD-TTg (Decision 11) that the FiT will be adjusted according to the fluctuation in the VND/USD exchange rate. This is consistent with what is stipulated in Decision 11.
In addition, I note that while the FiT for power output from on-grid projects is adjusted according to the fluctuation in the VND/USD exchange rate, meaning at any time during the year, it is not the same for rooftop projects. Instead, the mentioned FiT for excessive power output generated from rooftop projects remains the same throughout the first year of operation, and the new FiT for the next year will be adjusted based on the announced VND/ USD exchange rate of the last working day of the previous year.

2. Are there any concerns of investors that the solar PPA has not solved?

The rights of the investors are not fully protected in the following cases:
– when EVN is in the process of installing equipment, or making repairs, replacement, inspection or examination of the grid connection of the seller’s power plant;
– when the transmission grid or the distribution grid connected to EVN’s grid has a problem or grid equipment directly connected to EVN’s transmission grid or the distribution grid has a problem; and
– when EVN’s grid needs support to recover after the incident in accordance with the provisions of operation of the national power system and the standards, technical regulations of the electric industry.
– allocation of feeding points into the grid
It is quite risky for the producer if the output is ready to be fed to the grid but the connection is not available to do so. Absent a clear indication of whether the Solar PPA is a ‘take or pay” agreement, investors will find it difficult to secure and ensure the profits and revenue of their projects.
• No international arbitration dispute resolution clause
• No Government guarantee to enhance the credit of EVN as the sole off-taker;
• No provision addressing the risks of changes in applicable laws; and
• The Solar PPA is required to follow a specific template, which is not bankable.

3. Is this PPA solar bankable or not?

This PPA is not bankable due to reasons specified in 2).

4. In your opinion, how Vietnam government should do in order to reach their target for solar power capacity in the coming to time?

There is an increasing interest of foreign investors in the sector, proven by the fact that there are many solar projects with total capacity of 10,000 MW registered with the MOIT. However, not many of them have submitted the pre-feasibility study to the MOIT for consideration. There are many reasons behind this, but the most important ones are the lack of Government guarantee of EVN’s payment obligation in the PPA and currency hedging. Thus, the Government should consider a mechanism where EVN has to fulfil its payment obligation and the investors are ensured that they will be able to remit their profits abroad in foreign currency.

***
Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!

Vietnam – Solar Power Taking Off –  PPA Breaking News- The text of the PPA is issued – How to work with it:

Following the issuance of Decision No. 11/2017/QD-TTg of the Prime Minister on mechanism for encouragement of development of solar power in Vietnam (Decision 11), on 12 September 2017, the Ministry of Industry and Trade officially released Circular No. 16/2017/TT-BCT guiding Decision 11 (Circular 16). Circular 16 is aimed at providing regulations on formulation, approval and amendment of the national as well as provincial power master plan. In addition, the solar Power Purchase Agreement (Solar PPA), which is of great interest for many foreign investors, is also provided in Circular 16 as a mandatory template for future on-grid and rooftop solar power projects with only minor changes expected to be permitted during the contract negotiations.

In essence, the Solar PPA is almost the same as current applicable PPAs for renewable projects. This creates bankable issues for solar projects and a hindrance to foreign investors planning an investment in the sector.

Feed-in-Tariff (FiT)

Circular 16 repeats the solar FiT for power output from on-grid projects and excessive power output generated from rooftop projects specified in Decision 11 to be VND2,086/kWh or US 9.35 cents/kWh. This FiT only applies to on-grid projects and rooftop projects coming into commercial operation before 30 June 2019 and will remain within 20 years from the commercial operation date. We note that while the FiT for power output from on-grid projects is adjusted according to the fluctuation in the VND/USD exchange rate, meaning at any time during the year, it is not the same for rooftop projects. Instead, the mentioned FiT for excessive power output generated from rooftop projects remains the same throughout the first year of operation, and the new FiT for the next year will be adjusted based on the announced VND/ USD exchange rate of the last working day of the previous year.

EVN’s rights and obligations as the sole off-taker

EVN is delegated to purchase all power output generated from solar power projects pursuant to terms and conditions of the Solar PPA within 20 years.

It is noteworthy that the Circular 16 and the Solar PPA list out certain circumstances where EVN is not obliged to purchase power as negotiated with the seller, for example:

  1. when EVN is in the process of installing equipment, or making repairs, replacement, inspection or examination of the grid connection of the seller’s power plant;
  2. when the transmission grid or the distribution grid connected to EVN’s grid has a problem or grid equipment directly connected to EVN’s transmission grid or the distribution grid has a problem; and
  3. when EVN’s grid needs support to recover after the incident in accordance with the provisions of operation of the national power system and the standards, technical regulations of the electric industry.

Unfortunately, the current Solar PPA does not include provisions protecting the interests of the seller in the abovementioned circumstances. It is quite risky for the producer if the output is ready to be fed to the grid but the connection is not available to do so. Absent a clear indication of whether the Solar PPA is a ‘take or pay” agreement, investors will find it difficult to secure and ensure the profits and revenue of their projects.

Dispute resolution

The Solar PPA allows either party to the agreement to bring the dispute to local courts for litigation and other energy-related state bodies of Vietnam (General Directorate of Energy and the Electricity Regulatory Authority of Vietnam) for mediation and resolution.

The Solar PPA does not provide for international arbitration to be an option to resolve the dispute. This could be a great concern for foreign investors, especially those of large utility scale projects.

Other key issues of concern

  • No Government guarantee to enhance the credit of EVN as the sole off-taker;
  • No provision addressing the risks of changes in applicable laws; and
  • The Solar PPA is required to follow a specific template, which is not bankable.

Conclusion

Although these abovementioned bankability issues remain in the Solar PPA as the same for other renewable energy PPAs, we have assisted our clients on different large scale power projects, also in the Renewable Energy sector  and managed to win bankable PPAs with EVN. We strongly believe that our track record experience will help investors and the same will be done for the Solar PPA.

***

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

 

 

 

 

Rechtsanwalt in Vietnam Dr. Oliver Massmann DAS TRANSPAZIFISCHE PARTNERSCHAFTSABKOMMEN VERPFLICHTUNGEN ÜBER DEM LEVEL DER WTO – EINE ANALYSE

Überblick über das Transpazifische Partnerschaftsabkommen (TPP)

Das TPP wurde ursprünglich bekannt als „Trans-Pacific Strategic Economic Partnership“, das 2006 zwischen Singapur, Neuseeland, Chile und Brunei als „P-4-Abkommen“ abgeschlossen wurde als Mittel zur Förderung der Handelsliberalisierung im asiatisch-pazifischen Raum. Wie der Name schon sagt, war der ursprüngliche Zweck der Vereinbarung nur, ökonomische Fragen zu betreffen. Da die Zahl der teilnehmenden Länder in der P-4-Vereinbarung gestiegen ist, beginnend mit den Vereinigten Staaten im September 2008 (welche aber 2017 wieder terminiert haben) und anderen Ländern, wie Australien, Peru, Vietnam, Malaysia, Kanada, Mexiko und Japan bis Juli 2013 zu folgen, wird die Vereinbarung vereinbart “Eine umfassende, regionale Vereinbarung der nächsten Generation, die Handel und Investitionen liberalisiert und neue und traditionelle Handelsfragen und Herausforderungen des 21. Jahrhunderts anspricht” von den TPP-Handelsministern. Im Juni 2015 genehmigten die Vereinigten Staaten die Handelsförderungsbehörde für Präsident Obama. Die Vereinbarung endlich wird so, wie es heute durch harte Verhandlungsrunden ist, während die letzte Runde in Atlanta im September 2015 als die intensivste war. Die Verhandlungen zum TPP wurden bereits am 06. Oktober 2015 abgeschlossen. Im Februar kuendigten die USA das TPP worauf alle anderen Staaten sich einigten, das Schicksal des TPP im November 2017 endlich zu beschließen, wobei jetzt schon klar ist, dass die Mehrheit der Unterzeichnerstaaten das abkommen ratifizieren will (TPP11).

Der erfolgreiche Abschluss der TPP-Verhandlungen fügt Vietnam einer Gemeinschaft von 11 Nationen hinzu, die 28% des weltweiten Handels ausmacht.

Vietnam wäre der größte Profiteur dieses Handelspaktes. Das BIP in Vietnam würde eine sich zusätzlich um 13,6% steigern. Nach dem Weltwirtschaftsforum wird Vietnam voraussichtlich im Vergleich zu anderen TPP-Volkswirtschaften, RECP-Volkswirtschaften und RCEP-Volkswirtschaften die bedeutendste Veränderung des BIP im Jahr 2025 (d.h. 28,2%) aufweisen. Die Reallöhne von Vietnam werden bis 2025 ebenfalls voraussichtlich um 10,5% ansteigen, so dass Malaysias als zweithöchstes Einkommensaufsteigerland aus den TPP-Mitgliedern weit hinter sich gelassen werden wird.

Das TTP wird Vietnam dabei helfen, internationale Kooperationsmöglichkeiten zu nutzen, die Beziehungen zu den wichtigsten Märkten auszugleichen, sich größeren Märkten zu nähern, darunter Japan, Kanada, den Im- und Export zu steigern, das Import-Defizit zu reduzieren und ausländische Investitionen zu vergrößern. Darüber hinaus wird TTP auch dazu beitragen, dass die Wirtschaft Vietnams ihre Ressourcen effektiver nutzt und aktive Unterstützung der Prozesse der Umstrukturierung, der Innovation und der Verbesserung der Vorschriften ermöglicht und die Verwaltungsreformen verbessert.

Was macht das TPP zur Vorlage für kommende Vereinbarungen – Welche Verpflichtungen liegen außerhalb des WTO-Niveaus?

Die freiere Handelszone

Verpflichtungen im Handel mit Waren

Tarif- und nichttarifgebundene Handelshemmnisse werden im gesamten Handel mit Dienstleistungen und Waren im Rahmen des TPP erheblich reduziert und entfernt. Einfuhrzölle werden zu 100% für Waren reduziert, die zwischen den Mitgliedsstaaten gehandelt werden, wobei mehr als 90% sofort bei Abschluss des Abkommens beseitigt werden. Das TPP umfasst auch Fragen, die in Abkommen der WTO noch nicht angesprochen wurden, einschließlich der Ausfuhrabgaben, der Einfuhrzölle für Wiederverkäufe, des Marktzugangs für neu gestaltete Waren, strengere Vorschriften für Einfuhr- und Ausfuhrlizenzen, Monopole und Waren im Transit. Niedrigere Tarifbarrieren aus dem TPP geben Vietnam einen größeren Zugang zu großen Verbrauchermärkten in den USA, Japan, Kanada und Australien. Die potenziellen positiven Auswirkungen auf den Handel könnten transformativ sein, mit Schätzungen, dass das TPP die Ausfuhren Vietnams um über 37% bis 2025 steigern wird. Bemerkenswerterweise schloss Vietnam im August auch das Freihandelsabkommen mit der EU ab und ist somit dabei, Freihandelsabkommen mit drei seiner vier größten Exportziele – der EU, Japan und den USA – abzuschließen.

Verpflichtungen im Handel mit Dienstleistungen und Investitionen

Alle 12 Mitgliedsstaaten eröffnen die Möglichkeit eines liberalisierten Handels in diesem Bereich. Mehrere Sektoren werden im TPP im Vergleich zur WTO eröffnet, wie z.B. Telekommunikation, Vertrieb und Fertigung.

Darüber hinaus nimmt das TPP neben der Einbeziehung von grundlegenden WTO-Grundsätzen (nationale Behandlung (NT), Meistbegünstigung (MFN), Marktzugang und lokaler Präsenz) einen negativen Ansatz ein, so dass ihre Märkte für Dienstleister voll offen sind. Andere TPP-Parteien, soweit diese in ihren Verpflichtungen nichts anderes eingegangen sind (d.h. nicht- konforme Maßnahmen). Um solche Vorbehalte zu erheben, muss der Mitgliedsstaat die Notwendigkeit einer solchen Erhaltung und Verhandlung mit anderen Mitgliedsstaaten nachweisen. Bei der Genehmigung sind die nicht-konformen Maßnahmen nur auf solche Listen beschränkt, mit Ausnahme von Maßnahmen in bestimmten sensiblen Sektoren, die in einer separaten Liste enthalten sind. Die Mitgliedstaaten sind nur berechtigt, Maßnahmen zu ergreifen, die bereits besser sind als das bestehende (Ratchet-Prinzip). Das TPP schließt auch Verpflichtungen zur Beseitigung von Leistungsanforderungen ein (d.h. keine Bedingungen für lokale Anforderungen an Inhalte, Exportbedingungen, Nutzungen bestimmter Technologien, Standort des Investitionsprojekts usw.) und angemessene Anforderungen an die Geschäftsleitung und den Vorstand. Bemerkenswert ist, dass das TPP-Kapitel über Investitionen erstmals sehr klar und transparent im Hinblick auf das MFN-Prinzip ist, dass die Länder, die im Mehrstaatsregime tätig sind, den ausländischen Investoren die besten Investitionsbedingungen aller Staaten geben müssen, unabhängig von dem Staat, in dem die Investition findet statt. Investoren sind auch berechtigt, gegen die Regierung von der Investitionsregistrierung Anträge zu stellen.

Textilien

Textilien gehören zu den wichtigsten Handelswaren Vietnams. Nach Vorschlägen der Vereinigten Staaten wurden die Verhandlungen über Textilien getrennt von Verhandlungen über den Marktzugang für andere Güter geführt. Um für die TPP-Präferenzzollbehandlung qualifiziert zu sein, wendet das TPP das Stoff-Verarbeitungs-Prinzip an, d.h. Textilprodukte müssen in TPP-Ländern aus Stoffen vorbereitet werden. Allerdings enthält das TPP Ausnahmen, die es erlauben, dass (i) bestimmte Materialien von außerhalb TPP bezogen werden (“Short supply list”), (ii) bestimmte Fertigungsphasen (z.B. Färben, Weben usw.), die außerhalb von TPP durchgeführt werden sollen; Und (iii) ein Land, um Nicht-TPP-Materialien im Austausch für die Ausfuhr bestimmter Textilwaren in ein anderes Land verwenden zu können.

Staatliche Logistik

Das TPP macht eine Liste von Regierungsstellen und Agenturen, deren Logistik von bestimmten Waren und Dienstleistungen in einem bestimmten Betrag der öffentlichen Ausschreibung unterliegen muss. Dieses Kapitel enthält NT- und MFN-Prinzipien, entfernt bevorzugte Bedingungen, die lokale Ausschreibungen wie die Verwendung lokaler Güter oder lokaler Lieferanten, Bedingungen für den Technologietransfer oder den Zwei-Wege-Handel und die Investition usw. begünstigen. Diese Regelungen erfordern die Mitarbeit aller Parteien, insbesondere Vietnams, in Bezug auf Chinas Vorreiterstellung durch die vielen Angebote mit niedrigem Angebotspreis, aber qualitativ minderwertigen Dienstleistungen, ihre Gebotsverfahren zu reformieren und ihre eigenen Interessen zu schützen, indem sie die Angebote mit schlechter Leistung und geringer Kapazität disqualifizieren.

Streitbeilegung zwischen Investoren und Staaten

Das TPP zielt darauf ab, Investoren und ihre Investitionen in das Gastland zu schützen, indem sie Anforderungen an die Nichtdiskriminierung einführt; eine gerechte Behandlung einfordert; einen vollen Schutz und Sicherheit wahrt; das Verbot der Enteignung, das nicht für den öffentlichen Zweck, ohne ordnungsgemäßen Prozess oder ohne Entschädigung ist; die freie Übertragung von Mitteln im Zusammenhang mit Investitionen; und die Freiheit, Führungspositionen unabhängig von der Nationalität zu ernennen.

Das TPP enthält auch Verfahren für die Schiedsgerichtsbarkeit als Mittel zur Beilegung von Streitigkeiten zwischen Investoren und dem Aufnahmestaat. Es deckt neue Bestimmungen im Vergleich zu bestehenden Vereinbarungen wie Transparenz in Schiedsverfahren, Offenlegung von Einreichungen und Schiedssprüchen und die Beteiligung interessierter nicht streitender Parteien, um amicus curiae (lat. für: unabhängige Sachverständige) Entscheidungen zu erhalten.

Vereinbarkeit des TPP und älterer / bestehender Vereinbarungen

Die Mitgliedsstaaten des TPP erkennen die bestehenden Rechte und Pflichten jedes Mitglieds im Rahmen bestehender internationaler Vereinbarungen an, zu denen alle TPP-Mitgliedsstaaten Parteien sind (z.B. WTO-Abkommen, NAFTA oder weitere bilaterale Abkommen) oder von den mindestens zwei Mitgliedsstaaten Parteien sind. Im Falle einer Kollision zwischen einer Bestimmung des TPP und einer Bestimmung einer anderen Vereinbarung, auf die mindestens zwei TPP-Mitgliedsstaaten Parteien sind, werden diese Parteien miteinander eine gemeinsame zufriedenstellende Lösung erreichen. Bitte beachten Sie, dass der Fall in dem eine andere Vereinbarung eine günstigere Behandlung von Waren, Dienstleistungen, Investitionen oder Personen als die Behandlung des TPP vorsieht, nicht als Inkonsistenz angesehen wird.

Frist der Umsetzung des TPP

Am 04. Februar 2016 trafen sich die Handelsminister in Neuseeland, um das Abkommen zu unterzeichnen, damit es in den einzelnen Mitgliedstaaten im nächsten Schritt vor dem Inkrafttreten des Abkommens ratifiziert wird. Die TPP wird nicht wirksam, wenn nicht mindestens sechs Länder, die 85% des BIP des Blocks ausmachen, es ratifizieren. Laut dem Vietnamesischen Minister für Industrie und Handel, Herrn Vu Huy Hoang, wird erwartet, dass das TPP im Jahr 2018 in Kraft tritt auch ohne die USA! Dies wird auf dem APEC Treffen im November 2017 entschieden.

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Bitte zögern Sie nicht, Herrn Rechtsanwalt Dr. Oliver Massmann unter omassmann@duanemorris.com zu kontaktieren, sofern Sie Fragen haben oder mehr darüber erfahren möchten. Dr. Oliver Massmann ist der Geschäftsführer von Duane Morris Vietnam LLC.

Vielen Dank!

 

 

 

 

 

Vietnam Wind Power is taking off – The new Feed in Tariff – what you must know:

Decision No. 37 of the Prime Minister on supporting regime for wind power projects provides an FIT of 7.8 UScent/ kWh. This FIT applies to two current projects in operation in Binh Thuan, namely Phu Lac and Binh Thuan No. 1. For Bac Lieu near shore wind project, the FIT follows a special financial regime, being 9.8 UScent/kWh. However, with the current FIT, the Ministry of Industry and Trade (MOIT) opines that it will be difficult for these plants to recover their investment capital.

Thus, the MOIT has recently proposed the Government to increase wind FIT for inland wind power plants to 8.77 UScent/ kWh and to 9.97 UScent/kWh for near shore wind projects. This proposal is expected to attract more investors in the market as well as create incentive for current projects whose pre-feasibility reports have been approved by the MOIT to come into real operation.

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If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!

 

 

Lawyer in Vietnam Dr. Oliver Massmann – Solar Power Development in Vietnam – what you must know:

 

  1. What can you tell me about the policies Vietnam now has in place to support solar development?

The legal framework is almost complete. I expect the solar PPA template will be issued within this year so that the investors have full guidance to develop projects in Vietnam. However, as I see from the recent draft solar PPA, it repeats the same mistakes in other renewable PPAs that make projects not bankable. This issue needs to be sorted out soon so that solar development will be on fast track in near future.

  1. Total PV installations in Vietnam are still quite low — what has been holding back development?

Because the latest Prime Minister’s Decision promulgating solar FIT was only issued on 11 April 2017. In addition, solar energy is still expensive and less stable throughout the year compared with other sources of energy. Bankability of the PPA is also a worth-noting issue.

Bankability of PPAs has been achieved for other power projects in the past in Vietnam. We are now working on solutions for the solar power sector. It can be done.

  1. How do you see the solar market evolving through the end of this decade, both in terms of manufacturing and project development?

I foresee a rapid development in the sector. This is due to the Government’s change of focus on clean energy and environment protection policies. I can see many foreign investors visiting Vietnam recently to look for investment opportunities and many of them have managed to reach a deal with local partners.

  1. Where are the opportunities in Vietnamese PV and how should prospective investors and developers approach the market?

Vietnam is an untapped market for solar. The Government offers many good incentives to attract foreign investment, for example, exemption of land rental within 3 years from the operation date, CIT 10%, etc. Investors and developers should first establish close contact with local authorities and conduct careful due diligence on local partners. BOT is the most recommended investment form. In addition, investors and developers may consider taking part in different segments such as equipment supply, solar panels manufacturing, or assembling, etc.

  1. What can you tell me about the availability of financing?

IFC and ADB are the most active financiers. Local banks are also more and more interested in lending to renewable projects in general and solar projects in particular. However, due to poor performance and credit of EVN, the financing resources are still limited. We recommend MIGA (Multilateral Investment Guarantee Agency) support for on-grid utility scale solar power projects (above 50 MW).

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If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com, Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!

 

 

 

Lawyer in Vietnam Dr. Oliver Massmann – E-COMMERCE IN VIETNAM – WHAT YOU MUST KNOW:

1. Who are the major ‘e’ commerce players in Vietnam?
Global Sources, Sendo, chodientu, Agoda, Foody, Lazada, Tiki, Zalora, Nguyen Kim and adayroi according to public source.

2. How are they structured?
a. Sales through global website/ Direct ship to customer
Mostly online travel agents are structured this way.
b. Sales through a global website/ Shipment through a Bonded Zone or Foreign Trade Zone
c. Sales through a local website/ imported by resident entity
Mainly sales through a local website and/ or imported by a resident entity.
d. Other

3. What is the Sales/ Shipment Volume
The latest statistics is from 2015, when the total e-commerce revenue was USD4.9 billion.

4. How are duties and taxes assessed?
Duties and taxes are assessed based on total revenue of the enterprise/ individual.
Enterprises doing e-commerce business registered in Vietnam must pay Value- Added Tax (VAT) at a basic rate of 10% and Corporate Income Tax (CIT) of 20%.
Individual residents doing e-commerce business without establishing a company in Vietnam will only be subject to tax obligations if they have annual sale revenue (including other sale activities) of over VND100 million. In particular, they have to pay VAT of 1% and personal income tax (PIT) of 0.5% over the sale revenue.
Foreign contractors must declare and pay taxes, either via their authorized person in Vietnam or tax agents.

5. What is the profile of a typical ‘e’ commerce shopper?
In 2015, an average monthly income of consumers in Hanoi and Ho Chi Minh City was USD700 – 720. Vietnamese people tend to save 11-12% of their income generally. They spend 27-29% of their income on fresh food and fast moving consumer goods (FMCG). An average Vietnamese online shopper spends USD150 purchasing goods & services online per year in 2015. People having higher income shop less frequently than those with lower income, but when the former do, they spend more.
Around 25-35% of Vietnamese consumers tend to try multiple brands instead of sticking to one/ a few familiar or well-known brands.

6. How is ‘e’ commerce affecting the traditional bricks & mortar shop?
Bricks & Mortar retailers have to make plan to develop e-commerce channels. Some successful retailers are NguyenKim, thegioididong and FPT.

7. Has ‘e’ commerce hit the rural areas?
Yes, but still to a very limited extent. Bricks & mortar establishments still dominate the rural market. However, as a result of internet availability, smartphone usage and increasing GDP, we expect that e-commerce will become more popular in rural areas in the near future.

8. How is delivery made?
Delivery is mainly dependent on a third party’s service.
Delivery by motorbikes is the most popular means of delivery thanks to its flexibility and convenience in Vietnam’s narrow streets, small alleyways and dense traffic.
Cash on Delivery is still preferable in Vietnam (85% of e-commerce users choose this method).
Although there are many international logistics service providers in Vietnam, local ones are in many cases better choices because they have nationwide coverage, industry understanding and experience, as well as cheaper delivery cost.

9. How are return goods handled?
Depending on policies of each e-commerce site. For example, returning process can be done by filling an online form, going to the office directly or phone calling. Returnable duration varies by each site, from 07 days to 30 days.

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!

 

Lawyer in Vietnam Dr. Oliver Massmann UNNECESSARY TAX AND CUSTOMS RELATED BURDENS ON INVESTORS

The Government has implemented principles and measures in order to create favorable economic environment for enterprises through the issuance of Resolution 35/2016/NQ-CP dated 16 May 2016. These principles include, among others:

  • The State shall ensure the stability, consistency and predictability of relevant policies.
  • Regulations on business shall be clear, transparent and achievable, and the State shall issue reasonable route maps for removal of unreasonable sub-licenses, fees and charges.
  • Competent authorities shall be in charge of examining regulations on tax, tax administration and customs and proposing adjustments to simplify process and save time and business costs.

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