Duane Morris Vietnam

July 13, 2016 by Dr. Oliver Massmann

ベトナムにおける弁護士　オリバー　マスマン：M&A市場分析の要約

過去12ヶ月で最大且つ最も注目すべきM&A 取引

金融での注目すべきM&A取引は以下の通りです。

2015年5月、サイゴン商信株式商業銀行Sai Gon Thuong Tin Commercial Joint Stock Bank（Sacombank）はSouthern Commercial 株式銀行と合併しました。この合併により、Southern 銀行の株主はそれぞれ保有する株式に対しSacombank銀行の株式を0.75取得。Sacombank銀行という合弁企業自体は定款資本を18.85 兆ベトナムドン（8億5600万米ドル）以上保有し、総資産は290.86 兆ベトナムドン（132億米ドル）以上となっています。Sacombank銀行の株主は93.7％の議決にて合弁に同意しました。
2015年5月、the Mekong Housing Bank とベトナム投資開発銀行との合併が完了しました。
2015年5月、ベトナム工商銀行（Vietinbank）はペトロリメックス株式商業銀行（PG Bank）と合併しました。PG Bank の株とVietinbankの株の交換比率は1株：0.9株となり、Vietinbank は同社の株2億7000万株をPG Bank の株式3億株と交換できます。合併によりVietinbank の総資産は25兆ベトナムドン（11億9000万ドル）から685兆ベトナムドン（317億ドル）に増加し、定款資本は3兆ベトナムドン（1億4286万米ドル）から40兆ベトナムドン（18億5000米ドル）以上に増加しました。
2015年5月、クレディセゾンはベトナムで3番目に大きな消費者金融事業であるHDファイナンスの資本の49％を保有する為におよそ5億円費やしています。
2015年8月、メコン開発銀行（MDB）は定款資本の面で国の5大銀行の1つになる機関を形成する為にベトナム海事商業銀行（Maritime Bank）と合併をしました。近年、海事銀行の定款資本は3億7380万米ドルでメコン開発銀行は1億7523万米ドルとなり、つまり新しい金融機関は定款資本が5億4900万米ドル、総資産は52億8000万米ドルとなる見込みです。

その他

小売での注目すべき取引は以下となります。

2016年4月29日、タイのセントラルグループはフランス系カジノグループからビッグCを14億4000万米ドルで買収しました。
2015年6月、ウォーバーグ・ビンカス（ WarbusPincus）はビンコムリテール（Vincom Retail）に1億米ドル投資し、少数株主を維持しました。

食品での注目すべき取引は以下となります。

2015年5月、マサングループ（Masan Group）はVietnam French Cattle Feed JSC (Proconco) の総株式の52％を取得しています。買収はグループがSam Kim Limited Liability Companyの総株式の99.99%を買収し、Masan Nutri-Science Companyに改称した際に行いました。
2015年5月、Filipino firm Pilmico Foods Corporationは拡張入札の為にベトナムのいくつかの飼料会社を買収。the Aboitiz Group の子会社であるPilmicoは2014年に2800万米ドルの価格でVinh Hoan 1 Feed JSC (VHF)の総株式の70％を買収しました。
2015年7月、Mondelēz Internationalはおよそ3億7000万米ドルでベトナムの人気スナック事業である Kinh Do Corporationの総株式の80％の買収を完了しました。
2016年6月30日、Masan Nutri-Science株式会社はAgricultural Nutrition株式会社の株式を追加で30％買収し、会社の完全所有者になりました。

不動産での注目すべき取引は以下となります。

2015年5月、ドゥックロンザライ（Duc Long Gia Lai）は取引価格1170万米ドルでマスノーブル（Mass Noble）の株式97.73％を買収しました。
2015年6月、総取引金額は公表されていませんが、ビングループはVefac の89.42%を買収しました。
2015年6月、香港に拠点を置く非公開投資会社のGaw Capital Partners (GCP)は、ベトナムの不動産プロジェクトのポートフォリオを取得しました。ポートフォリオは1億600万米ドルで買収され、Indochina Land Holdings 2 Ltd の下で残りの４つのプロジェクトから成り立っています。
2015年6月、ムンタンホスピタリティー（Muong Thanh hospitality）及びプードンホテル（Phuong Dong hotel）との間の買収が完了しました。ムンタンホスピタリティーはプードンホテルを100％買収し、Phuong Dong Petroleum Tourism JSC社の一部になりました。
2015年7月初旬、マレーシアの不動産開発のGamuda Berhad の1部門であるGamuda Land VietnamはサコムリアルからCeladon City 及びThanh Cong JSC (TTC)を推定1.4 兆ベトナムドン（6410万米ドル）で買収しました。推定初期投資は 24.8兆ベトナムドン（11億米ドル）となっています。
2015年、ビングループは不動産、小売、物流部門において支配的なローカルM&A買収者となりました。最も注目すべき追加案件は以下となります。

o マステリ・タオディエン（Masteri Thao Dien）は7500万米ドル

o ビナテックス（Vinatex）の株式保有30% が2600万米ドル

o Giang Vo Tradeの株式保有90％が6900万米ドル

o Hop Nhat Express の株式保有30% は5200万米ドル

2015年12月、ビングループは取引価格2億5200万米ドルでホアフオンズオン社（Hoa Huong Duong）を完全買収しました。この取引によりビングループはホアフオンズオン社の子会社であるVinaconex-Viettel の98.3％株式を取得しました。
2016年3月、ロッテグループはポスコからホーチミン市にあるダイヤモンドプラザの総株式の70％を買収しました。取引価格は公表されていません。
2016年4月、Muong Thanh Corporation は取引価格3兆5000億ベトナムドンでCienco 5の総株式の95％を買収しました。

保険

2016年4月、エースライフ（ACE Life）とChubb の間の合併は完了し、エースライフは社名をChubb Life in Vietnam に変更しました。
2ヶ月後、パシフィックセンチュリーの支社であるFWD保険会社はこの買収に関するライセンスを受領後にGreat Eastern Vietnam の買収を開始しました。

M&A取引の体制での主要な動向

ベトナムでは、資産買収取引よりも株式買収取引のほうが多く、M&A取引は株式取得または資産買収のどちらかの形で行われます。

外国人購入者による株式取得は一般的にオフショアの直接投資として構成されています。新投資家は以下が可能です。

対象企業の現在の株主から株式取得または出資が可能（例、株式会社、有限会社など）。
対象企業の新規株式の発行を許可（株式会社に対して）。
対象企業の追加出資が可能（有限会社に対して）。

資産取引の場合は、外国人購入者は原則的にベトナムに新たな子会社を設立しなければなりません。

さらに、M&A取引は合併の形を取ることが可能となります。2つ以上の同業企業は別の企業と合併することができ、全ての資産、権利、義務、利益を合併した企業へ転送でき、合併している企業を終了することが出来ます。

2014年企業法はM&A取引の結果として投資家により使用される事業構造のタイプを設定することが可能となります。さらに、2014年投資法はM&A取引を規制し、その取引に投資証明書が不要であると明確に示した最初の法律です。対象企業が外国人投資家に対して適用している条件付き事業分野を運営する場合、または対象企業の51％以上が外国資本になる投資の場合（特に、51％以下から51 ％以上、51％から51％以上）、外国人投資亜家は現地の計画投資省にて取引の承認を得なければなりません。他の例では、対象企業は事業登録課にてメンバーまたは株主の登録者を変更する必要があります。この変化は幸いにもM&A取引を通してベトナム市場に参入または拡大しようとしている外国人投資家が経験している不明確で苦労を終わらせることができると予想されています。

過去12ヶ月での未公開株式の担保入札のレベル及び範囲

M&A取引の形での投資はいまだに非公開株式投資と比較して最も一般的な投資の形です。ここ数ヶ月で、非公開株式資本はベトナムでの証券市場に続いており、特にバリューチェーン活動を行っている企業にあります。消費財やインフラが最も注目を集めている分野となっていますがただ、情報公開が制限されている為、完全に非公開株式の担保入札を評価するこはできません。

過去12ヶ月の競合規制者のアプローチ

産業貿易商（VCA）のもとでベトナム競争庁は参加企業が30％から50％関連市場の合計市場シェアを持つ場合、その取引の通知をしなければなりません。VCAは合計市場シェアの計算が正しいか、また取引が禁止されているかどうか（つまり、ある特定の場合を除いて合計市場シェアが50％を超えているかどうか）を調査します。取引は競争法の基でその取引が禁止されていないとVCAが確認書を発行した際に行われます。

更なるVCAの情報はwww.vca.gov.vn/Default.aspx?lg=2をご確認下さい。

今後12ヶ月の間にM&A市場に影響を与える主な原因。

国がより深くそして広く世界市場に統合することによりM&A活動に新たなチャンスを提供しています。

もう一つの要因は特に環太平洋オアートなーシップ（TPP）などの署名した貿易協定に基づき要件を満たす為に国営企業（SoEs）を民営化する政府の強いプレッシャーが挙げられます。

外国投資の奨励兆候は以下の通りです。

経済再起
外国人投資家により幅広いアクセスを許可する政策の改革
2015年終わりにアセアン経済共同体の形成
自由貿易協定（FTA）や環太平洋パートナーシップ（TPP）の締結
株式市場の跳ね返し
上場企業の外国人投資家の許可レベルを増加する新規則

新投資法、企業法及びその他の法律や政策の導入により原則として投資や貿易、特にM&A市場に関する法的環境が改善しています。しかし、以下の要因がM&A取引に影響を及ぼしています。

ベトナムのWTO委員会のような国際条約の地元ライセンス当局による異なる解釈及び履行。
異なるタイプの取引に適用される異なるライセンス手続き（例、外資企業または国内企業、公開会社または非公開会社、国営企業の株式または非公開株式の買収）。

法的そして統治に対する障害やマクロ不安定性や市場の不透明性などが投資家にとって最大の関心事ではありますが、ベトナムにおけるM&A取引はまだ市場参入のための効果的な手段の１つとして期待できるでしょう。

ベトナムのM&A市場において期待される主な傾向は以下が含まれます。

銀行再編
特に不動産分野における買収及び反買収
M&A取引を通じベトナムにおける日本及びタイの投資の成長
国営企業の改革

金融派生商品市場はリスクを防ぎ、株式市場の成長を後押しし、M&A取引を促進し役立つとされる為2016年に開かれることが期待されています。

（ご注意）こちらの記事は皆様に情報をお届けする目的でのみ作成・掲載しておりますので、法的なアドバイスとして提供・構成することを目的としておりません。詳細につきましては、当法律事務所の注意書きをご一読下さい。

上記の内容に関しまして、さらなる詳細やご質問がもしございましたら遠慮なくomassmann@duanemorris.comまでご連絡ください。オリバー　マスマンはドウェイン・モリス・ベトナム法律事務所のディレクターです。

July 13, 2016July 14, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Why it is best to start preparing for transactions now in Vietnam ?

Vietnam has concluded the Trans-Pacific Partnership (“TPP”) and the EU- Vietnam Free Trade Agreement (“EVFTA”). Meanwhile, the ASEAN Economic Community (“AEC”), which Vietnam became a full member in 1995, has been established since the end of 2015. With such deep integration into the multilateral and regional economy, Vietnam is expected to be an attractive investment environment for investors and witness a significant growth in the upcoming years.

Vietnam has made progress over 3 continuous years to reach 56^th position in 2015 on the Global Competitiveness Index list, a jump of 12 positions compared to 2014. It is noteworthy that Vietnam is more competitive than 6 European Union countries on this list. Even more notably, 4 out of these 6 countries, namely Slovenia, Cyprus, Slovakia and Greece, are considered as advanced global economies, and have the GDP per capita of at least USD17,700, eight times more than Vietnam.

Samsung Electronics Company has decided to choose Vietnam as the Number 1 country to put their world largest mobile and tablet production and invested more than 6 Billion USD after a researching worldwide. Also major Japanese companies are convinced Vietnam is a top investment destination and become the largest investors in Vietnam.

The Vietnamese Government has made great attempts to develop itself by opening its economy to international trade, investments and free movement of people. The following section provides an overview of these free trade agreements and the AEC to help investors understand what is awaiting them ahead and decide their investment in Vietnam.

TPP

The TPP was originally known as the Trans- Pacific Strategic Economic Partnership concluded in 2006 among Singapore, New Zealand, Chile and Brunei (P-4 agreement) as a means to promote trade liberalization in the Asia- Pacific Region. As its name indicates, the original purpose of the agreement was only to address economic issues. As the number of participating countries in the P-4 agreement increased, starting with the United States in September 2008 and other countries to follow being Australia, Peru, Vietnam, Malaysia, Canada, Mexico and Japan until July 2013, the agreement is agreed to be “a comprehensive, next-generation regional agreement that liberalizes trade and investment and addresses new and traditional trade issues and 21st-century challenges” by TPP Trade ministers. In June 2015, the United States approved the trade promotion authority for President Obama. The Agreement finally becomes as it is today through tough negotiation rounds, while the last round in Atlanta in September 2015 was considered the most intensive one. The TPP was already concluded on 06 October 2015.

TPP Market Snapshot

· GDP: US$28,136.0 billion (2012)

· GDP per capita: US$35,488 (2012)

· Population: 792.8 million (2012)

· TPP % of world GDP: 39.0% (2012)

· TPP % of world population: 11.3% (2012)

· TPP % of world trade: 25.8% (2012)

The TPP includes thirty chapters with deep focus on comprehensive market access, a fully regional agreement, cross-cutting issues (regulatory coherence, competiveness and business facilitation, small and medium sized enterprises, and development), and new trade challenges (particularly rules on state owned enterprises and government procurement).

The TPP would expand market access in goods and services among its signatories. The market access issues include liberalization of trade barriers protecting dairy, sugar, and rice; tariffs and origin rules affecting textiles, clothing, and footwear; and services trade reforms, especially financial services, insurance, and labor services.

Vietnam would be the largest beneficiary of this trade pact, resulting from its strong trade ties with the United States, high level of protection against its main exports (i.e., apparel and footwear), and its highly competitive positions in industries such as manufacturing where China is gradually losing its competitive advantage. Statistics shows that by participating in the TPP, Vietnam’s GDP would add an additional increase of 13.6% to the baseline scenario.

TTP will help Vietnam make good use of international cooperation opportunities, balance relationships with key markets, approach larger markets including the U.S, Japan, Canada, boost import-export, reduce import deficit, and attract foreign investment. In addition, TTP will also help Vietnam’s economy allocate its resources more effectively, enabling active supports to the processes of restructuring, innovation and improving regulations, and improve administrative reforms.

Higher income will help Vietnam to invest more and grow more

Vietnam is among the largest income gains in TPP

The TPP is now being submitted for ratification in each country before it officially takes effect. Despite all political concerns, we strongly believe that the TPP will finally be implemented in 2018.

AEC

The AEC originates from the ASEAN Vision 2020, which was adopted in 1997 on the 30th anniversary of the Association of Southeast Asian Nations, made up of Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam (ASEAN). With a population of more than 600 million and a nominal GDP of about $2.31 trillion, ASEAN is a strong economic community in Asia and also a driver of global growth.

The AEC encompass the following characteristics: (i) a single market and production base, (ii) a highly competitive economic region, (iii) a region of equitable economic development, and (iv) a region fully integrated into the global economy.

The AEC is expected to be an area where goods can circulate freely and in which custom duties on goods will be gradually reduced to 0%. It will establish ASEAN as a single market and production base, making ASEAN more dynamic and competitive with new mechanisms and measures to strengthen the implementation of its existing economic initiatives; accelerating regional integration in the prioritized sectors; facilitating movement of business persons, skilled labor and talents; and strengthening the institutional mechanisms of ASEAN.

The free flow of investment will also offer enhanced investment protection to all ASEAN investors and their investments in other ASEAN member countries, including the settlement mechanism of an investor state dispute based on a non-discrimination principle when investing in other ASEAN countries. Those principles play a very important role in providing investor confidence when making cross-border investment.

Once the AEC is completed, it will be a unified market, a common manufacturing area seeking for more dynamic and competitive development and to create new opportunities for tariff reductions as well as other trade incentives.

AEC Market Snapshot

· GDP: US$2311.3 billion (2012)

· GDP per capita: US$3748.4 (2012)

· Population: 620 million, 60% under the age of 35

· AEC % of world GDP: ~3.3%

· AEC % of world population: 9%

· AEC’s merchandise exports: US$1.2 trillion – ~54% of total ASEAN GDP and 7% of global exports

· If ASEAN were one economy, it would be the 7^th largest in the world – 4^th largest by 2050 if growth trends continue

EVFTA

On 02 December 2015, after nearly 3 years with 14 rounds of negotiations, the Minister of Industry and Trade of Vietnam, H.E. Vu Huy Hoang and the European Commissioner for Trade, H.E. Cecilia Malmström have signed the EVFTA. Both parties will finalize the ratification process as soon as possible for the EVFTA to take effect from the beginning of 2018.

The EVFTA is considered one of the most comprehensive and ambitious trade and investment agreements. It is the second agreement in the ASEAN region after Singapore and it will intensify the bilateral relations between Vietnam and the EU.

The agreement has separate chapters on Trade of Goods, Rules of Origin, Customs and Trade Facilitation, Sanitary and Phytosanitary measures and Technical Barriers to Trade, Trade in Services, Investment, Trade Remedies, competition, State-Owned Enterprises, Government Procurement, Intellectual Property, sustainable Development, Cooperation and Capacity Building, Legal and Institutional Issues.

Nearly all customs duties – over 99% of the tariffs will be eliminated. The small remaining number is mainly due to the transition period. Vietnam will liberalize 65% of import duties on EU exports to Vietnam at entry into force and the remaining duties will be eliminated due to the next ten years; EU duties will be eliminated over a seven year period. The market will be opened for most of EU food products, i.e. wine, spirits and frozen pork meat will be liberalized after seven years and dairy products after a maximum of five years. The EU will eliminate duties for some sensitive products in the textile and footwear sector. The EU has offered access to Vietnamese exports via tariff rate quotas (TRQs), because some sensitive agricultural products will not be fully liberalized. Furthermore, the agreement will contain an annex with provisions to address non-tariff barriers in the automotive sector. Vietnamese exports of textile, clothing and footwear to the EU are expected to more than double in 2020 as a result of the EVFTA.

The EVFTA will help to increase quality of investment flows from EU, accelerate the process of sharing expertise and transfer of green technology and the creation of more employment activities.

The real wages of skilled laborers may increase by up to 12% while real salary of common workers may rise by 13%. The macro economy will be stable and inflation rate is controlled. Vietnam’s business activities will be booming in the next few years once the EVFTA officially comes into force and Government’s policies as well as institutional reforms start showing their positive effects.

Vietnam’s GDP is expected to increase by 0.5% annually, increase in exports is 4-6% per year. If this trend continues until 2020, Vietnam’s exports to EU will increase by USD 16 billion. Until 2025, the EVFTA is estimated to generate an additional 7-8% of GDP above the trend growth rate.

In 2013, the EU was Vietnam’s second biggest trade partner with a total value of trade in goods of EUR 24.2 billion. In the same the EU was also Vietnam’s biggest export market with EUR 21 billion, representing 19% of Vietnam’s total export. Vietnam’s export to EU increased by 28% from 2012 to 2013. In addition, the EU is among the biggest investors in Vietnam, with 1,810 FDI projects in 2013. The EU committed to continuing to support with the foreseen assistance amount of EUR 400 million in the coming six years. EU exports to Vietnam are dominated by high-tech products including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products. Vietnam’s key export items to the EU include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, aqua products, and furniture.

Conclusion: Why investment in Vietnam now?

Vietnam ties in first place with Singapore, thus it provides highest possible protection for investment

Country	Limitation of market access*	Country	Limitation of market access*
Malaysia	medium	Myanmar	high
Indonesia	medium	Cambodia	medium
Philippines	medium	Laos	medium
Singapore	low	India	high
Thailand	medium	China	medium
Brunei	high	Vietnam	low

*Typical restrictions: number of opened sectors, JV requirement, limits on foreign-owned shares, permission requirement

Vietnam has the fastest growing middle class with a very good demographic situation: about 90 Million people of which about 50 percent are under 30 years old.

Expectations of Vietnam parties might get unreasonable, the same as after Vietnam acceded to the WTO in 2007 and no projects could be done.

Market opening in certain sectors, for example, media, and there could be more competing companies from the AEC with better market access to Vietnam. Thus, it is vital that investors start working on their projects now to position themselves as early as possible before the coming into effect of the trade pacts.

***

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

July 13, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Interview with Caijing Magazine on the Trans Pacific Partnership Agreement and Institutional Reform and Competitiveness of Vietnam

1) Among the recommendations you raised for the government, reform to SOEs is the first one. Based on your observation, what are the remaining challenges for SOE reforms?

Answer: Comprehensive institutional reform of SOEs is of highest importance. It must be done by real privatization with majority options for investors. Investors must be granted with real performance control and business management control for SOE management. The Government must increase the number of shares sold and ensure a win-win solution for both investors and the government. In addition, the Government must stop supporting SOEs with loans to solve non-performing loan problem. These reforms should be fully implemented until end of 2017 or it will be too late to grasp the benefits of the upcoming EVFTA and the TPP.

2) Did you have a Q&A session with the members of the National Assembly? What are the issues they care about?

Answer: Yes. The main issue of their concern is what “institutional reform” of SOEs means. When they have a clear understanding of the concept, they will be able to develop a detailed plan. I have explained to them the meaning of institutional reforms as you see from my answer in Question 1. Other issues that some members raised are implementation of the TPP (by adopting a single and exclusive document for the TPP or other solutions), technical barriers for agricultural and livestock products, real advantages of reduced tariffs (in reality, not many firms are able to take advantage of the tariff reduction or the reduced tariffs have been applied in certain bilateral agreements) as well as competition issues.

3) As you mentioned 60% of imported materials sourced from other non-TPP countries, will the yarn-forward rule of origin totally change the supply chain and economic structure here? I heard a Chinese textile company is developing an industrial park in Vietnam in order to do weaving and dying here.

Answer: Vietnam will have to scale up the value-added chain as a result of the TPP. To enjoy benefits of TPP’s rules of origin, there must be a total transformation of the Vietnamese garment sector from a purely “cut and sew” operation to the next level of the supply chain. Not only Chinese investors are diverting their investment in Vietnam in this sector, the Japanese and EU investors are also considering this as a great opportunity to invest as there will be a huge demand for textile machines. The sector will witness significant changes when it becomes a fully integrated garment centre.

4) We heard a lot of discussion on TPP’s impact on the textile, garment and footwear industry. As the traditional industries, they are going to have much more opportunities when TPP takes effect. Are there any other industries will also benefit from it? How about the challenges TPP will bring to certain industry, like agriculture?

Answer: The TPP will have significant positive impact on Vietnam’s exports in textile, footwear, agriculture, forestry and fisheries sectors. This is due to major reduction in import duties for goods from Vietnam, especially in Japan and the United States. Supply chain established after the effectiveness of the TPP will also bring Vietnam a lot of new opportunities. Recently, many big corporations have chosen Vietnam as a part of their production chain of high tech products. The TPP will help to develop this trend.
The livestock industry will suffer from fierce competition as a result of the TPP. In Vietnam, the livestock industry is still small, not modernized, mainly household scale with participation of small and medium enterprises. Products have certain difficulties in meeting high quality and sanitary standards.

5) How do you see TPP’s role in Vietnam’s economic reform?

Answer: Vietnam would be the largest beneficiary of this trade pact. Statistics shows that by participating in the TPP, Vietnam’s GDP would add an additional increase of 13.6% to the baseline scenario. According to the World Bank and other institutions, Vietnam’s GDP in 2020 will increase by USD 23.5 billion and USD33.5 billion in 2035. Export value will also increase by USD 68 billion in 2025. Vietnam’s real income by 2025 is also forecast to increase by 10.5%, leaving Malaysia’s as the second highest income rising country out of the TPP members far behind at 5.6%.
TTP will help Vietnam balance relationships with key markets, approach larger markets including the U.S, Japan, Canada, boost import-export, reduce import deficit, and attract foreign investment. In addition, TTP will also help Vietnam’s economy allocate its resources more effectively, enabling active supports to the processes of restructuring, innovation and improving regulations, and improve administrative reforms.
For your information, Vietnam has made progress over 3 continuous years to reach 56th position in 2015 on the Global Competitiveness Index list, a jump of 12 positions compared to 2014. It is noteworthy that Vietnam is more competitive than 6 European Union countries on this list. Even more notably, 4 out of these 6 countries, namely Slovenia, Cyprus, Slovakia and Greece, are considered as advanced global economies, and have the GDP per capita of at least USD17,700, eight times more than Vietnam.
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Please do contact the author Oliver Massmann under omassmann@duanemorris.com if you have any questions. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

July 7, 2016July 7, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Public mergers and acquisitions: market analysis overview

Largest / most noteworthy public M&A transactions in the past 12 months
Financial
Noteworthy public M&A transactions include the following:
• In May 2015, Sai GonThuong Tin Commercial Joint Stock Bank (more commonly known as Sacombank) merged with Southern Commercial Joint Stock Bank. Following the merger, Southern Bank shareholders obtained a 0.75 Sacombank share for each share they held. The merged entity, to be called Sacombank, will have a charter capital of more than VND18.85 trillion (US$856 million) and total assets of over VND290.86 trillion (US$13.2 billion). Sacombank’s shareholders agreed to the merger by a 93.7% vote.
• In May 2015, the merger between the Mekong Housing Bank and the Bank for Investment and Development of Vietnam was completed.
• In May 2015, the Vietnam Bank for Industry and Trade (Vietinbank) merged with Petrolimex Group Commercial Joint Stock Bank (PG Bank). The change rate for PG Bank shares to Vietinbank shares was 1:0.9, which means Vietinbank exchanged 270 million of its shares for 300 million of PG Bank shares. The merger increased Vietinbank’s total assets by VND25 trillion (US$1.19 billion) to VND685 trillion (US$31.7 billion), and its chartered capital by VND3 trillion (US$142.86 million) to more than VND40 trillion (US$1.85 billion).
• In May 2015, Credit Saison spent about JPY5 billion to take a 49% stake in HDFinance, Vietnam’s third largest consumer finance business.
• In August 2015, the Mekong Development Bank (MDB) was set to merge with the Vietnam Maritime Commercial Bank (Maritime Bank) to form an institution that would be among the country’s five largest banks in terms of charter capital. Currently, Maritime Bank’s charter capital is US$373.8 million and MDB’s is US$175.23 million, meaning that the new banking institution would have a charter capital of US$549 million and total assets of US$5.28 billion.
Other
Retail.Noteworthy public M&A deals include the following:
• On 29 April 2016, Thailand’s Central Group bought Big C from Casino at a value of USD1.14 billion.
• In June 2015, WarbusPincus invested $100 million into Vincom Retail and still remained as a minority shareholder.
Food. Noteworthy deals include the following:
• In May 2015, Masan Group acquired 52% of the total shares in Vietnam French Cattle Feed JSC (Proconco). The acquisition occurred when the group bought 99.99% of the total shares in Sam Kim Limited Liability Company and renamed it Masan Nutri-Science Company.
• In May 2015, Filipino firm Pilmico Foods Corporation acquired some feed companies in Vietnam in an expansion bid. Pilmico, a subsidiary of the Aboitiz Group, had bought 70% of the total shares in VinhHoan 1 Feed JSC (VHF) at US$28 million in 2014.
• In July 2015, Mondelēz International completed the acquisition of 80% of the total shares in Kinh Do Corporation, a popular snack business in Vietnam, for about US$370 million.
• On 30 June 2016, Masan Nutri-Science Joint Stock Company bought additionally 30% of Agricultural Nutrition Joint Stock Company, leading to its 100% ownership in the company.
Real estate. Noteworthy deals include the following:
• In May 2015, Duc Long Gia Lai obtained 97.73% of Mass Noble with a transaction value of $11.7 million.
• In June 2015, 89.42% of Vefac was acquired by VinGroup, although the total transaction value was not disclosed.
• In June 2015, Gaw Capital Partners (GCP), the Hong Kong-based private equity firm, acquired an existing portfolio of real estate projects in Vietnam. The portfolio was purchased for US$106 million and is comprised of four of the remaining projects originally held under Indochina Land Holdings 2 Ltd.
• In June 2015, an acquisition between Muong Thanh hospitality and Phuong Dong hotel was completed. Muong Thanh hospitality acquired 100% of Phuong Dong hotel, a part of the Phuong Dong Petroleum Tourism JSC.
• At the beginning of July 2015, Gamuda Land Vietnam, a division of Malaysian property developer GamudaBerhad acquired Celadon City from the Saigon Thuong Tin Real Estate JSC (Sacomreal) and the Thanh Thanh Cong JSC (TTC) for an estimated VND1.4 trillion (US$64.1 million). The estimated original investment is VND24.8 trillion (US$1.1 billion).
• In 2015, Vingroup has become a dominant local M&A acquirer with a long list of transactions in the real estate, retail and logistics sectors. Its most notable additions include:
o Masteri Thao Dien for US$75 million;
o 30% stake ownership in Vinatex for US$26 million;
o 90% stake ownership in Giang Vo Trade Show Center for US$69 million; and
o 30% stake ownership in Hop Nhat Express for US$52 million.
• In December 2015, VinGroup acquired 100% of Hoa Huong Duong company with the deal value of US$252 million. This transaction has also made VinGroup the holder of 98.3% of Vinaconex-Viettel as this company is a subsidiary of Hoa Huong Duong.
• In March 2016, Lotte bought 70% of the total shares of Diamond Plaza in Ho Chi Minh from Posco. Deal value was not disclosed.
• In April 2016, Muong Thanh Corporation bought 95% of the total shares of Cienco 5 Land at the value of VND3,500 billion.
Insurance

• In April 2016, the merger between ACE Life and Chubb Life was completed, with ACE Life changing its name into Chubb Life in Vietnam.
• Two months later, FWD insurance company, a branch of Pacific Century, started the process of acquiring Great Eastern Vietnam after receiving the license for this acquisition.
The major trends in the structuring of public M&A transactions
In Vietnam, M&A transactions usually take the form of either share or asset acquisitions, with share acquisition transactions outnumbering asset acquisition transactions.
Share acquisitions by foreign purchasers are commonly structured as offshore direct investments. The new investor can:
• Acquire shares or capital contributions from an existing shareholder in the target (for example, a joint stock company, limited liability company, and so on).
• Subscribe for newly issued shares of the target (for a joint stock company).
• Make further capital contributions to the target (for a limited liability company).
In the case of an asset deal, a foreign purchaser must generally establish a new subsidiary in Vietnam.
In addition, M&A transactions can also take the form of a merger. One or more companies of the same type can be merged into another company by transferring all assets, rights, obligations and interests to the merged company, terminating the existence of the merging company.
The 2014 Enterprise Law sets out the types of business structuring that can be used by investors as a result of M&A transactions. In addition, the 2014 Investment Law is the first law that regulates M&A transactions and clearly provides that such transactions do not require an investment registration certificate. Instead, if the target company operates in conditional business sectors applicable for foreign investors, or the investment leading to foreign ownership of the target company being 51% or more (in particular, from below 51% to more than 51% and from 51% to above 51%), the foreign investors must seek approval of the local Department of Planning and Investment of the transaction. In other cases, the target company only needs to register change of membership / shareholders at the Business Registration Division. This change has ended years of uncertainty and frustration faced by foreign investors seeking entry into the Vietnam market or expansion through M&A transactions.

The level/extent of private equity-backed bids in the past 12 months
Investment in the form of M&A transactions is still the most popular form compared with private equity investment. In recent months, private equity funds have been following the securities market in Vietnam, especially companies carrying out value chain operations. Consumer goods and infrastructure are the sectors that attract the most attention. However, due to limited publicly available information, it is not possible to fully assess the level of private equity-backed bids.

The approach of the competition regulator(s) in the past 12 months
The Vietnam Competition Authority under the Ministry of Industry and Trade (VCA) must be notified of the transaction if participating companies have a combined market share in the relevant market of 30% up to 50%. The VCA will then examine whether the calculation of the combined market share is correct and whether the transaction is prohibited (that is, whether the combined market share exceeds 50%, except in certain cases). The transaction can be conducted when the VCA issues a written confirmation that the transaction is not prohibited under competition law.
For more information on the VCA, see www.vca.gov.vn/Default.aspx?lg=2.

Main factors affecting the public M&A market over the next 12 months
The country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities.
Another factor is the Government’s being put under high pressure to privatize State-owned enterprises to meet requirements under signed trade pacts, especially the Trans-Pacific Partnership (TPP).
Encouraging signs for foreign investment include:
• Economic recovery.
• Reformed policies to allow wider access to foreign investors.
• Formation of the ASEAN Economic Community at the end of 2015.
• The conclusion of free trade agreements (FTAs) and the TPP.
• The bouncing back of the stock market.
• New regulations that increase the authorised levels of foreign investment in public listed companies.
The introduction of the new Investment Law, Enterprise Law and other laws and policies are creating an improved legal environment for investment and trade in general, and the M&A market in particular. However, the following factors also affect M&A transactions:
• Divergent interpretations and implementations by local licensing authorities of international treaties such as Vietnam’s WTO Commitments.
• Different licensing procedures applied to different types of transactions (for example, for foreign invested companies and domestic companies, public companies and private companies, and for buying state-owned shares or private shares).
Although legal and governance barriers, along with macro instability and the lack of market transparency are still the greatest concerns for investors, M&A deals in Vietnam are still expected to be one of the key, effective channels for market entry.
The major expected trends in the Vietnam M&A market include:
• Bank restructurings.
• Acquisitions and anti-acquisitions, especially in the real estate sector.
• Growing Japanese and Thai investment in Vietnam through M&A transactions.
• Reform of SoEs.
The derivatives market is expected to open in 2016, which will help in preventing risks, boosting the growth of the stock market and in promoting M&A deals.

Please do contact the author Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam

July 7, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Public Mergers and Acquisitions

There has been a steady growth in M&A activities in Vietnam since Vietnam officially became a member of the World Trade Organization (WTO) in 2007. The first M&A wave in Vietnam occurred during the period between 2008 and 2013, with a reported total value of US$15 billion. Japanese investors made about US$1.2 billion worth of deals in 2012. Japan is the leading country for M&A deals in Vietnam in terms of both quantity and value. This helped the M&A market in Vietnam to reach a peak of US$5.1 billion in 2012. Real estate is considered to be the most attractive sector, with a total value of M&A transactions up to US$1.637 billion with 20 deals, accounting for 69% of the total M&A value by foreign investors in Vietnam. The retail, consumer goods, and industrial goods and services sectors are also very active, with high value M&A deals.

According to a research conducted by StoxPlus, Vietnam’s M&A market experienced a strong recovery in 2014, with six deals being reportedly made every week. There was a total of 341 M&A deals in 2015, with a value of US$5.2 billion, a 23.1% increase in terms of number of deals and 9.7% increase in terms of deal value compared with the previous year.

How to obtain control of a public company
The most common means of obtaining control over a public company are as follows:
o The acquisition of shares/charter capital through:
o buying shares/charter capital from the existing shareholders of the company;
o buying shares/charter capital of a listed company on the stock exchange; and
o public share purchase offer.
o Through a merger. The 2014 Law on Enterprises sets out the procedures for company mergers by way of a transfer of all lawful assets, rights, obligations and interests to the merged company, and for the simultaneous termination of the merging companies.
o Through the acquisition of assets.
There are restrictions on the purchase of shares/charter capital of local companies by foreign investors. In addition, the law does not yet allow merger or assets acquisition transactions where a foreign investor is a party.
Securities of public companies must be registered and deposited at the Vietnam Securities Depository Centre before being traded.
Depending on the numbers of shares purchased, an investor can become a controlling shareholder. Under the Vietnam Law on Securities, a shareholder that directly or indirectly owns 5% or more of the voting shares of an issuing organization is a major shareholder. Any transactions that result in more than 10% ownership of the paid-up charter capital of the securities company must seek approval of the State Securities Commission (SSC).

What a bidder generally questions before making a bid
Before officially contacting the potential target, the bidder conducts a preliminary assessment based on publicly available information. The bidder then contacts the target, expresses its intention of buying shares/subscribing for its shares and the parties sign a confidentiality agreement before the due diligence process. The confidentiality agreement basically includes confidentiality obligations in performing the transaction. The enforcement of confidentiality agreements by courts in Vietnam remains untested.
A bidder’s legal due diligence usually covers the following matters:
• Corporate details of the target and its subsidiaries, affiliates and other companies that form part of the target.
• Contingent liabilities (from past or pending litigation).
• Employment matters.
• Contractual agreements of the target.
• Statutory approvals and permits regarding the business activities of the target.
• Insurance, tax, intellectual property, debts, and land-related issues.
• Anti-trust, corruption and other regulatory issues.

Restrictions on shares transfer of key shareholders
Founding shareholders can only transfer their shares to other founding shareholders of the company within three years from the issuance of the Enterprise Registration Certificate. After then, the shares can be transferred freely. An internal approval of the general meeting of shareholders is always required if:
• The company increases its capital by issuing new shares.
• There is any share transfer of the founding shareholders within the above three-year period.
If the sale and purchase is a direct agreement between the company and the seller in relation to an issuance of shares, the selling price must be lower than the market price at the time of selling, or in the absence of a market price, the book value of the shares at the time of the approval plan to sell the shares. In addition, the selling price to foreign and domestic buyers must be the same.

When a tender offer is required
A tender offer is required in the following cases:
• Purchase of a company’s circulating shares that results in a purchaser, with no shareholding or less than a 25% shareholding, acquiring a 25% shareholding or more.
• Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
• Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of a previous offer.
There is no guidance on building a stake by using derivatives. In addition, the bidder cannot purchase shares or share purchase rights outside the offer process during the tender offer period.
The bidder must publicly announce the tender offer in three consecutive editions of one electronic newspaper or one written newspaper and (for a listed company only) on the relevant stock exchange within seven days from the receipt of the State Securities Commission’s (SSC’s) opinion regarding the registration of the tender offer. The tender offer can only be implemented after the SSC has provided its opinion, and following the public announcement by the bidder.

Making the bid public
The offer timetable is as follows:
• The bidder prepares registration documents for its public bid to purchase shares.
• The bidder sends the bid registration documents to the SSC for approval and, at the same time, sends the registration documents to the target.
• The SSC reviews the tender documents within seven days.
• The board of the target must send its opinions regarding the offer to the SSC and the shareholders of the target within 14 days from receipt of the tender documents.
• The bid is announced in the mass media (although this is not a legal requirement).
• The length of the offer period is between 30 and 60 days.
• The bidder reports the results of the tender to the SSC within 10 days of completion.
Companies operating in specific sectors (such as banking, insurance, and so on) can be subject to a different timetable.

Form of consideration and minimum level of consideration
Under Vietnamese law, shares can be purchased by offering cash, gold, land use rights, intellectual property rights, technology, technical know-how or other assets. In practice, acquisitions are most commonly made for cash consideration.
In cases of full acquisition of state-owned enterprises, the first payment for the share purchase must not be less than 70% of the value of such shares, with the remaining amount being paid within 12 months.
In transactions involving auctions of shares by state-owned enterprises, the purchaser must make a deposit of 10% of the value of the shares registered for subscription based on the reserve price at least five working days before the auction date included in the target company’s rule. Additionally, the purchaser must transfer the entire consideration for the shares into the bank account of the body conducting the auction within ten working days of the announcement of the auction results.
In the case of a public tender offer, the payment and transfer of shares via a securities agent company appointed to act as an agent for the public tender offer must comply with Decree 58/2012/ND-CP.

Delisting a company
If a company seeks voluntarily de-listing, it must submit an application for de-listing that includes the following documents:
• A request for de-listing.
• For a joint stock company:
o the shareholders’ general meeting approval of de-listing of the stock;
o the board of directors’ approval of de-listing of bonds; and
o the shareholders’ general meeting approval of de-listing of convertible bonds.
• The members’ council (for a multi-member limited liability company) or the company’s owner (for a single member limited liability company) approval of de-listing of bonds.
• For a securities investment fund, the investors’ congress approval of de-listing of the fund’s certificate.
• For a public securities investment company, the shareholders’ general meeting approval of stock de-listing.
A listed company can only de-list its securities if de-listing is approved by a decision of the general meeting of shareholders passed by more than 50% of the voting shareholders who are not major shareholders.
If a company voluntarily de-lists from the Hanoi Stock Exchange or Ho Chi Minh Stock Exchange, the application for de-listing must also include a plan to deal with the interests of shareholders and investors. The Hanoi Stock Exchange or Ho Chi Minh Stock Exchange must consider the request for de-listing within ten and 15 days from the receipt of a valid application, respectively.

Transfer duties payable on the sale of shares in a company
Depending on whether the seller is an individual or a corporate entity, the following taxes will apply:
• Capital gains tax. Capital gains tax is a form of income tax that is payable on any premium on the original investor’s actual contribution to capital or its costs to purchase such capital. Foreign companies and local corporate entities are subject to a corporate income tax of 20%. However, if the assets transferred are securities, a foreign corporate seller is subject to corporate income tax of 0.1% on the gross transfer price.
• Personal income tax. If the seller is an individual resident, personal income tax will be imposed at the rate of 20% of the gains made, and 0.1% on the sales price if the transferred assets are securities. An individual tax resident is defined as a person who:
o stays in Vietnam for 183 days or longer within a calendar year;
o stays in Vietnam for a period of 12 consecutive months from his arrival in Vietnam;
o has a registered permanent residence in Vietnam; or
o rents a house in Vietnam under a lease contract of a term of at least 90 days in a tax year.
If the seller is an individual non-resident, he is subject to personal income tax at 0.1% on the gross transfer price, regardless of whether there is any capital gain.
Payment of the above transfer taxes is mandatory in Vietnam.

Regulatory approvals
The investor will need to register the capital contribution and purchase of shares if either:
• The target is operating in one of the 267 conditional sectors referred to in the 2015 Investment Law.
• The capital contribution and purchase of shares results in foreign investors owning 51% or more of the target’s charter capital (in particular, from below 51% to more than 51% and from 51% to above 51%).

The local Department of Planning and Investment where the target is located must issue its final approval within 15 days from the receipt of a valid registration application. However, in practice, this procedure can take several months due to the workload of certain central authorities and the lack of clear guidance documents. Therefore, the registration requirement can cause substantial delays to the whole M&A process.

In other cases, the target company only needs to register change of membership / shareholders at the Business Registration Division.

Restrictions on repatriation of profits and/ or foreign exchange rules for foreign companies
If the target company in Vietnam already has an investment certificate, it must open a direct investment capital account at a licensed bank in Vietnam. Payment for a share purchase by a foreign investor must be conducted through this account. The account can be denominated in Vietnamese dong or a foreign currency. In addition, if the foreign investor is an offshore investor, it will also need to open a capital account at a commercial bank operating in Vietnam to carry out the payment on the seller’s account and receive profits.

If the target company in Vietnam does not have an investment certificate, the foreign investor will need to open an indirect investment capital account for payment to the seller and remittance of profits.

Please do contact the author Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

June 30, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann BREXIT IMPACT ON VIETNAM AND SOLUTIONS Making Vietnam ready for competition – Making Vietnam the ASEAN No. 1

Context
The UK withdrawal from the European Union (EU), often known as Brexit, has become one of the most remarkable events in the history of not only the UK, but also the world. Brexit refers to a political movement which would result in the expiration of the British membership in the EU after a referendum held on June 23, 2016. This event will not simply affect the economy of the UK as well as other nations in the EU but will also have influential impact on the global market in general; and Vietnam is not an exception.
Being one of the most active trade partners with the EU, Vietnam accounted for nearly 20% of the total trade between EU and members of the Association of Southeast Asian Nations (ASEAN) in 2015. More importantly, the United Kingdom (UK) has become Vietnam’s largest trading partner in the EU, with a bilateral trade reaching US$5.4 billion last year. In addition, although not currently ratified, a Free Trade Agreement (FTA) between Vietnam and the EU, also known as the EU – Vietnam Free Trade Agreement (EVFTA), has been concluded and is expected to be in force in 2018.

Immediate Impact
Several experts and policymakers have predicted the impact that Brexit would have on Vietnam as well as some solutions to this situation. According to Trinh D. Nguyen, an economic expert on Asian emerging markets, Vietnam could be the most heavily affected economy among Asian emerging markets as a result of the predicted EU economic downturn after Brexit.
Regarding the immediate or short-term impact, despite the fact that the UK is the largest trading partner of Vietnam in the EU, the UK only accounts for 10% – 12% of the total export volume of Vietnam to the EU. Although trading activities between Vietnam and the UK are likely to be affected as the EVFTA will not be applicable between the two countries, this will not have an immediate or sufficient impact on Vietnam’s economy due to minimal trade volume.
Another aspect that attracts substantial attention after Brexit is market volatility. After the result of the vote was announced, the British Pound fell dramatically, hitting a 31-year low against the US dollar, with a decrease of more than 10%. When this currency is compared to the Vietnamese Dong, its value has dropped a massive 12.55%.
In addition, other sectors of the market including gold and stocks in Vietnam also experienced some fluctuations. Particularly, gold price in Vietnam rocketed to $1,601 per tael, the highest in the past 10 months. Meanwhile, in an opposite direction, the stock market in the country dropped 11.5 points or 1.85 percent to 620.77 immediately after Brexit. The same trend was also experienced in the global stock market. However, many experts believe that this was a result of investors’ panic instead of direct negative influence of Brexit on Vietnam.

Long-term Impact
As mentioned, the British Pound reacted shortly after this nation voted to leave the EU. Although this was an immediate reaction, its consequences, according to several experts, could lead to a number of long-term effects. Since the Pound devaluated, it is expected that imported goods’ price would increase. As a result, the EU demand for these products, including those imported from Vietnam, would decline. Therefore, the devaluation of the Pound is likely to affect the Vietnamese economy to some extent despite Vietnam’s low export volume to the EU.
However, the Pound is not the only currency that decreased in value after Brexit. In fact, the Euro also experienced a similar trend. After Brexit, the Euro itself lost 4% in value. Again, this would limit the EU demand for imported products, affecting the Vietnamese economy where the EU has become one of the most important trading partners. On another hand, value of the US Dollar has increased significantly compared with other currencies, resulting in potential more investment from US investors in the country.
Nevertheless, it is argued that as the Pound itself lost value, imported products from almost anywhere in the world would increase in prices. Moreover, the demand is always present although it could decrease by a few percent. Therefore, Brexit should not have an enormous impact on imported products in Vietnam. However, this claim has not considered all aspects of the matter. Although it is undeniable that prices of the majority of imported products in the UK would increase, products from Vietnam are likely to increase more in prices when being compared to those of others as the value of the Vietnamese Dong accelerated excessively after Brexit. Particularly, in ASEAN, the Vietnamese Dong is the currency that increased the most in value when compared to both the British Pound and the Euro after the event. Therefore, Vietnamese exported products might suffer the most in the area.
Brexit will divert British investment and British business strategy in Vietnam will be affected. Although direct investment from the UK is not significant, capital influx via the UK is. Therefore, in the long term, there could be certain difficulties in attracting these capital flows.
Vietnam is the only Southeast Asian nation that has finalized its FTA with the EU. Although the EVFTA has not yet been ratified, it is an advantage to Vietnam when competing with other ASEAN nations in the EU market, especially when after Brexit, these nations could face several obstacles before reaching a final agreement. Despite this, as the UK has ended their membership in the EU, the EVFTA is no longer applicable between Vietnam and the UK. Brexit has temporarily been disrupting the process of reducing trade barriers between Vietnam and the EU. As a result, a new FTA must be negotiated between the two countries or the UK must build a similar regime as the GSP in the EU to reduce impact of Brexit on bilateral trade with Vietnam.
In order to maintain the trading partnership between Vietnam and the UK, the solutions must come from the Governments.

Solutions for Vietnam
Appreciations in other currencies as a result of Brexit would help improve Vietnam’s competitiveness over other countries, for example, Japan and China. If Vietnam’s Government takes timely action to make its economy more stable and improve business environment, Vietnam would be an attracting destination for capital inflows.
In order to achieve such objective, macro policies must be more flexible. The Government should also pay special attention to coordinating monetary and fiscal policies to ensure harmonization between policy flexibility and economic stability. The appreciation of the US Dollar as a global safe haven currency has introduced further opportunities for US investors in Vietnam, especially when many trade restrictions will soon be lifted following the ratification of the – already signed – Trans-Pacific Partnership Agreement.

Institutional Reform – A MUST
Comprehensive institutional reform of the state-owned enterprise (SOE) sector is of highest importance. It could be done by real privatization with majority options for investors. Investors must be granted with real performance control and business management control for SOE management every year. These reforms should be fully implemented until end of 2017 or it will be too late to grasp the benefits of the upcoming EVFTA and the TPP.
Leader in ASEAN – Learn from Germany in the EU
Last but not least, Brexit has handed Germany the leading role in Europe. Vietnam should forge even stronger ties with Germany and make use of Germany’s recipe for its economic strength.
—o0o—

Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above or should you request our assistance. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

THANK YOU !

June 28, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Casino Laws – Latest Update

The final draft of the casino decree (‘Casino Decree’) has been passed by the Ministry of Justice and Government’s Office. It is now on the table of the Politburo for their comments, which are as always, the most important. It is expected that the Casino Decree would be issued on 1 July 2016. Nevertheless, there is no absolute guarantee on this prospect. This is because in order for a decree to become effective, it must be publicized on Official Gazette first and waits for a 15-day period from the first publication on the Official Gazette.
For many reasons, the text of the Casino Decree has not been made public. The Ministry of Finance has been successful in keeping the draft Casino Decree under secrecy. Again, whether Vietnamese residents are permitted to enter casinos in Vietnam is a big question that may wait for decision of the highest level of Vietnam’s political system.
Recently, the Ministry of Public Security (MPS) has proposed a draft decree that lists casino as a conditional business which is subject to license of the MPS with respect to social orders. A very interesting point is that the draft decree only prohibits Vietnamese from playing on gaming machines. It is important to note that no such prohibition is mentioned with respect to Vietnamese’s playing in casinos. This may give a hint that Vietnamese may enter casinos if they are ‘permitted’. This fact corresponds to provisions of the new Penal Code that makes it very clear that only ‘illegal’ gambling is punished.
So, though not 100% sure, more likely that Vietnamese may enter casinos and gamble but with specific conditions.
At present, pending the issuance of the Casino Decree, all projects on casino are put on hold. we will follow up and keep you updated.
***
Please do contact the author Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
THANK YOU!

June 28, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Asean Economic Community Impact on Real Estate Sector

Often compared to the European Union (EU), the AEC is a community formed in order to promote economic integration in South East Asia. The aim of this community is to create a market where member countries are able to develop competitively and cooperate with fewer barriers including free movement of goods, services, investment, freer flow of capital as well as substantial growth in workforce and demanding occupations. In order to achieve this, there are several tasks that need to be fulfilled such as diminishing the gap between developed and developing nations or enhancing communications connectivity and infrastructure.

Due to this, it is expected that the AEC would have a significant impact on the members’ economies in general, and on their real estate sectors in particular; and Vietnam is not an exception. Considering market fluctuations, it can be seen that an excessive amount of foreign capital has been invested into properties recently. In reality, until June 2015, a total of $16.6 billion from ASEAN investors had been poured into this market, despite the fact that AEC was not formed until December last year. This is partly because of the recently applied Housing Law and the Law on Real Estate Business which allow foreign investors to legally own, sell and transfer real properties. Regardless, the influence of AEC is undeniable. Also, similar trends were found in other ASEAN nations including Thailand or Singapore.

This has led many experts to predict that the involvement of Vietnam in AEC would result in prosperity in the real estate market. Vietnam can well compete with its ASEAN member countries in the Real Estate sector.

Vietnam has the most liberalized Real Estate Sector of all Asia allowing free hold ownership of land and houses for foreigners who are married to Vietnamese nationals.

There are still a number of challenges ahead of us such as weak management or lack of skilled labors and unclear procedures. As a result, although with its diversity, the ASEAN real estate market is an attractive destination to several investors, individual countries including Vietnam are required to improve systematically in order to compete in the global market.

Please do contact the author Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

June 20, 2016 by Dr. Oliver Massmann

The National Assembly of Vietnam invited Oliver Massmann to present on the Trans-Pacific Partnership Agreement and its Impact on Vietnam

VIETNAM – FIRST TIME IN HISTORY: THE NATIONAL ASSEMBLY OF VIETNAM INVITED OLIVER MASSMANN TO PRESENT IN VIETNAMESE LANGUAGE ON THE TRANS-PACIFIC PARTNERSHIP AGREEMENT AND ITS IMPACT ON VIETNAM ON JUNE 17th: HERE IS HIS PRESENTATION:

English:

Lawyer in Vietnam Oliver Massmann presenting to the Members of the National Assembly of Vietnam on the Trans-Pacific Partnership Agreement from Dr. Oliver Massmann

Vietnamese:

LUẬT SƯ OLIVER MASSMANN PHÁT BIỂU TRƯỚC CÁC ĐẠI BIỂU QUỐC HỘI VIỆT NAM VỀ HIỆP ĐỊNH ĐỐI TÁC XUYÊN THÁI BÌNH DƯƠNG from Dr. Oliver Massmann

I thank the Members of the National Assembly of Vietnam very much for giving me the opportunity to present. I am very happy about the very positive feedback the Members of the National Assembly gave me for my presentation. I feel very honored!

THANK YOU VERY MUCH!
Oliver Massmann

June 10, 2016June 10, 2016 by Dr. Oliver Massmann

ベトナムにおける弁護士　オリバー　マスマン：M&Aでの譲渡価格設定

問題点
買収において、原則的に譲渡価格は交渉可能です。残念ながら、対象企業の定款資本（株式）に対し譲渡価格が売り手の出資金額の額面よりも低い金額で合意した場合、ライセンス当局は買収を認めず、承認を拒む可能性があります。買収は次に譲渡価格が「市場価格」または上記株式の「簿価」を反映しているか確認をするために税務当局によって調査されます。税務当局が市場価格または簿価が適切に反映していないと判断した場合、税務管理の為に適切だと考えられる別の譲渡価格について言及します。大きな損失を被っている地場企業は例外です。当事務所の見解としては、ライセンス当局が単に商業的問題である譲渡価格を「確認」できないと法律で明確にすることが重要であり、そして税務当局のみが唯一税務目的の為に譲渡価格の確認ができるようにするべきだと考えています。市場価格または簿価を反映せずに決定された譲渡価格は、ライセンス当局が承認発行を拒み取引を停止する理由ではないということを明らかにしたほうが良いでしょう。
さらに、M&A取引から生じる税金負債はまた投資家たちにとって懸念要素となっています。原則的に、株式の譲渡は標準キャピタルゲイン税率（すなわち、株式譲渡から生じる利益の法人所得税22％）が対象となり、一方で資産売却は付加価値税（VAT）（基本的に10％）がほとんどの場合に対象となります。個々の売り手に対する個人所得税は課税所得と納税者の種類に応じて資本投資及び資本譲渡に対して5％から20％の間の税率が適用されます。公開会社における株式譲渡での利益は総売上高の0.1％が課税対象です。
またベトナムの税規制はオフショアの買収に対するキャピタルゲイン税の適用（もし適用が可能である場合）に関し不透明です（すなわち、オフショアの買い手とベトナムの会社に出資しているオフショアの対象企業の売り手との取引）。ベトナム税務総局（GTD）は以下の全ての条件を満たす場合、以前はベトナムのキャピタルゲイン税は適用してきませんでした。（1）買収が完全にオフショア（2）オフショア対象企業のベトナム国内子会社の資本は全てそのまま残されている（3）オフショアの対象企業及びベトナム国内子会社が買収による利益を受け取らない（4）ベトナム国内子会社の投資証明書を変更しない場合。例として、2012年6月28日付けのGTDの公式文書2268/TCT-CSをご参照ください。しかしながら、近年のベトナム税法の動きでは（具体的には2015年1月から施行された政令12/2015/ND-CP）、GTDは最近のガイダンス（例、2015年4月24日付けのGTDの公式文書1595/TCT-DNL）の一部に関し、オフショアの買収はベトナムのキャピタルゲイン税の対象であるとの見解を述べています。実際にどのようにベトナムのキャピタルゲイン税の適用が施行されているかに関する明確なガイダンスはありません。
ベトナムにとっての将来的な利益と懸念事項
キャピタルゲイン税はM&A取引の構造を計画する為に重要となります。税金が適切かどうか、どのように税金が適用され、適用税率はどのようになっているかなどに関する不透明さは投資家たちに不明確な金融債務を引き起こします。実際に、この曖昧さにより多くの場合移転価格は長期間凍結しています。計画された取引のタイムスケールに影響を及ぼし、取引停止につながる可能性もあります。
さらに、税規制の枠組みに対する曖昧さや税金負債における税務当局の自由裁量はM&A当事者たちにこの問題に対するリスクレベルを決定する際に困難に直面させ、またM&A締結後に延滞税又は脱税疑惑の危険にさらしています。
推奨
当事務所は以下について推奨しております。
• 譲渡価格に対する解釈の調和
• M&A取引から生じる税金負債に対する規制枠組みの明確さと改良
〈ご注意〉こちらの記事は皆様に情報をお届けする目的でのみ作成・掲載しておりますので、法的なアドバイスとして提供・構成することを目的としておりません。詳細につきましては、当法律事務所の注意書きをご一読下さい。
オリバー・マスマンはドウェイン・モリス・ベトナム法律事務所のディレクターです。上記に関するご質問等はomassmann@duanemorris.comまでお気軽にご連絡ください。