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.

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

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.

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 !

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.
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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!

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.

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:

Vietnamese:

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

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。

Rechtsanwalt in Vietnam Oliver Massmann Auslandsdirektinvestitionen (FDI)

Vietnam unterzieht sich fundamentalen Veränderungen um ein attraktives und wettbewerbsfähiges Fundament in Vorbereitung auf die kommende ASEAN Wirtschaftgemeinschaft (AEC) zu bilden, welches die EU-Vietnam FTA und die Transpazifische Partnerschaftsvereinbarung (TPP) beinhaltet.
Seit Juli 2015 traten eine Vielzahl von neuen Gesetzen in Kraft die Auslandsinvestitionen, Unternehmen, Grundbesitz und Eigentumsbeschränkungen von Ausländern regulieren.
Beispielsweise das neue Gesetz zu Investitionen und das neue Gesetz zu Unternehmen:
i) definiert auslandsfinanzierte Unternehmen
ii) Erleichtert M&A Tätigkeiten
iii) Reduziert die Zahl der Verbote und Bedingungen im Unternehmenssektor
iv) Reduziert gesetzliche Lizensierungszeiten für Unternehmen
v) Gestaltet die Unternehmensführung flexibler (wie z.B. mehrfache Stellvertretung und Verringerung der Wahlvoraussetzungen) und
vi) erzeugt günstigere Konditionen für Aktionärsklagen/Anlegerklagen

Darüber hinaus treten neue Gesetz und Regulierungen in Kraft die das Eigentum von Ausländern an Grundbesitz betreffen.
Ausländer können nun Appartements besitzen und erstmals Häuser kaufen. Sie dürfen nun auch Untervermieten und Grundbesitz erben.
Die durch das Inkrafttreten einiger internationaler Handelsabkommen, im besonderen EVFTA, eintretenden positiven Veränderungen werden von den EuroCham Mitgliedern begrüßt, da sie nicht nur das Unternehmen fördern, sondern auch zu Vietnams Wachstum beitragen.

Vietnam als attraktives FDI Ziel
Zusätzlich zu der Vielzahl an rechtlichen Änderungen besitzt Vietnam fundamentale Prinzipien die zu seinem Wachstum beitragen. Beispielsweise ist Vietnam mit 25% der 90 Millionen Einwohners zwischen 10 und 24 Jahren im Goldenen Zeitalter der demographischen Entwicklung. Das Pro Kopf BIP hat sich drastisch erhöht, da Vietnam die am schnellsten wachsende Mittelstandsklasse in Südostasien hat (12,9 % Wachstum pro Jahr zwischen 2012 und 2020). Aufgrund der hohen Lesefähigkeit der Bevölkerung und des Bildungsniveuas mit vergleichsweise niedrigen Löhnen, Konnexität und der zentralen Lage innerhalb des ASEAN wählen mehr und mehr Investoren Vietnam als ihren Mittelpunkt um die Mekong Region und die Region drum herum zu unterhalten.
Vietnams attraktives Profil wird durch die generelle Willkommenshaltung gegenüber Auslandsdirektinvestitionen (FDI) in den Produktionstätigkeiten reflektiert.
Die Verpflichtung Vietnams zur sukzessiven Öffnung der meisten Dienstleistungssektoren nach dem WTO Plan hat in 2007 begonnen und wurde in 2015 abgeschlossen.
Nationales Recht hat zudem den Zugang zum Markt auf andere Sektoren über die WTO Verpflichtungen hinaus geöffnet.
Beispielsweise war die Teilhaberschaft an öffentlichen Unternehmen durch Ausländer früher begrenzt auf 49 % und ist nun generell zu 100 % für ausländischen Anteilbesitz möglich. Vietnam gewährt auch
Zuschüsse für Investitionen inklusive Steuererleichterungen in Bereichen wie z.B. High Tech, Umwelttechnologie und Landwirtschaft, in denen europäische Unternehmen weltweit führen sind.
In 2014 hat Vietnam darüber hinaus 21.92 Milliarden Dollar als FDI verzeichnet mit insgesamt 1843 Investitionslizenzen für auslandsfinanzierte Projekte mit einem registrierten Kapital von 16.5 Milliarden Dollar, was einen Anstieg um 14 % im Vergleich zum Vorjahr darstellt.
Unter den Auslandsinvestoren stellt die EU eine zunehmend wichtige Quelle als FDI für Vietnam dar. „Nach Angaben der Auslandsinvestitionsagentur des vietnamesischen Ministeriums für Planung und Investment haben Investoren aus 23 der 28 Mitgliedstaaten der EU insgesamt Investitionen von 19.1 Milliarden Dollar in 1566 Projekte über 25 Jahre getätigt (Stand 15.12.2014).
Die EU steht aufgrund der starken Aktivität von insgesamt 587.1 Milliarden Dollar in FDIs in 2014 auf Platz 5 der FDI Partner von Vietnam.
Zusätzlich zu den FDIs wird die starke Handelsbeziehung zwischen der EU und Vietnam auch durch Programme wie z.B. MUTRAP, welches über 35.12 Milliarden Euro beinhaltet, deutlich.
MUTRAP half Vietnam in der Verhandlung über den WTO Beitritt und unterstützt Vietnam auch weiterhin bei der Umsetzung der Handelsverpflichtungen.
Bezüglich des Handels wird erwartet, dass sowohl die europäischen als auch vietnamesischen Unternehmen von EVFTA profitieren. Die FTA will sukzessiv die Zölle für über 99 % der Waren und Dienstleistungen abschaffen und auch weitere bilaterale Handelsmechanismen unterstützen.
Am 4.08.2015 haben die EU und Vietnam ein Freihandelsabkommen getroffen, welches mehr FDI in das Land locken soll.

Vietnams Top Handelspartner in 2013
Letzendlich wird das starke Engagement der EU in Bezug auf die Unterstützung Vietnams zur Modernisierung und Integration in die Weltwirtschaft durch die Hilfsprogramme wiedergespiegelt/ deutlich. Die EU hat im Einklang mit dem 2020 sozialökonischem Plan Vietnams ihre Hilfe um 30 % auf 400 Millionen Euro im Rahmen des mehrjährigen Richtprogrammes für die Zeit zwischen 2014- 2020 mit Fokusierung auf die Entwicklung von sauberer Energie in Vietnam erhöht.

Weitere Verbesserungen sind nötig.
Vietnams Entwicklung und Attraktivität bei ausländischen Investoren kann nicht geleugnet werden, da Vietnam fortwährend sein wirtschaftspolitisches Umfeld verbessert. Jedoch wurden, im Zeitpunkt des Verfassens des Artikels, Richtlinien für viele neue Gesetze noch nicht veröffentlicht, und Investoren nehmen Verzögerungen des Bewerbungsprozesses wahr. Wir erwarten eine Verbesserung der Bearbeitungszeiten sobald die Richtlinien in Kraft treten und die Beamten/Amtsträger sich an die Veränderungen gewöhnt haben.
Ein anderes Thema, welches durch unsere Mitglieder hervorgehoben wurde, ist, dass viele ausländische Invetsoren immer noch mit der vietnamesischen Bürokratie zu kämpfen haben. Steuererklärungen einreichen, Zollbefreiungen, Unternehmensregistrierungen und Lizensierungen, sowie weitere administrative Prozeduren werden oft verzögert, das Ergebnis ist unvorhersehbar und Unternehmen müssen Resourcen in die Administration stecken, die sie lieber in die Erweiterung ihrer Haupttätigkeit investieren würden.
Trotz der verbleibenden Hürden hat die vietnamesiche Regierung ihr Verständnis über die Probleme der ausländischen Investoren zum Ausdruck gebracht. Aufgrund des ansteigenden Zugangs ausländischer Investoren zum Markt wird erwartet, dass Auslandsdirektinvestitionen weiter fließen. Für die ausländischen Investoren wird das potenzielle Risiko wesentlich von der positiven wirtschaftlichen Entwicklung des Landes und seiner Grundsätze überwogen .
In diesem Lichte möchte die EuroCham in Verbindung mit einigen wichtigen Ratschlägen die Kernprobleme präsentieren, die ihren Mitgliedern aufgrund der Tätigkeiten in Vietnam begegnen.
EuroCham hofft auf einen konstruktiven Dialog und ansteigende Kooperation mit den respektiven Behörden bezüglich der angesprochenen Schwierigkeiten in diesem Artikel, um das wirtschaftspolitische Umfeld für alle Unternehmen in Vietnam weiter zu verbessern und um zur schnellen Modernisierung des Landes beizutragen.

Bei Fragen oder weiteren Informationen zu dem oben gesagten zögern Sie bitte nicht Oliver Massmann unter omassmann@duanemorris.com zu kontaktieren. Oliver Massmann ist der Generaldirektor von Duane Morris Vietnam, LL.C.
VIELEN DANK!

Lawyer in Vietnam Oliver Massmann Transfer Pricing in Mergers and Acquisitions

The Issue
In an acquisition, the transfer price is, in principle, negotiable. Unfortunately, if that price is agreed to be less than the face value of the sellers’ capital contribution to the charter capital (equity)]of the target, the licensing authority may not accept the acquisition and refuse to approve the acquisition. The acquisition may subsequently also be examined by the tax authority who may review the transfer price again to ensure that it reflects the ‘market price’ or the above ‘book value’ of equity. If the tax authority concludes that the market price or book value has not been reflected appropriately, it may refer to another transfer price it deems fit for tax management purposes. Exceptions can be made for a local company that has suffered from large losses. In our view, it is important that the law clarifies that the licensing authority cannot ‘review’ the transfer price, which is per se a purely commercial issue; and that only the tax authority may do so for taxation purposes. It should be clear that a transfer price determined not to reflect the market price or book value cannot be a ground for the licensing authority to block the transfer by refusing the issuance of its approval.

Moreover, tax liabilities arising from any M&A transaction also create concerns to the investor. Generally, any assignment of capital is subject to the standard capital gain tax rate (i.e. 22% corporate income tax of the profit derived from such assignment) while the sale of assets is subject to Value-added Tax (VAT) (at a default 10% rate) in most of cases. The personal income tax of the individual seller may be applied with various tax rates of between 5% and 20% for capital investment and capital assignment depending on the types of taxable income and taxpayer. The gain from the shares transfer in a public company may also be subject to tax at 0.1% of the gross sales proceeds.

Vietnamese tax regulations are also not clear on the capital gain tax (if any) applicable to an offshore acquisition (i.e. transfer between offshore seller and buyer of equity interest in an offshore target company which holds capital contribution in a Vietnamese company). The position of Vietnam’s General Tax Department (“GTD”) has once been that no Vietnam’s capital gain tax is applicable if all the following conditions are met: (i) the acquisition is entirely offshore, (ii) the capital of the offshore target in the onshore subsidiary remains intact, (iii) the offshore target and the onshore subsidiary do not receive any income from the acquisition and (iv) the investment certificate of the onshore subsidiary does not change. For example: see Official Letter 2268/TCT-CS of the GTD dated 28 June 2012. However, under a recent development of Vietnam’s tax law (in particular Decree 12/2015/ND-CP effective from 1 January 2015), the GTD has opined in some of its recently guidance (for instanceOfficial Letter 1595/TCT-DNL of the GTD dated 24 April 2015) that offshore acquisitions may also be subject to Vietnam’s capital gain tax. There has not been any specific guidance on how this application of Vietnamese capital gain tax is implemented in practice.

Potential gains/concerns for Vietnam
Capital gain tax is important for planning the structure of an M&A transaction. This lack of clarity regarding whether taxes are applicable, how they are applicable and/or the applicable tax rates creates uncertain financial obligations for investors. In practice, due to these ambiguities, transfer prices are often frozen for long periods of time. This impacts on the planned timescale of transactions and could lead to deals being stopped.
Furthermore, the ambiguous tax regulatory frameworks and the sole discretion of tax authorities on the tax liabilities lead the M&A parties to face difficulties in determining risks levels on this matter or even to the risk of tax arrears or accusations of tax evasion after the conclusion of an M&A.

Recommendations
We would like to make the following recommendations:
• Harmonise the interpretation of transfer price;
• Clarify and improve the regulatory frameworks on tax liabilities arisen from M&A transaction.
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.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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