EU VN FTA – Duane Morris Vietnam

July 22, 2020 by Dr. Oliver Massmann

VIETNAM – EVALUATION OF THE IMPLEMENTATION OF THE EU-VIETNAM FREE TRADE AGREEMENT AND THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP

Globalization, global economic integration and trade liberalization have now become prominent in the world economy. Following such trend, Vietnam has been taking better steps to integrate into the world economy. Looking back at the nearly 30-year journey since Vietnam was a closed economy and started to implement the Doi Moi (Renovation) policy from the Party’s sixth national congress when the international economic integration was simply referred to as an open economy, up to now, Vietnam’s international integration policy has become much more detailed and complete. The first significant milestone in when Vietnam officially became the 150th member of the World Trade Organization (WTO) on 11 January 2007, after 11 years of accession negotiations. From then, a new period began: Vietnam’s economy has integrated more deeply and comprehensively into the world economy.

Vietnam has participated in integration at both regional and international levels and has established meaningful relationships with major partners. Especially in recent years, Vietnam has actively participated in negotiations and signed the Free Trade Agreements (FTAs), which is complementary to the goal of multilateral trade and investment liberalization when such cooperation has been facing many hurdles. Among 13 Free Trade Agreements that Vienam has signed, the FTA with the European Union (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) must be highlighted. These two agreements are considered new-generation free trade agreements because they contain unprecedented commitments under the previous FTAs signed by Vietnam. They have encouraged and accelerated institutional reform in order to improve the legal environment in compliance with Vietnam’s commitments. As a result, they help Vietnam to become a competitive economy, attract foreign investment, advanced technology and other important resources for development.

However, in order to take advantage of the incentives under these Agreements to attract foreign investment, in this article, I would like to evaluate the outstanding advantages of EVFTA and CPTPP as well as the implementation of these two Agreements from the perspective of a foreign investor with regard to: (1) market access; (2) government procurement; and (3) dispute resolution.

I. ADVANTAGES
1. Market Access
a. EVFTA
Market Access for Goods
Vietnam commits to eliminate import duties on 48.5% of tariff lines, equivalent to 64.5% of EU exports immediately after the EVFTA comes into effect on 1 August 2020. After 10 years, the elimination rate will be 99% of the total tariff lines, equal to 99.8% of the EU’s exports respectively. For some products such as motorcycles over 1,500cc, automobile parts and about half of EU exported medicine products, the tax reduction mechanism will apply after 7 years from the effective date. For the remaining tariff lines, Vietnam will have a roadmap of over 10 years or give preferential treatment to the EU on the basis of tariff quotas. This is considered an unprecedented commitment to deep tax cuts for a developing country like Vietnam, which has demonstrated the ambition for deep integration and strengthened trade relations with the EU.

Market Access for Services
Although Vietnam’s commitments under the WTO are used as a basis for negotiating its commitments under the EVFTA, Vietnam has not only opened additional sectors/sub-sectors for EU service providers but also made higher commitments than those outlined in the WTO resulting in EU investors being given best access to Vietnam’s market. Sectors/sub-sectors that Vietnam is not committed to under the WTO, but are open for EU investors include, but not limited to: interdisciplinary Research & Development (R&D) services; nursing services, physiotherapists and para-medical personnel; packaging services; trade fairs and exhibitions services and building-cleaning services. It is worth noting that the EVFTA includes the most-favored-nation (MFN) treatment provisions that allow a party to give the other party the highest level of treatment it is negotiating with any third party in other agreement.

b. CPTPP
Market Access for Goods
Vietnam commits to eliminate nearly 100% of tariff lines, in which: (i) 65.8% of tariff lines have 0% tax rate after the CPTPP takes effect from 14 January 2019; (ii) 86.5% of tariff lines have a 0% tax rate in the fourth year after the CPTPP takes effect; (iii) 97.8% of tariff lines have 0% tax rate in the 11th year after the CPTPP takes effect; (iv) import tax on remaining items shall be abolished in the 16th year or in accordance with tariff quotas. The CPTPP also covers issues that have never been addressed in the WTO including import duties, export duties for re-manufactured goods, re-furbished goods, market access for re-furbished goods, monopolies and goods in transit.

Market Access for Services and Investment
All 11 member-states give consent to a liberalized trade in this area. More sectors are opened under the CPTPP compared with the WTO, such as telecommunications, distribution and manufacturing sectors.
In addition, besides incorporating basic WTO principles (national treatment (NT), most-favored nation treatment (MFN), market access, and local presence), the CPTPP takes a negative approach, meaning that their markets are fully open to service suppliers from other CPTPP Parties, except otherwise indicated in their commitments (i.e, non-conforming measures). In order to make such reservations, the member state must prove the necessity of such preservation and negotiate with other member states. If approved, non-conforming measures must only be limited to such list, except for measures in certain sensitive sectors that are included in a separate list. Member states are only allowed to adopt policies that are better than what they commit (ratchet principle). The CPTPP also includes obligations on removal of performance requirements (i.e., no conditions on local content requirements, export conditions, use of certain technology, location of the investment project, etc.) and reasonable requirements on senior management and board of directors. Notably, the CPTPP Chapter on Investment for the first time successfully clarified the MFN principle- countries operating in multi-state regime must give foreign investors the best investment conditions in all states, regardless of the location of the state where the investment takes place. Investors are also allowed to petition against the Government from the investment registration stage.

2. Government Procurement
Vietnam has one of the highest ratios of public investment-to-GDP in the world (39% annually from 1995). However, until now, Vietnam has not agreed to its government procurement being covered by the Government Procurement Agreement (GPA) of the WTO. Now, for the first time, Vietnam has undertaken to do so in the EVFTA and CPTPP. Investors of member states will surely get access to large government procurement market with many incentives and advantages.

a. EVFTA
The Government Procurement Chapter mainly deals with the requirement to treat EU bidders, or domestic bidders with EU investment capital, equally with Vietnamese bidders when a Government purchases goods or requests a service worth over the specified threshold. Vietnam undertakes to publish information on tender in a timely manner, allow sufficient time for bidders to prepare for and submit bids and maintain the confidentiality of tenders. The EVFTA also requires its Parties to assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documents and create an effective regime for complaints and settling disputes, and so on. These rules require Parties to ensure that their bidding procedures match the commitments and protect their own interests, thus helping Vietnam to solve its problem of bids being won by cheap but low-quality service providers.

We also believe that these changes in procedures and laws related to government procurement will allow EU exporters to access previously closed markets and compete more effectively.

b. CPTPP
The CPTPP makes a list of government entities and agencies whose procurement of particular goods and services at a particular amount must be subject to public tender. In other words, a bidding package is only subject to CPTPP if it satisfies all 3 criteria on the subject matter of procurement, type of goods and services, and procurement threshold. Any negotiation to expand coverage of the Government Procurement chapter, particularly in relation to state government and local government contracts, will be delayed. Parties will only initiate talks on this issue at least five years after the date of entry into force of the CPTPP.
This chapter includes NT and MFN principles, removes tender conditions favoring local tenders such as using local goods or local suppliers, conditions on technology transfer or two-way trade and investment, etc. These rules require all parties, to reform their bidding procedures and protect their own interests by disqualifying tenders with poor performance and low capacity.

3. Dispute resolution
a. EVFTA
For any investment-related dispute (i.e. expropriation without compensation, investment discrimination), an investor is allowed to bring such dispute to the Investment Court for settlement (Investor-state dispute settlement mechanism- ISDS). The final arbitration award is binding and enforceable without the local courts’ review of its validity. This is an advantage for European investors as the fact shows that the percentage of applications for enforcement of foreign arbitral awards being rejected by the Vietnamese courts is notably high for various reasons.

b. CPTPP
The CPTPP aims at protecting investors and their investment in the host country by introducing requirements on non-discrimination; fair and equitable treatment; full protection and security; the prohibition of expropriation that is not for public purpose, without due process, or without compensation; the free transfer of funds related to investments; and the freedom to appoint senior management positions regardless of nationality.
For the first time investors of a party may sue the Government of the other party for its violation of investment-related commitments when the investors make investment in that party. However, please note that under the CPTPP, investors will not be able to sue the Government using ISDS clauses if there is any dispute in connection with an investment agreement. An investment agreement is a written agreement that is concluded and takes effect after the date of entry into force of the CPTPP, between an authority at the central level of government of a Party and a covered investment or an investor of another Party, that creates an exchange of rights and obligations, binding on both parties under the applicable law. Investment agreement refers to an agreement in writing, negotiated and executed by both parties, whether in the form of single or multiple instruments. A unilateral act of an administrative or judicial authority, such as a permit, license, authorization, certificate, approval, etc. and an administrative or judicial consent decree or order will not be considered a written agreement.
The CPTPP also includes procedures for arbitration as means of settling disputes between investors and the host state. It covers new provisions compared with existing agreements such as transparency in arbitral proceedings, disclosure of filings and arbitral awards, and participation of interested non-disputing parties to make amicus curiae submissions to a tribunal. Arbitral awards are final, binding and fully enforceable in CPTPP countries.

II. DIFFICULTIES
1. Market Access
a. Market Access for Goods
As mentioned above, both the EVFTA and CPTPP contain commitments to broad tariff cuts. However, how enterprises can make full use of these commitments is somewhat closely related to the rules of origin of goods.
Vietnam’s manufacture sector currently depends on raw materials imported from non-EU member countries as the value-added amount generated from abroad is higher than in the country. If this situation does not improve, it will be difficult for Vietnamese goods to meet strict rules of origin in these two agreements. Therefore, the Government should issue policies to encourage enterprises to participate in the global value chain, reduction of trade costs, simplification of customs procedures, and transparency in non-tariff policies.
Besides, regarding the mechanism of certification of origin, when as the EVFTA and Vietnamese law stipulate that the competent authorities to issue certificates of origin, the CPTPP requires applying a self-certification of origin mechanism- importers, exporters and manufacturers can make self-certification of origin. This creates an obstacle for Vietnam because Vietnam only allows a few pilot cases of self-certification of origin in ASEAN. Furthermore, enterprises themselves are not flexible and proactive in determining the origin of goods, possibly leading to a delay in tariff preferences under the CPTPP. Because there are projects where the cost and time spent working with authorities issuing a certification of origin is in excess of the preferential tariffs granted, some enterprises are hesitant to apply for the certification of origin under the agreements. As a result, tariff preferences for goods originating from member states are not used.
Although the CPTPP does not require Vietnam to immediately implement this self-certification mechanism, some importing countries may have/will apply this mechanism after the CPTPP takes effect. Therefore, the Vietnamese government should issue regulations on self-certification of origin as soon as possible and consult with the business community on how to structure enterprises and maximize the benefits of the CPTPP.

b. Market Access for Services
The CPTPP and EVFTA are considered to have created more services sectors than the WTO. However, in reality, enterprises still meet difficulties when carrying out investment in Vietnam, specifically as follows:
• Enterprise registration: Although the investor has submitted the application for enterprise registration online, the information technology system of the enterprise registration agency is somewhat outdated, leading to disruptions and delays in the process. Post-licensing procedures such as social insurance registration, seal registration, bank account opening, payment of licensing costs, etc. …are cumbersome and time-consuming for enterprises. The Government should consider reducing unnecessary steps, or create conditions for enterprises to carry out post-licensing procedures through a portal.
• Infrastructure for electricity, transport and logistics: Weak infrastructure is a barrier to the development of Vietnam’s economy. The shortage of power occurs frequently in industrial parks. Deep-sea ports currently do not meet the high demand for maritime transportation. The Government should consider development of transportation infrastructure, ensuring that seaports and airports are accessible to people but not too close to residential areas to avoid congestion.
• High cost of legal compliance: Many overlapping and conflicting documents make it difficult for enterprises to implement compliance. In particular, in many areas such as taxation, insurance, enterprises must comply with too many regulations, and many new regulations are regularly introduced which affect the stable and predictable operation of enterprises. Therefore, the Government should ensure the stability of policies, especially tax policies to attract more foreign investments.
• Corruption: Action by the Government has reduced corruption rate in recent years, however, enterprises still face with petty corruption when they carry out administrative procedures. In order to prevent this situation, the Government should apply information technology in carrying out administrative procedures (such as online filing, cameras installation to monitor administrative officers at check-in counters, etc.) as well as conduct unplanned inspections more often to control any negative issues.
• Land registration and management: It is difficult for investors to access Vietnam’s land database. Public and transparent information on real estate is limited. Therefore, investors face with many difficulties when developing projects, especially projects that need to consume large land area. In order not to hinder foreign investment in the development of high quality projects, it is necessary to create favorable conditions for investors to access land information, which can be charged if necessary.

In addition, a preliminary review indicates that although Vietnam has opened more service sectors under the EVFTA and CPTPP, domestic laws still set out restrictions that should be removed soon by the Government to comply with Vietnam’s commitments:
• Accounting, auditing and bookkeeping services (CPC 862): Vietnam economy is fully integrated under the CPTPP and EVFTA, but Vietnam laws do not allow the establishment of wholly foreign-owned enterprises operating in accounting and auditing sectors.
• Architectural services (CPC 8671): Vietnam opens this sector under the CPTPP and EVFTA but Vietnam laws require investment in this area in the form of a joint venture or foreign investors must use Vietnamese subcontractors.
• Basic telecommunications services: Vietnam law complies with the commitments under the CPTPP but it is not compatible with the level of accession required under the EVFTA.
• Regarding the list of goods that foreign investors are not permitted to distribute: CPTPP makes a longer list than that set out in Vietnam laws.
• Higher education services (CPC 923), adult education (CPC 924), and other education services (CPC 929 including foreign language training): Vietnam is committed to fully open these under the CPTPP and EVFTA (except requirements on foreign teachers’ experience and qualifications). However, Vietnam law sets out conditions for foreign investors such as conditions on facilities, number of lecturers, etc.
• Customs clearance/customs brokerage services: Vietnam is committed to fully open these services under the CPTPP and EVFTA, but Vietnam law provides restrictions.
• Container handling services (CPC 741): Vietnam is committed to fully open these sectors under the CPTPP, but domestic laws provide restrictions.

2. Government Procurement
Both the CPTPP and EVFTA require the disclosure of bidding information and transparency in the selection of contractors, however, in fact the bidding period is prolonged, openness and transparency in the bidding information is limited, many bidding packages are invited only for formality, evaluation of bid documents are not based on criteria of tender documents. If this situation continues, foreign investors will hesitate to participate in bidding in Vietnam.
To solve this problem, the Ministry of Planning and Investment has vigorously promoted online bidding. Online bidding has contributed to the end of “blue army, red army” situation (“quân xanh, quân đỏ”), which limited transparency in bidding. In addition, template dossiers used for goods procurement, construction and consultancy are posted on the system, helping investors to fill in information for each step and each stage. After completion, information will be processed by the system to provide bidding price based on the bidding unit price and the quantity of goods/services of the bidding package to make the bidding process take place more quickly and conveniently.
Despite many advantages, the online bidding rate is not high. This is because the bidding network system is weak, is not regularly upgraded and its interface is not friendly with users. Furthermore, the awareness of enterprises about the advantages of online bidding is limited, so they are not willing to participate in electronic bidding packages. In order for online bidding to become popular and further enhance transparency, the Department of Public Procurement should propagate and train enterprises on online bidding so that they are willing to participate in more electronic bidding packages in the system.

3. Dispute Resolution
Under the Civil Procedure Code, any judgment or decision (civil) of a foreign jurisdiction is effective in Vietnam if the competent court of Vietnam recognizes it. The Vietnamese court will recognize any judgments or decisions issued by the courts of the country with which Vietnam has signed a mutual legal assistance agreement. In addition, recognition can also be considered on a reciprocal basis without any mutual legal assistance agreement.
However, under the CPTPP and EVIPA, the arbitral award will be final and binding on the parties and can be enforced directly without recognition and enforcement mechanism of foreign arbitral awards in Vietnam. Although Vietnam has reserved the right to fulfill this commitment for 5 years, the Government should study and revise the domestic laws in this regard right now to ensure they comply with the commitments under CPTPP and EVIPA. Any amendments of domestic regulations made on timely basis will make foreign investors feel safe and secured in their investments in case any dispute occurs.

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Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.

July 12, 2019 by Dr. Oliver Massmann

VIETNAM—FOREIGN DIRECT INVESTMENT AND UNINTENDED EFFECTS AND OPPORTUNITIES OF CPTPP/EVFTA

According to the Ministry of Planning and Investment (MPI), in the first 5 months of 2019, foreign direct investment (FDI) projects were US $7.3 billion, up 7.8% as compared to the same period in 2018. In addition, FDI contribution to the state budget rose from US $1.8 billion during 1994-2000 to US $14.2 billion during 2001-10, and to US $23.7 billion during 2011-15. In 2017 alone, FDI contributed US $8 billion to the state budget, accounting for 17% of the total state budget.[1] Phan Huu Thang, Vice Chairman of Vietnam’s Association of Foreign-Invested Enterprises, told Vietnam Investment Review that hi-tech processing and manufacturing, smart agriculture, healthcare, education and training, and renewable energy will be the hottest sectors for FDI in the coming months and years.[2] All these numbers and projections sound fantastic, but there are always impediments to a flourishing FDI program, as well as untapped (or under-utilized) opportunities. More importantly, how can the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) and European Union—Vietnam Free Trade (EVFTA) agreements foster and support FDI?

Two important draft laws affecting FDI originally slated for passage in July 2019 have, unfortunately, been postponed for passage until May 2020 per Resolution 78 (78/2019/QH14) in the Vietnam National Assembly: the Law on Investment in the Public Private Partnership Form [Law on PPP] and the Law Amending the Law on Investment and the Law on Enterprises.[3] There will be more to come on the effect of those laws after passage.

Unintended Effects of CPTPP and EVFTA on FDI

In the first five months of 2019, Vietnam’s FDI attraction reached a total value of US $16.7 billion, up 69 percent over the same period last year.[4] Currently, there are 131 countries and territories with valid investment projects in Vietnam, of which the Republic of Korea (RoK), Japan and Singapore claim the top three places (Japan and Singapore are CPTPP countries).[5] Since the beginning of 2019, however, a new top contender is emerging—China. In the past, China has been the seventh largest investor in Vietnam (with US $15 billion total); however, in the first half of 2019, their FDI alone was US $2 billion.[6] This is not a great surprise as the US—China “trade war” continues, but it does highlight that China is intending to exploit Vietnam’s entrance into the CPTPP and EVFTA (Agreements that China does not currently benefit from). This year, the Vietnamese government licensed the US $280 million ACTR tire-manufacturing project in the southern province of Tay Ninh, and a US $214.4 million project by the Advance Vietnam Tire Co., Ltd in the Mekong Delta province of Tien Giang.

ACTR manufactures steel-radial tires for trucks and busses, and is a joint venture between China’s Sailun Vietnam Co., Ltd, (with 65% equity) and the US’s Cooper Tire and Rubber Co. (35% equity). Because of the more stringent Certificate of Origin (COO) requirements under the CPTPP, China could no longer import tire components from CPTPP countries and process them domestically to obtain CPTPP member-country benefits (or vice versa—export components for assembly). They would need to have a physical processing plant located in Vietnam to claim “Made in Vietnam” COO. With that member-country COO, China now enjoys zero-tariffs on those products exported to member nations. That is a significant counter to the US—China trade tariffs, and a direct result of CPTPP. Advance Vietnam Tire Co. (owned by Guizhou Advance Type Investment co., Ltd, of China) is an almost identical example to ACTR; other than Advance is not a joint venture. China could have invested in other CPTPP countries, but Vietnam is the most attractive and cost-effective venue for FDI compared to others.

The EVFTA contains similar provisions as the CPTPP regarding tariffs and duties. With the EVFTA now in force, China has poised itself to take advantage of this new regulatory environment for the European markets. Using the examples from above, China will now be able to compete (in effect with domestic-preference) directly with Europe’s largest physically domestic producer of tires, Michelin.

Before CPTPP, EVFTA, and the US—China trade tensions, Chinese investors were mainly small businesses with out-dated technology, but now many large corporations are funding large-scale projects. Five of the seven biggest foreign-invested projects in the last five months came from Chinese backers, including not only the ones already discussed, but also a US $260 million electronic equipment and multimedia audio products manufacturing project invested by Hong Kong-based Goertek Co., Ltd.[7] Chinese investors are also increasing merger and acquisition (M&A) activities. Hong Kong topped foreign investors in Vietnam with the US $3.8 billion purchase of Vietnam Beverage Co. Ltd, in Saigon Beer-Alcohol-Beverage Corp (SABECO).

It appears clear from the investment activity in Vietnam since the onset of CPTPP that it has had a substantial positive impact on FDI. With the advent of EVFTA coming in force (and providing similar—if not more—beneficial trade platforms), Vietnam will have a multitude of investors rushing to reap the benefits of those trade agreements. For Vietnam be able to absorb this inevitable expansion of its FDI landscape the government needs to adapt holistically (and quickly) to the new global trade environment they have embarked on to realize its full potential.

EVFTA and CPTPP Vocational Training Market Opportunity

As Phan Huu Thang mentioned, education and training and renewable energy will be some of the hottest sectors in the coming months and years for FDI. An often-overlooked aspect of FDI is Vocational Training Schools. Vocational training will be critical to the long-term success of Vietnam’s infrastructure platforms, especially when operating and maintaining an enhanced energy and power sector. With highly advanced and technologically complex energy platforms (especially renewables) comes a requirement for competently trained personnel to sustain them. Vietnam has a large workforce pool; however, technical training for these opportunities is currently limited.

The EVFTA and CPTPP both have provisions easing the access of engineering and technology support to assist in achieving the required knowledge and training skillsets.[8] Vietnam recognized this also and updated their regulatory requirements regarding vocational schools through Decree 15 (15/2019/ND-CP), which specifies the order and procedures for opening foreign-invested vocational training schools.[9] The FDI project would need to be in line with the national planning of vocational training in Vietnam, but the threshold capital requirements have been lowered to VND 5 billion (US $216,000) to open a vocational training centre, VND 50 billion (US $2.2 million) for a vocational secondary school, and VND 100 billion (US $4.4 million) for a vocational college.[10] In addition, if a project is aligned with an industry of national priority or significance (enter renewable-energy), the Ministry of Labour will be the sole authority on issuing licenses[11]—a departure from the traditional methodology in an effort to streamline the process. This is good news for many renewable energy projects. Not only will a foreign business have more opportunities for development under CPTPP and EVFTA, but they can also add a minimal supplement to that investment and create the necessary workforce to support it.

An example from USA clearly demonstrates the opportunity in vocational training schools. In 2011, Boeing, Inc. opened a final assembly facility for the 787 Dreamliner in Charleston, South Carolina. Along with that came a demand for technically trained personnel to operate the complex facility and to have personnel trained in the intricate technology involved in assembling the aircrafts. Boeing invested US $80 million to have an aeronautical vocational training facility built near Boeing’s assembly plant (completed June 2019).[12] This is a win-win for Boeing. They provided the initial funding to build the vocational facility; in return, they have professionally trained personnel, and the government takes over costs of maintaining the training facility. Boeing also gets guarantees from the government to repay Boeing’s initial investment through tax incentives and bond issuance. This is a textbook case of vocational FDI supplementing an already significant investment.

As many foreign investors establish their presence even more in Vietnam’s infrastructure landscape, this is another opportunity for FDI to affect Vietnam’s (and the investor’s) bottom-line. The EVFTA and CPTPP are enablers as they both allow services to flow less restrictively between the parties. Phan Huu Thang noted that for Vietnam to realize its fourth-industrial-revolution plan (4IR), local enterprises [must] be encouraged to cooperate with foreign-invested enterprises to learn experience, transfer technology, and receive support in training.[13] Vocational training centers will help fill that need.

Summary

Vietnam’s FDI has been steadily increasing for decades. FDI has helped transform Vietnam from a poor nation to the verge of a massive middle-class population. CPTPP and EVFTA are two vehicles that will propel Vietnam across that line and perhaps even further. The tangible benefits of CPTPP are already proving themselves as evidenced by the hard-data collected. The unintended effects on FDI from non-member countries, however, have a distinct possibility of compounding those benefits exponentially as others see the potential of CPTPP and EVFTA. Traditionally under-utilized sectors for FDI in education and training are also poised to take advantage of these trade agreements. While not the most high profile, E&T are necessary support vehicles to sustain the larger sectors. Vietnam has been slow, thus far, in aggressively changing their regulatory environment to adapt; however, they need to act expeditiously to fully reform their regulatory environment in order to meet this inevitable influx of FDI.

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If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyers in our office listing. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you very much!

January 3, 2017 by Dr. Oliver Massmann

Rechtsanwalt in Vietnam Oliver Massmann Direktinvestitionen und EU VN Freihandelsabkommen (EU VN FTA)

Vietnam arbeitet am Gewinn ausländischer Direktinvestitionen durch Senkung des Standardsatzes der Körperschaftssteuer von 25 -auf 10-20% in priorisierte Sektoren und den Verzicht auf die Erhebung von Grundstücksmietgebühren für ausländisch investierte Unternehmen (FIEs). Sollten die FDIs gefördert werden, wird dies hauptsächlich durch den sich einschließenden Technologietransfer (eng.: technology transfer) verursacht werden. Ungeachtet der wachsenden Anzahl an ausländisch investierten Unternehmen in Vietnam, wird ein Spill-over-Effekt aufgrund des Mangels dreier Voraussetzungen erwartet: einer strukturell dichten Vorleistungsindustrie (eng.: backward linkage), geographischer Nähe und der FDI-Absorptionsfähigkeit (eng.: absorptive capacity).

Unser erstes Anliegen nimmt den Mangel der Vorleistungsindustrie in Angriff, der durch vietnamesische Firmen entstanden ist. Mehr als die Hälfte der durch FIEs importieren Einfuhren stammen aus dem Heimat –oder einem Dritte-Welt-Land. Das ist von verschiedenen Faktoren abhängig: der Zulieferungsart (eng.: suppliers form), des Wirtschaftssektors und dem Herkunftsland.

FIEs werden hauptsächlich von Privaten oder Importzulieferern beliefert. Trotzdem variiert der Prozentsatz an FIEs bezüglich des Zulieferertyps innerhalb jedes Sektors. Das Finanzwesen und der Dienstleistungssektor sind die zwei Sektoren mit der höchsten Vorleistungsindustrie, seitdem diese auf dem Humankapital fußen. In der Produktion und im Bergbausektor importieren die FIEs mehr als die Hälfte der Einfuhren aus anderen Ländern.

Darüber hinaus diversifizieren die FIEs ihre Quellen, durch das Vorweisen eines Wandels der Sourcing-Strategie, ungeachtet der Investitionsanreize, die sie erhalten. Die Zulieferertypen sind vielfältiger als in der Vergangenheit: In zwei Jahren wurden 45 -68% der FIEs von inländischen Privatzulieferern und 10 -20% von

Haushaltsversorgern bedient. Die Eigenproduktion ist die einzige Versorgungsform, die gesunken ist.

Die zahlreichen Anreize (eng.: incentives) haben den Zweck der Förderung der FDI im Hightech Sektor, in benachteiligten Regionen und in anderen vorzugswürdigen Sektoren. Jedoch ist das Bestehen des Technologietransfers fragwürdig. In der Tat zielen die Anreize auf Regionen und Sektoren ab, die für moderne Technologien nicht empfangsbereit sind. Deshalb sind FIEs in höherentwickelten Regionen nicht auf Anreize angewiesen.

Die Hauptsektoren bestimmen provinzübergreifend die Quelle der FIE-Versorger in Ansehung der technologischen Anforderungen, die sie für ihre Tätigkeit benötigen. Vietnamesische Zulieferer sind fähiger, Verbindungen mit FIEs, in niedrigeren Technologiesektoren herzustellen, bei denen der technologische Rückstand aber nicht untragbar groß ist. Somit sind mehr Verbindungen zu taiwanesischen Unternehmen hergestellt, die sich auf Textilien, Leichtindustrie und Leichtelektronik konzentrieren, als zu japanischen oder koreanischen Unternehmen mit Spezialisierung auf komplexe Elektronik. FIEs unterstehen keinerlei Verpflichtung zum Transfer ihrer Technologie. Dies hindert vietnamesische Firmen an der Möglichkeit zur Beteiligung an der Hightech-Versorgungskette und zur Etablierung nachgelagerter Industrien (eng.: forward linkages).

Die räumliche Nähe zwischen den FIE-Zentren und den inländischen Privatunternehmen muss unter starker Beachtung stehen, weil der Technologietransfer meistens durch direkter Fachberatung zustande kommt. Bisher ist es schwer eine klare Abgrenzung zwischen der Auswirkung des räumlichen Näheverhältnisses und der inländischen Firmenstrategie zu treffen. In beiden Fällen hat die Nähe einen Einfluss auf die Strategiewahl. Eine unmittelbare Nähe gewährleistet einen besseren technologischen Spillover. Die Einrichtung von inländischen Privatunternehmen in Industriezonen erhöht die Exporteffizienz, vermindert aber die Möglichkeit des Technologietransfers, durch die Isolierung der FIEs von wirtschaftlich besser ausgeprägten Bereichen.

Letztendlich wird der Technologietransfer durch die Absorptionsfähigkeit des FDI noch weiter erleichtert. Jedoch wird das Potenzial des Technologietransfers verringert, wenn der Abstand des Fortschritts zwischen den inländischen Unternehmen und den FDIs in den Bereichen moderner Technologien oder des Arbeitskraftpotenzials zu enorm ist.

Im Bereich der Arbeitsqualität haben Staatsunternehmen einen höheren Anteil an guter Arbeitsqualität vorzuweisen, wohingegen private Unternehmen über weniger gutausgebildete Arbeitskräfte verfügen. Die Qualität der Belegschaft ist entscheidend für die Annahme der Technologien und Führungstechniken der FIEs. Dadurch passen sich die inländischen Zulieferer der FIEs mit einer geringeren Wahrscheinlichkeit an ihre ausländischen Kunden an. Dies ist auf ihre begrenzte Absorptionsfähigkeit zurückzuführen. Die Verbesserung der Arbeitsqualität ist der fehlende Schlüssel zur Verbesserung des Technologietransfers der FIEs. Die Verknüpfungen (eng.: linkages) und die Nähe allein, wird lediglich die Möglichkeit zur Kontaktaufnahme und zur Verbesserung des Spillover führen.

Handlungsempfehlung für das EU-VN Freihandelsabkommen (FTA)

Jetzt ist der optimale Zeitpunkt, wegen des FTA in Vietnam zu investieren. Vietnam ist das einzige ASEAN-Land, das dieses Abkommen mit der EU unterzeichnet hat. (Singapur unterzeichnete das FTA 2014, jedoch beeinträchtigt das nicht die Wettbewerbsfähigkeit von Vietnam, da Singapur vorwiegend Maschinen, chemische Produkte und Transportmittel exportiert).

Nach den Richtlinien des Abkommens, werden über 99% der Zollbestimmungen innerhalb der nächsten sieben Jahre ab dem Datum des Inkrafttretens des FTA aufgehoben. Die vietnamesischen Verpflichtungen für EU-Exporte werden in einem Zeitraum innerhalb von 10 Jahren verschwinden. Die Exportpflichten der EU für einzelne Produkte (Motorräder, Autoteile, die Hälfte der EU-Arzneimittel) erlöschen innerhalb von sieben Jahren. Die Öffnung des Marktes wird die Geschäftsbeziehungen zwischen der EU und Vietnam und dessen beidseitige Vorteile festigen. Das Engangement von Vietnam gegenüber der World Trade Organization (WTO) und gegenüber zusätzlichen Teilbereichen, wie den interdisziplinären F&E-Dienstleistungen, Pflegeleistungen, Verpackungsdienstleistungen etc. ermöglicht den EU-Partnern einen bestmöglichen Zugang zum vietnamesischen Markt.

Für den Vertriebssektor ist nach der WTO ein wirtschaftlicher Bedarfstest (ENT) mit Ausnahmen und einer Laufzeit von fünf Jahren ab Inkrafttreten des Abkommen nötig. Folglich endet der Bedarfstest nach dieser Zeit.

Vietnam ist der rentabelste Platz im ASEAN für eine Investition. Diese Position ist partiell dem EU-VN Freihandelsabkommen zu verdanken. Seine stabile wirtschaftliche Entwicklung, seine kontrollierte Inflation und seine geeignete Gesetzgebung bilden einwandfreie Rahmenbedingungen für eine Investition.

Die wichtigsten Problemschwerpunkte

Berücksichtigung, welche die am besten passende Versorgungsart für die Modernisierung des Betriebs ist
Wählen einer passenden Strategie, um zwischen dem Wahrnehmen von Anreizen, der Abstandnahme von Verknüpfungen und der Etablierung von Vorleistungsverknüpfungen mit den inländischen Unternehmen zu wählen, auch wenn dies die Aufgabe von Anreizen bedeutet.
Treffen einer Entscheidung über die Wahl einer Investition: Vietnam ist das neue Land der Investitionen. Investoren sollten sich daher so früh wie möglich positionieren, damit sie die Vorzüge des FTAs wahrnehmen können, sobald diese sich auftun.
Beachtung der neuesten Rechtsentwicklung: Die Regierung tendiert zur Verbesserung des Wirtschaftsklimas durch Reformierung von Rechtsverordnungen, vor allem für den Zeitpunkt des Inkrafttretens der geschlossenen Handelsabkommen (z.B.: Investitionsrecht, Unternehmensrecht, Verordnungen bezüglich privat-öffentlicher Partnerschaften)Bei Rückfragen, zögern Sie bitte nicht Herr Oliver Massmann, den Generaldirektor von Duane Morris Vietnam LLC, unter: omassmann@duanemorris.com zu kontaktieren.

Vielen Dank!