oliver – Page 11 – Duane Morris Vietnam

January 26, 2016January 27, 2016 by Dr. Oliver Massmann

The Trans Pacific Partnership Agreement – Commitments above WTO Level – An Analysis

Overview on the Trans Pacific Partnership Agreement (TPP)
The TPP was originally known as the Trans- Pacific Strategic Economic Partnership concluded in 2006 among Singapore, New Zealand, Chile and Brunei (P-4 agreement) as a means to promote trade liberalization in the Asia- Pacific Region. As its name indicates, the original purpose of the agreement was only to address economic issues. As the number of participating countries in the P-4 agreement increased, starting with the United States in September 2008 and other countries to follow being Australia, Peru, Vietnam, Malaysia, Canada, Mexico and Japan until July 2013, the agreement is agreed to be “a comprehensive, next-generation regional agreement that liberalizes trade and investment and addresses new and traditional trade issues and 21st-century challenges” by TPP Trade ministers. In June 2015, the United States approved the trade promotion authority for President Obama. The Agreement finally becomes as it is today through tough negotiation rounds, while the last round in Atlanta in September 2015 was considered the most intensive one. The TPP was already concluded on 06 October 2015.
The successful conclusion of the TPP negotiations adds Vietnam to a club of 12 nations accounting for 40% of world’s GDP (about $US28.1 trillion, $39.1 trillion), one-third of global trade ($US11 trillion) and about 800 million consumers.
Vietnam would be the largest beneficiary of this trade pact. Vietnam’s GDP would add an additional increase of 13.6% to the baseline scenario. According to the World Economic Forum, Vietnam is predicted to have the most significant change in GDP in 2025 (i.e., 28.2%) compared with other TPP economies, RECP economies and RCEP-only economies. 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.

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

What makes the TPP the template for next generation trade agreements – What commitments are beyond the WTO Level ?
Freer trade zone
Commitments in Trade in goods
Tariff and non-tariff barriers are reduced and removed substantially across all trade in services and goods under the TPP. Import tariffs are reduced for 100% goods traded among member states, with more than 90% being eliminated immediately when the Agreement takes effect. The TPP also covers issues which have never been addressed in the WTO, including export duties, import duties for re-manufactured goods, market access for re-furbished goods, stricter regulations on import and export licensing, monopolies and goods in transit.
Lower tariff barriers from the TPP will give Vietnam greater access to large consumer markets in the US, Japan, Canada and Australia. The potential positive effect on trade could be transformative, with estimates that the TPP will boost Vietnam’s exports by over 37% until 2025. Notably, Vietnam in August also concluded FTA with the EU, putting it on course to complete free trade agreements with three of its four largest export destinations – the EU, Japan and the US.
Commitments in Trade in services and Investment
All 12 member states give consent to a liberalized trade in this area. More sectors are opened in the TPP 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 TPP takes a negative approach, meaning that their markets are fully open to service suppliers from other TPP 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, the non-conforming measures are only limited to such list, except for measures in certain sensitive sectors which are included in a separate list. Member states are only allowed to adopt policies that are better than what they commit (ratchet principle). The TPP 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 TPP Chapter on Investment for the first time makes it very clear and transparent with regards to the MFN principle, that countries operating in multi-state regime must give foreign investors the best investment conditions of all states, regardless of the state where the investment takes place. Investors are also allowed to petition against the Government from the investment registration stage.

Textiles
Textiles are among Vietnam’s core negotiating sectors. According to suggestions by the United States, negotiations on textiles were conducted separately from negotiations on market access for other goods. To be qualified for TPP preferential tariff treatment, the TPP applies the yarn-forward principle, meaning textile products must be produced in TPP countries from yarn forward. However, the TPP includes exceptions that allow (i) certain materials to be sourced from outside TPP (“Short supply list”), (ii) certain manufacturing phases (for example, dying, weaving, etc.) to be conducted outside TPP; and (iii) one country to be able to use non-TPP materials in exchange for its export of certain textile goods to another country.
Government procurement
The TPP makes a list of government entities and agencies whose procurement of a particular̉ goods and services at a particular amount must be subject to public tender. 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, especially Vietnam, in the context of China’s bidders predominantly win the bids with cheap offer price but low-quality services, to reform their bidding procedures and protect their own interests by disqualifying tenders with poor performance and low capacity.

Investor-State Dispute Settlement
The TPP 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.
TPP 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.

Application of the TPP and older/ existing agreements
Member states of the TPP acknowledge existing rights and obligations of each member under existing international agreements to which all TPP member states are parties (for example, the WTO Agreement, NAFTA, or bilateral agreements) or at least two member states are parties. In case there is any consistency between a provision of the TPP and a provision of another agreement to which at least two TPP member states are parties, these parties will consult with each other to reach a mutually satisfactory solution. Please note that the case where an agreement provides more favourable treatment of goods, services, investments or persons than that provided for under the TPP is not considered as an inconsistency.

Implementation deadline of the TPP
Trade ministers will meet in New Zealand on 04 February 2016 to sign this Agreement for it to be ratified in each member states as the next step before the Agreement officially takes effect. The TPP will not take effect unless at least six countries accounting for 85% of the GDP of the bloc ratify it. According to Minister of Vietnam Ministry of Industry and Trade Mr. Vu Huy Hoang, the TPP would promisingly take effect in 2018.

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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.

January 22, 2016 by Dr. Oliver Massmann

Vietnam Economic Times interviewing lawyer in Vietnam Oliver Massmann on impact of new laws for foreigners in Vietnam

1. In your opinion, which are the important regulations taking effect in the year of 2016 that foreigners may care about and the reasons for those?
Answer:
Note: The below answer will only address regulations that have direct impact on foreigners in Vietnam. Other regulations which do not regulate foreigners specifically in their governing scope will then be excluded.
Foreigners should be aware of the following legal documents will be in effect from January 2016 as these new laws will significantly impact their rights and obligations:
– Law on Social Insurance:
o Foreign employees with work permit or practicing certificate or practicing license issued by Vietnam’s competent authorities are now subject to compulsory social insurance.
o Accordingly, foreign employees are entitled to insurance on their sickness, maternity, labor accidents, occupational diseases, retirement and death. These entitlements are the same as what local employees currently enjoy.
o From 01 January 2016, male employees (including foreign ones) are entitled to paternity leave if the wife is on maternity.
In particular, male employees are entitled to 5 working day leave if his wife is on normal maternity. In case of operation or giving birth to an under 32-week baby, a 7-working-day leave will apply. In case of giving birth to a twin, paternity leave is 10 working days, with additional 3 working day leave for each further baby. In case the wife gives birth to a twin or more babies by operation, 14-day paternity leave applies. Please note that this paternity leave only applies within 30 days from the birth date of the baby.
o Male employees when adopting a child under 6 month old are also entitled to the same paternity treatment as in the case of female employees adopting such child.
– Decree No. 122/2015/ND-CP: in relation with the social insurance participation, foreigners should also note the following minimum regional salary, which serves as the basis to calculate payment amount of social insurance, health insurance and unemployment insurance; o Region I: 3.500.000 VND/month (increasing by 400.000 VND/month) o Region II: 3.100.000 VND/month (increasing by 350.000 VND/month) o Region III: 2.700.000 VND/month (increasing by 300.000 VND/month) o Region IV: 2.400.000 VND/month (increasing by 250.000 VND/month)
– Law on Civil Status:
o Foreigners permanently reside in Vietnam must register their civil status with the People’s Committee at ward level instead of the provincial level as previously.
o Children of foreigners born in Vietnam are allowed to register their birth with the People’s Committee at ward level where the mother or father lives.
o Foreigners residing in Vietnam wishing to register their marriage in Vietnam can do so at the People’s Committee at ward level where the wife/ husband lives. Interview is no longer required so that the total time to register a marriage is reduced by half to 15 days (compared with 25 days previously) o Foreigners wishing to apply for a Confirmation on marital status can do so at the People’s Committee at ward level where they register their permanent or temporary residence. The Confirmation on marital status is issued within 3 working days from the receipt of a valid dossier and will be valid for 6 months from the issuance date.

2. Starting January 1st, special consumption tax on cigarette, beer, wine will be raised. How will this affect the economy of Vietnam in the long-term? Also, with this, how do we expect the change in Vietnamese’s consumption habit of these commodities?
Answer: For alcohols of 20oC and above, from 01 January 2016 to 31 December 2016, the tax rate is 55%. This rate will be 60% for the whole 2017 year and 65% from 01 January 2018 onwards. The schedule for increase in special consumption tax rate for beer is the same. Meanwhile, this rate for cigarettes is higher (70% from 01 January 2016 to end of 2018 and 75% from 01 January 2019 onwards).
In my opinion, the increase of such tax rate will on its face increase the State budget. It will somehow reduce the number of people smoking and drinking alcohol, thereby protect public health and prevent negative social issues related to social orders, traffic safety and crimes related to smoking and drinking alcohol.
However, given the fact that the increase is not very high (compared with the increase in minimum regional salary), the retail price of these goods will not be much affected, leading to stagnant change in purchasing power of the products. Adults may still continue to consume these goods. Moreover, the tax increase may create more chances for smuggling which is already very complicated and hard to control in Vietnam.
Thus, together with policies of increasing special consumption tax, the Government should adopt regulations on strict control of smuggling, educate young people’s awareness on serious effects resulting from consumption of alcohols and cigarettes.

3. Starting July 1st, individuals, organizations are not permitted to send commercial information to e-addresses (including email, mobile number, personal sites and other similar means) in the cases the recipient does not accept that. How is your view on this regulation?
Answer: The spread of spam emails and text messages with advertising nature has created strong disturbance for internet and network users. While previous regulations such as the Decree and Circular on preventing spam emails and messages or Circular on managing prepaid subscribers seem to have limited impact, this new regulation is another effort of the Government to fight against the more serious and much more complicated forms of advertisment. I really doubt about whether this new regulation could bring significant positive improvement to the current situation, but highly hope that with cooperation from network operators, strong sanctioning measures from the state authorities, the situation will improve gradually.

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.

January 18, 2016January 18, 2016 by Dr. Oliver Massmann

Rechtsanwalt in Vietnam Oliver Massmann STROM UND ENERGIE

In einigen Regionen Vietnams können derzeit ausreichende Netzqualitäten nicht gewährleistet werden und es besteht insoweit ein entsprechender Finanzierungsbedarf, um die veralteten Übertragungsleitungen auf einen technisch aktuellen Stand zu bringen. Die Entwicklung des vietnamesischen Geschäfts- und Investitionsklimas hängt in hohem Maße von einer zuverlässigen Stromversorgung ab.
Es bestehen erhebliche Bedenken, dass der Power Master Plan VII, welcher vom stellvertretenden Minister Vuong bestätigt wurde, Verzögerungen bei der Erschließung neuer Energiequellen beinhaltet, welche zu einem Energieengpass in 2017/2018 führen und Energielieferungen aus dem Norden Vietnams erforderlich machen. Weitere Bedenken werden hinsichtlich des langen Zeitraums zur Mittelbeschaffung für die Finanzierung der Übertragungsleitungen geäußert. Darüber hinaus werden die Bestrebungen der privaten Investoren in neue Energiequellen zu investieren auf lange und komplexe Verhandlungen hinausgeschoben. Auch stellt der staatliche Regulierungsrahmen weiterhin ein Markteintrittshemmnis dar und genehmigte Projekte scheitern aufgrund der fehlendenden Finanzierungsanreize.
Die Arbeitsgruppe Strom und Energie vertritt die folgenden Positionen:
1. Schaffung eines wettbewerbsorientierten Stromgroßhandelsmarktes für Vietnam – Beschluss Nr. 8266/QD-BTC vom 10. August 2015
Die Arbeitsgruppe Strom und Energie hat folgende Kommentare und Vorschläge.
Nach Maßgabe des Beschlusses Nr. 8266/QD-BTC ist eine vollständige Umsetzung bis zum Jahre 2019 vorgesehen. Um eine verlässliche Stromversorgung gewährleisten zu können, schlägt die AUSLÄNDISCHE INVESTORENGRUPPE vor, dass dringend Anreize geschaffen werden müssen, um den vietnamesischen Energiemarkt für private Investoren attraktiv zu gestalten. Die AUSLÄNDISCHE INVESTORENGRUPPE ersucht das MOIT daher, die Umsetzung dieser entscheidenden Marktreform zu beschleunigen. Während Vietnam Electricity (EVN) weiterhin das Ankaufsmonopol auf dem Strommarkt besitzt, gibt die finanzielle Situation des Unternehmens den privaten Investoren, die gesetzlich dazu verpflichtet sind ihren produzierten Strom an EVN zu verkaufen, weiterhin Anlass zur Sorge.
In Ergänzung zu den stetigen Bemühungen durch weitere Strompreisanpassungen eine Deckung der Versorgungskosten zu erreichen, schlägt die AUSLÄNDISCHE INVESTORENGRUPPE dem MOIT vor, den Einsatz neuer Methoden zur Bonitätsverbesserung von EVN in Betracht zu ziehen. Ausländische Geldgeber, die ein Interesse daran haben die Entwicklung der nachhaltigen Energieerzeugung in Vietnam zu fördern, könnten in Fällen, in denen der Stromanbieter aus einem erneuerbarem Energieprojekt stammt, dazu bereit sein, die Bonität von EVN durch spezielle Risikobürgschaften zu verbessern. Ein Mechanismus, der eine Unterstützung seitens der ausländischen Geldgeber in diese Richtung fördern würde, erscheint sehr wünschenswert und würde die Belastung des Finanzministeriums sämtlichen Stromanbietern Bürgschaften zur Verfügung zu stellen beenden. Insbesondere benötigen Projektträger aus den Bereichen der erneuerbaren Energien und Kleinkraftwerke in Vietnam eine entsprechende Unterstützung, da die steigenden Kosten für Handelskredite, Bürgschaften sowie Verzögerungen ein erhebliches Investitionshindernis darstellen.
Die AUSLÄNDISCHE INVESTORENGRUPPE hat bereits zuvor darauf hingewiesen, dass viele Energiequellen, insbesondere die Windkraft, nicht dem Mechanismus eines wettbewerbsorientierten Großhandelsmarktes unterliegen. Die AUSLÄNDISCHE INVESTORENGRUPPE hat auch auf den Bezug zu anderen detaillierten Vorschriften hingewiesen, die Bestimmungen enthalten, wie Windenergie in Vietnam gefördert wird. Die AUSLÄNDISCHE INVESTORENGRUPPE weist darauf hin, dass auch die Windkraft in den Markt integriert werden könnte und beruft sich diesbezüglich auf die erfolgreiche Entwicklung der Windenergie in anderen Entwicklungsländern (z.B. Mexiko) durch den Abschluss von “direkten” Stromabnahmeverträgen (SAV). Die AUSLÄNDISCHE INVESTORENGRUPPE würde es sehr begrüßen, wenn das MOIT kurzfristig seine Haltung mitteilen würde, ob die Einführung von SAVs in Vietnam möglich erscheint und wie diese in die Struktur des wettbewerbsorientierten Großhandelsmarktes integriert werden könnten. Die AUSLÄNDISCHE INVESTORENGRUPPE würde die Möglichkeit sehr begrüßen, wenn sie ihren Dialog mit dem MOIT zu diesem Thema fortsetzen und dabei die große internationale Erfahrung seiner Mitglieder miteinbringen könnte.
Wesentliches Element eines funktionierenden offenen Strommarkts ist, dass die Hauptakteure ihr Geschäfts unabhängig voneinander betreiben und ihre Beziehungen im Rahmen von Handels-verträgen transparent geregelt sind.
2. Konzept zur Strompreisentwicklung
Obwohl die seit 2012 gefassten Beschlüsse des Ministerpräsidenten in Bezug auf Strompreise den Markt positiv beeinflusst haben, gehören die Kosten für Strom weiterhin zu den niedrigsten in der Region und EVN erwirtschaftet weiterhin Verluste. Dies schränkt Direktinvestitionen in neue Energiequellen und in die Netzinfrastruktur ein und vermittelt Kunden und Unternehmen keinen Anreiz dazu sich selbst energieeffizienter zu verhalten. Um eine nachhaltige Entwicklung des vietnamesischen Energiesektors zu erreichen, schlägt die AUSLÄNDISCHE INVESTORENGRUPPE vor, dass das MOIT die Energiepreise weiter anpasst. Da Bürger mit niedrigem Einkommen unter Preiserhöhungen am meisten zu leiden haben, schlägt die AUSLÄNDISCHE INVESTORENGRUPPE vor, dass der Staat diese Personengruppe subventioniert (30 kWh / Monat kostenlos) und sicherstellt, dass die ländliche Bevölkerung nicht durch eine Stromlastverteilung an bevorzugte Branchen in Mitleidenschaft gezogen wird. Die Wirtschaft würde insgesamt davon profitieren, wenn das MOIT ein Strompreisentwicklungs-konzept für Endverbraucher kommunizieren würde, in welchem es die Entwicklung hin zu Wettbewerbspreisen unter staatlicher Führung darlegt. Dies würde den Zugang zu den erforderlichen Privatinvestitionen aus dem In- und Ausland öffnen und Endverbraucher dazu anhalten, sich energieeffizienter zu verhalten. Die AUSLÄNDISCHE INVESTORENGRUPPE befürwortet die Verwendung der Gebermittel zur Ablösung staatlicher Bürgschaften, da die Grenze staatlicher Sicherungszusagen bereits im Folgejahr erreicht sein wird.
3. Erneuerbare Energie
Wie von Minister Hoang am 9. Juni 2015 dargelegt, stellen fossile Brennstoffe eine endliche Ressource dar, die sogar unwirtschaftlich werden könnte, was Vietnam zu Energieimporten zwingen würde und damit seine Versorgungssicherheit bedroht. Der Umweltschutz, die soziale Sicherheit und die Volksgesundheit stellen weitere Gründe dar, um die Entwicklung im Bereich der erneuerbare Energien (EE) in Vietnam zu intensivieren. Die AUSLÄNDISCHE INVESTORENGRUPPE beglückwünscht die Verwaltung hinsichtlich der Beschlüsse des Ministerpräsidenten in Bezug auf Sonne und Biomasse. Unsere ausführlichen Kommentierungen zum Entscheidungs-/Beschlussentwurf über den Mechanismus zur Unterstützung der Entwicklung von Sonnenenergie-Projekten in Vietnam ist der Anlage zu diesem Positionspapier zu entnehmen. Mit Schaffung der richtigen Anreize für die EE-Erzeugung, z.B. im Bereich der Sonnen- und Windenergie, könnte das 5%-EE Ziel für das Jahr 2020 bei weitem übertroffen werden. Die AUSLÄNDISCHE INVESTORENGRUPPE ist der Ansicht, dass die EE aufgrund ihrer schnellen Erweiterungsfähigkeit am besten dafür geeignet ist, den aktuellen Energiebedarf Vietnams zu unterstützen. Um die EE zu stärken, unterstützt die Arbeitsgruppe Strom und Energie die Schaffung eines attraktiven Investitionsklimas für die zuvor genannten Sektoren. Insbesondere stimmt die Arbeitsgruppe den Empfehlungen der MOIT Berater (UNDP und GIZ) zu, die eine Erhöhung der Einspeisevergütungssätze (EVS) für Sonnen- und Windenergie sowie eine Vereinfachung des Antragsverfahrens fordern.
Unsere Hauptanmerkung in Bezug auf den Solarbereich ist der niedrige Strompreis in Höhe von USD 0,11 / kWh für netzgekoppelte Solarstrom-Projekte. Die derzeit existenten RE-Tarife scheinen auf dem derzeit niedrigen Niveau zu dem Zweck festgelegt worden zu sein, um Unterstützungen von Geldgebern in Form von Darlehen zu Vorzugsbedingungen und Zuschussmöglichkeit zu erhalten und nicht um private Investitionen anzuziehen.
4. Unmittelbare Stromabnahmeverträgen
Die Arbeitsgruppe Strom und Energie hat mit den MOIT Beratern Informationen ausgetauscht, die an direkten SAV zwischen Stromendverbrauchern und unabhängigen vietnamesisch Stromerzeuger arbeiten geteilt. Aus Sicht vietnamesischer privater Entwickler und Unternehmen, Technologianbieter sowie finanzierender Banken, besteht ein hohes Interesse an einer Umsetzung dieses Modells. Direkte SAV haben auch in Mexiko, Indien und Brasilien gut funktioniert, insbesondere in Bereichen, die ohne staatliche Bürgschaften auskommen.
5. National Power Master Plan VII
Wie vom MOIT am 15. Mai 2014 erwähnt, sieht die Arbeitsgruppe Strom und Energie dem Erhalt des aktualisierten National Power Master Plan VII zur Kommentierung erwartungsvoll entgegen.
6. EVN Rettungsplan
Der durch die EVN überarbeitet EVN-Rettungsplan soll im September 2015 veröffentlicht werden; Die AUSLÄNDISCHE INVESTORENGRUPPE sieht der Übermittlung einer Kopie erwartungsvoll entgegen. Die AUSLÄNDISCHE INVESTORENGRUPPE entnimmt der Haltung der Weltbank, dass die EVN den 10-Jahres-Reformplan umsetzen sollte, um bestimmte finanzielle Kennzahlen und Standards zu erreichen. Wie bereits zuvor erwähnt, muss ein solcher Reformplan von der Behörde mit der letztgültigen Entscheidungsgewalt ergehen.
7. Nutzung natürlicher Ressourcen
Die Arbeitsgruppe Strom und Energie betont, dass die vorgeschlagene Strategie zur erfolgreichen Nutzung der natürlichen Ressourcen Vietnams zwecks einer stabilen Energieversorgung in Einklang mit der zu erwartenden Umsetzung von Freihandelsabkommen (FHA) steht und zugleich eine Stärkung für den Privatsektor sowie für kleine und mittlere Unternehmen (KMU) bedeutet. Die Steigerung des vietnamesischen BIP sowie der wirtschaftlichen Entwicklung insgesamt, welche als Folge der FHA zu erwarten ist, basiert insbesondere auf einer verlässlichen Energieversorgung.
8. Kohlepolitik
Schließlich sei angeführt, dass die Arbeitsgruppe Strom und Energie über den langsamen Fortschritt der geplanten Stärkung der Kohlepolitik besorgt ist, der durch eine erhebliche Reduzierung zu Lasten Vietnam´s natürlichen Ressourcen von Erdgas, Sonne und Wind.
Wie bereits erwähnt, sind Verhandlungen in Bezug auf Betreibermodelle (BOT) zeitlich intensiv und komplex. Die Ausweitung der Kohlenutzung durch den Import von 38 Mio. Tonnen Kohle erfordert einen massiven Ausbau der Infrastruktur bis 2020. Für die AUSLÄNDISCHE INVESTORENGRUPPE ist nicht klar erkennbar, wer die Kosten für den benötigten Infrastrukturausbau tragen soll.
Bitte wenden Sie sich an den Autor Oliver Massmann unter omassmann@duanemorris.com wenn Sie Fragen haben. Oliver Massmann ist der General Director von Duane Morris Vietnam LLC.VIELEN DANK !

January 4, 2016January 4, 2016 by Dr. Oliver Massmann

Vietnam – Energy Sector – Direct Awards of Public Procurement Projects and The Trans-Pacific Partnership Agreement – What You Must Know

Q: Under what conditions can power projects be awarded without Government tender?

A: Power projects can be awarded directly without Government tender if the projects are not:
a. Investment projects for development using state funding by state agencies;
b. Investment projects for development of state-owned enterprises;
c. Investment projects for development other than those in a) and b) which are financed by the state; has 30% or more of total investment capital contributed by state-owned enterprises ; or less than 30% but more than VND 500 billion of the total investment capital of the project;
d. Procurement projects using state funding to provide public goods and/ or services; or
e. Investment projects in the form of public-private partnership or investment projects using land.

Q: Under which circumstances is direct appointment of an investor applied?
A: Direct appointment of an investor applies in the following cases:
a. There is only one investor registering the project’s implementation;
b. There is only one investor being able to implement the project as the project is related to intellectual property, commercial secret, technologies or capital arrangement;
c. The investor who proposes the project satisfies requirement of implementing the project with the highest feasibility and efficiency in accordance with regulations of the Government.
However, please note that direct appointment of an investor is still a part of a Government tender, meaning that this applies only when the abovementioned cases occur in the Government tender process.

Q: Under which circumstances is direct appointment of a contractor applied?
Direct appointment of a contractor applies in the following cases:
a. An event of force majeure such as disasters, war, change of the state policies, …which are objective, unpredictable and cannot be solved despite using all necessary measures within one’s own capacity. Vietnam is likely to face energy crisis in the coming years due to significant growth in energy demand. Thus, this is a good chance and foreign energy investors and companies should be prepared.
b. Bid packages need to be performed to ensure national secrets. National secrets are information in politics, national defence, security, foreign affairs, economics, science, technology sectors and other sectors that has not been disclosed or will not be disclosed by the state, and if disclosed, it will cause damage to the country.
c. Urgent bid packages need to be carried out to protect national sovereignty, national borders, and islands;
d. Bid packages of providing advisory services, non-advisory services, procurement of goods which must be purchased from previous contractors to ensure the compatibility of technologies and copyright which are unable to be purchased from other contractors; bid packages with research and testing nature; purchase of intellectual property right;
e. Bid packages of providing advisory services for making feasible study reports, construction designs which have been appointed to authors of designs of architectural works who won in a selection or are selected when authors have full capability in accordance with regulations; bid packages of constructing statues, reliefs, monumental paintings, art works in association with author right from the creation stage to construction stage of the works;
f. Bid packages of relocating technical infrastructure works directly managed by a specialized unit for site clearance;
g. Bid packages of providing public goods and services, bid packages with bid package price ranging from VND 500 million to VND 1 billion depending on types of projects.

Q: How is government procurement addressed under the Trans-Pacific Partnership Agreement (“TPP”) ?
A: The TPP on Government Procurement mainly deals with the requirement to open up bidding to companies in other nations when a government buys products or orders a public works project worth over a certain amount. Governments undertake to timely publish information on tender, allow sufficient time for bidders to prepare for and submit bids, maintain confidentiality of tenders. The TPP also requires its Parties assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documentation, create an effective regime for complaints and settling disputes, etc. These rules require all Parties, especially Vietnam, in the context of China’s bidders predominantly win the bids with cheap offer price but low-quality services, to reform their bidding procedures and protect their own interests by disqualifying tenders with poor performance and low capacity.

Q: How to appeal Government tender decision?
A: The TPP 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.
TPP also includes procedures for arbitration as means of settling disputes between investors and the host state. It is expected to cover new provisions 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.

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If you would like to have a legal concept for direct awards or detailed guidance on this topic please contact Oliver Massmann under: omassmann@duanemorris.com. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

December 30, 2015 by Dr. Oliver Massmann

Vietnam – Bloomberg asking Lawyer in Vietnam Oliver Massmann on investment trends in 2016

1. Do you see a growing interest in Vietnam by foreign companies and investors? If so, why?

Yes. The country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities. Encouraging signs for foreign investment are the recovery of the macro-economy (Vietnam economy grows at highest rate in five years), reformed policies to open a wider door to foreign investors, the conclusion of FTAs and TPP, the bouncing back of the stock market, and new regulations including wider room for foreign investors ownership in public listed companies.

The introduction of the new Investment Law, Enterprise Law and other commercial laws and economic policies are creating a better legal environment for investment and trade in general and M&A market.

Major M&A trends in Vietnam are forecasted for 2016, including bank restructuring, acquisition and mergers, growing Japanese investment in Vietnam via M&A and reform of state-owned enterprises. The derivatives market being expected to open next year will help prevent risks and boost the growth of the stock market, promoting M&A deals.

2. Do you think this trend will be sustainable next year?

The trend will continue next year. If foreign investors come to Vietnam to participate in production and business, they could approach large markets that are member countries of the TPP and EVFTA. In the past few years, there have been many large projects of the US, Japan and EU to take advantage of the upcoming trade pacts because timing is of the essence and first comers benefit the most.

Many other international groups have also expressed their intention to relocate the business and production to Vietnam. The real impacts of many recent sealed trade deals need to be assessed over a longer period, but the trend will continue until and after their effective date.

3. What does this mean for the economy and what do you think the government should do to attract more foreign investment?

Vietnam must walk its talk with regard to its Asean Economic Community Commitments (AEC) and WTO Commitments and TPP and EU Vietnam FTA Commitments to be credible for foreign investors.

Only then Vietnam will attract a greater and sustainable flow of foreign direct investment capital.

Institutional reforms, especially in public investment procedures and Dispute Resolution as well as Enforcement of Arbitration Awards are a “MUST” to facilitate foreign investment, leading to a more efficient legal framework, higher productivity, better investment environment as well as improvement in business capacity, living standards and higher level of development.

However, in the meantime, the Government should:

– Take action to solve the Non-Performing loan problem by moving away from over supporting the State Owned Enterprise sector with loans.

– Active support for the private sector with establishing a performance based access system for loans.

– Improve the Education System

– Improve labor productivity via vocational training

– Reform tortuous customs and tax procedures

– Review all sectors to take advantage of the upcoming trade pacts, create facilitated business environment and implements its International Commitments in time without delay

– Work on changing the mindset of the policy makers towards pro-Western faction rather than pro-Beijing one only. We recognize a “drift” towards China in the last decade. We hope Vietnam’s membership to the AEC, the TPP and EUVN FTA will restore balance.

– Improve transport and social infrastructure

– Continue to control inflation rate and reduce red tape. At this stage allow me to congratulate the State Bank of Vietnam which has done a great job re control of inflation in the last years.

December 22, 2015April 21, 2016 by Dr. Oliver Massmann

Vietnam Wind Energy – Eurocham Legal Sector Committee – Meeting with Chairman of EVN Mr Duong Quang Thanh – Presenting Major Legal Issues for Getting Deals Done

On 18 December 2015, Mr. Oliver Massmann, the Managing Partner of Duane Morris Vietnam LLC, Chairman of the Legal Sector Committee of Eurocham, attended the conference “EVN-HCMC Dialogue with Korean, American and European enterprises” held by EVN HCMC.

Besides the presentation on how to improve the quality of power supply in Vietnam of EVN HCMC, Mr. Massmann had an opportunity to give a speech in Vietnamese and raise major issues in relation to wind power energy projects in Vietnam, including:
– The Government offers low FiT rate in comparison to the investment of the investors;
– Power Purchase Agreement (PPA) is required to follow a specific template, which is not bankable;
– The PPA template is unclear whether it is a “take or pay” agreement;
– There is no clear guidance and procedure to obtain the approval for the amendment of the PPA template.

The speech received the sympathy from many foreign investors in the conference. Mr. Duong Quang Thanh, the Chairman of the Members’ Council of EVN, well received the comments with positive feedback and personally congratulated Mr. Massmann for the successful speech after the event.

Followings are the brief analysis of the issues and the response from Mr. Thanh to each issue.
1. Low FiT rate
– Mr. Massmann raised the concern that the FiT, as regulated in Decision No. 37/2011/QD-TTg, is 7.8 cents USD/kWh, equivalent to 1,614VND/kWh, is very low compared to the investment capital of the investors in the projects. Accordingly, such purchase price cannot ensure the profits for the investors. Therefore, instead of fixing the price, the Government can regulate the ceiling price and give the parties the rights to negotiate the price. In addition, it would be appreciated if EVN can share information about the exact timeline that the new FiT would be published.
– As discussed by Mr. Thanh, EVN understood the concern of the investors on the low FiT. The Government is considering the issue. However, Mr. Thanh could not say exactly when the new FiT will be published.
2. The PPA template is not bankable
– Mr. Massmann recommended to enhance the bankability of the PPA, such as to clearly define force majeure events (Articles 5.1 and 5.3 of the template PPA) and distinguish the natural force majeure event and force majeure event due to political issue; to clearly define events of default of either Seller and Buyer (Articles 6.2 and 6.3 of the template PPA).
– In response, Mr. Thanh explained that the purpose of PPA template is to cut down the negotiation process between the parties. EVN noted the comments and will propose to amend the template.
3. The PPA template is unclear whether it is a “take or pay” agreement
– Mr. Massmann suggested that in order to secure and ensure the profits and revenue of the project, it must be clear that it is a “take or pay” agreement. Because under the current template, EVN will be released from the obligation to purchase the power in specific circumstances.
– Said by Mr. Thanh, for the time being, it is difficult to make clear that this is a “take or pay” agreement as the power generated from the wind power projects will depends on many factors, such as speed and force of the wind. However, EVN noted the comment and will consider to amend the PPA template.
4. No clear procedure to obtain approval for amendment of PPA
– Mr. Massmann addressed that in practice, the parties will need to agree on the additional agreements suitable for each project. Therefore, although the template PPA is compulsory, in case the parties are willing to amend, there must be a clear procedure to obtain the approval for the amendment of the PPA.
– On behalf of EVN, Mr. Thanh noted the comment and will consider to propose appropriate changes.

Although the issues raised by Mr. Massmann could not be addressed in details during the conference, Mr. Thanh said that EVN would do their best to cooperate and would research on the appropriate solution and propose to the Government for amendment in the future.
***
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.

December 15, 2015 by Dr. Oliver Massmann

 ベトナムにおける弁護士オリバー　マスマン「ベトナムでのM&A：市場分析の要約」過去12ヶ月で最大且つ最も注目すべきM&A 取引

1. 過去12ヶ月で最大且つ最も注目すべきM&A 取引、IT 及び電子機器、2014年６月、ベトナムの主要なIT企業である、FPTソフトウェアは（ヨーロッパで主要な公益企業の１つである）RWEグループの子会社であるRWE ITスロバキアを買収しました。従って、RWE IT スロバキアはFPTソフトウェアが１００％保有し、FPTスロバキアに社名を改称。この取引はFPTの最初のM&A 取引となり、またベトナム国外にあるベトナムICT企業の最初のM&A 取引となっています。しかし、この取引値は開示されていません。石油ガス、化学物質。2014年11月、石油ガス会社のSapuraKencana Petroleum Berhad （マレーシア）は国際入札手続き後に400万米ドルでベトナム南部から3ブロックのところにあるマレーシアの国営石油会社のPetroliam Nasional Berhad（ペトロナス）の総株式を買収しました。金融注目すべきM&A 取引は以下の通りです。• 2014年12月、ベトナム・フィナンシャル・トランスファー（Banknetvn）はカード決済システムや銀行間システムを提供するスマートリンクカード会社（Smartlink）と合併しました。バンクネットベトナムは中央銀行が総株式の25％を保有するこの市場で唯一のカード決済会社となります。ベトナム国営金融 •2015年5月、サイゴン商信株式商業銀行Sai Gon Thuong Tin Commercial Joint Stock Bank（Sacombank）はSouthern Commercial 株式銀行と合併しました。この合併により、Southern 銀行の株主はそれぞれ保有する株式に対しSacombank銀行の株式を0.75取得。Sacombank銀行という合弁企業自体は定款資本を18.85 兆ベトナムドン（8億5600万米ドル）以上保有し、総資産は290.86 兆ベトナムドン（132億米ドル）以上となっています。Sacombank銀行の株主は93.7％の議決にて合弁に同意しました。•2015年5月、the Mekong Housing Bank とベトナム投資開発銀行との合併が完了しました。•2015年4月、クレディセゾンはベトナムで3番目に大きな消費者金融事業であるHDファイナンスの資本の49％を保有する為におよそ5億円費やしています。•2015年8月、メコン開発銀行（MDB）は定款資本の面で国の5大銀行の1つになる機関を形成する為にベトナム海事商業銀行（Maritime Bank）と合併をしました。近年、海事銀行の定款資本は3億7380万米ドルでメコン開発銀行は1億7523万米ドルとなり、
2. つまり新しい金融機関は定款資本が5億4900万米ドル、総資産は52億8000万米ドルとなる見込みです。• ベトナム工商銀行（Vietinbank）はペトロリメックス株式商業銀行（PG Bank）と合併しました。PG Bank の株とVietinbankの株の交換比率は1株：0.9株となり、Vietinbank は同社の株2億7000万株をPG Bank の株式3億株と交換できます。合併によりVietinbank の総資産は25兆ベトナムドン（11億9000万ドル）から685兆ベトナムドン（317億ドル）に増加し、定款資本は3兆ベトナムドン（1億4286万米ドル）から40兆ベトナムドン（18億5000米ドル）以上に増加する見込みとなっています。鉱業、メタル、エンジニアリング、2014年、ベトナム石炭鉱物産業グループ（Vinacomin）はベトナム石炭の定款資本100％売却しました。つまり、VP銀行への1人鉱物金融有限会社となります。この取引値は開示されていません。医療、バイオテクノロジー、ヘルスケア。2014年9月、スタンダード・チャータード・プライベート・エクイティ（Standard Chartered Private Equity）は9000万米ドルでベトナムの農業分野でマーケットリーダーであるAn Giang Plant Protection JSCの重要な少数株式を取得に成功しました。その他
小売での注目すべきM&A取引は以下となります。•2014年8月タイのBJCは総額6億5500ユーロの取引値でMetro Cash & Carry Vietnam を買収しました。• タイのセントラルグループはグエン・キム・貿易会社のオーナーであるNKT新技術ソリューション投資開発公社の全株式の49％の買収を完了しました。取引値は開示されていません。• ビングループ（Vingroup）はベトナム北部のオーシャンマート・リテールシステム（OceanMart retail system）を所有しているオーシャングループの傘下であるオーシャンリテール（Ocean Retail Company）の総株式の70％を取得し、またビンマートリテールグループ（ VinMart Retail Group）に改称しました。取引値は2600万米ドルとなっています。飲食 • 2015年4月、マサングループ（Masan Group）2社の株式買収を発表しました。1社はVietnam French Cattle Feed JSC (Proconco) の総株式の52％で、もう1社はAgro Nutrition Company JSC (Anco)の総株式の70%を取得しています。買収はグループがSam Kim Limited Liability Companyの総株式の99.99%を買収し、Masan Nutri-Science Companyに改称した際に行いました。
3. •2015年5月、Filipino firm Pilmico Foods Corporationは拡張入札の為にベトナムのいくつかの飼料会社を買収。the Aboitiz Group の子会社であるPilmicoは2014年に2800万米ドルの価格でVinh Hoan 1 Feed JSC (VHF)の総株式の70％を買収しました。• F&N Dairy Investments Pte Ltd はビナミルク(Vinamilk)の定款資本の11.04% に相当する1億1040万株を保有しています。現在、the State Capital Investment Corporation (SCIC)に次ぐ第2位のビナミルクの株主となっています。• Mondelēz Internationalはおよそ3億7000万米ドルでベトナムの人気スナック事業である Kinh Do Corporationの総株式の80％の買収を完了しました。不動産•2014年1月、香港に拠点を置くTung Shing Groupは約1600万米ドルでフーニャン地区に所在するモーベンピック・サイゴンホテルの総株式の53％を取得しました。•2015年3月、ロッテグループはダイヤモンドプラザのプロジェクトの70％を取得しました。建物はは約60万米ドルの初期投資の恩恵を受けています。しかし、ロッテグループはこの取引で費やした金額を公表していません。•2014年11月、ホーチミン拠点の不動産会社ノバランド（Novaland）は約3兆ベトナムドン（1億4250万米ドル）の投資の恩恵を受けている4区のアイコン56（Icon 56）、ギャラクシー9（Galaxy 9）、また2区レキシントンレジデンス（Lexington Residence）を含む遅れているプロジェクトを取得しました。•2015年6月、香港に拠点を置く非公開投資会社のGaw Capital Partners (GCP)は、ベトナムの不動産プロジェクトのポートフォリオを取得しました。ポートフォリオは1億600万米ドルで買収され、Indochina Land Holdings 2 Ltd の下で残りの４つのプロジェクトから成り立っています。•2015年7月初旬、マレーシアの不動産開発のGamuda Berhad の1部門であるGamuda Land VietnamはサコムリアルからCeladon City 及びThanh Cong JSC (TTC)を推定1.4 兆ベトナムドン（6410万米ドル）で買収しました。推定初期投資は 24.8兆ベトナムドン（11億米ドル）となっています•2015年、ビングループは不動産、小売、物流部門において支配的なローカルM&A買収者となった。最も注目すべき追加案件は以下となります。 o マステリ・タオディエン（Masteri Thao Dien）は7500万米ドルo ビナテックス（Vinatex）の株式保有30% が2600万米ドルo Giang Vo Trade Show Center の株式保有o Hop Nhat Express の株式保有30% は5200万米ドル•2014年11月、アメリカ拠点のGlobal Emerging Markets Fund (GEM)はベトナムの農場及び不動産会社であるHoang Anh Gia Laiの10％を8000万米ドルで取得することに合意しました。
4. GEMは重役の役割を獲得し、将来的に国際市場で見込みのある企業リストを支援する予定です。保険。2015年4月、カナダに本社を置くFairfax Financial Holdings の子会社Fairfax Asia Limited はBIDV保険総公社の総株式の35％を5000万米ドルで取得しました。従って、保険業界で戦略的投資家となっています。M&A取引の体制での主要な動向。ベトナムでは、M&A取引は通常株式取得または資産買収のどちらかの形で行われます。外国人購入者による株式取得は一般的にオフショアの直接投資として構成されています。新投資家は以下が可能です。•対象企業の現在の株主から株式取得または出資が可能（例、株式会社、有限会社など•対象企業の新規株式の発行を許可（例、株式会社）。 •対象企業の追加出資が可能（例、有限会社）。資産取引の場合は、外国人購入者はベトナムに新たな子会社を設立しなければなりません。さらに、M&A取引は合併の形を取ることが可能となります。2つ以上の同業企業は別の企業と合併することができ、全ての資産、権利、義務、利益を合併した企業へ転送でき、合併している企業を終了することが出来ます。2014年企業法はM&A取引の結果として投資家により使用されるビジネス構造のタイプを設定することが可能となります。さらに、2014年投資法はM&A取引を規制し、その取引に投資証明書が不要であると明確に示した最初の法律です。この変化は幸いにもM&A取引を通してベトナム市場に参入または拡大しようとしている外国人投資家が経験している不明確で苦労を終わらせることができると予想されています。しかし、これらの2015年7月から施行され、また施行細則がまた発行されていないため、これらの法律が有効になるのはまだ早いと思われています。またかつての企業法及び投資法の下でライセンスを取得している企業にとって、どっちつかずの状態で企業登録またライセンス改正が残ったままとなっています。この状況はM&A取引に直接影響を及ぼします。過去12ヶ月での未公開株式の担保入札のレベルまた範囲。M&A取引の形での投資はいまだに非公開株式投資と比較して最も一般的な投資の形です。ここ数ヶ月で、非公開株式資本はベトナムでの証券市場に続いており、特にバリューチェーン活動を行っている企業にあります。
5. 消費財やインフラが最も注目を集めている分野となっていますがただ、情報公開が制限されている為、完全に非公開株式の担保入札を評価するこはできません。過去12ヶ月の競合規制者のアプローチ。産業貿易商（VCA）のもとでベトナム競争庁は参加企業が30％から50％関連市場の合計市場シェアを持つ場合、その取引の通知をしなければなりません。VCAは合計市場シェアの計算が正しいか、また取引が禁止されているかどうか（つまり、ある特定の場合を除いて合計市場シェアが50％を超えているかどうか）を調査します。取引は競争法の基でその取引が禁止されていないとVCAが確認書を発行した際に行われます。更なるVCAの情報はwww.vca.gov.vn/Default.aspx?lg=2をご確認下さい。今後12ヶ月の間にM&A市場に影響を与える主な原因。国がより深くそして広く世界市場に統合することによりM&A活動に新たなチャンスを提供しています。もう一つの要因は国営企業（SoEs）を民営化する政府の目標が挙げられます。首相は2014年から2015年に432の国営企業を株式会社化する計画を承認しました。現在まで、企業の176が民営化しています。大手国営企業による初期公募はM&A市場に新しく魅力的な供給を作りだしています。国営企業による非中核事業の売却及び商業銀行の再構築はM&A市場をより魅力的にしています。外国投資の奨励兆候は以下の通りです。•経済再起•外国人投資家により幅広いアクセスを許可する政策の改革•自由貿易協定（FTA）や環太平洋パートナーシップ（TPP）の締結•株式市場の跳ね返し•上場企業の外国人投資家の許可レベルを増加する新規則。新投資法、企業法及びその他の法律や政策の導入により原則として投資や貿易、特にM&A市場に関する法的環境が改善しています。しかし、以下の要因がM&A取引に影響を及ぼしています。• ベトナムのWTO委員会のような国際条約の地元ライセンス当局による異なる解釈及び履行
6. •異なるタイプの取引に適用される異なるライセンス手続き（例、外資企業または国内企業、公開会社または非公開会社、国営企業の株式または非公開株式の買収）。法的そして統治に対する障害やマクロ不安定性や市場の不透明性などが投資家にとって最大の関心事ではありますが、ベトナムにおけるM&A取引はまだ市場参入のための効果的な手段の１つとして期待できるでしょう。ベトナムのM&A市場において期待される主な傾向は以下が含まれます。•銀行再編•買収及び反買収• M&A取引を通じベトナムにおける日本の投資の成長 •国営企業の改革。金融派生商品市場はリスクを防ぎ、株式市場の成長を後押しし、M&A取引を促進し役立つとされる為2016年に開かれることが期待されています。
***上記の内容に関しまして、さらなる詳細やご質問がもしございましたら遠慮なくomassmann@duanemorris.comまでご連絡ください。オリバー　マスマンはドウェイン・モリス・ベトナム法律事務所のディレクターです。
（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。

December 8, 2015 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Latest Draft Decree on Casino Business allows Vietnamese citizens to gamble in Vietnam

According to public media, a new version of the draft decree on casino (the Casino Draft) has been internally circulated to interested parties including senior experts/consultants and other State bodies of Vietnam. While full text of the draft is not made public, local newspapers give us some hints about how the Casino Draft would be shaped. For example, it is more likely that Vietnamese citizens of 21 years old or more who are able to show evidence on their ‘financial capacity’ and afford the entrance fee may gamble at casinos. Detailed conditions are still on their way.
One more notable change is that registered total investment capital would be reduced from $4 billion to $2 billion. Please be noted that the above threshold include both borrowings and equity though it is still unclear about the minimum equity that the investor must contribute.
For now, Vietnam has 04 areas which are planned to aim at entertainment complexes that have casinos inside, which are Van Don (Quang Ninh Province), Hoi An (Quang Nam Province), Ho Tram (Vung Tau Province) and Phu Quoc (Kien Giang Province). So far, only Ho Tram Project came into operations while other are still in the process of infrastructure development. However we understand that the above list is not closed. This means that investors may actively propose new areas for the Government’s consideration.
It is expected that the Casino Draft will be officially issued in March 2016 following the Communist Party’s Congress.

December 7, 2015 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann EU-VIETNAM FREE TRADE AGREEMENT OFFICIALLY SIGNED

On 02 December 2015, after nearly 3 years with 14 rounds of negotiations, the Minister of Industry and Trade of Vietnam, H.E. Vu Huy Hoang and the European Commissioner for Trade, H.E. Cecilia Malmström have signed the Vietnam-EU Free Trade Agreement (FTA). Both parties will finalize the ratification process as soon as possible for the FTA to take effect from the beginning of 2018.
The FTA is considered one of the most comprehensive and ambitious trade and investment agreements. It is the second agreement in the ASEAN region after Singapore and it will intensify the bilateral relations between Vietnam and the EU.
The agreement has separate chapters on Trade of Goods, Rules of Origin, Customs and Trade Facilitation, Sanitary and Phytosanitary measures and Technical Barriers to Trade, Trade in Services, Investment, Trade Remedies, competition, State-Owned Enterprises, Government Procurement, Intellectual Property, sustainable Development, Cooperation and Capacity Building, Legal and Institutional Issues.
Nearly all customs duties – over 99% of the tariffs will be eliminated. The small remaining number is mainly due to the transition period. Vietnam will liberalize 65% of import duties on EU exports to Vietnam at entry into force and the remaining duties will be eliminated due to the next ten years; EU duties will be eliminated over a seven year period. The market will be opened for most of EU food products, i.e. wine, spirits and frozen pork meat will be liberalized after seven years and dairy products after a maximum of five years. The EU will eliminate duties for some sensitive products in the textile and footwear sector. The EU has offered access to Vietnamese exports via tariff rate quotas (TRQs), because some sensitive agricultural products will not be fully liberalized. Furthermore, the agreement will contain an annex with provisions to address non-tariff barriers in the automotive sector. Vietnamese exports of textile, clothing and footwear to the EU are expected to more than double in 2020 as a result of the FTA.
The FTA will help to increase quality of investment flows from EU, accelerate the process of sharing expertise and transfer of green technology and the creation of more employment activities.
The real wages of skilled laborers may increase by up to 12% while real salary of common workers may rise by 13%. The macro economy will be stable and inflation rate is controlled. Vietnam’s business activities will be booming in the next few years once the EU- Vietnam FTA officially comes into force and Government’s policies as well as institutional reforms start showing their positive effects.
Vietnam’s GDP is expected to increase by 0.5% annually, increase in exports is 4-6% per year. If this trend continues until 2020, Vietnam’s exports to EU will increase by USD 16 billion. Until 2025, the FTA is estimated to generate an additional 7-8% of GDP above the trend growth rate.
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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.

November 30, 2015 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann New Decree guiding the Law on Investment What you must know:

On 12 November 2015, after months of delay, the Government has finally issued Decree No. 118/2015/ND-CP (“New Decree”) on detailing and guiding the implementation of certain provisions of the Law on Investment.
Set out below are major worth-noting points in this New Decree:
Investment conditions for foreign investors
Investment conditions for foreign investors are defined as conditions that foreign investors must satisfy when investing in conditional business sectors applicable for foreign investors pursuant to Vietnam’s laws, ordinances, decrees and international treaties on investment.
These conditions include:
– Conditions on foreign ownership of charter capital in an economic organization;
– Conditions on investment form;
– Conditions on scope of investment activities;
– Conditions on a Vietnamese partner participating in investment activities; and
– Other conditions pursuant to laws, ordinances, decrees and international treaties on investment.
The above conditions must be satisfied when foreign investors:
– Making investment to establish an economic organization;
– Contributing capital, purchasing shares, capital contribution portion in an economic organization;
– Investing in the form of business cooperation contract;
– Receiving investment projects transferred from another investor or other cases of receiving transferred investment projects; or
– Amending or supplementing investment business lines or sectors of foreign invested economic organizations.
Conditional business sectors applicable for foreign investors as well as the corresponding conditions are not included in the New Decree but will be published on the National information gate on foreign investment. For business sectors whose conditions are not specified anywhere in Vietnam’s WTO Commitments and other international treaties on investment or not yet committed (“Uncommitted Sectors”), the investment registration authority must seek approval of the Ministry of Planning and Investment and other specialized ministries on the foreign investment.
It is worth noting that the New Decree recognizes ‘licensing precedent’, meaning where foreign investment in Uncommitted Sectors has been approved and such Uncommitted Sectors have been published on the National information gate on foreign investment, any later foreign investors making investment in the same Uncommitted Sectors will no longer need the approval of the specialized managing ministry.
Licensing procedures on investment registration and enterprise registration by foreign investors
Instead of go through 2 different steps, namely (1) applying for issuance of an Investment Registration Certificate; and (2) applying for issuance of an Enterprise Registration Certificate when establishing an enterprise in Vietnam, foreign investors now can apply for these two certificates at the same time. Specifically:
– Foreign investors submit the applications for issuance of an Investment Registration Certificate and an Enterprise Registration Certificate to the investment registration authority;
– Within 01 working day from the receipt of the applications, the investment registration authority sends the application for enterprise establishment registration to the Business Registration authority for review and notifying the investment registration authority of its decision;
– If there is any request for amendments or supplements to either the application for investment registration or enterprise establishment, the investment registration authority will provide the investors a single response within 5 working days from the receipt of the applications.
The coordination regime between the investment registration authority and the business registration authority will be detailed by the Ministry of Planning and Investment later.
Securing the implementation of an investment project
Investors that are granted, or leased land by the Government, or allowed by the Government to change the land use purpose, with certain exceptions, must make a deposit from 1-3% of the total investment capital recorded in a document approving the investment plan or in the Investment Registration Certificate based on a progressive basis, in particular:
– For capital part of up to VND300 billion, the deposit rate is 3%;
– For capital part from VND300 billion to VND1,000 billion, the deposit rate is 2%;
– For capital part from VND1,000 billion, the deposit rate is 1%.
M&A procedures

There is explicitly no requirement of application for Investment Registration Certificate in acquisitions of target companies by foreign investors.
However, foreign investors must register its acquisition of the target company if:
– They contribute capital to, purchase shares or capital contribution portion of an economic organization doing business in conditional sectors which are applicable for foreign investors;
– The capital contribution, shares and capital contribution portion result in F1, F2 and F2’ mentioned in the graph above holding 51% or more of the target company:
o Increasing foreign ownership rate from below 51% to more than 51%; and
o Increasing the existing foreign ownership rate of 51% to a higher ownership rate.
After completion of the acquisition, the target company must carry out procedures to change its members or shareholders at the business registration authority.
For investment of foreign investors other than F1, F2 and F2’, the target company only needs to carry out procedures to change its members or shareholders at the business registration authority without the foreign investors having to register the acquisition transaction with the investment authority.