On 12 November 2015, after months of delay, the Government has finally issued Decree No. 118\/2015\/ND-CP (\u201cNew Decree\u201d) on detailing and guiding the implementation of certain provisions of the Law on Investment.
\nSet out below are major worth-noting points in this New Decree:
\nInvestment conditions for foreign investors
\nInvestment 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\u2019s laws, ordinances, decrees and international treaties on investment.
\nThese conditions include:
\n–\tConditions on foreign ownership of charter capital in an economic organization;
\n–\tConditions on investment form;
\n–\tConditions on scope of investment activities;
\n–\tConditions on a Vietnamese partner participating in investment activities; and
\n–\tOther conditions pursuant to laws, ordinances, decrees and international treaties on investment.
\nThe above conditions must be satisfied when foreign investors:
\n–\tMaking investment to establish an economic organization;
\n–\tContributing capital, purchasing shares, capital contribution portion in an economic organization;
\n–\tInvesting in the form of business cooperation contract;
\n–\tReceiving investment projects transferred from another investor or other cases of receiving transferred investment projects; or
\n–\tAmending or supplementing investment business lines or sectors of foreign invested economic organizations.
\nConditional 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\u2019s WTO Commitments and other international treaties on investment or not yet committed (\u201cUncommitted Sectors\u201d), the investment registration authority must seek approval of the Ministry of Planning and Investment and other specialized ministries on the foreign investment.
\nIt is worth noting that the New Decree recognizes \u2018licensing precedent\u2019, 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.
\nLicensing procedures on investment registration and enterprise registration by foreign investors
\nInstead 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:
\n–\tForeign investors submit the applications for issuance of an Investment Registration Certificate and an Enterprise Registration Certificate to the investment registration authority;
\n–\tWithin 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;
\n–\tIf 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.
\nThe coordination regime between the investment registration authority and the business registration authority will be detailed by the Ministry of Planning and Investment later.
\nSecuring the implementation of an investment project
\nInvestors 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:
\n–\tFor capital part of up to VND300 billion, the deposit rate is 3%;
\n–\tFor capital part from VND300 billion to VND1,000 billion, the deposit rate is 2%;
\n–\tFor capital part from VND1,000 billion, the deposit rate is 1%.
\nM&A procedures<\/p>\n
There is explicitly no requirement of application for Investment Registration Certificate in acquisitions of target companies by foreign investors.
\nHowever, foreign investors must register its acquisition of the target company if:
\n–\tThey contribute capital to, purchase shares or capital contribution portion of an economic organization doing business in conditional sectors which are applicable for foreign investors;
\n–\tThe capital contribution, shares and capital contribution portion result in F1, F2 and F2\u2019 mentioned in the graph above holding 51% or more of the target company:
\no\tIncreasing foreign ownership rate from below 51% to more than 51%; and
\no\tIncreasing the existing foreign ownership rate of 51% to a higher ownership rate.
\nAfter completion of the acquisition, the target company must carry out procedures to change its members or shareholders at the business registration authority.
\nFor investment of foreign investors other than F1, F2 and F2\u2019, 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.<\/p>\n
***
\nPlease 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.<\/p>\n","protected":false},"excerpt":{"rendered":"
On 12 November 2015, after months of delay, the Government has finally issued Decree No. 118\/2015\/ND-CP (\u201cNew Decree\u201d) 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 … <\/p>\n
Continue reading “Lawyer in Vietnam Oliver Massmann New Decree guiding the Law on Investment What you must know:”<\/span><\/a><\/p>\n","protected":false},"author":24,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[241,19,275,189,54,190,202,201,26],"ppma_author":[1007],"class_list":["post-284","post","type-post","status-publish","format-standard","hentry","category-investmentiin-vietnam","tag-enterprise","tag-foreign","tag-investment","tag-investor","tag-law","tag-lawyer","tag-massmann","tag-oliver","tag-vietnam"],"authors":[{"term_id":1007,"user_id":24,"is_guest":0,"slug":"omassmann","display_name":"Dr. Oliver Massmann","avatar_url":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-content\/uploads\/sites\/19\/2014\/08\/massmannoliver-125x150.jpg","author_category":"","last_name":"Massmann","first_name":"Dr. Oliver","job_title":"","user_url":"http:\/\/www.duanemorris.com\/attorneys\/olivermassmann.html","description":"Read Oliver's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/comments?post=284"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/284\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/media?parent=284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/categories?post=284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/tags?post=284"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/ppma_author?post=284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}