GUIDEBOOK ON BUSINESS AND INVESTMENT IN VIETNAM

Transcription

1 GUIDEBOOK ON BUSINESS AND INVESTMENT IN VIETNAM

2 ABBREVIATION ASEAN BCC BOM BOT BT BTO CEPT CIT CPC DOLISA EIAR EL EPC EPZ EU EZ FIC FOB GDP HTZ IL IZ JVC LTT LUR LURC MFN MOIT MOLISA MONRE MOST MPI NOIP ODA PCT PIT PPP RO SBV TTC USD VAT VCAD VND WTO Association of Southeast Asian Nations Business co-operation contract Board of Management of IZs, EPZs, HTZs and EZs Build-operate-transfer (including its derivative forms, BTO and BT) Build-transfer Build-transfer-operate Common Effective Preferential Tariff Scheme Corporate income tax Civil Proceedings Code Provincial Department of Labour, War Invalids and Social Affairs Provincial Department of Planning and Investment Environmental impact assessment report Enterprise Law Environment protection commitment Export processing zone European Union Economic zone Foreign-invested company Free on board Gross Domestic Product High-tech zone Investment Law Industrial zone Joint venture company Law on Technology Transfer Land use rights Certificate of land use rights Most Favoured Nation Ministry of Industry and Trade Ministry of Labour, War Invalids and Social Affairs Ministry of Natural Resources and Environment Ministry of Science and Technology Ministry of Planning and Investment National Office of Intellectual Property Official development assistance Patent Cooperation Treaty Personal income tax Public Private Partnership Representative Office State Bank of Vietnam Technology transfer contract United States of America dollar Value-added tax Vietnam Competition Administration Department Vietnamese Dong World Trade Organisation 2

3 TABLE OF CONTENTS VIETNAM AT A GLANCE... 4 I: KEY FACTS...4 II: POLITICAL SYSTEM...5 III: ECONOMY...5 IV: INFRASTRUCTURE...13 V: VIETNAM- GERMANY ECONOMIC RELATIONSHIP...21 LEGAL GUIDE FOR INVESTING AND DOING BUSINESS IN VIETNAM I: INVESTMENT REGULATIONS...24 II: TRADE REGULATIONS...30 III: TAXATION...35 IV: CUSTOMS REGULATIONS...42 V: LAND LAW...44 VI: FOREIGN EXCHANGE AND LOANS...49 VII: EMPLOYMENT...53 VIII: COMPETITION LAW...58 IX: ENVIRONMENT...62 X: INTELLECTUAL PROPERTY...65 XI: TECHNOLOGY TRANSFER...72 XII: DISPUTE RESOLUTION...74 BUSINESS TRAVEL GUIDE TO VIETNAM APPENDICES APPENDIX 1: LIST OF SECTORS ENTITLED TO INVESTMENT INCENTIVES...81 APPENDIX 2: LIST OF GEOGRAPHICAL REGIONS OF INVESTMENT INCENTIVES...85 APPENDIX 3: USEFUL CONTACTS AND ADDRESSES IN VIETNAM

4 I: KEY FACTS VIETNAM AT A GLANCE Official name: The Socialist Republic of Vietnam. Capital: Hanoi. Largest city: Ho Chi Minh City. Administrative subdivisions: 58 provinces and 5 municipalities (Hanoi, Hai Phong, Da Nang, Ho Chi Minh and Can Tho). Official language: Vietnamese. Location: In the center of Southeast Asia, neighboring on China to the north, Laos and Cambodia to the west, and the East Sea and Pacific Ocean to the East and South. Area: 331,690 km 2. Coast line: 3,260 km. Climate: tropical in south; monsoonal in north with hot, rainy season (mid- May to mid-september) and warm, dry season (mid-october to mid-march). Population (2010): 86.9 million, by area (urban: 30% and rural: 70%) and by age (less than 15 years old: 24.7%, years old: 68.5% and more than 65 years old: 6.8%). Population density: 262 people/km 2. Literacy: 93.7%. Natural resource: Energy resources (oil, gas, coal, hydropower and wind power); minerals (bauxite, iron ore, lead, gold, precious stones, tin, chromate, anthracite, construction materials, granite, marble, clay, white sand and graphite); sea and tropical forestry resources and agricultural potential. Currency: Vietnamese Dong (VND). Exchange rate (April 2011): 1 USD = 20,725 VND. GDP (2010): billion USD. GDP per capita (2010): 1,204 USD. GDP real growth rate (2010): 6.78%. GDP by sector (2010): Agriculture (20.6%), Industry (41.1%) and Service (38.3%). Exports: Crude oil, garments, shoes, marine products, electronic products and components, funitures, rice, coffee, rubber, tea, pepper. Major export markets: USA, Japan, China, Australia, Singapore, Germany, South Korea, Malaysia, the Philippines, Netherland. 4

5 II: Imports: Machinery & equipment, petroleum products, pharmaceuticals, fertilizer, steel products, metal, textile, garment and shoe inputs, vehicles. Major import markets: China, Japan, South Korea, Taiwan, Singapore, Thailand, USA, Malaysia, India, Germany. POLITICAL SYSTEM The current Constitution was adopted in 1992 and amended in It clearly indicates that the State is of the people, by the people and for the people. The people access the State power through the National Assembly and People's Councils, which are composed of elected representatives who represent the people's will and aspirations. The Constitution endows all citizens, men and women alike, with equal rights in all political, economic, cultural and social spheres as well as in family affairs, the right to and freedom of belief and religion and the right to choose and practice a religion, the right to and freedom of movement and residence in Vietnam, and the right to go abroad and return home as stipulated by laws. The National Assembly is the highest representative body of the people, endowed with the highest State power of the Socialist Republic of Vietnam. It governs constitutional and legislative rights, decides fundamental domestic and foreign policies, socioeconomic tasks, and national defence and security issues, etc. It exercises the right to supreme supervision of all activities of the State. The State President is the Head of State, elected by the National Assembly from among its deputies to represent the Socialist Republic of Vietnam in domestic and foreign affairs. The term of office of the President is the same as that of the Chairman of the National Assembly. The Government is the executive body of the Socialist Republic of Vietnam. It has the same term of office as the National Assembly and administers the implementation of State affairs in the fields of politics, economics, culture, society, national defence and security and foreign relations. The government is headed by the Prime Minister and comprises Deputy Prime Ministers, Ministers and other government members. The Supreme People's Court is the judicial body of the Socialist Republic of Vietnam. It supervises and directs the judicial work of local People's Courts, Military Tribunals, Special Tribunals and other tribunals, unless otherwise prescribed by the National Assembly at the establishment of such Tribunals. The Supreme People's Procuracy oversees the enforcement of the law and exercises the right to prosecution, and ensures serious and uniform implementation of the law. III: ECONOMY Since the Doi moi (reforms) were introduced in the mid-1980s, Vietnamese economy has changed rapidly. Replacing the old centrally-planned economy, Vietnam has shifted to a new economic structure namely a socialist-oriented market economy, and has gained significant success. Today the aim of Vietnam is to become a basically industrialized country by

6 Overall achievements Vietnam embarked on Doi moi in 1986 and the country has seen many dramatic changes since. Over the last decade it has recorded an average GDP growth rate of 7.3 percent per annum, ranking it second in the region after China. Its economy suffered from the economic crisis but recovered rapidly, with GDP growth rate of 6.78 percent in ADB forecasts that the economy of Vietnam will increase by 6.1 and 6.7 percent in 2011 and 2012 respectively. Vietnam already became a lower middle income country with its GDP per capita of 1,204 USD in To a large extent, Vietnam has successfully transformed from a centrally-planned economy with heavy bureaucracy and subsidies to a socialist-oriented market economy characterized by strong dynamism and rapidly growing entrepreneurship. The country's economy has integrated deeply into the global and regional economies, bringing about a sharp rise in trade volumes as well as an influx of foreign investment. The economy is well on the way to being a multi-sector model operating according to market mechanisms. The private sector has enjoyed very favourable conditions created by the Enterprise Law of 2000, which institutionalizes the freedom of all individuals to conduct business in areas not prohibited by law and removes a large number of administrative obstacles that hampered enterprises. With a view to raising the efficiency of the state-owned sector, the government has adopted assertive policy measures to reorganize the sector through equalization. As a result, more than 3,970 state-owned enterprises were equitized by the end of 6

7 2010. Source: General Statistics Office Progress in particular sectors GDP of Vietnam, As Vietnam's GDP continuously increases the country's economic structure has also seen notable changes. From 1990 to 2010 the share of the agriculture sector reduced from 38.7 percent to 20.6 percent, while that of industry and construction increased from 22.7 percent in 1990 to 41.1 percent in 2010.The service sector remained relatively constant: 38.6 percent in 1990 and 38.3 percent in Agriculture still plays a critical role in Vietnam's socio-economic life since it generates about 57 percent of total employment and makes important contribution to the expansion of the country's foreign trade. Vietnam are among the leading countries in terms of agricultural exports such as rice, coffee, cashew nuts and aqua-products, etc. Industry continues to grow rapidly in terms of gross output, at an average rate of percent per annum. Besides state enterprises, foreign-invested and the private enterprises play an increasingly important role in industrial development and exports. Services are growing at an average rate of 7-8 percent. In 2010 the value added of service sector grew 7.52 percent with good performances being recorded in the trade, finance, and hotels and restaurant sub-sectors as consumption and tourism remained buoyant. Industry and services continue to increase their share in the economy. This reflects market oriented reforms, a gradual reduction in barriers to competition and to private sector development, and improvements in physical infrastructure. Greater diversification in industrial production and services lays the foundation for further sustained growth in output and employment. VA growth rate by sector of Vietnam,

8 Source: General Statistics Office 8

9 International economic integration Vietnam has made major steps forward in its commitments to regional and international economic integration. Following the introduction of Doi moi it signed an economic and trade cooperation agreement with the EU in 1995, joined ASEAN in 1995, adhered to CEPT/AFTA in 1996 and became an APEC member in 1998.The Bilateral Trade Agreement (BTA) with the United States was signed in 2000, which resulted in a dramatic increase in the trade volume between the two countries. Vietnam became the 150th member of the World Trade Organization on January 11, Vietnam's commitments in the WTO increase market access for exports of goods and services of WTO's members and establish greater transparency in regulatory trade practices as well as a more level playing field between Vietnamese and foreign companies. Vietnam undertook commitments on goods (tariffs, quotas and ceilings on agricultural subsidies) and services (provisions of access to foreign service providers and related conditions), and to implement agreements on intellectual property (TRIPS), investment measures (TRIMS), customs valuation, technical barriers to trade, sanitary and phytosanitary measures, import licensing provisions, anti-dumping and countervailing measures, and rules of origin. At present, Viet Nam has established diplomatic relations with 172 countries and signed 55 bilateral investment agreements and 58 double taxation agreements with countries and territories including Germany. It has economic and trading relations with about 165 countries and territories. Vietnam holds membership in 63 international organizations and over 650 non-governmental organizations. The policy of multi-lateralization and diversification in international relations has helped Vietnam to integrate more deeply into the global and regional economies and increase trade and investment ties with nations all over the world. More importantly, Vietnam has improved its enable business friendly environment over time. World Bank recognized that Vietnam is one of the 10 most-improved economies in ease of doing business in Currently, its ranking is 78 and even higher than other Asia countries such as Indonesia, Philippines, China, India. Vietnam s rankings according to various indices Index rank rank World Bank s Ease of doing business 78/183 88/183 World Economic Forum's Global competitiveness index 59/139 75/133 ATKEARNEY' FDI confidence index 12/top 20 12/top 25 (*) Note (*) data for

10 International trade Total export volume of Vietnam increased by 18 percent per year on average in the last decade and its import volume also did so by 19.2 percent per year. In 2010 its total trade volume reached $155.6 billion ($71.6 billion of export and $84 billion of import), equal to 149 percent of its GDP. Both the composition and quality of exports have improved significantly. The proportion of industrial products has risen considerably. The five biggest export items include oil, textiles, footwear, seafood and wood products. Vietnam is in the early stage of the industrialisation and modernisation process and receives a large inflow of FDI therefore it relies largely on the imported equipment and materials. Trade relations with foreign countries, especially other countries in the region, have expanded over time. The biggest trading partners of Viet Nam include China, America, ASEAN, EU, Japan and South Korea. International trade of Vietnam, Source: General Statistics Office 10

11 Top 10 export and import items of Vietnam, 2010 Source: General Statistics Office Foreign direct investment Since the introduction of the Law on Foreign Investment in 1987, by the end of 2010, 12,236 foreign investment projects were licensed with total registered capital of $193.4 billion and total disbursed capital of over $61 billion. The investors from 92 countries and territories have committed investments in Viet Nam. Most of them are from Asia, Europe and America. Taiwan, Republic of Korea, Singapore, Japan and Malaysia and are the top five countries and territories investing in Vietnam. The next five countries and territories are British Virgin Islands, America, Hongkong, Cayman Islands and Thailand. These top ten countries and territories account for over three quarters of the total licensed projects and foreign registered capital in Viet Nam. Since 1996 there has been a tendency towards investment in producing goods for export, infrastructure construction, producing import substitutes and in labourintensive industries. There are more than 8,327 projects in the manufacturing and processing, real estate and construction industries with a total capital of about US$153,5 billion, accounting for nearly 80% of the registered capital. While there are foreign invested projects in all provinces and cities in Viet Nam, most investment has been in the key economic areas in the South including Ho Chi Minh City, Dong Nai, Binh Duong, Ba Ria, Vung Tau, and in the North including Hanoi, Hai Duong, Hai Phong and Quang Ninh. The foreign invested sector has increased rapidly, gradually asserting itself as a dynamic component of the economy, and has made an important contribution to enhancing the competitiveness and efficiency of the economy. In 2010, the foreign invested sector has accounted for 21.5% of the country's total investment, contributed 18.3 percent to GDP, 54.2 percent to export volume (crude oil included), 44.4 percent to industrial gross output and employed 1.6 million persons. 11

12 FDI Inflow of Vietnam, Source: Ministry of Planning and Investment FDI of Vietnam by sector, 2010 Note: Accumulated inflow of FDI by the end of 2010 Source: Ministry of Planning and Investment 12

13 Top 10 destinations and investors of Vietnam, 2010 Note: Accumulated inflow of FDI by the end of 2010 Source: Ministry of Planning and Investment IV: INFRASTRUCTURE Road network: - 171,392 km country-wide. - 2 North-South pivot routes: (i) the 1A National Highway of 2,260km in length from Lang Son to Ca Mau and (ii) the Ho Chi Minh Highway of 3,167km in length from Cao Bang to Ca Mau. Railway network: - Total length of 2,632 km stations country-wide. - Hanoi Ho Chi Minh City line: 1,726 km (it takes 29.5 hours for express train). - Linked to China railways in two directions, one from Lao Cai province to Yunnan province and one from Lang Son province to Kwangsi province of China. - Planned to construct the railway lines connecting with Laos and Cambodia. Inland waterway: - More than 2,300 rivers and canals with total length of 198,000 km. 13

14 - Inland waterway system of 35,386 km. Sea ports: - Vietnam has 3,260km coastline, a strategic position close to international shipping routes and favored natural conditions of foundation, sea depth, current, tidal, sedimentation and channels for developing seaport business national level sea ports, 23 provincial level sea ports and 9 offshore oil and gas sea ports. Current major important ports include Cai Lan and Hai Phong in the North, Da Nang and Quy Nhon in the Centre and Sai Gon and Cai Mep in the South. Airports: - 8 international airports: Cam Ranh (Nha Trang), Cat Bi (Hai Phong), Da Nang (Da Nang), Lien Khuong (Lam Dong), Noi Bai (Ha Noi), Phu Bai (Hue), Tra Noc (Can Tho), Tan Son Nhat (Ho Chi Minh City). In 2010, Tan Son Nhat Airport received 15.5 million passergers and Noi Bai airport did 9.5 million passengers domestic airports: Buon Ma Thuot (Dac Lac), Ca Mau (Ca Mau), Chu Lai (Quang Nam), Co Ong (Ba Ria - Vung Tau), Dien Bien Phu (Dien Bien Phu), Dong Tac (Phu Yen), Dong Hoi (Quang Binh), Gia Lam (Ha Noi), Na San (Son La), Pleiku (Gia Lai), Phu Cat (Binh Dinh), Phu Quoc (Kien Giang), Rach Gia (Kien Giang), Vinh (Nghe An). Business development zones: industrial zones and export processing zones with total area of 71,394 ha of land. - 3 high-tech zones (Hoa Lac, Da Nang and Ho Chi Minh City) with total area of 3,509 ha of land economic zones located along sea coast with total area of 638,633 ha of land. Energy: - Electricity output reached 92.7 billion kwh. - Crude oil and gas exploited 23 million ton. - Coal exploited 44 million ton. Telecommunication: million Internet users million mobile subscriptions million fixed phone subscriptions. 14

15 15

16 Vietnam rail network 16

17 National seaports of Vietnam No. Seaport Province Current capacity of ship (DWT) 1 Cam Pha Quang Ninh 50,000 2 Hon Gai Quang Ninh 40,000 3 Hai Phong Hai Phong 20,000 4 Nghi Son Thanh Hoa 20,000 5 Cua Lo Nghe An 10,000 6 Vung Ang Ha Tinh 30,000 7 Chan May Thua Thien Hue 30,000 8 Da Nang Da Nang 30,000 9 Dung Quat Quang Ngai 30, Quy Nhon Binh Dinh 30, Van Phong Khanh Hoa 50, Nha Trang Khanh Hoa 20, Ba Ngoi Khanh Hoa 30, Ho Chi Minh City Ho Chi Minh City 30, Vung Tau Ba Ria - Vung Tau 50, Dong Nai Dong Nai 20, Can Tho Can Tho 10,000 Source: Decision 2190/QD-TTg dated 24/12/

18 Number and size of IPs and EPZs in Vietnam Source: Ministry of Planning and Investment 18

19 Economic zones of Vietnam 19

20 SWOT Analysis of Vietnam Strengths One of fastest growing economies in Asia with average GDP growth of 7.2% per year over the last decade; Stable political and social security; Abundance of human resources (labour force of 46.2 million people; young, motivated and educated workforce; 60% of population under 35 years old); Competitive business and production costs (cost labor, industrial land rent, energy cost, telephone cost, marine transportation, taxation); Available mineral and natural resources (coal, oil & gas, iron ore, bauxite, rare earth,..); Central location in South East Asia, long distance coast. Opportunities Weaknesses Few skilled professionals available; High bureaucratic barriers; Weak infrastructure (power, transportation); Underdeveloped supporting industries. Threats Global integration (ASEAN, APEC, WTO membership); one of the world s most open economies; Higher demand for consumer goods and capital goods with better quality because of being a lower middle income country, aiming at an industrialized country and increasing urban population; Export oriented and labour intensive industries; Infrastruture (road, railway, seaport, airport, power) projects funded by international donors or foreign investors. High inflation; High trade deficit; Devaluation of VND; Banking and finance sector in infant stage; Low national reserves. 20

21 V: VIETNAM- GERMANY ECONOMIC RELATIONSHIP Trade Germany is the biggest trade partner of Vietnam in Europe. In 2010, despite the global economic downturn, bilateral trade reached nearly USD 6 billion, a substantial increase over the previous year. Total export value of Vietnam to Germany reached nearly USD 4 billion, accounting for 19% of total Vietnam s export to the EU while its import value from German amounted to USD 2 billion. Vietnam s main export items to Germany are garments, footwear, coffees, furnitures, see foods, leather and leather apparel, office machinery, iron, metal products, articles of plastics, ceramic products, crude rubber. Germany is the second-largest market worldwide for robusta coffee and black pepper of Vietnam. Main import items from Germany to Vietnam include: machines (in mining, construction and civil engineering, textile, food and beverage, ), aircraft, units for electricity generation and distribution, passenger cars, chemical products, pharmaceutical products, measurement, control and regulation technology products, industrial plants, plastics, lifting and handling equipment, medical equipment and orthopedic appliances, engines, iron, metal products, electronic components After WTO accession, Vietnam is becoming an emerging and lucrative market in Asia. As Vietnam is accelerating its industrialization process to become an industrialized country by 2020, the trend towards sophisticated production facilities is evident and it is likely to result in increased demand for hi-tech machinery made in Germany. Investment There have been over 230 German companies operating and investing in Vietnam, including many Germany s leading groups such as Siemens, Deutsche Bank, Mercedes, Metro, Bosch etc. By the end of April 2011, German companies have invested in 163 projects with registered capital of USD 825 million in Vietnam. Three fourths of total investment projects and two thirds of investment capital of Germany mainly concentrate in manufacturing, processing, technique services, information and communication technology, banking and finance services. Although German investment projects have been located in 26 locations in Vietnam, most of them have been implemented in Ho Chi Minh City, Hanoi, Binh Duong and Dong Nai. In the upcoming time, the active implementation of mega infrastructure development and energy projects partially funded by German ODA such as the metro line No.2 Ben Thanh - An Suong in Ho Chi Minh City (with length of 11 km and total investment capital of USD 1.25 billion), O Mon IV thermo power, Phu Lac wind power, Vietnamese Green Line,... will have positive impacts on promoting German investment flow into Vietnam. The Association of Chambers of Industry and Commerce (DIHK) opened representative offices in Ha Noi and Ho Chi Minh City to support German companies in Vietnam. The Chamber is domiciled in Ho Chi Minh City in premises 21

22 shared with the German Business Association, in which more than 150 German companies are gathered. A correspondent of Germany Trade and Invest (GTAI) has been working in Hanoi since 2008, which means that German foreign trade and investment promotion is well positioned in Vietnam. Development cooperation Vietnam is an important partner of Germany in development cooperation. As one of the biggest donors among the EU members, Germany has provided Vietnam with more than EUR 1 billion in ODA since During , Germany committed nearly EUR 300 million for Vietnam. This is a clear evidence for strong support by Germany to the development of Vietnam. German-Vietnamese development cooperation focuses on the three priority areas: (i) Sustainable economic development and vocational training; (ii) Environmental policy, conservation and sustainable use of natural resources; (iii) Health. German development cooperation has been utilizing effectively and contributing positively to socio-economic development of Vietnam, especially in vocational training, human resource development, infrastructure, clean energy source. In March 2010, the visit of Germany s Development Cooperation Minister Dirk Niebel to Vietnam renewed a strong impetus to bilateral development cooperation, especially in the areas of climate change and vocational training. Export and import between Vietnam and Germany,

23 Source: German Federal Statistical Office Gernam investment flow into Vietnam by sector, 2010 Source: Ministry of Planning and Investment 23

24 LEGAL GUIDE FOR INVESTING AND DOING BUSINESS IN VIETNAM I: INVESTMENT REGULATIONS On 1 July 2006, the investment regime comprised of a unified Enterprise Law ( EL ), which regulates corporations, and a common Investment Law ( IL ), which regulates investment, came into effect. The promulgation of these two important legislations is considered a significant watershed for improvement of the legal environment on investment activities and corporate governance in Vietnam. 1. Overview To do business under the IL and EL, foreign investors are required to obtain investment certificates from an appropriate Licensing Authority. Under the IL, investors may invest in all sectors not prohibited by law. Areas prohibited by law include: Investment projects detrimental to national defence, security, and the public interest; Investment projects detrimental to historical and cultural traditions and the ethics or customs of Vietnam; Investment projects harming people s health or destroying natural resources and the environment; and Investment projects treating toxic waste imported to Vietnam and investment projects manufacturing toxic chemicals banned by international law. 2. Licensing Investors shall follow the licensing and registration steps depending on the size and the sector of the investment project. Investment Certification Process 24

25 Conditional sectors: Investment projects in conditional sectors shall satisfy certain conditions in order to be licensed. Conditional sectors include: Broadcasting and television; Production, publishing and distribution of cultural products; Exploration and exploitation of minerals; Establishment of infrastructure for telecommunications network, transmission and provision of internet and telecommunications services; Establishment of public postal network and provision of postal services and express services; Construction and operation of river ports, sea ports, terminals and airports; Transportation of goods and passengers by railway, airway, roadway and sea and inland waterways; Catching of aquaculture; Production of tobacco; Real estate business; Import, export and distribution business; Education and training; Hospitals and clinics; and Other investment sectors in international treaties of which Vietnam is a member and which restrict the opening of the market to foreign investors. Investment Registration: Foreign investment projects with a total invested capital of less than VND 300 billion (US$ 15 million) and not falling in a conditional sector are subject to investment registration and foreign investors of such projects shall carry out the procedures for investment registration in order to be granted an investment certificate. The investment certificate also serves as the business registration of the corporate entity. Enterprises can subsequently register additional investment projects without the need to create a separate entity. The investor should submit application documents for investment registration to the Licensing Authority. The Licensing Authority shall check the documents and issue the investment certificate to the investors within 15 working days of receiving the valid application. Investment Evaluation: Any investment project with a total invested capital of VND 300 billion (US$ 15 million) or more or investment projects falling in conditional sectors shall undergo an investment evaluation by the Licensing Authority and other relevant authorities. There are two different types of evaluation: evaluation for investment projects regardless of total invested capital falling into conditional sectors; and evaluation for investment projects with total invested capital of VND300 billion or more that do not fall into conditional sectors. For the evaluation of investment projects with total invested capital of VND 300 billion or more, along with the application documents, the applicant must also 25

26 submit an economic - technical explanation of the investment project to the Licensing Authority. This covers the economic technical explanatory statement, objectives, scale, location, investment capital, implementation schedule, land use needs, and technological and environmental solutions of the investment project. For the evaluation of investment projects falling in conditional sectors, in addition to the application documents, the investor shall also demonstrate compliance with requirements specific to that conditional sector. When assessing the application documents, the Licensing Authority may liaise with other relevant Ministries and authorities in evaluating the proposed investment project. Items to be evaluated shall comprise: compliance with master planning/zoning for technical infrastructure, master planning/zoning for land use, master planning for construction, master planning for utilization of minerals and other natural resources; land use requirements; project implementation schedule; environmental solutions. The time-limit for evaluation of investment shall not exceed thirty (30) days from the date of receipt of a complete and valid file. In necessary cases, the above time-limit may be extended, but not beyond forty five (45) days. To-Do List for Investors Projects subject to Report on environmental effects evaluation Filing for Investment Certificate Applying for the approval of Report on environment effects evaluation Agreement on land/building/office renting Investment Certificate Applying for Construction License Evaluating preliminary technical design Environmental protection commitment Land/building/office renting contract Projects subject to construction license Projects subject to environmental protection commitment 26

27 3. Licensing Authority Licensing Authority 3.1 The Board of Management ( BOM ) of industrial zones ( IZs ), export processing zones ( EPZs ), high-tech zones ( HTZs ), and economic zones ( EZs ) are responsible for licensing foreign investments within their zones. 3.2 National important BOT projects and PPP projects are licensed by the Ministry of Planning and Investment ( MPI ). Oil and gas projects, credit institutions, insurance projects and law firms are licensed by Ministry of Trade and Industry, State Bank of Vietnam, Ministry of Finance and Ministry of Justice respectively. 3.3 The Provincial People s Committee is the authority responsible for all other foreign investments. Licensing applications shall be submitted to these bodies, who will consult with other relevant governmental authorities (where so required) before issuing final approval. 3.4 The Prime Minister will approve the following investment projects (unless they are not included in the approved master plan): (a) The following investment projects, irrespective of the source of investment capital and scale of investment: - construction and commercial operation of airports; air transportation; - construction and commercial operation of national sea ports; - exploration, mining and processing of petroleum; exploration and mining of minerals; - radio and television broadcasting; - commercial operation of casinos; - production of cigarettes; 27

28 - establishment of university training establishments; and - establishment of IZs, EPZs, HTZs and EZs. (b) The following investment projects, irrespective of the source of investment capital but with a total invested capital of VND 1,500 billion or more in the following sectors: - business in electricity, processing of minerals, metallurgy; - construction of railway, road and internal waterway infrastructure; and - production and business of alcohol, beer; (c) The following projects with foreign-invested capital in the following sectors: - commercial operation of sea transportation; - construction of networks for and supply of postal and delivery, telecommunications and internet services, construction of wave transmission networks; - printing and distributing newspapers and printed matter, publishing; and - establishment of independent scientific research establishments. 4. Forms of Investment and Enterprise Under the Law on Investment and the Law on Enterprises foreign investors may choose the following forms of investment in Viet Nam: Investment forms: - Invest in business development; - Establish economic organizations (100% capital of foreign investors or joint- venture); - Purchase shares or contribute capital to participate in management of investment activities; - Invest in contractual forms of BBC, BO, BTO, BT, PPP; and - M&A of enterprises. While foreign investors are allowed to buy shares in many domestic companies without limitation, there are ownership limitations for certain companies listed on the Vietnam stock exchange and financial sectors. Foreign ownership cannot exceed 49 percent of listed companies and 30 percent of listed companies in the financial sector. Forms of enterprises: - Limited liability company (with one member or more than one member); - Share holding company/joint stock company; - Private company/sole proprietorship; - Partnership; and 28

29 - Corporate group. 5. Investment assistance and Incentives Incentives to encourage investment in Vietnam come in varying forms, including: preferential corporate income tax rates; exemption from, or reduction of, corporate income tax; import duty exemptions; exemption from taxes on royalties; exemption from, or reduction of, land use or land rental fees; and privileges awarded to BOT, BTO, BT and PPP projects and projects in economic zones or high tech zones. Investments in geographical areas of Vietnam that face difficult socio-economic conditions are more likely to qualify for some of the above investment incentives. Investment incentives are available for projects that focus on the following activities: Production of new materials or new energy; Production of high-tech, bio-technology or info-technology products; Production of manufactured mechanical products; Cultivation and processing of agricultural, forestry and aquatic products; Production of man made strains, new seeds and breeds of animals; Use of, or research and development on, high technology or modern technology; Protection of ecological environment; Employment of large numbers of employees; Construction and development on infrastructure or important projects; Development of facilities in educational, training, medical, gymnastic and sports sectors; and Development of traditional trades. In addition, Government support is available for investments that deliver the following economic benefits: Technology transfer; Training support; Investment supporting services (i.e. consultancies, training, market research, design and testing centres); and Construction of infrastructure outside zones. Investment guarantees include: No nationalization or confiscation of investors assets; Protection of intellectual property rights; Opening markets and investments related to trade; Remittance of capital and assets abroad; and Investment guarantees in the event of changes in law or policies. 29

30 Performance requirements Requirement Purchase or use of domestic goods or services Export requirements of goods or services Domestic content requirements for intermediate inputs Self balance of foreign currency Domestic R&D content requirements Price rates for goods and fees and charges for services controlled by the State None None None None None Uniform application II: TRADE REGULATIONS 1. Introduction A new Trade Law took effect on 1 January It covers fundamental trade principles, foreign business undertaking trade activities in Vietnam, general provisions applicable to purchase and sales of goods, rights and obligations of parties to contracts for purchase and sale of goods, sale and purchase of goods via commodity exchange, general provisions applicable to provision of services, rights and obligations of parties to service contracts, promotion, advertising, display and introduction of goods and services, fairs and exhibition, intermediary trade activities, representation of business, trade brokerage, sale and purchase of goods by authorized dealers, trade agency, manufacturing for trade, auction and bidding, logistic services, inspection, leasing, franchising and remedies and settlement of trade disputes. 2. Trading and Distribution Rights As a result of the trade liberalization, Vietnamese individuals and enterprises have long been granted full trading rights, with exception of certain products required to be imported through specific enterprises. These products include cigarettes, cigars, crude oil and petroleum products, cultural products affecting social morals (newspapers, journals, periodicals, records, tapes and other recorded media...), aircrafts and spare parts. In compliance with WTO commitments by Vietnam, currently all foreign individuals and companies (including foreign-invested companies in Vietnam) are granted full trading rights, with exception of certain products required to be imported through specific enterprises as mentioned above. Foreign individuals and enterprises without commercial presence in Vietnam are also allowed to register as importers and exporters of record. But they are not automatically allowed to participate in the distribution system in the country. 30

31 Foreign invested enterprises in Vietnam may directly distribute or set up a distribution network to sell the products they manufacture in Vietnam. 3. Representative Office To promote and facilitate trade with Vietnam, a foreign trader can establish its representative office ( RO ) in Vietnam. It is intended to promote business opportunities for its head office and to supervise or speed up the performance of contracts that the head office has entered into with Vietnamese parties. An RO is not regarded as an investment in Vietnam since such an office cannot conduct any revenue-generating activities. A foreign company can open more than one RO in Vietnam. The establishment and operation of ROs of credit institutions, education establishments, and insurance companies are subject to different regulations Establishment Conditions A foreign company that wants to set up an RO in Vietnam must, in general, satisfy the following requirements: it must have obtained a certificate of incorporation in the relevant foreign country where its head office is situated; the RO s parent company must have been in operation for at least 01 year after its lawful establishment or business registration in its country prior to an application for an RO licence; and its proposed operating activities in Vietnam are not be prohibited by the laws of Vietnam Application Procedures To establish an RO in Vietnam, foreign companies are required to file the following documents with the relevant licensing authority: Application form for issuance of a license for establishment of a RO; Copy of the certificate of business registration of the foreign entity; Audited financial statements or other data of equivalent validity proving the actual existence and operations of the foreign business entity throughout the preceding financial year; Copy of the operational charter of the foreign business entity, if it is an economic organization; Lease contract of address of head office of RO; Notarized copy of passport / identity card of the Chief of RO. Non-Vietnamese documents must be legalized in accordance with the law of Vietnam and translated into Vietnamese whereby such translation must be certified Licensing Authority 31

32 The Department of Industry and Trade is responsible for issuing licences for ROs. For specific business sectors (Banking, Tourism etc.) other authorities are responsible Time Limit for Licensing and Licensing Fee Within 15 days after the date of receipt of all documents, a licence for the establishment of an RO is issued by the relevant licensing agency. In the event that the application is not made in compliance with the law, the relevant licensing authority will give a written notice to the applicant within 03 working days after the date of receipt of the application. The licensing fee for establishment of an RO is currently VND1,000,000 (approx. USD50) Operation The operating duration of an RO in Vietnam is 05 years, which is extendable. Within forty-five 45 days of issuance of the RO s licence, the RO must register its operation by way of a written notice to the relevant licensing authority indicating its office address, number of Vietnamese staff and foreign staff working at the RO and its chief representative, and obtain an acknowledgement from the relevant licensing authority. For the purpose of the above registration, the relevant licensing authority may require a copy of the lease agreement of the RO in Vietnam. Following the registration, and on the basis of a letter of introduction issued by the provincial Department of Industry and Trade, the RO will register its seal with the provincial Police Department. During the term of the RO licence, any change in (i) the name or nationality of the parent company, or the name of the RO, (ii) the number of staff, (iii) the content of the RO s activities, or (iv) the RO s address, shall be reported to the relevant licensing authority Permitted Activities The RO is permitted to carry out the activities specified in its licence. Such permitted activities include non-revenue generating activities such as market research, customer support, and marketing or feasibility studies for investment projects. Foreign companies are not permitted to use the RO as a vehicle to carry on actual business in Vietnam. For example, the RO cannot be used to conclude or execute commercial contracts. However, the chief representative of the RO may be authorised by the parent company to negotiate and to sign contracts on its behalf, under a power of attorney on a case-by-case basis, provided that such contracts may only be performed by the parent company itself. It should be noted that there may be a tax implications for authorizing a representative in Vietnam to sign a contract on behalf of the parent company. ROs may (i) lease an office, residential accommodation and other facilities necessary for its activities (but no sublease by the ROs is permitted), (ii) import equipment and facilities necessary for its operation and (iii) employ Vietnamese and expatriates. It may also open a bank account in foreign and Vietnamese currency at a bank in 32

33 Vietnam, but any conversion or remittance of currencies must comply with the foreign exchange laws of Vietnam. The purpose of this account is to pay for the expenses of a representative office and should not be used for the receipt of payments from other companies. ROs may be required to obtain a tax code for the purpose of deducting and paying personal income tax on behalf of its employees. 4. Branch of Foreign Company Branch of foreign company has the right to conduct business activities for its own account, execute contracts in its own name and carry out all other commercial activities in respect of restricted goods and services will only be available as scheduled in Vietnam s international undertakings. The Ministry of Trade and Industry is authorised to grant, amend or withdraw licence for branch of foreign company that engage in trading activities and most other services. 5. Franchise The franchising model, which allows people with limited access to capital to enter an established business, is well-suited to a developing economy like Vietnam. Meanwhile, rising incomes and an emerging middle class are generating growth in consumer-driven sectors such as retail, entertainment, food and beverage, and lifestyle-oriented businesses. As a result, the Vietnam franchising market has surged in the past few years, growing at approximately 30 percent last year. Although far from saturated, the market is still relatively small and competition is heating up as more brands enter the market. However, growth prospects are bright as local investors become more familiar with franchising and are increasingly exposed to successful franchise concepts. In addition to interest among local companies and individuals, a number of foreign-invested retail and distribution groups have made investments in well-known foreign franchise brands with plans to expand throughout the country. Franchising was legally recognized in Vietnam with the new Trade Law, which took effect on January 1, The law provides for a legal and regulatory climate conducive to the development of the sector. This specifically legitimized franchising services, and therefore marked an important change in the Government s perspective towards the development of the franchise sector in Vietnam. One of the biggest challenges is identifying and conducting due diligence on partners to determine suitability and financial viability. Because franchising is relatively new to Vietnam, establishing good communication, setting clear expectations and achieving mutual understanding should not be taken for granted. Many local companies may not have a full understanding of brand value and/or legal regulations relating to franchising. Any goods or services may be franchised if they are not included in the list of goods and services prohibited from trade or may be traded under certain conditions, franchise can only be carried out if the franchisee is granted with a certificate to trade such goods or services. 33

34 There are several factors that will contribute to the growth of foreign franchises in Vietnam and that will attract foreign franchisors to participate in this market, including: - Per capita GDP and per capita incomes are on the rise, and incomes in the urban areas (such as Ho Chi Minh City, Ha Noi, Da Nang and Can Tho) have seen significant growth; - An emerging middle-class with disposable income is driving demand for high-quality food and beverages, entertainment and lifestyle oriented products and services; - High-end, well-known premium brands are in demand, although recent research by Nielson suggests a slight shift toward value and increasing price sensitivity among urban consumers. Vietnamese consumers often associate Western brands with quality and reliability; - Consumer patterns vary throughout the country: between urban and rural areas, and especially between the regions of Hanoi and the north, Da Nang and the Central Coast, and Ho Chi Minh City and the Mekong Delta region in the south. Franchiser: A trader who wishes to franchise its trading rights must satisfy all of the following conditions: - The business system to be franchised has been operating for at least one year. If a Vietnamese master franchisee wishes to sub-franchise the trading rights than it has received from a foreign franchiser, the Vietnamese master franchisee must have been operating the franchising business in Vietnam for at least one year; - Having registered its franchising business with the Ministry of Industry and Trade or the provincial Department of Industry and Trade; - The goods or services are allowed to be franchised. Franchise agreement for trading rights in Vietnam must be made in Vietnamese language and may include essential contents such as: trading rights, rights and obligations of franchiser and franchisee, price or periodical fees and method of payment, duration of agreement and extension, termination and disputes settlement. If intellectual property rights are transferred along with the franchise of trading rights, the franchise agreement may include a separate part dealing with the transfer, which is subject to the Law on Intellectual Property. The contracting parties may agree upon the duration of a franchise agreement without any minimum or maximum time limitation. The law allows either the franchiser or the franchisee to unilaterally terminate the franchise agreement prior to its expiry. Franchiser has the right to unilaterally terminate the agreement in the following cases: - The franchisee no longer has a business certificate or equivalent papers that are required by law for the franchisee to carry out the franchise business; - The franchisee is liquidated or bankrupted in accordance with Vietnamese law; 34

35 - The franchisee has seriously violated the law which may cause significant damages to the prestige of the franchise system; or - The franchisee fails to remedy its minors breaches of the agreement within a reasonable period of time after receiving a written request from the franchiser for such remedies - The franchisee may unilaterally terminate the agreement if the franchiser violates or fails to perform one of its obligations as stipulated in the Trade law as follow: To provide the franchise manual To provide initial training and regular technical assistance To design and layout the goods and services sales outlet at the cost of franchisee To ensure the intellectual property rights in respect of the objects set out in the franchise agreement or To accord equal treatment to franchisees in the franchise system. Registration of Franchise business: The current law does not require a franchising agreement to be registered. However, a Vietnamese or foreign trader who wishes to franchise its trading rights must register its franchise activities with either Ministry of Industry and Trade (in case of franchise being undertaken between a Vietnamese and a foreign trader) or the provincial Department of Industry and Trade (in case of franchise being undertaken between Vietnamese traders). The following documents are required for registration of franchise activities: - A standard application form; - The manual on franchise system (in the standard form); - Documents in respect of legal status of the franchiser and certificates of the intellectual property registered in Vietnam or abroad if the franchiser plans to license such intellectual property; The registration of franchise activities may be revoked if the franchiser ceases or changes its business activities, or if its business registration certificate or investment license is withdrawn. Under Vietnam s WTO commitments, foreign investors may now set up a joint venture with a Vietnamese partner(s) with no limitation of foreign capital share or even 100% foreign owned companies to engage in franchising services. After 1 January 2010, foreign invested companies engaged in franchising services may branch out in the country. The chief of branches has to be resident in Vietnam. III: TAXATION The following taxes may affect foreign-invested projects and foreigners working in Vietnam: Corporate Income Tax; Capital Transfer Tax; Value-Added Tax; and Personal Income Tax. 35

36 1. Corporate Income Tax 1.1 CIT rates The new Law on CIT has introduced a standard CIT rate of 25% for FICs, including foreign parties to BCCs since 1 January FICs and foreign parties to BCCs which obtained investment licences or certificates before 1 January 2009 will continue to enjoy the preferential tax incentives as stipulated in their investment licence or certificate. 1.2 Preferential rates Other than the standard rate, preferential rates of 10% (for 15 years or the whole operation period) and 20% (for 10 years) apply to a number of investment projects which satisfy certain conditions such as investment in certain fields of business and/or encouraged geographical locations. In addition to preferential CIT rates, FICs and foreign parties to BCCs may enjoy CIT exemption between 02 to 04 years and a 50% reduction in CIT between 04 to 09 years subsequently. CIT preferential rates, exemptions and reductions CIT Rate Criteria Period applicable CIT exemption* 50% CIT reduction when CIT exemption period expired* Newly established enterprises in: 10% Locations: with specially difficult socioeconomic conditions; Economic Zones, High Tech Zone established under PM s decision Sectors: high technology, scientific research and technology development, investment in development of specially important infrastructure facilities of the State; production of software products. Enterprise operating in the field of socialization (education training, occupational training, health care, culture, sport and the environment) 15 years from the first year of revenue generation 15 years from the first year of revenue generation (maximum 30 years at PM s approval) During the whole operation period 4 years 9 years (5 years for newlyestablished enterprises in the socialization sectors operating in areas other than areas with difficult or specially difficult socio-economic conditions) 20% Newly established enterprise in areas of difficult socio-economic conditions 10 years from the first year of revenue generation 2 years 4 years 25% Standard rate for all projects except for projects in the field of oil and gas or rare and precious mineral exploitation, which are subject to 32-50% CIT rates N/A N/A N/A Certain expenditures of enterprises in manufacturing, construction and transportation for female or ethnic minority labor are deducted from CIT * The application of tax exemption/ reduction from the first profitable year. 3 year limit is introduced. 36

37 1.3 Carried-forward losses During the operation, any losses incurred by FICs or foreign parties to BCCs in any tax year may be carried over to the following years and such losses are deductible from taxable income. Losses may be carried forward for a maximum period of 05 consecutive years as from the year following the year in which the loss arose. Carrying-back of losses is not permitted. 1.4 Profit remittance tax From 01 January 2004, profits derived from foreign investments in Vietnam have not been subject to profit remittance tax when remitted out of Vietnam. 2. Capital Transfer Tax The tax rate applied to capital transfer is 25% and 20% of the assessable income with respect to corporations and individual tax residents, respectively, and 0.1% of the transfer price with respect to individual non-tax residents. Upon obtaining the amendment to the investment certificate, the transferor is required to register the transfer of capital with the tax authority. 3. Value-Added Tax Value-Added Tax ( VAT ) applies to the supply of goods and services for use in production, business or consumption in Vietnam. VAT is calculated on the sale/purchase price of the relevant goods or service before the addition of VAT. The applicable VAT rates are 0%, 5% and 10%, of which the normal rate of 10% is applicable to most goods and services; 5% for a number of encouraged goods and services; and 0% for exported ones and international transportation. Certain goods and services are exempt from VAT, e.g., unprocessed agricultural products sold by the producer, certain insurance services and certain imported equipment. The difference between being subject to VAT at 0% and being exempt from VAT is that, in the former case, the input VAT can be claimed from the tax authority. VAT exemptions Foreign-invested projects shall be exempt from VAT with respect to the following imported items: (a) machinery, equipment and materials which are not yet able to be produced domestically and which are required to be imported for direct use in scientific research and technological development activities; (b) machinery, equipment, replacement parts, specialised means of transportation and materials which are not yet able to be produced domestically and which are required to be imported to carry out prospecting, exploration and development of petroleum and natural gas field; and (c) aircraft, drilling platforms and watercraft which are not yet able to be produced domestically and which are required to be imported to form fixed assets of enterprises or which are leased from foreign parties for use in production and business and in order to be sub-leased. 37

38 4. Personal Income Tax 4.1 Taxpayers Under the new Law on Personal Income Tax, taxpayers include tax residents and non-tax residents. A tax resident who (a) stayed in Vietnam for 183 days or more within a calendar year or within a consecutive 12 month period from his/her arrival in Vietnam or (b) has a registered permanent residence in Vietnam or has a house rented in Vietnam under a lease contract of 90 days or more in a tax year, is subject to PIT on worldwide-sourced income (regardless of where the income is paid) and Vietnam-sourced income. A non-tax resident who does not fall under the category of tax resident above is subject to PIT on income sourced in Vietnam. 4.2 Exempt income and allowable deductions Exempt income: The following incomes, among others, are not subject to PIT: Income from the transfer of immovable properties between spouses; parents and children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grandchildren; and between siblings; Income from the transfer of residential houses, residential land use right and properties attached thereto in case the house or the land is the only place for accommodation of the transferor; Income being receipt of an inheritance or gift of real property as between husband and wife; as between parents and children, including foster parents and adopted children; as between parents-in-law and children-in-law; as between grandparents and grandchildren; and as between siblings; Interest income from deposits or savings in credit institutions/banks and interest from life insurance policies; Income from overseas remittances from Vietnamese relatives; Salary for night-shifts and excessive amount of overtime income; Pension paid by the Social Insurance; Income from the scholarships granted by the State budget or by national and international organizations; Insurance compensation payments under life insurance policies, non-life insurance policies, compensations for accidents at work; Income earned from charity (non-profit) funds; and Income from governmental or non-governmental foreign aids for charity and humanitarian purpose. Family deductions: Under the new PIT regime, sums called as family deductions may be deducted 38

39 from the taxable business incomes and employment incomes of tax residents prior to the assessment of tax. Family deductions include: Personal deduction of VND4 million/month (approx. USD200/month); and Dependent deduction of VND1.6 million (approx. USD80/dependent/month). A dependent means a person that a taxpayer has obligations to feed up or support, including (a) infant or offspring being handicapped or incapable to work, and (b) individuals having no income or having incomes not exceeding VND500,000/month (approx. USD25/month) including offspring studying in universities, colleges, high schools or technical and vocational schools; spouse who is incapable of working; parents over the working age or incapable of working; and other persons directly reared or cared for by taxpayers who are over the working age, or within the working age but is disabled, with no residence. There is no limit on the number of dependent reported by each taxpayer but each dependent must be reported once by taxpayers. Other deductions: Taxpayers can claim deductions from their business incomes and employment incomes for the compulsory contributions of Social Insurance, Health Insurance, professional indemnity insurances, and other statutory insurances. Furthermore, donations to licensed charity organizations including humanitarian funds and study encouragement funds may also be deducted from business incomes and employment incomes of taxpayers. 4.3 PIT rates applicable to tax residents (a) The scale of progressive tax rates on each portion of income that applies to business income and employment income are as follows: Exchange rate: USD1=approx. VND20,000 Tax Brack et Portion of Annual Assessable Income (million VND) Portion of Annual Assessable Income (million VND) Tax Rate (%) 1 Up to 60 Up to Over 60 to 120 Over 5 to Over 120 to 216 Over 10 to Over 216 to 384 Over 18 to Over 384 to 624 Over 32 to Over 624 to 960 Over 52 to Over 960 Over

40 (b) Flat tax rates for other taxable income Assessable Income Tax Rate (%) Capital investment, royalties 5 Franchise, interests and dividends 5 Inheritances 10 Winning or prizes, gifts 10 Capital transfer 20 Gains transfer of securities Value transfer of securities (Gains are unable to be determined) Gains on transfer of immovable properties Value transfer of immovable properties (Gains are unable to be determined) PIT rates applicable to non-tax residents Flat tax rates are applicable to non-tax residents as follows: Income Items 1. Business income (on turnover arising from provision of goods & services): Tax Rate (%) (a) For trading activities 1 (b) For services 5 (c) For production, construction, transportation and other business activities 2 2. Employment income (irrespective of where the income is paid or received) 3. Capital investment (on total amount receivable from the investment) Capital transfer (on transfer price) Transfer of immovable properties (on transfer price) 2 40

41 6. Royalty and franchise (on the portion of income exceeding VND10 million) 7. Prizes, inheritances and gifts (on the portion of income exceeding VND10 million) Import and Export Duties 5.1 Tax rates Export duties are charged on a few items, primarily agricultural products (e.g. rice, forest products and fish) and natural minerals. Rates vary between 0% and 50% of the FOB price of exported goods. Petroleum oil is subject to an export duty rate between 0% and 8%. Import duty rates are now classified into three categories as follows: preferential rates vary between 0% and 150% of the CIF price of imported goods. Preferential rates are applied to goods imported from countries including Germany which have MFN status with Vietnam; special preferential rates apply to goods imported from countries which have a special preferential agreement with Vietnam, e.g. the ASEAN member countries, Japan and with China, Korea, Japan Australia and New Zealand as part of ASEAN. ordinary rates apply to goods imported from other countries. These are up to 70% above the preferential rates applicable to MFN countries; To be eligible for the preferential rates or special preferential rates, the imported goods must be accompanied by an appropriate Certificate of Origin. 5.2 Import duty exemptions FICs and parties to BCCs shall be exempted from import duty with respect to the following goods, provided that: (a) they are implementing a project in an encouraged field of business set out in Appendix I, or in a geographical location set out in Appendix II and (b) such goods are imported to form the fixed assets of the enterprise: i. equipment and machinery; ii. iii. iv. specialized means of transport of a production line which are not yet able be produced domestically and means of transport to be used for carrying workers (automobiles having 24 seats or more, and watercraft); components, details, detachable parts, spare parts, accessories, moulds and supplements pertaining to or accompanying the equipment and machinery, and specialized means of transport as specified above; raw materials and materials which are not yet able be produced domestically for the manufacturing of the equipment and machinery which are parts of the production line or the manufacturing of components, parts, detached 41

42 devices, spare parts, installations, moulds and accessories which accompany the equipment and machinery; and v. construction materials which cannot be manufactured domestically. The above exemption of import duty is also applicable in the case of a project's expansion or replacement or renovation of technology. Investment projects in the specially encouraged sectors or in areas with specially difficult socio-economic conditions shall be exempt from import duties on goods imported for their own use and which can not be produced domestically for a duration of 5 years from the date of commencement of production, including raw materials, materials and component parts. This 5-year tax exemption does not apply to projects producing and assembling automobiles, motorcycles, air conditioners, refrigerators and other items as identified by the Prime Minister. In addition, goods and products imported in a number of circumstances also enjoy import duty exemption i.e. export processing, petroleum, software, ship building,... Based on the investment certificate, the feasibility study and the technical design of a project, FICs and parties to BCCs shall register the list of import duty exempted goods with local custom office. IV: CUSTOMS REGULATIONS Documents required for export include: - Customs declaration form for export goods (original); - Detailed packing list (original); - Export permit for goods requiring export permit (original); - Purchase and sale contract or equivalent documents (copy); - Other documents as stipulated by law for specific items (copy). Documents required for import include: - Customs declaration form for import goods (original); - Commercial invoice; - Purchase and sale contract or equivalent documents (copy); - Import permit for goods requiring import permit (original); - Bill of lading (copy); - Detailed packing list (original); - Certificate of origin (original). It is requited to be eligible for the preferential or special preferential rates, the import goods must be accompanied by an appropriate C/O certifying that they are sourced from preferential treatment countries, otherwise C/O is not required. - Certificate of registration for quality inspection issued by an inspection organization or note on exemption from state quality control issued by the competent authority and other documents as stipulated by law. Procedures Customs procedures are completed at customs offices established at international seaports, international river ports, international civil airports, international railway 42

43 stations, international post offices, or land border gates or at customs offices established elsewhere under the decision of the Minister of Finance. Examination The head of the customs office that receives customs declaration shall determine whether to examine the merchandise or the extent of examination. Vietnam has adopted a system of minimum customs inspection. Under the newly amended Law on Customs, whether a consignment of goods is examined or not depends on the result of analysis of information, records of compliance with law by the owner, and the level of risk of breach of the customs law. Instead of actual customs examination before clearance of goods, the customs now relies more on post-entry auditing to enforce the law. Examination Exemption: The actual customs inspection is exempted for: - Goods being imported or exported by owners with good observance of the law; - Export goods, except those produced from imported materials and those subject to conditional export; - Import goods which are machinery and equipment to form fixed assets and which are tax exempt as part of an investment project; - Goods imported into free trade zones, transit ports and customs bond warehouses, goods in transit, emergency relief goods, specialized goods directly servicing national defense and security, humanitarian aid goods and goods temporarily imported for re-exported within a specified time; - Goods in other special cases as may be decided by the Prime Minister; - Goods other than the above mentioned may be exempted from actual customs examination if the analysis of information from various sources and from a reconnaissance by Customs establishes that there is no possibility of a breach of the law of customs. Random examination of no more than 5% of merchandise may be conducted by the customs to assess the goods owner s compliance with the customs law. Whole Lot Examination shall be applied to goods whose owners have bad customs records or where customs violation is suspected. Clearance In general, goods are released after customs procedures have been completed and taxes have been paid. However, there are some exceptions to this rule. For example, where there is an appropriate reason, declarers may be allowed to submit certain documents in delay. Deferred tax payment may also be applicable to certain type of merchandise such as inputs imported for export manufacturing etc. Goods imported in emergency cases are released immediately without waiting for the completion of customs procedures or paying taxes. For import or export goods which must be appraised in order to as certain if they are permitted to be imported or exported, if the goods owner requests to hold the goods for preservation, the customs office shall accept such request only in the case where all conditions for customs control have been satisfied. For goods which are permitted to be imported or exported but their value must be verified or they must be appraised, analyzed and classified in order to determine 43

44 the amount of duty payable, such goods shall be cleared by Customs only after the goods owner has discharged the obligation to pay duty on the basis of a self declaration and assessment of duty and has provides sufficient guarantee in the form of a surety, a deposit or some other appropriate instrument, covering the ultimate payment of customs duties for which the goods may be liable as the results of the verification of the value of the goods and of the appraisal, analysis and classification of the goods. Post-clearance Audit Where merchandise has been released to the importer and customs comes to believe that the merchandise has been entered in violation of the laws, they may decided to carry out post customs clearance examination. Customs has the right to do so within five years after the date of registration of the customs declaration. Signs of violation include illegal or invalid customs declarations, unreasonable tariff duties, commercial and tax fraud and invalid import and export permits for those goods that fall into the sector management. Post clearance audit may be conducted: - At the customs office to compare declarations with information, analysis and related Customs law or - At the enterprises to compare customs declarations with accounting records of the importer; - Actual examination of the cleared goods will be conducted if necessary. Merchandise Classification for Tax Purpose If customs office disagrees with the classification of the declarer, they may ask the declarer to supply additional documents or the samples under the witness of the declarer for analysis, classification and determination of tax rate. If the declarer disagrees with the classification of customs office, he may hire another organization at his own expense to reclassify the merchandise. V: LAND LAW 1. Land Use Rights and Land Use Right Certificate Private ownership of land is not permitted in Vietnam and the people hold all ownership rights with the State as the administrator. However, the laws of Vietnam allow ownership of a right to use land. This right is called the Land Use Right ( LUR ). LUR to foreign investors allows title holders to conduct real estate transactions, including mortgages. There are three main regimes for investors to acquire LURs from the States: Allocation: The State can allocate LURs by administrative decision to national entities only. Allocated LURs can be subject to a land use fee or not, depending on the cases. Recognition: The State can "recognize" LURs to national entities only, in which case no fee is applicable. 44

45 Leasing: The State can lease LURs on the basis of a contract to both national and foreign entities. LURs leases are subject to a land use rent and are the only form of land ownership available to foreigners. Foreign investors in Vietnam obtain LURs (a) by way of a JVC to which a local Vietnamese partner contribute LUR as capital contribution, or (b) by way of land leased directly from certain permitted lessors such as the State. 2. Land Lease A foreign investor may lease the land directly from the Government after he/she establishes an FIC in Vietnam. Lessors permitted to lease land to FICs Previously, FICs in Vietnam could only lease land from the Government or sublease land from an infrastructure developer. In addition to these lessors, the current Land Law has allowed FICs, which are set up by foreign investors in Vietnam, to lease land from: Vietnamese economic organizations (including State-owned companies), private joint stock companies, and limited liability companies; overseas Vietnamese citizens; or an existing FIC which leases land from the Government and develops infrastructure facilities on the land, provided that this existing FIC has paid the land rental for the whole land lease term. The Land Law only allows the lessor who has obtained the land under the allocation regime (as opposed to the land lease regime) to lease his or her land to FICs. The one exception where the land obtained by the lessor under the lease regime can be subleased to FICs is when: the Vietnamese Party has leased the relevant land before the effective date of the current Land Law, i.e., 1 July 2004; and the land lease has been prepaid in full for the whole or for the majority of the lease term and the remaining prepaid term is at least 05 years. Land Contribution by Local Parties to Joint Ventures It is a matter of practice that Joint Ventures in Vietnam have local partners contribute their portion of capital in the form of the LUR value. In this case, the local partner s land payment must not be sourced directly from the State budget. Under the Land Law, the Vietnamese party to a Joint Venture may make capital contributions in the form of the LUR only after it has received a land allocation, rather than a land lease, and where a payment in full for the land allocation has been made. Where the land usage fee payment is deferred, the contribution of the LUR into foreign investment projects is still permissible as far as the deferment is allowed in writing by the relevant People's Committee. There is one exception under the Land Law where a Vietnamese party which leases land from the Government can make its contribution in the form of the LUR 45

46 to a Joint Venture. This exception requires the two conditions as explained above to be satisfied. After the Joint Venture is incorporated as a result of the issuance of the investment certificate by the Licensing Authority, the LURC will be issued to and in the name of the Joint Venture. Lease term The lease term must be consistent with the duration of the approved project provided that it must not exceed 50 years or, in some special circumstances, 70 years. The extension of the lease term may be allowed by the Government upon expiry if the lessee wants to continue to use the land, provided that: the lessee has complied with the land regulations during its use period; and the use of land is consistent with the approved land plan. Foreign investors wishing to extend their lease term must obtain approval to do so. Foreign investors must apply for an extension 06 months before expiration of their LURs and include in their applications an amended business or production plan approved by the relevant authorities. Rights of foreign investors to the land leased The LUR of foreign investors shall vary depending on the payment arrangement of land rentals. Where land is being leased from the Government, the Land Law contemplates two payment arrangements of land rental: annual rental payment (the Annual Arrangement ); and one-off payment of rental for the entire lease term (the One-off Arrangement ). Under a land lease for the Annual Arrangement, the FIC could use the land only and is not allowed to transfer, sub-lease, or mortgage the LUR. In addition to the LUR given under the Annual Arrangement regime, FICs adopting the One-off Arrangement regime have the additional rights as follows: rights to transfer LURs and assets attached to the land (foreign investors with an Annual Arrangement may only transfer assets attached to the land); rights to sublease land and assets attached to the land; rights to contribute LURs and assets attached to the land as capital of joint ventures; and rights to mortgage LURs and assets to credit institutions in Vietnam during the term of the lease. 46

47 2. Land Rent Incentives Land and water surface rent exemptions and reductions apply to a number of investment projects which satisfy certain conditions such as investment in encouraged sectors or certain fields of business and/or encouraged geographical locations. FICs and foreign parties to BCCs may enjoy land and water surface rent exemptions between 03 years to the whole operation period and land and water surface rent reduction in some cases. Land and water surface rent exemptions and reductions Criteria (for investment projects in) - Sectors with special investment incentives which are located in areas with specially difficult socio-economic conditions or economic zones; - Construction of apartments for industrial park workers; - Education, health care, culture, sport, science and technology; - BOT, BTO and PPP form. - Sectors with investment incentives; - Business and production relocation under planning or due to environmental pollution. Areas with difficult socio-economic conditions. - Areas with specially difficult socio-economic conditions or economic zones; - Sectors with special investment incentives; - Sectors with investment incentives which are located in areas with difficult socio-economic conditions. - Sectors with investment incentives which are located in areas with specially difficult socio-economic conditions or economic zones; - Sectors with special investment incentives which are located in areas with difficult socio-economic conditions. Agriculture sector suffering from natural disasters or fires which caused a loss of less than 40% of output. Land/water surface rent exemptions During the whole operation period 3 years from the date of operation 7 years from the date of operation 11 years from the date of operation 15 years from the date of operation N/A Land/water surface rent reductions N/A N/A N/A N/A N/A corresponding rent reduction to be considered Agriculture sector suffering from natural disasters or fires which caused a loss of 40% or more of output. In the affected year N/A 47

48 Criteria (for investment projects in) Non-agriculture sector suffering from natural disasters, fires or force majeure. Land/water surface rent exemptions N/A Land/water surface rent reductions 50% rent reduction for the termination period of operation 4. Land Price Land Price is determined in three ways: (i) (ii) (iii) by the relevant People s Committee; via auction; or by land users upon transfer/lease, sublease of LURs, or contribution of LURs as capital. The Government determines land price based on the actual value of the land under normal circumstances. If there is a large discrepancy between their calculations compared to the market price, the Government must adjust the price. The provincial People's Committee issues an official land price for each specific type of land on the first of January every year. The official land price must not be 20% higher than the maximum price or 20% lower than the minimum price of the land price framework provided by the Government. 5. Lease of Commercial Property As an alternative to leasing a piece of land, service or software companies may consider leasing an office in a commercial building. The procedure for leasing such an office is comparatively simple and is not subject to any approval by Vietnamese authorities. Another alternative is to lease an office or factory from another company located in an IZ or EPZ. 6. Land Clearance Under the Land Law, foreign organisations and individuals and overseas Vietnamese investing in Vietnam are not required to pay compensation and assistance for the resettlement of residents. However, if these have been paid in advance, it will be deducted from the relevant rental. The State will take charge of site clearance and compensation to displaced land users when withdrawing land for use by foreign organisations and individuals and overseas Vietnamese. Foreign investors may enter negotiations directly with the current land users regarding site clearance and compensation. 7. Sale of Apartments Under the law, potential buyers of real estate projects include the following: (a) (b) Local Vietnamese individuals and organizations; Overseas Vietnamese who satisfy legal requirements under the laws to purchase apartments/houses in Vietnam; 48

49 (c) Foreign individuals and companies are also allowed to purchase apartments from residential projects in Vietnam. The categories of foreigners allowed to purchase apartments in Vietnam are as follows: (i) (ii) (iii) (iv) (v) foreigners who have direct investments in Vietnam or holding management position in a company operating in Vietnam; foreigners who have made contribution to Vietnam and such contribution has been recognized by the President or the Prime Minister of Vietnam; foreigners who have university degrees or higher education level and are currently working in socio-economic fields, and those who have special knowledge which Vietnam needs; foreigners married to Vietnamese citizens; companies with foreign-invested capital operating in Vietnam which are not a real estate trading companies and have a demand of residential accommodation for its employees. Foreign individuals are permitted to own apartments for a maximum term of 50 years and foreign companies are permitted to own apartments for a term equal to the term recorded in its investment certificate. 8. Lease of residential houses by foreigners Currently, not every foreigner or foreign entity entering Vietnam is entitled to lease residential houses or apartments. According to the Law on Residential Housing, only the following are eligible to lease residential houses in Vietnam: (a) (b) Foreign organizations and individuals who are allowed to enter Vietnam for a period of at least 03 consecutive months; Vietnamese residing overseas who currently reside in Vietnam and have a need to lease a residential house. VI: FOREIGN EXCHANGE AND LOANS 1. Foreign Exchange 1.1 Bank Accounts Accounts in Vietnam All FICs and foreign parties to BCCs must open a capital account 1 with an authorized bank in Vietnam to monitor the flow of capital in foreign currency into and out of Vietnam. Therefore, certain transfers of capital (e.g., transfer of capital/equity, profits or off-shore loans) must be effected through this capital account. In addition to the capital account, FICs and foreign parties to BCCs can open other foreign currency and VND accounts at other banks in Vietnam. Accounts outside Vietnam 1 Specialized capital deposit account of an FIC or a foreign party to a BCC 49

50 The opening and operation of offshore accounts must be approved by the SBV. FICs are allowed to open offshore accounts in certain special circumstances. For example, the opening of offshore accounts by BOT companies in Vietnam for security purposes as required under financing agreements or for the remittance of equity. 1.2 Conversion All FICs and foreign parties to BCCs are entitled to buy foreign currency for current transactions and other permitted transactions in accordance with the foreign exchange regulations. Not being required to obtain approval for conversion, the ability of FICs and foreign parties to BCCs to convert VND into foreign currency is only subject to foreign currency being available from banks. Government guarantee The Government shall support foreign exchange balancing in cases where authorized credit institutions are not able to satisfy the demand for foreign currency of investors with respect to a number of important projects in the sectors of energy; waste treatment; and construction of traffic infrastructure. Conversion purposes All residents are entitled to buy foreign currency to meet their payment requirements for legitimate purposes, subject to the selling bank's verification. In the territory of Vietnam, all transactions being payments and remittance of money relating to current transactions of residents and non-residents shall be conducted freely in compliance with relevant regulations. Payment for current transactions includes the following: (i) repayment of principal, interest and fees under foreign loans; (ii) overseas remittance of net income and depreciation of investment capital (if applicable); (iii) payment for imports of goods and services and other current transactions; and (iv) other remittance for consumption purposes and similar transactions. 1.3 Remittance of Capital and Profits After a foreign investor has discharged fully its financial obligations to the State of Vietnam, it shall be permitted to remit abroad the following: (a) Its profits derived from business activities; (b) Payments received from the provision of technology and services and from intellectual property; (c) The principal of and any interest on foreign loans; (d) Invested capital and proceeds from the liquidation of investments; (e) Other sums of money and assets lawfully owned by the investor. A foreigner working in Vietnam for an investment project shall be permitted to remit abroad his or her lawful income after having discharged fully his or her financial obligations to the State of Vietnam. 50

51 The remittance of the above sums of money shall be made in a freely convertible currency in accordance with the trading exchange rate published by a commercial bank selected by the investor. Procedures for remitting abroad the sums of money relating to an investment activity shall be subject to the laws on foreign exchange control. 1.4 Foreign Currency Payments Foreign currency payments within Vietnam, except for certain limited circumstances, are strictly prohibited under the Foreign Exchange Ordinance and are subject to the strict control of the SBV. Except for certain circumstances, residents and non-residents are prohibited from effecting a sale/purchase, making a payment, or granting loans in foreign currency and posting notice of goods and services in a foreign currency. Examples of permissible circumstances are: Transactions with credit institutions and other organizations licensed to provide foreign exchange services. Residents being organizations may internally transfer capital in foreign currencies via bank accounts (as between an entity with legal status and a dependent accounting entity or vice versa). Residents may contribute capital in foreign currencies in order to implement foreign investment projects in Vietnam. Residents are entitled to receive payments in foreign currencies made via bank account transfer in accordance with entrusted import or export contracts. Residents being domestic or foreign contractors are entitled to receive payments in foreign currencies made via bank account transfer by investors or principal contractors in order to make payment and to remit outside Vietnam. Residents being insurers are entitled to receive foreign currencies transferred via bank accounts by insurance buyers for goods and services which must be re-insured overseas. Residents being organizations conducting business in duty-free goods, organizations providing services in isolated areas of international bordergates or organizations providing customs bond warehouse services are entitled to receive payments in foreign currencies and Vietnam dong from the supply of goods and services. Individual foreign non-residents and residents are entitled to receive wages, bonuses and allowances in foreign currencies from residents or non-residents being organizations. Non-residents are entitled to transfer foreign currencies via bank accounts to other non-residents or to make payment to residents for export of goods and services. Transactions are approved to be effected in foreign currency by the SBV on case by case basis. 51

52 It should be noted that a breach of the above requirements may make the whole contract, to which the payment relates to, invalid. 1.5 Rates of Exchange Each day the SBV announces in the mass media an average exchange rate in the Foreign Currency Interbank Market of VND against USD. This official exchange rate is used in the following circumstances: to calculate import/export duties; to consider bidding for national projects at the time of the opening of bids; and to calculate the value of capital contributions made to a JVC or a BCC at the time of the capital contribution. Commercial banks (including foreign bank branches) shall determine and announce their buying/selling rates of VND against USD within the range permitted by the SBV. 2. Loans Subject to the laws of Vietnam, from the date of receiving an investment certificate by a Licensing Authority, FICs in Vietnam are entitled to obtain loans from (and grant security to) both onshore and offshore lenders. Borrowing limit The investment certificate of an FIC stipulates its total investment capital and charter capital. The difference between the total investment capital and the charter capital is the loan capital of the FIC. All loans obtained by an FIC from onshore and offshore lenders (including loans from shareholders) must not exceed the amount of the loan capital. Exceptions are made in the following circumstances: offshore loans for working capital with a term of one year or less if the loan is obtained after the completion of construction and the project is already in operation; and refinancing (i.e., when an existing loan is paid out by another new loan). Approval from the Licensing Authority will be required if the loan amount results in the borrower exceeding the loan capital unless that loan falls under the above exceptions. On this basis, due consideration should be given to the capital structure of an FIC in Vietnam. Registration Offshore loans with a term of up to 1 year (or short-term loans) for working capital purposes are not subject to registration with the SBV. A short-term loan, however, must be registered with the SBV if the loan is extended and the total loan term (including both original term and extended term) is over 1 year. All loans obtained from offshore lenders (including offshore shareholders) and with a term of more than 1 year must be registered with the SBV within 30 days from the date of execution of the loan agreement and prior to the first drawdown under the loan agreement. For the purpose of registration with the SBV, the borrower is required to submit a standard application form to the SBV and the loan agreement 52

53 must be translated into Vietnamese. It should be noted, however, that a prior approval from SBV must be obtained if a provision of the finance documents is not consistent with the laws of Vietnam. Any amendment to the details of the SBV registration certificate (including loan assignments) must also be registered with SBV within 30 days of the date of the amendment agreement and before the effective date of such amendment. Withholding tax Payment of interest to offshore lenders is subject to withholding tax of 10%. VII: EMPLOYMENT 1. Recruitment Under the Labour Code, FICs are allowed to recruit Vietnamese employees directly or through a recruitment centre. Not less than 07 days before recruiting, FICs are required to publicly announce (on either local or central mass media) and post at its head office the recruitment requirements such as a job description, job qualifications, number of labourers to be recruited, the contract term, salary, and working conditions. Within 07 days from the recruitment, FICs are required to provide a list of recruited labourers to the relevant DOLISA. International or foreign organisations, including any representative offices and branches in Vietnam, are required to recruit Vietnamese employees through a recruitment centre. In the event that the recruitment centre fails to supply the required candidates within 15 days of a recruitment request, the foreign organisation is entitled to recruit employees directly. Foreigners may work in Vietnam in the following forms: (a) pursuant to a labour contract; (b) internal transfer within an enterprise which has a commercial presence in Vietnam; (c) performance of contracts that are economic, commercial, financial, banking, insurance, scientific, cultural, sports, education, or medical health; (d) service providers pursuant to a contract; (e) foreigners (who does not live in Vietnam and who does not receive remuneration from any source in Vietnam) offering services by participating in activities relating to representation of a service supplier in order to negotiate the sale or consumption of services of such supplier, on condition that foreigner does not directly sell such services to the public and does not directly participate in the provision of services; or (f) foreigners representing a foreign non-governmental organization which is permitted to operate in Vietnam. Foreigners must satisfy all of the following conditions in order to work in Vietnam: (i) be at least 18 years of age; (ii) in good health as necessary to satisfy the job requirements; (iii) either a manager, executive director, or an expert as defined under the law; (iv) not have a criminal record for a national security offence; (v) not currently subject to criminal prosecution or any criminal sentence in accordance with the laws of Vietnam and foreign laws; and (vi) with a work permit issued by the authorized State body of Vietnam if required. 53

54 2. Labour Contracts A labour contract shall, with the exception of contracts with a term of less than 03 months, be in writing and signed directly between an employee and the legal representative of the employer. The contract shall be made on the standard form issued by MOLISA. The contract shall contain the following details: the work to be carried out, working hours and length of breaks, the wage, workplace, term of contract, health and safety provisions, and social insurance. The standard form also allows the employer and employee to agree on other employment terms and conditions. The contents of a labour contract must be in compliance with the laws of Vietnam and any collective labour agreement of the relevant company. Types of labour contracts The Labour Code introduced three types of labour contracts: non-fixed term labour contract; fixed term labour contract (from 12 to 36 months); and seasonal labour contract (less than 12 months). Probationary period A probationary period can be applied before execution of a labour contract. During the probationary period, either party can terminate the employment contract without prior notice. The probationary period must be: (a) (b) (c) no more than 60 days for positions requiring college level qualifications; no more than 30 days for positions requiring secondary level qualifications, or with respect to technicians and trade persons; and no more than 06 days for manual labour. 3. Termination of Employment Unilateral termination The Labour Code only allows unilateral termination of a labour contract in limited circumstances, irrespective of any mutual agreement or other circumstances. There are different procedures for termination by employers and employees. Generally, a party terminating a labour contract unilaterally must give prior notice of termination to the other party. Unilateral termination by an employee An employee who signs a labour contract with a fixed term from months, or for seasonal work or a specific task of less than 12 months, is entitled to unilaterally terminate the contract prior to expiration if the employee: (i) (ii) (iii) is not assigned to the work, workplace, or working conditions agreed under the labour contract; is not paid the full amount or at the time specified in the labour contract; is subject to maltreatment or forced labour; 54

55 (iv) (v) (vi) (vii) cannot continue their employment due to adverse personal or family difficulties; is elected to a full-time position in a representative public office or is appointed to an office in a State body; is sick or involved in an accident requiring medical treatment for three consecutive months in respect of a fixed-term labour contract of 12 months to 36 months or a quarter of the contract term in respect of a seasonal job or a specific job with a term of less than 12 months; or in the case of female employees, is pregnant and must stop working based on the advice of a doctor. An employee who signs a non-fixed term labour contract is entitled to unilaterally terminate the contract whenever he/she wishes so provided that 45-day prior notice is duly given to the employer. Unilateral termination by an employer During the term of a labour contract, unilateral termination by an employer is permitted in the following circumstances: (i) (ii) the employee regularly fails to perform his contractual duties; the employee is dismissed for disciplinary reasons; (iii) the employee has been sick for an extended period (06 months or 12 months depending on the term of the labour contract); (iv) (v) the employer is forced to make cuts in the production and workforce due to force majeure events such as fire or natural disaster; or the company or organisation ceases operations. 4. Wages, Overtime Payments, and Statutory Minimums The Labour Code allows foreign-invested projects to denominate and pay wages to Vietnamese employees in Dong. Salaries for foreigners may be denominated and paid in foreign currency. The Government decides and publishes a minimum wage which varies depending on geographical regions and types of work. The current minimum wage per month for an employee is VND1,550,000 (approx. USD77), VND1,350,000 (approx. USD68), VND1170,000 (approx. USD59) and VND1100,000 (approx. USD55) in four different zones. By 2012 all businesses, foreign and domestic, will pay a single nationwide minimum wage. Overtime on a normal working day (six days of the week and including non-public holidays) must be at least one and a half times the normal hourly rate. On nonworking days (01 day a week), overtime pay is at least twice the normal hourly pay, while overtime on public holidays and paid annual leave is three times the normal pay rate. Overtime may not exceed 04 hours a day or 16 hours a week, or 200 hours in a year or 300 hours in a year for special circumstances which require the approval of the provincial People s Committee. 55

56 The normal number of working hours in a week is 48 hours, comprising six 8-hour working days and extendable by mutual agreement. Employees working in dangerous, noxious, or especially toxic jobs (as defined by MOLISA) have their work day shortened to 06 or 07 hours. An employee working for at least 12 months is entitled to annual leave of 12 days in addition to public holidays. Certain especially hazardous and toxic jobs are entitled to either 14 or 16 days annual leave as determined by the Government. An employer may set the schedule of annual leave after consulting with the Executive Committee of the enterprise trade union and notifying his employees. Employees will be compensated for remaining leave prior to departure from work. An employee is entitled to paid leave for the following personal reasons: marriage (03 days leave); marriage of a son or daughter (01 day leave); and the death of a person s parents, spouse s parents, spouse, son, or daughter (03 days leave). Female employees are entitled to maternity leave of at least 04 months, with an allowance equal to 100% of their salary to be paid by the Social Insurance Fund. At least 02 months of the maternity leave must be taken post-birth. 5. Work Permits Expatriates working in Vietnam for 03 months or more must obtain a work permit. The term of a work permit is required to correspond with the length of the labour contract, which is capped at 36 months but may be extended at the employer's request. Not less than twenty days before an expatriate s estimated date of commencement of work, an FIC must apply to DOLISA or BOM of zone to obtain a work permit for that expatriate. DOLISA or BOM of zone is obliged to give its decision within 15 days of its receipt of such application. Clear reasons must be provided if the application is refused. In addition, a work permit can be withdrawn in certain circumstances, including for a breach of the laws of Vietnam by the expatriate. Following groups of foreigners working in Vietnam are exempt from the requirement of obtaining a work permit: (i) (ii) (iii) (iv) (v) foreigners entering Vietnam to work for less than 03 months; a member of a limited liability company with two or more members; the owner of a one member limited liability company; a member of the board of management of a shareholding company; a foreigner entering Vietnam to offer services; (vi) foreigners entering Vietnam to work to resolve an emergency situation such as a breakdown or a technically or technologically complex situation arising and affecting, or with the risk of affecting, production and/or business which Vietnamese experts or foreign experts currently in Vietnam are unable to deal with. Such foreigners must carry out procedures for issuance of a work permit if their work extends for more than 03 months; and (vii) a foreign lawyer to whom the Ministry of Justice has issued a certificate to practice law in Vietnam. 56

57 Not less than seven days prior to the date of commencement of work, foreigners who are exempted from work permit requirements must be registered at DOLISA or BOM of zone where the employer s head office is located. The registration must state the name, age, nationality and passport number of the employee, the dates of commencement and termination of employment, and a description of the work to be done. 6. Collective Labour Agreement An FIC must negotiate a collective labour agreement if requested by the trade union at the company. This agreement is valid only if at least 50% of the employees agree to the provisions of the agreement. The collective labour agreement covers matters such as wages for different categories of employees and working conditions. A copy of the collective labour agreement must be filed with DOLISA or BOM of zone within 10 days of the signing of the agreement and will come into effect from the date agreed by the parties as stated in the agreement, or from the signing date where no such date is specified. The term of the collective labour agreement can be of 01 to 03 years subject to renewals thereafter. 7. Trade Unions Within 06 months of the commencement of a company's operations, the provincial federation of trade union shall set up a provisional trade union organisation at the company to represent and protect the rights and interests of employees and the workforce. An employer must recognise a trade union's status once it is validly organised. There are strict rules protecting the trade union and its members from any coercion or discrimination from employers regarding activity within the trade union. The employer is responsible for ensuring an environment conducive to the activities of the trade union. 8. Employment Funds The Social Insurance Fund, Health Insurance Fund, and Unemployment Insurance Fund only cover Vietnamese employees. Social Insurance Fund Contribution to the State Social Insurance Fund is a statutory obligation of both the employer and employee in all contractual employment relationships longer than 03 months. The Social Insurance Fund provides benefits such as pensions, salaries during sick days, salaries and treatment for labour-related accidents and occupational illnesses, maternity benefits, and death benefits. The contributions are made as follows: Employer pays 15% of the monthly salary pool to the Social Insurance Fund. Employee pays 5% of his/her monthly salary to the Social Insurance Fund. Health Insurance Fund The Health Insurance Fund covers 100% of medical expenses, except for cases where high cost treatments are involved. In such cases, the Health Insurance Fund 57

58 covers 100% of medical expenses incurred by working employees provided that they are less than VND7 million and 60% of such medical expenses with a cap of VND20 million if they are above VND7 million. An employer is obliged to pay 2% of the monthly salary pool to the Health Insurance Fund. Each employee must also contribute by paying 1% of his or her monthly salary to the Health Insurance Fund. Unemployment Insurance Fund The provision of the law on Unemployment Insurance Fund takes effect on 01 January Unemployment insurance covers unemployment allowance, joblearning support, and job-seeking support. The contributions are made as follows: Employer pays 1% of the fund of monthly salary pool of employees who participate in unemployment insurance on which unemployment insurance premiums are based. Employee pays 1% of his/her monthly salary on which unemployment insurance premiums are based. Provision Fund for Retrenchment Allowances A company is required to place 1-3% of the total wages paid into a Retrenchment Allowance Fund. When an employee loses his or her job due to restructuring or technological advances affecting a company, the employer has responsibility to retrain the employee. If a new job cannot be created, the employee is entitled to a severance pay of one month's salary for each year employment, with at least two months of such pay guaranteed. VIII: COMPETITION LAW The Competition Law of Vietnam has cam into effect since 1 July The Law applies to all business enterprises and professional and trade associations in Vietnam; overseas enterprises and associations registered in Vietnam; public utilities and state monopoly enterprises; and State administrative bodies. It has superseding power over all other enacted laws of Vietnam regarding restrictive business practice and unfair trade practices. In the Competition Law, there is no regulation providing for cases of exception or exemption based on ownership types of enterprises. The law prohibits anticompetitive behaviour/decisions by officials or State administrative agencies, taking advantage of their authority. 1. Unfair Competition The Law defines unfair competition activities as activities which contravene normal standards of business ethics to customers, other enterprises, or the State, including: infringement of business secrets, including breaches of confidential agreements; coercion of customers or other business counterparts; defamation of other enterprises; 58

59 causing disruption to business activities of other enterprises; misrepresentation in relation to trade name, slogan, symbol, packaging design, geographic indications and other factors; advertising and promotion aimed at unfair competition; discrimination against enterprises by professional associations; and illegal multi-level selling or pyramid schemes. 2. Practices in Restraint of Competition Under the Law, activities in restraint of competition are defined as those which will reduce, deviate or restrain competition in the market including agreements in restraint of competition, abuse of a dominant or monopoly position in the market, and economic concentration. Practices in Restraint of Competition Agreements in Restraint of Competition Abuse of Dominant Market / Monopoly Position Economic Concentration 3. Agreements in Restraint of Competition All enterprises are strictly prohibited from entering into agreements which restrict the entry or development of other businesses, exclude other enterprises from the market, or collaborate to manipulate bids. Other agreements restraining competition are prohibited only where the parties to the agreement have a combined market share of 30% or more of the relevant market. Parties with a combined market share of 30% or more are prohibited from entering into: agreements fixing prices directly or indirectly; agreements dividing markets or distribution of supplies; agreements limiting or controlling the volume of products or services in production or supply; agreement for the restraint of technical or technological development or for the restraint of investment; agreements imposing conditions on other businesses to enter into contracts for the sale of goods or services, or forcing other businesses to accept contractual obligations which are not related to the subject matter of the contract. 59

60 Market share<30% Agreement is allowed Agreement in Restraint of Competition Market share>30% No Does exemption apply to the Agreement? Agreement is prohibited Yes Agreement is allowed Exemptions are generally available where a prohibited agreement provides economic benefits to consumers that outweigh the restriction on competition, and these exemptions are decided by MOIT. An exemption must be obtained before execution of the agreement and the exemption may only be enjoyed during the period specified in the decision of MOIT. In order to be exempted, the agreement in restraint of competition must satisfy one of the following criteria: rationalising organisation structure, business model, raising business efficiency; promoting technical and technological advances, raising goods and service quality; promoting the uniform application of quality standards and technical norms of different kinds of products; harmonising business, goods delivery and payment conditions, which have no connection with prices and price factors; enhancing the competitiveness of small-and medium-sized enterprises; enhancing the competitiveness of Vietnamese enterprises on the international market. 4. Monopolies and Market Dominance The Law defines a monopoly as an enterprise holding a position in the relevant market with no competitor of the same goods or services. An enterprise is deemed to be in a dominant position in the relevant market if it holds a share of 30% or more or is capable of restricting competition significantly. A group of enterprises is considered holding a dominant position in the relevant market if they attempt to restrain competition in one of the following circumstances: two enterprises hold a combined market share of 50% or more in the relevant market in question; three enterprises hold a combined market share of 65% or more in the relevant market in question; or 60

61 four enterprises hold a combined market share of 75% or more in the relevant market in question. Market dominance and monopolies are not prohibited by the Law, but it is the abuse of these positions that is unlawful. A dominant enterprise or group of enterprises is prohibited from engaging in any of the following activities which are considered to be an abuse of dominance or monopoly position: artificially lowering prices to exclude competitors; fixing prices unreasonably or setting minimum prices which cause damage to customers; restraining production or distribution of goods or services, limiting the market, or impeding technical or technological development, thereby causing loss to customers; imposing discriminatory condition for similar transactions to cause inequality in competition; imposing conditions on other enterprises signing contracts for the purchase and sale of goods and services or forcing other enterprises to agree to obligations which are not related in a direct way to the subject matter of the contract; preventing new competitors from entering the market. Monopolies are subject to the same prohibitions for parties in a dominant position as listed above. They are also prohibited from imposing unfavourable conditions on customers and abusing the monopoly position to unilaterally unreasonably modify or cancel a contract. 5. Economic Concentration When a merger, consolidation, acquisition (with some exceptions), joint venture, or other type of economic concentration results in a combined market share of between 30% to 50% of relevant market, the Vietnam Competition Administration Department ( VCAD ) must be notified, unless the concentration results in a small or medium enterprise. Under the Law, acquisition is defined as the purchase by one enterprise of all or part of the assets of another enterprise sufficient to control the activities of one or all of the businesses of the acquired enterprise. An economic concentration ( EC ) resulting in a market share of 50% or above is prohibited, unless the concentration results in a small or medium sized enterprise or an exemption is granted. Exemptions are available when one of the parties is at risk of being dissolved or insolvent, or where economic concentration enhances export, socio-economic development or technical progress, which shall be assessed by VCAD and MOIT. 61

62 Market share<30% EC is allowed without notification Economic Concentration 30%<Market share<50% EC must be notified to VCAD No EC is prohibited Market share>50% Does exemption apply to the EC? Yes Yes EC is allowed 6. Competition Authorities Competition authorities are comprised of VCAD and Vietnam Competition Council. VCAD is an organization under MOIT and has the function of assisting MOIT in undertaking State administration of competition, anti-dumping and anti-subsidy measures; application of self-protective measures with respect to goods imported into Vietnam; protection of consumers rights; and co-ordination with enterprises, industry or trade associations in dealing with proceedings in international trade involving dumping, subsidies and application of self-protective measures. Vietnam Competition Council is an independent executive body that deals with competition cases and resolves complaints with respect to practices in restraint of competition. IX: ENVIRONMENT Subject to the nature, scale and environmental impact level of projects, authorities and investors are required to prepare strategic environment assessment reports and either environmental impact assessment reports ( EIAR ) or environment protection commitments ( EPC ) as conditions for the establishment and operation of certain projects in Vietnam. 1. Strategic Environment Assessment Reports Projects that are subject to strategic environment assessment reports include strategies and plans on national socio-economic development at the national or provincial level. The agency responsible for building a national strategic project must prepare and submit a strategic environment assessment report to the relevant appraisal body. The appraisal is one of the grounds for approving the project. A strategic environment assessment report must include the following contents: 62

63 (i) (ii) (iii) (iv) (v) general descriptions of the objectives, size and features of the project; descriptions of the natural, economic, social and environmental conditions of the project; a prediction of possible negative effects on the environment; sources of data and appraisal methods; and proposed solutions and directions for the implementation of the project. MONRE is responsible for forming a Strategic Environment Assessment Report Appraisal Board with regard to projects within the authority of the National Assembly, the Government and or Prime Minister. The relevant ministries have a responsibility to form Strategic Environment Assessment Report Appraisal Boards with regard to the projects under their respective authority. Provincial People s Committees are responsible for forming Strategic Environment Assessment Report Appraisal Boards with regard to the projects under their respective authority or provincial People s Councils authority. 2. Environmental Impact Assessment Report Investment projects subject to compulsory EIARs cover the following main categories: (i) (ii) (iii) (iv) nationally important projects; projects using part of the land of or causing an adverse impact on a natural conservation zone, national park, historical and cultural site, natural heritage or classified beauty spot; projects with a potentially adverse impact on a river watercourse, coastal area or area containing a protected ecosystem; projects for the construction of infrastructure of EZs, IZs, HTZs, EPZs or craft village group; (v) projects for construction of new urban centres or concentrated residential areas; (vi) projects for exploitation and utilization of groundwater or natural resources on a large scale; and (vii) other projects with a potential risk of causing an adverse impact on the environment. Contents of EIAR An EIAR is required to have the following main contents: (i) (ii) (iii) enumeration and detailed description of the project s construction components, construction area, time and workload; operational technology for each component and the entire project; overall assessment of the environmental status at the project site and neighbouring areas; the sensitivity and load capacity of the environment; detailed assessment of possible environmental impacts when the project is executed and environmental components and socio-economic elements to 63

64 (iv) (v) (vi) (vii) be impacted by the project; prediction of environmental incidents possibly caused by the project; specific measures to minimize bad environmental impacts, prevent and respond to environmental incidents; commitments to take environmental protection measures during project construction and operation; lists of project items, the program on management and supervision of environmental issues during project execution; cost estimates for building environmental protection works within the total cost estimate of the project; (viii) opinions of the commune-level People s Committees and representatives of population communities in the place where the project is located; opinions against the project location or against environmental protection solutions must be presented in the environmental impact assessment report; (ix) citation of sources of figures and data, assessment methods. Procedures for Consideration and Approval of an EIAR MONRE is responsible for establishing appraisal boards for appraisal of EIARs for projects approved by the National Assembly, the Government or the Prime Minister, and also for inter-branch or inter-provincial projects. Ministries, ministerial equivalent bodies or Government bodies are responsible for establishing appraisal boards for appraisal of EIARs for projects within their respective decision-making authority (excluding projects under MONRE responsibility). Provincial People s Committees or BOM of zones are responsible for establishing appraisal boards for establishing appraisal boards for appraisal of EIARs for projects located in their respective localities and within the decisionmaking authority of their People s Council. The time-limits for appraisal of strategic environmental assessment reports and EIARs are as follows: (i) a maximum of 45 working days from the date of receipt of a complete and valid application file shall apply to appraisal of projects which the appraisal councils established by MONRE; and (ii) a maximum of 30 working days from the date of receipt of a complete and valid application file shall apply to appraisal of other projects. 3. Environmental Protection Commitment Projects subject to Environmental Protection Commitments ( EPCs ): Any project which is not subject to strategic environment assessment reports and EIARs must make a written EPC. The main contents of an EPC are as follows: (i) (ii) used; (iii) location of execution of the project; type and scale of production, business or service and materials and fuel kinds of wastes generated; 64

65 (iv) commitments to apply measures to minimize and treat wastes and strictly comply with the provisions of the laws and regulations on environmental protection. Registration of EPCs District People s Committees or BOM of zone are required to organize registration of EPCs. The time limit for acceptance of EPCs is 05 working days after the date of receipt of valid EPCs. The project owners may commence production, business or service activities after registration of EPCs. X: INTELLECTUAL PROPERTY On 1 January 2006, the Civil Code came into force, and on 1 July 2006, the Law on Intellectual Property, which codified the government regulations on intellectual property, came into force. These are the two principal laws governing the protection of intellectual property rights in Vietnam and adopted by Vietnam to conform to WTO standards on intellectual property protection. In addition to these laws, Vietnam is also a State Party to the Paris Convention, the Madrid Agreement, Madrid Protocol, and the Stockholm Convention of 1967 (which established the World Intellectual Property Organisation). Vietnam is also a member of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), the Berne Convention for the Protection of Literary and Artistic Works with effect from 26 October 2004, the Geneva Convention for the Protection of Producers of Phonograms against Unauthorised Duplication of their Phonograms with effect from 06 July 2005, the Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite with effect from 12 January 2006, the International Convention for the Protection of New Varieties of Plant with effect from 24 December 2006, and the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations with effect from 01 March Vietnam s industrial property regime is administered principally by MOST acting through NOIP. The copyright regime is administered by the Ministry of Culture, Sports and Tourism, acting through the Copyright Department. 1. Protection of Intellectual Property Rights in Vietnam Generally, except for trade secrets, geographic indications, and trade names (which are entitled to legal protection as far as it fulfils the conditions of formation and usage), intellectual property rights are protected in Vietnam upon registration on a first-to-file priority basis. Below is a summary of the various types of intellectual property rights protected in Vietnam and the duration of the protection: Type Brief Description Duration of Protection Patent for Invention A technical solution presenting worldwide novelty and an inventive step applicable in socio-economic fields 20 years from the date of application 65

66 Type Brief Description Duration of Protection Patent for Utility Solution Industrial Design Layout Design of Integrated Circuit Trademark Geographic Indication Trade Name Trade Secret New Plant Variety Copyright Copyrightrelated rights A new technical solution in comparison with existing technology and achievable in current economic technological conditions The external appearance of a product embodied by lines, three dimensional forms, colours, or a combination of these that is novel, inventive throughout the world, and capable of serving as a pattern for an industrial or handcrafted product Three dimensional circuit elements and their interconnections in the integrated circuit which is original and not widely known in the relevant field Marks used to distinguish goods or services of one person from similar goods and services of another person. They may take the form of words, images, or any combination presented in one or more colours Information indicating territorial origin of a product with characteristics or qualities pertaining to the territory Names of individuals or entities used in business activities Confidential trade information which could enable the possessor to gain economic advantage New plant variety with a recognisable name among relevant species as created by selection or development which is of distinctiveness, uniformity, and stability for plantation. Moral and material rights with respect to original literary, artistic and scientific works including software Moral and material rights in respect of performance show, audio record, visual record, radio program, and satellite program-coded signal 10 years from the date of application 05 years from the date of application which is renewable for an additional two periods 05 years (a total of 15 years maximum) The earlier of: (i) 10 years from the date of grant; (ii) 10 years from the date of the first commercial use by owner or an assignee; (iii) 15 years from the creation of the design. 10 years from the date of application (renewable for successive 10-year periods without limit) In perpetuity from the certification of protection As long as it is in formation and usage As long as it is in formation and usage 20 years from the certification of protection (25 years for timber trees and vines) Author s life plus 50 years (except for movies, photographs, plays, applied fine art works, which enjoy 50- year protection) 50 years 2. Trademarks Trademarks are generally protected by registration but certain marks, including logos, cannot be registered if they are: not distinctive; widely used; descriptive of the goods or services in question; or 66

67 misleading, deceptive, or identical to or confusingly similar to existing registrations. 2.1 Priority rights Vietnam adopts a first-to-file rather than a first-to-use priority system, so that an earlier application for a trademark establishes a right of first priority. The date of priority is generally the date of application, but this can be earlier if a qualifying application has been made in another member country of the international trademark treaties. Trademarks that have been internationally registered in accordance with an international treaty can also be established in Vietnam once accepted for protection by the trademark office. Applicants who wish to rely on international treaties in establishing a right of priority must make an express statement to that effect in their application for protection and present evidence in support of their claim of priority. 2.2 Registration procedure Vietnam has adopted the classification of goods and services as specified in the Nice Agreement for the purposes of trademark registration although Vietnam is not a member of the Nice Agreement. A preliminary trademark search can be conducted by the applicant to establish whether the mark or any similar mark has already been registered before applying for a trademark in Vietnam. Applications can be made either for international registration (including Vietnam) through the World Intellectual Property Organisation or directly in Vietnam. 2.3 Well-known trademarks Trademarks may still be protected in Vietnam in the absence of first-to-file priority. "Well-known" trademarks in Vietnam are protected in perpetuity. A trademark will be deemed well-known if it has wide public recognition as evaluated on the following criteria: - number of customers; - location for sales; - sales turnover; - the number of years in continuous use; - reputation of goods or services bearing the mark; - the number of countries where the trademark has been protected or recognised as well-known; and - costs for an assignment or licensing of the mark, or investment capital contribution value of the mark. 3. Patents 3.1 Invention and utility solution An invention is defined as a technical solution which is new in comparison to existing technology, which is of a creative character, and is applicable to various social and economic fields. The following are excluded from patent protection: scientific discoveries, theories, or mathematical methods; schemes, plans, rules and methods for performing 67

68 mental acts; methods of training domestic animals, playing games, and doing business; computer programs; the presentation of information; solutions of aesthetic characteristics only; plant varieties or animal breeds; processes of plant or animal production which are principally of a biological nature, other than microbiological processes; and human and animal disease prevention methods, diagnostic and treatment methods. An applicant unable to secure protection as an invention patent may qualify for protection as a utility solution patent (which is essentially an invention without involving an inventive step). 3.2 Priority rights The priority of applications for patent protection is determined by either the date on which NOIP receives the application or in accordance with the applicable international treaties. Applicants relying on international treaties to establish a right of priority shall make an express statement to that effect in their application and present evidence in support of their claim of priority. Vietnam is a State Party to the Patent Cooperation Treaty ( PCT ). State Parties to the PCT have agreed to permit an applicant to wait for up to 30 months after the initial filing of a patent application in one country to begin prosecuting the application in other countries. Vietnamese law extends this period to 31 months. 3.3 Registration procedure Patent applications can be made either for international registration under the PCT procedure or directly in Vietnam. Applying for patent protection directly in Vietnam will only be possible if the invention or utility solution has not been made public anywhere in the world by being used or described in a written publication before the filing date or priority date, as applicable. A patent application must be submitted to NOIP. NOIP publishes the application in the industrial property gazette after preliminary examination and acceptance of the application. A substantive examination will only be carried out upon request by the applicant or a third party. A substantive examination determines the patentability of the invention or utility solution and its scope of protection. 4. Industrial designs An industrial design is evaluated for worldwide novelty in the same way as an invention which requires a substantial distinction and uniqueness when evaluated by a person having ordinary skill in the relevant area. Excluded from the protection of industrial designs are mere functional or technical features of a product s appearance, external features of civil or industrial construction works, and the shape of a product which is invisible during the use of the product. A technical design should not be disclosed in any form or in any jurisdiction until the date of filing for protection. This is to maintain its worldwide novelty. Priority rights over protection of industrial designs are achieved by the same way as for trademarks and patents. 68

69 Since international applications are not available for protection of industrial designs, applicants need to register in Vietnam through NOIP. 5. Copyright 5.1 Owners and authors of copyright There is a distinction between owners and authors of works. An author is a person who creates all or part of a literary, artistic or scientific work. Those who translate, adapt or edit works are deemed to be the authors of their derivative work. Owners of works may be authors or co-authors, authorities or organisations which delegate a duty to an author to create a work, individuals or organisations which contract with an author for the creation of a work, heirs who inherit a work from an author who was also the owner of a work, and individuals and organisations to which ownership rights over a work are transferred by contract. Rights over a work include personal rights (including the right to name a work and to permit others to use the work) and property rights (including the right to receive royalties and to rent out the work). These rights are divided into three types: (i) rights of an author; (ii) rights of an owner; and (iii) rights of an author who is concurrently the owner of a work and therefore holds full personal and property rights over a work. 5.2 Establishment of copyright Copyright arises from the moment a work is created in a definite form. The Civil Code provides that copyright protection in respect of foreign individuals and entities will be limited to works which are first published or disseminated in Vietnam, or which are created and take a definite form in Vietnam. Works of foreign authors not first published in Vietnam must be published in Vietnam within thirty days of first publication. Vietnam has acceded to the Berne Convention for the Protection of Literary and Artistic Works that provides the protection of Vietnamese copyright law to qualifying works under the Berne Convention. 5.3 Registration of copyright Authors, co-authors and owners of works have the right to apply for the registration and protection of copyright and ownership of such works to the Copyright Department under the Ministry of Culture, Sports and Tourism. The application must be supported by evidence of the applicant s authorship and/or ownership of the work. Where the application is in order, the applicant will be issued with a Copyright Certificate 2 within 15 working days from the receipt of the application. The Ministry of Culture, Sports and Tourism has primary responsibility for the protection of copyright in Vietnam and is assisted at the local level by a network of Culture, Sports and Tourism Inspectors. 2 Certificate of ownership rights over copyright works 69

70 6. Transfer of Intellectual Property Rights 6.1 Industrial property Owners of industrial property that is protected in Vietnam (except for geographic indications ) may license the right to use or transfer ownership of such objects to a third party. Exclusive licensees of the right to use industrial property may further sub-license their right to use. 6.2 Registration requirement Licence or assignment of industrial property rights must be made by a written contract. A licensing or assignment agreement must include certain provisions set forth by law such as the particulars of the parties, price, rights and obligations, scope, term, and territory for licensing. Assignment of certain types of industrial property, including inventions, industrial designs, layout designs of an integrated circuit, and trademarks, must be registered with NOIP. The licensing of industrial property rights is binding on the licensor and the licensee without registration with NOIP, but is ineffective against third-parties until registration with NOIP. 6.3 Duration The duration of licensing contracts is limited to the valid duration of the certificate of protection 3 for each type of industrial property. 6.4 Prohibited terms Certain terms restricting a licensee s rights may be invalid, especially those terms that do not originate or protect the rights of the licensor. These terms include: - prohibitions on the licensee s innovation or improvement of the licensed objects of industrial property (except for trademarks), or any obligation of the licensee to transfer such improvement to the licensor free of charge; - direct or indirect limits on the licensee s export of goods or services provided under the industrial property object license contract to territories where the licensor is neither the owner of the corresponding industrial property right nor the exclusive importer of such goods (e.g., where the licensor grants exclusive licence of the industrial property); - any obligation of the licensee to purchase from a source appointed by the licensor and without product quality assurance of all or a certain percentage of materials, accessories, or equipment from the licensor or another supplier; and - prohibitions on the licensee s claim in respect of the validity of the industrial property right or the licensor s right to license. 6.5 Other statutory obligations and restrictions The licence or assignment of the trademark must not cause confusion in relation to the characteristics and origin of the goods or services bearing the trademark. The current regulations prohibit the licence or assignment of industrial property rights for the purpose of squeezing out competitors and attempting to monopolise the market. 3 Certificate of ownership rights over inventions, utility solutions, industrial designs and trademarks, and the right to use an appellation of origin of goods 70

71 6.6 Licence of copyright and related rights Authors and owners of copyrights may transfer all or part of the property rights over a work to others under a contract or under the laws on inheritance. The personal rights of an author are not generally transferable, but an author who is concurrently the owner of a work has a limited right to transfer some of his/her personal rights. 7. Enforcement of Intellectual Property Rights 7.1 Course of action The remedies for industrial property infringement fall into two categories - judicial and administrative. An owner or registered user of industrial property is entitled to commence proceedings in court for infringement of their intellectual property rights and the courts have the power to issue an injunction preventing the infringement from continuing and to award damages. The competent authorities have the powers to enforce such an injunction. Proceedings can be filed at NOIP for verification of the infringement. The customs authorities, market management authorities and economic police have the power to regulate infringing goods and to take the necessary action to seize infringing products. The courses of action available to them include: powers of search; sealing up of premises; temporary detention of persons; temporary custody of goods; and the suspension of production and sale of goods. 7.2 Administrative penalties for infringement Infringement of rights over industrial property objects shall be subject to penalties in the form of either a warning or a fine. Other sanctions may also be applied such as the suspension of a business licence; confiscation of counterfeit goods, facilities or materials used in the infringement; compelled destruction of counterfeit goods; distribution or use of counterfeit goods for non-commercial purposes; and compensation for damages. Penalties must be applied within one year, or two years for business activities which infringe legal rights of registered trademarks, geographical indications, inventions, or industrial designs, following the date of the infringement. After these statutory time limits have passed, infringers will not be subject to penalties. 7.3 Border control The Law on Intellectual Property allows customs authorities to apply border control measures for all goods that infringe on intellectual property rights. Border control measures include: - suspension of customs procedures for goods suspected of infringing intellectual property rights; and - inspection of goods so an intellectual property right holder may collect information to exercise the right to request suspension of customs procedures. Customs authorities can suspend the release of goods where there is: (a) a request from the intellectual property right holder; (b) production of protection certificates and evidence of infringement, and (c) a sum of money has been deposited or a bank guarantee has been provided for possible compensation to persons later determined to have not infringed on intellectual property rights. 71

72 XI: TECHNOLOGY TRANSFER Law on Technology Transfer ( LTT ) which took effect on 01 July 2007 has seven chapters with 61 articles, dealing with objects eligible for transfer; technologies encouraged for, restricted to, and prohibited from transfer; technology transfer agreements; technology transfer services (including technology transfer brokerage, appraisal, evaluation, assessment and promotion); measures for encouraging and boosting technology transfers; approval and registration of technology transfers; and handling disputes, claims, denouncements and breaches in technology transfers. 1. General Principles The LTT defines technology as solutions, processes and know-how, which may or may not be associated with tools and means, to turn resources into products.. Technologies are classified under the LTT into technologies encouraged for transfer, technologies the transfer of which are restricted, and technologies prohibited from transfer. The term transfer of technology refers to either the transfer of the right to own the technology or the licensing/sublicensing of the right to use the technology either by an individual or a corporation. In cases where objects of the technology transfer have already been protected as objects of industrial property, the transfer of ownership of such technology must be implemented together with transfer of ownership of the industrial property rights in accordance with the law on intellectual property. The actual transfer of such industrial property rights is subject to intellectual property regulations and falls outside the ambit of the technology transfer regulations. The transfer of a technology may be in the form of an independent technology transfer contract or in a section on technology transfer in the following projects or contracts: investment project; franchising contract; contract transferring industrial property rights; contract for purchase and sale of machinery or equipment to which the transfer of a technology is attached. 2. Technology Transfer Contract The contract is the basis for performance, ensuring the legality of the transfer of technology, and setting payments and methods to resolve disputes. Technology Transfer Contracts ( TTCs ) can be agreed in a written contract or other equivalent forms, such as telegram, telex, fax, data messages and other forms as permitted by law. The parties are also allowed to choose the language of the TTC. In the case of a transaction in Vietnam, a Vietnamese version is required. The Vietnamese and foreign language versions are of equal validity. The parties to a TTC may reach an agreement on the following particulars: - Name of the TTC, clearly stating the name of the transferred technology; - The technology object which is being transferred and the products created from the technology; - Transfer of the ownership of and/or right to use the technology; - Method of transfer of the technology; 72

73 - Rights and obligations of the parties; - Price and mode of payment; - Date of effectiveness and term of validity of the TTC; - Definition of terms and concepts (if any) used in the TTC; - Plan and schedule for transfer of technology, and location for implementing the transfer of technology; - Liability to provide a warrant for the transferred technology; - Penalties for breach of the TTC; - Liability for breach of the TTC; - Applicable law for dispute resolution; - Tribunal for dispute resolution; - Other agreements, on the condition that they are not contrary to the laws of Vietnam. 3. Governing Law The parties are allowed to agree on foreign governing law, together with other terms and conditions which are not contrary to Vietnamese law. Article 776 of the Civil Code 2005 provides that technology transfer with a foreign element (i.e., between a Vietnamese entity and foreign entity and technology transfer from any foreign country into Vietnam or from Vietnam to any foreign country) must comply with (i) provisions of the Civil Code 2005 and other legal documents of Vietnam concerning technology transfers; (ii) international treaties to which Vietnam is a contracting party; or (iii) foreign law, if the application of such foreign law or the consequence of its application does not contradict the basic principles of the law of Vietnam. The LTT provides that any disputes arising out of TTCs with a foreign party can be settled by either local or international competent arbitrator or courts which the parties specifically chose to the extent that the foreign jurisdiction choice does not contradict the basic principles of the law of Vietnam. 4. Registration The LTT provides the right of the parties to register on a voluntary basis with respect to unrestricted TTCs in order to set the ground [for the parties] to enjoy incentives given in this Law and other relevant laws. It is therefore suggested that parties register TTCs in order to enjoy incentives under the LTT and other laws. The LTT requires that restricted technology transfers are subject to approval by the technology management authority (the Technology Authority ) before the TTC is entered into by the parties, and then a permit is issued after the TTC s execution. 5. Pricing Parties are free to agree on the payment price for the technology transfer in the TTC. Payment may be made in one or a combination of the following methods: - a one-off payment or payments in installments in cash or goods; - transfer of the value of the technology as a capital contribution to an investment project or to the capital of an enterprise as stipulated by law; - other payment methods as agreed by the parties. 73

74 6. Confidentiality Competent authorities responsible for the issuance of technology transfer permits and certificates of registration of TTCs are obligated to maintain confidentiality of the technologies and business secrets in application files for issuance of technology transfer permits and registration of technology transfer contracts. XII: DISPUTE RESOLUTION 1. Conciliation and Mediation The laws of Vietnam emphasize the need for parties to settle their disputes by conciliation and mediation. Parties are encouraged to seek the assistance of the relevant authorities to arrive at an amicable solution to any dispute. A settlement agreement reached between the parties during mediation or conciliation is currently treated in the same way as a normal contractual agreement, with the usual contractual remedies available for breach of its provisions. Where litigants are required to attend conciliation meetings chaired by a judge, the settlement agreements reached, and thereafter recognised by judges decisions, are final and enforceable against the parties. If conciliation and mediation fail, the parties may refer the matter to various fora, including international arbitrators, commercial arbitrators in Vietnam, Vietnamese courts, or foreign courts. 2. International Arbitration In 1995, Vietnam ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ( New York Convention ). Shortly thereafter, the Ordinance on Foreign Arbitral Awards was passed providing for domestic enforcement of foreign arbitral awards. This was subsequently repealed by the new Civil Proceedings Code ( CPC ) which took effect on 01 January General Under the CPC, foreign arbitral awards are defined as arbitral awards rendered outside Vietnam or within Vietnam by non-vietnamese arbitrators. Vietnamese court considers the recognition and enforcement of a foreign arbitral award when the award has been rendered in or by arbitrators of a country being a party to the New York Convention or, in case of a country not being a party to the New York Convention, to the extent that such country grants reciprocal treatment to Vietnam. Organisations and individuals who obtain favourable foreign arbitral awards or their lawful representatives may file a petition with Vietnamese court to request for the recognition and enforcement of the award, provided that: (i) in respect of an organisation, the obliged organization has its head office in Vietnam; (ii) in respect of an individual, the obliged individual resides or works in Vietnam; or (iii) the properties subject of the enforcement of civil decision, judgment of foreign court, or decision of foreign arbitration, are in Vietnam at the time the petition is filed. The CPC has significantly broadened the scope of recognition and enforcement of foreign arbitral awards in relation to business and commercial disputes so that the scope covers most commercial relations. 74

75 3. Foreign Courts Under the laws of Vietnam, FICs may not be able to refer their disputes to a foreign court. Judgments issued by foreign courts are not enforceable in Vietnam unless Vietnam has signed a bilateral treaty with the relevant country regarding enforcement of that country's court judgments. 4. Domestic Arbitration Under the Ordinance on Commercial Arbitration, commercial disputes may be resolved by an arbitration tribunal organised by an arbitration centre or set up by the parties (ad hoc arbitration). The arbitration tribunal may consist of three arbitrators or a single arbitrator as agreed by the parties. Commercial arbitrators in Vietnam have jurisdiction to arbitrate commercial disputes. The disputes include disputes relating to the sale and purchase of goods, provision of services, distribution, business representation and agency, custodianship, leasing or hiring, hire purchase, construction, consultancy, licensing, investment, finance, banking, insurance, exploration and exploitation, transportation, and other commercial activities. The laws of Vietnam allow parties to a dispute with foreign elements to: (i) appoint foreigners as their arbitrators provided that the appointed foreigners are qualified to act as arbitrators in their own countries, and (ii) to agree on the application of a foreign substantive law, foreign arbitration rules, foreign language for arbitral proceedings, and an appropriate location for arbitral proceedings inside or outside Vietnam. Arbitral awards issued by commercial arbitrators in Vietnam will be enforced in Vietnam. Arbitral awards given by the commercial arbitrators under the Ordinance on Commercial Arbitration do not need to be recognised by a Vietnamese court. Following the arbitration proceeding, a successful claimant is entitled to bring the relevant arbitral award to the relevant enforcement agency for enforcement unless such arbitral award is cancelled by a Vietnamese court. Although the Ordinance on Commercial Arbitration gives parties to a dispute an opportunity to request a relevant Vietnamese court to cancel an arbitral award, the court may only review procedural matters and cannot re-hear the dispute. The court may, at the request of a party to the dispute, cancel an arbitral award given under the Ordinance on Commercial Arbitration in the following circumstances: - the parties do not have an arbitration agreement; - the arbitration agreement is void (for example, the party to the relevant agreement does not have the authority to sign such an agreement); - the composition of the arbitration tribunal or the arbitral proceedings is not in accordance with the agreement of the parties; - the dispute does not fall under the jurisdiction of the relevant arbitration tribunal; - the relevant arbitrators are in breach of their obligations; and - the arbitral award is contrary to the public interest of Vietnam. 75

76 Unless otherwise stipulated by law, the statute of limitation for arbitration proceedings is two years from the date of the dispute. The parties have 30 days after the arbitral award is given to apply to the court for cancellation of the award. The Ordinance on Commercial Arbitration imposes the following restrictions on the selection of governing law in arbitration proceedings: - disputes between Vietnamese entities must be resolved in accordance with the laws of Vietnam; and - disputes involving a foreign element may be resolved in accordance with any law agreed between the parties to the dispute, provided that the selection and the application of that law are not contrary to the basic principles of the laws of Vietnam. For this purpose, a foreign element means: (i) one party to the dispute is a foreign entity; (ii) the basis of the dispute arises outside of Vietnam; or (iii) the assets relating to the dispute are located outside of Vietnam. 5. Vietnamese Courts The Vietnamese court system consists of the Administrative Court, Economic Court, Civil Court, Labour Court and Criminal Court. The jurisdiction of each type of court is different, depending on the type of dispute. The Economic Court has jurisdiction over most commercial and financial disputes. Vietnam has unified its court procedures for the different courts under the CPC. Under the CPC, all disputes, whether civil, commercial or labour, are now subject to the same set of procedural rules. A dispute may, depending on the type of dispute and the value of the dispute, either be heard at the district court or the provincial court at first instance. The recognition of foreign judgments and foreign arbitral awards fall under the jurisdiction of the provincial courts. In general, court procedures in Vietnam can be divided into three distinct stages: first instance, appeal and review (second appeal). Most cases go to both first instance and appeal as parties are entitled to appeal against a judgment within 15 days of the judgment. In this case, first instance judgments are not enforceable until the case has been disposed of by the appellate court. Under the laws of Vietnam, anyone may petition for review (second appeal) of a case (on the grounds of legal errors or newly discovered evidence) whether they are a party to the proceedings or not. The decision to grant such a review is made administratively by either the Chief Judge or Chief Prosecutor of a competent court or Prosecutor. The CPC and its guiding regulations provide for a much more comprehensive set of rules on the application of important remedies such as preliminary injunctive relief. In certain cases, the CPC also allows parties to apply for temporary measures even before the court formally accepts a case for resolution. Decisions and judgments issued by Vietnamese courts are enforceable in Vietnam. Foreign investors should be aware of certain statutes of limitation. In general, the CPC provides that the statute of limitation for initiating court proceeding is 02 years from the date the dispute arises. 76

77 6. Enforcement Process Following the court or the arbitration proceeding, the successful claimant is required to initiate the enforcement process by sending an application to the enforcement authority in cases where the involved parties fail to voluntarily execute the judgment or decision. The statute of limitation for filing an application for enforcement of a court judgment or decision is three years from the effective date of the court judgment or decision. Except for limited cases wherein claimants are exempted from enforcement fee obligation. The claimant is responsible for paying an enforcement fee in accordance to a scale based on the value of the assets which such claimant actually receives. 77

78 BUSINESS TRAVEL GUIDE TO VIETNAM Visas You should contact Vietnamese Embassy in Berlin or Consulate General in Frankfurt (contact details in the Appendix III) to obtain a business visa. Allow sufficient time (1 week) as it can take a while. Getting There & Away Both Hanoi and Ho Chi Minh City are very well served by a range of international airlines. Vietnam Airlines provides non-stop flight from Vietnam to Germany with frequency of 4 times a week Hanoi Frankfurt am Main and 3 times a week HCM city - Frankfurt am Main. Getting Around Domestic flights: The monopoly of Vietnam Airlines on domestic flights has recently been broken. However, the benefit of deregulation for the business traveller thus far has been the improvement in Vietnam Airlines own service. Land transport: Taxis are cheap in Vietnam but the drivers rarely speak English. You are best off using one of the larger companies that your hotel can recommend, and making sure the driver knows where you are going before you set off (have your destination written down in Vietnamese for good measure). Major hotels also offer limousine options. Language Vietnam s national language is Vietnamese. English is increasingly spoken, especially in the private sector. However, you should always consider whether you need a reliable interpreter for business meetings, especially when dealing with government entities. Safety While Vietnam is one of the safest countries in Asia, caution should be exercised if walking around the frenetic cities Ho Chi Minh City and Hanoi. Pickpockets and bag snatchers are not unknown. Crossing the road in these cities is an interesting experience, given that there are few traffic lights and a multitude of motorbike riders. You ll observe how the locals cross very slowly, giving the motorbikes the opportunity to avoid them! Healthcare Though healthcare is not typically up to Western standards, there are foreign-run private clinics in Hanoi and Ho Chi Minh City. One of the larger operators is International SOS (tel ). You should ensure that you have comprehensive travel insurance. Accommodation 78

79 Hanoi and Ho Chi Minh City have plenty of first class hotels such as: Caravelle, Sheraton, Park Hyatt, Intercontinental or Movenpick in Ho Chi Minh City and Sofitel Metropole, Hilton Opera, Melia Hanoi or Intercontinental West Lake in Ha Noi. There are also plenty of serviced apartment options for longer stays: for instance, Sherwood Residence (HCMC), Fraser Suites (Hanoi) or the Somerset Group (both). Restaurants Vietnamese food has made a name for itself around the world. The country s cities offer a wide array of high-quality international restaurants and all the hotels above have plenty of options in-house. You can find a reasonably up-to-date list of good restaurants in Vietnam at Electricity Vietnam uses 220V electricity nationwide. In the South, outlets are often US-style flat pins. In the North, many outlets fit round pins. Major hotels provide adapters. Time/Business Hours/Public Holidays Vietnam has a single time zone, seven hours ahead of GMT/UTC. Business hours tend to be 8am to 5pm with a one hour lunch break. The main public holiday period of the year is Tet, the week-long lunar new year holiday in late January or early February. It is best to avoid business travel to Vietnam in this period. Other major public holidays are New Year s Day (1 January), Liberation of South Vietnam Day (30 April), International Labour Day (1 May) and Vietnam s National Day (2 September). Communications Mobile phones: coverage in Vietnam s urban centres is quite good. For visitors, roaming is an option (GSM only), or you can obtain a local SIM card easily and cheaply (ID is required). Local mobile phone tariffs are exceptionally low. Internet: the major hotels provide international standard broadband. There is a trend not to charge guests for internet access, but not all hotels have this policy. Landline: charges, for domestic calls at least, tend to be very inexpensive, even in hotels. From 5 October 2008, fixed-line phone numbers in 55 provinces and cities in Vietnam, including those in Hanoi and Ho Chi Minh City, were given a new prefix, e.g. 3. It is important to be aware of this, as many websites or directories had not yet been updated. Business Etiquette in Vietnam Displaying good manners and treating people you meet with respect will take you a long way no matter where you are doing business. However, in Vietnam it is nonetheless worth being aware of certain particular characteristics. Attire: Business attire generally consists of a suit and tie for men and suit or dress for women. During the hotter months, formal dress for men is a shirt and tie. Open 79

80 collar shirts and slacks may be worn to more informal meetings, depending on the situation. The trend in southern Vietnam is to be more casual: suit jackets are worn only on very formal occasions and at first meetings. Consensus: Decision-making by consensus is a strong element of Vietnamese social and political behaviour. As a result, business decisions may take longer than you expect. Face: As in many other Asian countries, Vietnamese place a great deal of importance on saving face. It is especially important never to cause a Vietnamese to lose face in front of others. Meetings: If you are meeting with several Vietnamese business people at once, they will tend to sit on the opposite side of the table from you and/or your delegation. Note that the most important person is likely to be seated in the middle of the group, and may not enter the room until everyone else is present. Names: The surname/family name of the Vietnamese is the first name listed, followed by the middle name and then the first name. However, Vietnamese are usually addressed by their first name (the one coming last) rather than their family name. Smile: Many foreigners misunderstand the meaning of the smile to Vietnamese. While Vietnamese smile for all the same reasons as people of other nationalities, a smile can also convey nervousness, irritation or a simple lack of understanding. 80

81 APPENDIX 1: LIST OF SECTORS ENTITLED TO INVESTMENT INCENTIVES A. LIST OF SECTORS TO WHICH SPECIAL INVESTMENT INCENTIVES SHALL BE GIVEN: I. Production of new materials, new energy; production of high-tech products, bio-technology products, info-technology products; production of manufactured mechanical products 1. Production of composite materials, light construction materials, rare and precious materials. 2. Production of high quality steel, alloy, special metals, sponge iron; steel billets. 3. Production of new energy: Construction of plants using solar energy, wind energy, bio-gas, geothermal energy, tides. 4. Production of medical equipment for analytical and extractive technologies in medical sector; orthopaedic instruments, wheelchairs, specialised instruments for the disabled; 5. Projects applying advanced technology, biotechnology to produce medicines meeting international GMP standards; production of drug materials for antibiotics. 6. Production of computers; information, telecommunications and Internet equipment; pivotal infotechnology products. 7. Production of semiconductors and high-tech electronic components; production of software products, website applications; provision of software services; research on information technology; training human resources in the field of info-technology. 8. Production and manufacture of precision mechanical equipment; equipment and machinery for examination and control of safety during the process of industrial production; industrial robots. II. Cultivation and processing of agricultural, forestry and aquatic products; making salt; production of man-made strains, new seeds and breeds of animals. 9. Afforestation and taking care of forests; 10. Cultivation of agricultural, forestry and aquatic products in uncultivated land, unexploited waters; 11. Catching of marine products at offshore sea. 12. Production of new strains; propagation and hybridization of seeds and breeds of animals with high economic efficiency. 13. Production, exploitation and refining of salt. III. Use of high-technology; modern technology; protection of ecological environment; research on, development and fostering of high-technology. 14. Application of high-technology; application of new technologies which have not been applied in Vietnam; application of biotechnology. 15. Pollution treatment and environmental protection; manufacture of equipment for treatment of environmental pollution, equipment for observation and analysis of environment. 16. Collection and treatment of liquid waste, gaseous waste, solid waste; recycling and reuse of waste; 17. Research on, development and fostering of high-technology IV. Employment of large number of employees 18. Projects regularly employing 5,000 or more employees. V. Construction and development of infrastructures and important projects 19. Construction and operation of infrastructure facilities in industrial zones, export processing zones, high-tech zones and economic zones, and of important projects established under a decision of the Prime Minister. VI. Development of facilities in educational, training, medical, gymnastic and sports sectors 81

82 20. Construction of drug detoxification centres or tobacco detoxification centres. 21. Setting up establishments providing sanitation services to prevent and fight against epidemics; 22. Establishment of geriatric centres, and relief centres concentrating on care for the disabled and orphans; 23. Construction of sports centres for training and coaching athletes with high performance; sports centres for the disabled; sports centres with equipment and facilities for exercises and contests, meeting requirements of international sporting events; VII. Other sectors of production and service 24. Investment in research and development (R&D) accounting for 25% or more of turnover; 25. Services of salvage in the sea. 26. Construction of tenements for employees working in industrial zones, export processing zones, high-tech zones, economic zones; construction of dormitories for college students and construction of housing for people entitled to social benefits. B. LIST OF SECTORS TO WHICH INVESTMENT INCENTIVES SHALL BE GIVEN: I. Production of new materials, new energy; production of high-tech products, biotechnology products, info-technology products, manufactured mechanical products 1. Production of sonic, electric and thermal highly-insulating materials; wood-substitute synthetic materials; fire-proof materials, construction plastics, fibreglass, special cement, 2. Production of non-ferrous metals; cast-iron refining. 3. Production of moulds for metal and non-metal products. 4. Construction of new power plants, electricity transmission and distribution networks. 5. Production of medical equipment; building storage for preservation of pharmaceutical products and for storing human medicaments for prevention of and fighting against natural disasters, calamities, dangerous epidemics; 6. Production of equipment for testing toxic substances in foodstuffs; 7. Development of petrochemical industry; 8. Production of coke, activated carbon. 9. Production of crops protection drugs, insecticides, preventive and curative drugs for animals and aquatic creatures, veterinary drugs. 10. Materials for production of drugs, preventive and curative drugs for social diseases; vaccines, medical bio-products, medicines from pharmaceutical materials, oriental medicines; 11. Construction of establishments for biological testing, and for evaluating effects of drugs; construction of establishments meeting criteria for production, preservation and testing of drugs; cultivation, reaping and processing of pharmaceutical materials. 12. Development of resources of pharmaceutical materials and production of drugs from pharmaceutical materials; projects for researching on and proving the scientific basis of oriental medicine prescriptions, and formulating testing criteria in respect of oriental medicine prescriptions; conducting a survey of and compiling statistics on various types of pharmaceutical materials used for production of drugs; collection, inheritance and application of oriental medicine prescriptions; search for, exploitation and utilisation of new pharmaceutical materials. 13. Production of electronic products. 14. Production of machinery, equipment and components packs in the fields of exploitation of petroleum, mining, and energy; manufacture of large-size lifting and lowering equipment; manufacture of machine tools for metal processing; metallurgy equipment; 15. Production of high and medium voltage electric devices; large-size generators. 82

83 16. Production of diesel engines; production and building of, and repair to ships; production of equipment and spare parts for cargo ships, fishing boats; manufacture of dynamic and hydraulic machinery and parts, and compressing machines; 17. Production of equipment, vehicles and machinery for construction; production of technical equipment for the transportation industry; production of locomotives and carriages; 18. Production of machine tools, machinery, equipment, spare parts serving agricultural and forestry production; food processors; equipment used in irrigation; 19. Production of equipment and machinery for the textile and garment industry; production of machinery for the leather industry. II. Cultivation and processing of agricultural, forestry and aquatic products, making salt; production of man-made strains, seeds and breeds of animals 20. Cultivation of medicinal plants; 21. Preservation of post-harvest agricultural products; preservation of agricultural and aquatic products and foodstuffs; 22. Production of bottled or canned juice from fruits; 23. Production and refining of feed for cattle, poultry, aquatic creatures; 24. Technical services in support of cultivation of industrial plants and forestry plants, animal husbandry, aquaculture, protection of plants and domestic animals. 25. Production, propagation and hybridization of seeds and breeds of animal. III. Use of high technology, modern technologies; protection of ecological environment; research on, development and fostering of high technology 26. Production of equipment for dealing with oil-overflow. 27. Production of equipment for waste treatment. 28. Construction of technical establishments and facilities: laboratories, experimental stations for application of new technologies to production; establishment of research institutes. IV. Employment of lots of employees: 29. Projects regularly employing 500 to 5,000 employees. V. Construction and development of infrastructure facilities 30. Construction of infrastructure facilities in service of production and operation of cooperatives and community life in rural areas; 31. Projects for operation of infrastructure facilities and production in complexes of industries and trades in rural areas. 32. Construction of water plants or water supply systems in service of living needs or industries; construction of drainage systems; 33. Construction and improvement of bridges, roads, airports, ports, railroad stations, bus stations, parking lots; opening of more railroad routes; 34. Construction of technical infrastructures for densely-populated areas in localities provided in Appendix B issued together with this Decree. VI. Development of facilities in educational, training, medical, gymnastic, sports and national cultural sectors 35. Construction of infrastructure facilities of educational and training establishments. Construction of private and people-founded schools and educational and training establishments at all levels: pre-schools; popular schools; secondary vocational schools; colleges and universities. 36. Establishment of people-founded hospitals and private hospitals. 83

84 37. Construction of gymnastic and sports centres, exercising clubs, gymnastic and sports clubs; establishments for production and manufacture of or for repair to equipment and devices used for gymnastic and sports exercises. 38. Establishment of national cultural houses, groups of singers and dancers performing national music and dance; theatres, film studios, film printing and developing establishments, cinemas; production and manufacture of, and repair to national musical instruments; renovation and conservation of museums, national cultural houses and cultural and artistic schools. 39. Construction of national tourism areas, eco-tourism areas; construction of cultural parks including sports areas and entertainment areas. VII. Development of traditional trades 40. Formulation and development of traditional trades in relation to production of fine-art and handicraft products; processing of agricultural products and food; production of cultural products. VIII. Other production or service sectors 41. Provision of the Internet connection, access and application services, and establishment of telephone booths in regions included in Appendix B issued together with this Decree. 42. Development of means of public transportation including: development of ships and airplanes, means of railroad transportation, automobiles of 24 seats or more for transportation of passengers by land; modern and high-sped boats for transportation of passengers by river; container ships, ocean-going vessels. 43. Projects for relocation of production establishments out of inner cities. 44. Construction of type-i markets and exhibition areas. 45. Production of children s toys. 46. Projects for raising capital and lending capital by People s credit funds. 47. Legal consultancy; consultancy on intellectual property and technology transfer. 48. Production of various types of materials for pesticides. 49. Production of basic chemicals, purified chemicals, specialised chemicals and dyes. 50. Production of materials for cleansers, and additives for the chemical industry. 51. Production of paper, cardboard, artificial planks directly from sources of agricultural and forestry materials at home; production of paper-pulp. 52. Weaving fabric, completing textile products; producing silk and fibres of various kinds; tanning and semi-processing of hides. 53. Investment projects in industrial zones, established under a decision of the Prime Minister. 84

85 APPENDIX 2: LIST OF GEOGRAPHICAL REGIONS OF INVESTMENT INCENTIVES No Province Regions with specially difficult socio-economic conditions 1 Bac Kan All districts and towns 2 Cao Bang All districts and towns 3 Ha Giang All districts and towns 4 Lai Chau All districts and towns 5 Son La All districts and towns 6 Dien Bien All districts and Dien Bien city 7 Lao Cai All districts Lao Cai city 8 Tuyen Quang Na Hang and Chiem Hoa districts 9 Bac Giang Son Dong district 10 Hoa Binh Da Bac and Mai Chau districts 11 Lang Son 12 Phu Tho Binh Gia, Dinh Lap, Cao Loc, Loc Binh, Trang Dinh, Van Lang and Van Quan districts Thanh Son and Yen Lap districts 13 Thai Nguyen Vo Nhai and Dinh Hoa districts 14 Yen Bai 15 Quang Ninh 16 Hai Phong 17 Ha Nam 18 Nam Dinh 19 Thai Binh 20 Ninh Binh 21 Thanh Hoa 22 Nghe An Luc Yen, Mu Cang Chai and Tram Tau districts Ba Che and Binh Lieu districts, Co To island district, and other islands and isles of the province Island districts of Bach Long Vy and Cat Hai Muong Lat, Quan Hoa, Ba Thuoc, Lang Chanh, Thuong Xuan, Cam Thuy, Ngoc Lac, Nhu Thanh and Nhu Xuan districts Ky Son, Tuong Duong, Con Cuong, Que Phong, Quy Hop, 85 Regions with difficult socioeconomic conditions Ham Yen, Son Duong and Yen Son districts, and Tuyen Quang town Luc Ngan, Luc Nam,Yen The and Hiep Hoa districts Kim Boi, Ky Son, Luong Son, Lac Thuy, Tan Lac, Cao Phong, Lac Son and Yen Thuy districts Bac Son, Chi Lang and Huu Lung districts Doan Hung. Ha Hoa, Phu Ninh, Song Thao, Thanh Ba, Tam Nong and Thanh Thuy districts Dai Tu, Pho Yen, Phu Luong, Phu Binh and Dong Hy districts Tran Yen, Van Chan, Van Yen and Yen Binh districts, and Nghia Lo town Cam Pha district Ly Nhan and Thanh Liem districts Giao Thuy, Xuan Truong, Hai Hau and Nghia Hung districts Thai Thuy and Tien Hai districts Nho Quan, Gia Vien, Kim Son, Tam Diep and Yen Mo districts Thach Thanh and Nong Cong districts Tan Ky, Nghia Dan and Thanh Chuong districts

86 No 23 Ha Tinh Province 24 Quang Binh 25 Quang Tri Regions with specially difficult socio-economic conditions Quy Chau and Anh Son districts Huong Khe, Huong Son and Vu Quang districts Tuyen Hoa, Minh Hoa and Bo Trach districts Huong Hoa and Dac Krong districts 26 Thua Thien Hue A Luoi district 27 Da Nang Hoang Sa island district 28 Quang Nam Dong Giang, Tay Giang, Nam Giang, Phuoc Son, Bac Tra My, Nam Tra My, Hiep Duc, Tien Phuoc, Nui Thanh districts, and Cu Lao Cham island Ba To, Tra Bong, Son Tay, 29 Quang Ngai Son Ha, Minh Long, Binh Son and Tay Tra districts, and Ly Son island district An Lao, Vinh Thanh, Van 30 Binh Dinh Canh, Phu Cat and Tay Son districts 31 Phu Yen Song Hinh, Dong Xuan, Son Hoa and Phu Hoa districts Khanh Vinh and Khanh Son 32 Khanh Hoa districts, Truong Son island district, and other islands 33 Ninh Thuan All districts 86 Regions with difficult socioeconomic conditions Duc Tho, Ky Anh, Nghi Xuan, Thach Ha, Cam Xuyen and Can Loc districts The remaining districts except Tuyen Hoa, Minh Hoa and Bo Trach districts The remaining districts except Huong Hoa and Dac Krong districts Phong Dien, Nam Dong, Quang Dien, Huong Tra, Phu Loc and Phu Vang districts Dai Loc and Duy Xuyen districts Nghia Hanh and Son Tinh districts Hoai An and Phu My districts Song Cau, Tuy Hoa and Tuy An districts Van Ninh, Dien Khanh and Ninh Hoa districts, Cam Ranh town 34 Binh Thuan Phu Quy island district Bac Binh, Tuy Phong, Duc Linh, Tanh Linh, Ham Thuan Bac and Ham Thuan Nam ditricts 35 Dac Lac All districts 36 Gia Lai All districts and town 37 Kon Tum All districts and town 38 Dak Nong All districts 39 Lam Dong All districts Bao Loc town 40 Ba Ria Vung Tau Con Dao island district Tan thanh district 41 Tay Ninh 42 Binh Phuoc 43 Long An Tan Bien, Tan Chau, Chau Thanh and Ben Cau districts Loc Ninh, Bu Dang and Bu Dop districts The remaining districts except Tan Bien, Tan Chau, Chau Thanh and Ben Cau districts Dong Phu, Binh Long, Phuoc Long and Chon Thanh districts Duc Hue, Moc Hoa, Tan Thanh, Duc Hoa, Vinh Hung and Tan Hung districts 44 Tien Giang Go Cong Dong and Go Cong

87 No Province Regions with specially difficult socio-economic conditions Tan Phuoc district Regions with difficult socioeconomic conditions Tay districts 45 Ben Tre 46 Tra Vinh 47 Dong Thap Thanh Phu, Ba Tri and Binh Dai districts Chau Thanh and Tra Cu districts Hong Ngu, Tan Hong, Tam Nong and Thap Muoi districts The remaining districts except Thanh Phu, Ba Tri and Binh Dai districts Cau Ngang, Cau Ke and Tieu Can districts The remaining districts except Hong Ngu, Tan Hong, Tam Nong and Thap Muoi districts 48 Vinh Long Tra On district 49 Soc Trang All districts Soc Trang town 50 Hau Giang All districts Vi Thanh town 51 An Giang An Phu, Tri Ton, Thoai Son, Tan Chau and Tinh Bien districts The remaining districts except An Phu, Tri Ton, Thoai Son, Tan Chau and Tinh Bien districts 52 Bac Lieu All districts Bac Lieu town 53 Ca Mau All districts Ca Mau city 54 Kien Giang All districts, and islands and isles of the province Ha Tien town, Rach Gia town High-tech zones and economic Industrial zones and export 55 Other regions zones entitled to incentives, processing zones established established under a decision under a decision of the Prime of the Prime Minister Minister 87

88 APPENDIX 3: USEFUL CONTACTS AND ADDRESSES IN VIETNAM Government agencies of Vietnam ORGANIZATION WEBSITE ADDRESS TEL FAX Government of Vietnam 16 Le Hong Phong, Ba Dinh, Ha Noi Ministry of Planning and 6 B Hoang Dieu, Ba Investment Dinh, Ha Noi Ministry of Finance 28 Tran Hung Dao, Hoan Kiem, Ha Noi Ministry of Foreign 1 Ton That Dam, Ba Affairs Dinh, Ha Noi Ministry of Industry and 54 Hai Ba Trung, Ba Trade Dinh. Ha Noi Ministry of Information and Communications 18 Nguyen Du, Ha Noi Ministry of Construction 37 Le Dai Hanh, Ha Noi Ministry of Education and Training 49 Dai Co Viet, Ha Noi Ministry of Science and 39 Tran Hung Dao, Ha Technology Noi Ministry of Transport 80 Tran Hung Dao, Ha Noi Ministry of Labour, Invalids and Social 12 Ngo Quyen, Ha Noi Affairs Ministry of Natural Resources and Environment Ministry of Culture, Sports and Tourism Ministry of Health Ministry of Agriculture and Rural Development State Bank of Vietnam General Department of Taxation General Department of Customs Directorate for Standards and Quality National Office of Intellectual Property Nguyen Chi Thanh, Dong Da, Ha Noi 55 To Hien Thanh, Hai Ba Trung, Ha Noi 138A Giang Vo, Ba Dinh, Ha Noi 2 Ngoc Ha, Ba Dinh, Ha Noi 49 Ly Thai To, Hoan Kiem, Ha Noi Lo Duc, Ha Noi Nguyen Van Cu, Long Bien, Ha Noi 8 Hoang Quoc Viet, Nghia Do, Cau Giay, Ha Noi 384 Nguyen Trai, Thanh Xuan, Ha Noi

89 Representative agencies of Vietnam in Germany ORGANIZATION WEBSITE ADDRESS TEL FAX Embassy of Vietnam in Germany Consulate General of Vietnam in Frankfurt Trade Office of Vietnam in Germany Elsen str Berlin, Germany Kennedy-Allee 49, Frankfurt am Main, Germany Rosa Luxemburg St. 7, Berlin, Germany Trade Promotion and Foreign Investment Agencies of Vietnam ORGANIZATION WEBSITE ADDRESS TEL FAX Foreign Investment Agency (FIA) Department of Economic Zone Management Investment Promotion Centre for North Vietnam Investment Promotion Centre for Central Vietnam Investment Promotion Centre for Southern Vietnam Vietnam Trade Promotion Agency B Hoang Dieu, Ba Dinh, Hanoi 6B Hoang Dieu, Ba Dinh, Hanoi 65 Van Mieu Road, Hanoi 102 Quang Trung Street, Da Nang 178 Nguyen Dinh Chieu Street, Ho Chi Minh City 20 Ly Thuong Kiet, Ha Noi Departments o Planning and Investment () and Management Boards of Industrial Zones, Export Processing Zones, Economic Zones, Hi-tech Zones (IZ/EPZ/EZ/HT) in Vietnam No. PROVINCE ORGANIZATION ADDRESS TEL FAX 16 Cat Linh - Dong Da IZs/EPZs MB 7 floors building, Mo Lao residence, Mo Lao ward, Hanoi Ha Dong First floor, Building 17T7, Hoa Lac HTZ MB Trung Hoa - Nhan Chinh, Hoang Dao Thuy str., Thanh Xuan 2. Hai Phong 1 Dinh Tien Hoang, Hong Bang EZ MB 24 Cu Chinh Lan, Hong Bang Quang Ninh Nguyen Van Cu, Ha Long city

90 No. PROVINCE ORGANIZATION ADDRESS TEL FAX EZ MB 2 Nguyen Van Cu, Ha Long city Hai Duong 58 Quang Trung, Hai Duong city IZs MB 2 Thanh Nien str., Hai Duong city Chua Chuong, Hien Hung Yen Nam, Hung Yen IZs MB Pho Noi, My Hao district Cao Bang Xuan Truong str. Hop Giang, Cao Bang town Bac Can 9, Truong Trinh, Bac Kan town IZs MB Group 7, Cho Moi town, Cho Moi district Lang Son No 2 Hoang Van Thu, Chi Lang, Lang Son town Ha Giang 156 Tran Hung Dao, Ha Giang town IZs MB Group 13, Nguyen Trai ward, Ha Giang town Tran Hung Dao str., Minh Xuan, Tuyen Quang Tuyen Quang town IZs MB 177 Tran Hung Dao, Tuyen Quang town , Nha Trang, Trung Vuong ward, Thai Nguyen Thai Nguyen city IZs MB Tan Quang commune, Song Cong town Dien Bien 900, 7/5 str., Dien Bien city Lai Chau Tan Phong ward, Lai Châu town Son La Khau Ca str., Son La town Lao Cai 266 Hoang Lien str., Kim Tan, Lao Cai town Yen Bai Yen Ninh str., Dong Tam, Yen Bai city IZs MB 118 Tran Phu, Dong Tam ward, Yen Bai city Tran Hung Dao str., Hoa Binh town Hoa Binh 3 B Tran Hung Dao, IZs MB Phuong Lam ward, Hoa Binh town Tran Phu str., Tan Dan, Viet Tri city Phu Tho 40/4, Gia Cam ward, Viet IZs MB Tri city Vinh Phuc IZs MB 20. Bac Giang No 40, Nguyen Trai str., Vinh Yen town Nguyen Trai str., Vinh Yen town Nguyen Gia Thieu str., Bac Giang town

91 No. PROVINCE ORGANIZATION ADDRESS TEL FAX 21. Bac Ninh 22. Ha Nam 23. Thai Binh 24. Nam Dinh 25. Ninh Binh 26. Thanh Hoa 27. Nghe An 28. Ha Tinh 29. Quang Binh 30. Quang Tri 31. Thua Thien Hue 32. Da Nang 33. Quang Nam 34. Quang Ngai IZs MB Dinh Tram IZ, Viet Yen district No 6 Ly Thai To str., Suoi Hoa ward, Bac Ninh town IZs MB 10 Phu Dong Thien Vuong str., Bac Ninh town Tran Phu, Phu Ly town IZs MB 209, Le Hoan, Quang Trung ward, Phu Ly town Hai Ba Trung, Thai Binh city IZs MB Ngo Gia Kham str., Phuc Khanh IZ, Thai Binh city Han Thuyen, Nam Dinh city IZs MB Km 105, Highway No. 10, Loc Vuong ward, Nam Dinh city 15 Le Hong Phong, Ninh Binh town IZs MB 10 Le Hong Phong, Ninh Binh town B Le Loi str., Lam Son ward, Thanh Hoa city Nghi Son EZ MB Truc Lam commune, Tinh Gia district Truong Thi, Vinh city Dong Nam Nghe An 43 Dinh Le, Hung Phuc EZ MB ward, Vinh city Xo Viet Nghe Tinh road, Nguyen Du ward, Ha Tinh city Vung Ang EZ MB 86 Phan Dinh Phung, Ha Tinh town Quang Trung, Dong Hoi city EZ MB 317 Ly Thuong Kiet, Dong Hoi city Hung Vuong, Dong Ha town IZs MB 68 Highway No. 9, Dong Ha town Ton Duc Thang str., Hue city IZs MB 20 Nguyen Hue, Hue city Chan May - Lang Co 15 Nguyen Hue, Hue city, EZ MB Thua Thien Hue Ngo Gia Tu, Hai Chau 1 ward, Hai Chau IZs/EPZs MB 58 Nguyen Chi Thanh, Da Nang Tran Phu, Tam Ky city IZs MB 30 Hung Vuong str., Tam Ky city Chu Lai Open EZ MB An Ha - Quang Phu, An Phu ward, Tam Ky city Nguyen Nghiem, Quang Ngai city IZs MB 25 Hung Vuong, Quang

92 No. PROVINCE ORGANIZATION ADDRESS TEL FAX Ngai city 35. Binh Dinh 36. Phu Yen 37. Khanh Hoa 38. Ninh Thuan 39. Binh Thuan 40. Kon Tum 41. Gia Lai 42. Dak Lak 43. Dak Nong 44. Lam Dong Ho Chi Minh city Ba Ria Vung Tau 47. Dong Nai Van Tuong, Binh Tri Dung Quat EZ MB commune, Binh Son district 35 Le Loi str., Quy Nhon city EZ MB 65 Tay Son, Quy Nhon city A Dien Bien Phu, Tuy Hoa town Nam Phu Yen EZ MB 353 Tran Hung Dao, Tuy Hoa town Tran Phu str., Nha Trang city Van Phong EZ MB 06 Le Thanh Phuong, Nha Trang city , Road 16/4, Phan Rang - Thap Cham city IZs MB 78 Tran Phu str., Phan Rang - Thap Cham city Tran Hung Dao, Phan Thiet city IZs MB 119 Tran Hung Dao, Phan Thiet city B Tran Phu str., KonTum town IZs MB 145 Ure str., Kon Tum town Hoang Hoa Tham str., Pleiku city IZs MB 104 Le Loi, Pleiku city Le Duan str., Buon Ma Thuot city IZs MB 7 Truong Trinh, Buon Ma Thuot city March str., Gia Nghia town IZs MB 1 Le Lai, Gia Nghia town Tran Hung Dao str., Da Lat city IZs MB 39 Hung Vuong str., Da Lat city Le Thanh Ton street, district 1, HCMC IZs and EPZs MB 35 Nguyen Binh Khiem SaiGon Hi Teck Park MB IZs MB IZs MB (DIZA) str., district 1, HCMC D1 str., SaiGon Hi-Teck Park, Tan Phu ward, district 9, HCMC 01 Ho Xuan Huong str., Thang Tam ward, Vung Tau city 124 Vo Thi Sau st., Vung Tau city 2 Nguyen Van Tri str., Bien Hoa city, Dong Nai No.26, A2 Avenue, Bien Hoa IZ, Bien Hoa city

93 No. PROVINCE ORGANIZATION ADDRESS TEL FAX 48. Tay Ninh 49. Binh Duong 50. Binh Phuoc 51. Can Tho 52. Long An 53. Tien Giang 54. Vinh Long 55. Ben Tre 56. Tra Vinh 57. Hau Giang 58. Dong Thap 59. An Giang 60. Kien Giang IZs MB IZs MB VSIP MB IZs MB IZs MB IZs MB IZs MB IZs MB IZs MB IZs MB IZs MB IZs MB IZs MB IZs MB C300 CMT8 str., ward 2, Tay Ninh town Anh Binh, An Tinh, Trang Bang district Highway No. 13, Thu Dau Mot town 5 Quang Trung str., Thu Dau Mot town VSIP building, 8 Huu Nghi avenue, Thuan An Highway No. 14, Dong Xoai town Highway No.14, Dong Xoai town 61/21 Ly Tu Trong str., Ninh Kieu district, Can Tho city 105 Tran Hung Dao str., An Phu ward, Ninh Kieu district 61 Truong Dinh str., ward 1, Tan An town 65B Bao Dinh str., ward 2, Tan An town 38 Nam Ky Khoi Nghia str., My Tho city 27 Nam Ky Khoi Nghia str., My Tho city 1. Trung Nu Vuong str., ward 1, Vinh Long town 85 Trung Nu Vuong str., ward 1, Vinh Long town 28 Le Dai Hanh str., ward 3, Ben Tre town 20,3 February str., ward 3, Ben Tre town 19A Nam Ky Khoi Nghia str., Tra Vinh town 56B Nguyen Dang str., ward 6, Tra Vinh town 2 Hoa Binh str., Vi Thanh town G3/29 Road 54, Phu An residence, Cai Rang district, Can Tho city 11 Vo Truong Toan road, ward 1, Cao Lanh city 466 Nguyen Sinh Sac, ward 1, Sa Dec town 8/18 Ly Thuong Kiet, Long Xuyen city 35. Nguyen Van Cung, My Long ward, Long Xuyen city 29 Bach Dang str., Rach Gia town 531. Nguyen Trung Truc str., Vinh Thanh ward, Rach Gia town, Kien Giang

94 No. PROVINCE ORGANIZATION ADDRESS TEL FAX 61. Soc Trang 62. Bac Lieu 63. Ca Mau Phu Quoc EZ IZs MB IZs MB IZs MB 3 Bach Dang, Duong Dong town, Phu Quoc 21 Tran Hung Dao str., ward 3, Soc Trang town Km , Highway 1A, Soc Trang town Nguyen Tat Thanh str., Bac Lieu town 89 Ba Trieu str., ward 3, Bac Lieu town 93 Ly Thuong Kiet, Ca Mau city 28 Phan Ngoc Hien str., ward 2, Ca Mau city Business associations of Vietnam ORGANIZATION WEBSITE ADDRESS TEL FAX Vietnam Chamber of Commerce and Industry Viet Nam Leather and Footwear Association Viet Nam Textile and Clothing Association Viet Nam Coffee and Cocoa Association Viet Nam Timber and Forest Product Association Viet Nam Association of Seafood Exporters and Producers Viet Nam Plastics Association Viet Nam Rubber Association Handicraft And Wood Industry Association Viet Nam Fruit Association Vietnam Food Association Vietnam Cashew Association Viet Nam Pepper Association Vietnam Builiding Ceramic Association Viet Nam Electronic Industries Association Viet Nam Tourism Association Dao Duy Anh, Dong Da, Ha Noi 160 Hoang Hoa Tham, Tay Ho, Ha Noi 25 Ba Trieu, Hoan Kiem, Ha Noi Ong Ich Khiem, Ha Noi /14A, Trung Hoa, Cau Giay, Ha Noi An Phu, District 2, Ho Chi Minh City Ly Chinh Thang, district 3, Ho Chi Minh City 236 Nam Ky Khoi Nghia, district 3, Ho Chi Minh City Nguyen Cong Tru, district 1, Ho Chi Minh City 58 Nguyen Binh Khiem, distrist 1, Ho Chi Minh City 210 Nguyen Thi Minh Khai, district 3, Ho Chi Minh City 135 Pasteur Street, District 3, Ho Chi Minh City 4th Floor, 135A Pasteur, District 3, Ho Chi Minh City Lane 235 Nguyen Trai, Thanh Xuan, Hanoi B Phan Huy Chu, Ha Noi Yet Kieu, Ha Noi

95 German institutions and agencies in Vietnam ORGANIZATION WEBSITE ADDRESS TEL FAX Embassy of Germany Consulate General of Germany in HCMC Delegation of German Industry and Commerce in Vietnam (AHK Vietnam) German Business Association Vietnam GIZ Office Vietnam Germany Trade and Invest Hanoi - GTaI German Financial Development Cooperation (KfW Vietnam) 29 Tran Phu, Hanoi Nguyen Dinh Chieu, ward 6, district 3, Ho Chi Minh City Ha Noi office: 1303 Vietcombank Tower 198 Tran Quang Khai, Hanoi, Vietnam Ho Chi Minh City office: 5 th Floor, Nguyen Thi Minh Khai, district 1, Ho Chi Minh City Somerset Chancellor Court 5th Floor Nguyen Thi Minh Khai, district 1, Ho Chi Minh City 6th Floor, Hanoi Towers 49 Hai Ba Trung, Ha Noi 1303 Vietcombank Tower 198 Tran Quang Khai, Ha Noi 6th Floor, Hanoi Towers 49 Hai Ba Trung, Hanoi