ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

Thứ Tư, 17 tháng 1, 2018

Vietnamese steel makers in battle against steep US import duties

The U.S. claims Chinese steel is being processed or shipped through Vietnam to avoid heavy taxes.
The Vietnam Steel Association (VSA) is working with the Ministry of Industry and Trade to protect what Vietnamese authorities call the legitimate rights and interest of local steel producers who have been accused of tax evasion by the U.S. Department of Commerce (DOC).

The DOC said it will apply the same anti-dumping and anti-subsidy rates on corrosion-resistant and cold-rolled steel from Vietnam that it does on the Chinese equivalents if they are produced using Chinese hot-rolled steel.

Although the products receive their corrosion resistant treatment or are cold-rolled in Vietnam, the DOC agreed with claims by American producers that as much as 90 percent of the products' value originates from China, according to Reuters.

Vietnamese cold-rolled steel will face combined preliminary U.S. anti-subsidy and anti-dumping duties of 531 percent, while corrosion-resistant steel will face combined duties of 238 percent. The final duties are expected to be announced on February 16.

The DOC said that after anti-dumping duties were imposed on Chinese steel products in 2015, shipments of cold-rolled steel from Vietnam to the U.S. shot up to $295 million annually from $11 million.

Dismissing the claim, the VSA said the processing of cold-rolled steel and corrosion-resistant steel from hot-rolled steel is a substantial transformation. The process involves many stages, which creates an added value equal to 30-40 percent of the products’ value, it said.

Thus, the U.S. claim is groundless, the VSA stressed.

Nguyen Thanh Trung, CEO of Ton Dong A Corporation, argued against the decision, saying that the company mainly uses materials imported from Japan to produce steel to export to the U.S.

His company is one of four Vietnamese steel makers that have been accused of importing Chinese steel for minor processing before shipping it to the U.S.

Vietnam imported 100,000 tons of hot-rolled steel from China in the first 11 months of this year, which accounted for just 2 percent of the country’s total imports of the product during that time, according to the General Department of Customs.

Commenting on the issue, the Ministry of Industry and Trade said cold-rolled steel and corrosion-resistant steel produced in Vietnam from imported steel should be considered Vietnamese products.

According to the World Trade Organization’s rules of origin, a country is considered the origin of goods if it is where a substantial transformation to create the goods is carried out, it said.

Vietnam affirms that the production of cold-rolled steel and corrosion-resistant steel from imported hot-rolled steel is a substantial transformation, the ministry added. “Thus, there is no tax evasion as claimed by the DOC.”

Diversify markets

The U.S. decision is expected to have negative impacts on Vietnam’s steel industry, said economist Le Dang Doanh. “This is a regrettable decision for Vietnam. The country should make efforts to clarify any doubts held by the U.S., and demonstrate that the steel products it exports to the U.S. do not originate from China.”

He said local steel makers should upgrade their technology and cut production costs to make their products more competitive, while diversifying export markets.

Predicting risks in the U.S. market, some local steel makers have expanded their exports to other markets and sought alternative sources of input material.

Pham Manh Hung, CEO of steel producer Nam Kim, said his company stopped using hot-rolled steel from China after the U.S. launched a formal investigation into whether Chinese companies were shipping steel through Vietnam to avoid import tariffs late last year.

The company has increased its use of products imported from other markets such as India, South Korea and Japan, or those locally produced to avoid risks.

Vietnamese steel products are exported to more than 50 countries and territories, including ASEAN, the E.U., South Korea, India and Taiwan. The country’s steel shipment to the U.S. accounted for 13 percent of its total steel export in the first eight months of this year, lower than the ratio of 27 percent in the same period last year, said the VSA.

Vietnam earned over $2.7 billion from iron and steel exports in the first 11 months, surging 52.8 percent over the same period last year, according to the General Statistics Department.
Source: E.vnexpress

Japanese firms sound out business prospects in Vietnam

The Japan External Trade Organization (JETRO) has organized a networking event for Vietnamese and Japanese businesses in Hanoi City in order to facilitate their cooperation, the Vietnam News Agency reports.

The event was part of a JETRO project for nurturing new industries in Japan and ASEAN countries, including Vietnam, to promote cooperation in some fields such as information technology, digitalization, and Internet of Things.

More than 100 representatives of Vietnamese and Japanese enterprises took part in the event in Hanoi City last Friday.

Hironobu Kitagawa, chief representative of JETRO in Hanoi, said Vietnam is the fifth country after Thailand, Indonesia, the Philippines and Malaysia where the organization has held networking events as part of the project.

The event is aimed at creating an opportunity for companies of the two countries to cooperate with each other, he said.

Japanese startups develop various business ideas, and have the ability to assess market demand in Japan and other nations while Vietnamese counterparts have technical skills and creativity. Therefore, they will have good chances of becoming partners, he added.

Le Thai Phong, a lecturer specializing in business administration at the Foreign Trade University, said various organizations from ministries, State agencies, universities, and embassies offer their support for startups. However, a representative agency for the Vietnamese startup ecosystem has yet to exist.

Other participants also voiced their concerns over some disadvantages to the local startup ecosystem compared with its equivalents in other countries.

For example, they said, local startups spend at least US$50 and seven days registering to obtain business licenses. Meanwhile, those in other countries take around 30 minutes and pay no charge.

Besides, State and private companies in the same business environment receive different treatments for administrative procedures.

Phong stressed the Government has offered policy incentives for startups, but local authorities have still made life difficult for these companies.
Source: The Saigon Times

Chủ Nhật, 14 tháng 1, 2018

VN opens up logistics sector to foreign companies

HCMC – Foreign investors will be given the go-ahead to establish logistics companies in Vietnam, but with conditions on ownership and services, according to Government Decree 163 on logistics services which will come into force on February 20.

Foreign investors are given the green light to establish maritime shipping companies, except for domestic services.

They are required to meet some requirements such as their vessels carrying the Vietnamese flag, their captains and first vice captains being Vietnamese citizens, and the number of their foreign crewmen being less than one-third of the total on board.

Overseas investors who offer container loading and unloading services can set up their own companies, or hold a stake of below 50% in local enterprises.

Those providing goods customs clearance services can also do the aforementioned services. However, they have the right to establish a commercial presence in the form of business cooperation contract only.

Foreigners are allowed to set up companies specializing in goods shipping services by inland waterway and rail, or acquire stakes of less than 49% in local companies in the same sector.

Those active in road cargo transport can set up their own companies, but all of their drivers must be Vietnamese citizens.

According to the decree, they also must fulfill business investment requirements in line with regulations for their services. Besides, they must compensate their customers if goods become defective in their shipping process.

Statistics of the Vietnam Logistics Association indicate Vietnam has around 3,000 local companies, with 1,300 being small and medium enterprises, in the logistics sector. However, they hold a market share of a mere 25%. Meanwhile, 25 foreign companies make up the remaining proportion, mainly in international transport services.

The association said the domestic logistics sector has an annual growth rate of 15-16%. The Logistics Performance Index of the World Bank indicates that Vietnam was ranked 64th among 160 countries, and took the fourth place among ASEAN countries behind Singapore, Malaysia and Thailand in 2016.

However, logistics cost accounted for 20.8% of gross domestic product, totaling a whopping US$41.26 billion in 2016.

Source: The Saigon Times

Thứ Tư, 10 tháng 1, 2018

Foreign capital via M&A mostly flows to HCMC

HCMC – Of the total value of share acquisitions and capital contributions by foreign investors in Vietnam at US$6.19 billion near the end of last year, HCMC accounted for nearly 60%.

According to the Foreign Investment Agency, the total value picked up 45.1% against 2016 and came from more than 5,000 cases of capital contributions and buyouts from last year’s beginning to December 20. This pointed to the explosion of the merger and acquisition (M&A) market as forecast by experts and foreign investors last year.

HCMC is the venue for most of the value. Data given at a meeting on 2018 socio-economic development and budgeting plans of the HCMC government shows HCMC approved 2,276 cases in which foreign investors carried out procedures to contribute capital, buy shares and acquire stakes of domestic enterprises with total registered capital of US$3.68 billion.

While foreign capital poured via M&A deals made up only 17.25% of the total value pledged for Vietnam, the proportion in HCMC was 57.7%.

Investments via capital contribution and share buying of foreign investors have reflected foreign capital flows in M&A activities in the Vietnamese market.

According to analysts and investors, M&A is regarded as the fastest way for foreign enterprises to penetrate the domestic market.

Vietnam’s M&A market has seen many high-value transactions since 2014 and higher value over the years, with a record high of US$5.82 billion in 2016. Though the number and value of M&A transactions were seen slowing down between late 2016 and mid-2017 with the absence of big deals, the market soon recovered and rose in the second half of last year.

However, it should be noted that the above-mentioned value is not final results of the year as data of localities are not fully updated yet like Vietnam Beverage’s acquisition of over 343 million shares of Saigon Beer-Alcohol-Beverage Corporation (Sabeco) on December 18 with VND109.966 trillion (around US$4.8 billion).

If the aforementioned deal is included, total foreign capital invested via M&A of last year would be some US$11 billion, US$8.48 billion of it in HCMC.

Though more barriers need to be lifted to facilitate M&A transactions in Vietnam, many investors, experts and enterprises attending the Vietnam M&A Forum 2017 last August had the same opinion about growth potential in the coming years.

In particular, Seck Yee Chung, partner at Baker & McKenzie, said there have been improvements in terms of laws. Vietnam has taken action to create business opportunities, promote development and open the door to foreign investors.

Since July 1, 2015 when the 2014 law on investment came into effect, capital contributions and share acquisitions at Vietnamese enterprises have been busier.

Under the existing regulations, investment registration is not required for such M&A deals by foreign investors, helping them approach the Vietnamese market quickly.

In addition, this investment tendency is assisted by Vietnam’s policy to boost equitization and capital divestment at State-owned enterprises. Notably, Decree 60/2015/ND-CP raises foreign ownership at listed and public enterprises from 49% to 100%, except for enterprises active in certain conditional business areas.

Therefore, analysts believe that foreign investments via capital contribution and share buying will grow faster in the coming time.

Source: The Saigon Times

Chủ Nhật, 7 tháng 1, 2018

Govt says will halve business conditions

HCMC – The Government has issued Resolution 01 asking ministries and agencies to halve the current business conditions to improve the business environment, the Government news website reports.

At a meeting between the Government and local authorities last week, Prime Minister Nguyen Xuan Phuc hailed the Ministries of Industry-Trade, Agriculture-Rural Development and Construction for removing from one-third to half of their business conditions. However, there have been many complicated procedures.

Minister of Justice Le Thanh Long said there are 243 fields still bound by 4,284 business and investment conditions.

It is difficult for enterprises as these conditions change frequently. Some of the conditions even appear in different decrees by different ministries and agencies. For example, business conditions for food processing and trading enterprises are set by the Ministries of Industry-Trade, Agriculture-Rural Development and Health, and even provided in a law and four Government decrees.

Business and investment conditions remain troublesome, affecting market entry, competitiveness and labor productivity of local firms, and leading to harassment. Therefore, ministries and agencies should continue abolishing business conditions to facilitate business activity.

The Ministry of Justice has proposed cutting 31 legal documents with unreasonable business conditions since July 1, 2015. In 2017 alone, the ministry suggested abolishing six documents, taking the total to 26.

Minister of Planning and Investment Nguyen Chi Dung said the reduction of business conditions is aimed at boosting competition among companies. The PM has assigned ministries to continue reviewing, evaluating and removing from one-third to half of the current business conditions that are hindering business and investment activities.

However, just five ministries had complied with the PM’s order by December 22 last year. The Ministry of Industry and Trade was the first to revise and remove 675 business and investment conditions among 1,216 conditions under its management.

The Ministry of Agriculture and Rural Development also plans to amend 53 business conditions and abolish 65 others out of 345 conditions under its management. However, the ministry has not thrashed out specific amending solutions.

According to the Ministry of Planning and Investment, the Ministry of Construction has considerably streamlined business conditions. Particularly, the ministry has proposed eliminating nine fields and 89 conditions and simplifying 94 conditions out of the total 215. These proposals will be stated in a draft law amending and supplementing the Laws on Construction, Housing, Real Estate Business and Urban Planning and a draft Government decree.

Besides, the Ministry of Information and Communications has suggested amending and eliminating 51 business conditions but has yet to issue a roadmap.

The State Bank of Vietnam (SBV) proposed maintaining business conditions in the banking sector as this is a sensitive business field.

Ten other ministries and agencies have yet to make proposals for business condition reductions. Certain ministries are struggling to tell business conditions and management criteria apart, said Dung.

The Ministry of Planning and Investment proposed the PM ask the Ministries of Finance, Science-Technology, Agriculture-Rural Development, Transport, Public Security, Health, Information-Communications, Natural Resources-Environment, National Defense, Culture-Sports-Tourism, Education-Training, and Labor-Invalids-Social Affairs, and SBV to quickly simplify business and investment procedures and report results to the PM this month.

Commenting on Resolution 01, economic experts said the resolution which had been prepared carefully with extremely important contents is expected to create social and economic breakthroughs this year, an important transitional year in the five-year socio-economic development plan between 2016 and 2020.

Tran Du Lich, an economic expert, said the Government had consulted ministries, agencies and experts before the resolution came out. The Government has issued feasible action plans to maintain economic growth, stabilize the macro economy, and speed up the economic restructuring.

In addition, the resolution lists 242 specific tasks for ministries, agencies and localities.

Nguyen Dinh Cung, president of the Central Institute for Economic Management, said the Government should boost the restructuring of State-owned enterprises, the banking system and public investment, and focus on developing the logistics, tourism and agriculture sectors.

Vietnam could be optimistic about the economic outlook this year thanks to higher-than-expected results in inflation control, economic growth, export-import operations and foreign currency reserves last year, said Nguyen Tri Hieu, another economic expert.

Foreign investors can continue seeking investment opportunities in Vietnam as the Government’s reforms and policie

Source: The Saigon Times

Thứ Ba, 2 tháng 1, 2018

Nearly 127,000 enterprises set up this year

HCMC – As many as 153,307 enterprises have been established and restarted this year, including 126,859 startups and 26,448 enterprises becoming active again, according to the Business Registration Agency.

As shown in a report of the agency, registered capital of 127,000 newly established enterprises is VND1,295.9 trillion, up 15.2% in number and 45.4% in capital, with the real estate sector making up nearly one-third of fresh funds. On average, each new enterprise has VND10.2 billion in registered capital, a rise of 26.2% year-on-year.

Meanwhile, 35,276 enterprises have registered to adjust capital with VND1,869.3 trillion in total, bringing total registered capital of this year to VND3,165.2 trillion.

According to the agency, new enterprises of this year are mainly active in the areas of wholesale, retail, repair of autos and bikes with more than 45,410 enterprises (35.8%). The processing-manufacturing sector welcomes over 16,190 new enterprises (12.8%), whereas the respective figures in the construction and real estate sectors are 16,035 and nearly 5,070 units.

Though the highest number of newly established enterprises is seen in the wholesale, retail, auto and bike repair sectors, real estate reports the biggest growth rate of 62%. In addition, regarding registered capital, the real estate sector continues to record the largest amount with VND388.37 trillion, accounting for 30%, followed by wholesale, retail, repair of autos and bikes with VND198.04 trillion (15.3%), construction with VND190.82 trillion (14.7%) and processing-manufacturing with VND144.73 trillion (11.2%).

While a new real estate enterprise boasts average registered capital of VND76.7 billion, an enterprise producing and distributing power, water and gas has VND65.7 billion.

In addition, the total number of laborers registered by newly established enterprises falls 8.4% to some 1.16 million. Of these, the processing-manufacturing sector is expected to employ some 430,620 workers (37.1%).

As for nearly 26,450 enterprises resuming operation this year, the number drops by 0.9%. They mostly operate in fields of wholesale, retail and repair of autos and bikes with 10,127 units (38.3%); construction with over 4,000 units (15.1%) and processing-manufacturing with 3,394 units (12.8%).

This year also sees temporary business suspensions at 21,684 enterprises, up 8.9% against last year. Of these, there are more than 8,600 enterprises (39.7%) in wholesale, retail and repair of autos and bikes; 3,165 construction enterprises (14.6%) and nearly 2,790 processing-manufacturing enterprises (12.8%).
Besides, nearly 38,870 enterprises stop operation without registering or are performing procedures for dissolution, down 4.6%. There is also a decline of 2.9% in the number of dissolving enterprises with 12,113 units

Source: The Saigon Times

Thứ Năm, 28 tháng 12, 2017

Tax Obligations of Representative Offices in Vietnam

Foreign entities have found Vietnam as an increasing attractive destination for investment.  They could consider entering Vietnam in various forms, including setting up representative offices.
“A representative office is a dependent unit of the enterprise, having the task of representing under authorization the interests of the enterprise and protecting such interests” (Clause 2 of article 45, Law on Enterprises 2014). “Representative office shall perform the functions of liaison offices, market surveys, promotion of business opportunities for traders they represent, excluding those in which the establishment of representative offices in that field, it is stipulated in specialized legal documents” (Article 30 – Decree No.07/2016/ND-CP decree detailed regulations on establishment of representative offices or branches of foreign traders in Vietnam under Laws on Commerce).

A representative office is a dependent unit of a foreign enterprise in Vietnam, and it acts under the authorization of foreign enterprises. Representative office shall not conduct business activities therefore, the tax obligations of the representative office are limited, such as:
Firstly, as representative office does not involve profit making activity, hence there are no Value Added Tax, Corporate Income Tax, Annual Due incurred.
Secondly, representative office has to register its tax code, to deduct and pay Personal Income Tax on behalf of its employees working in the representative office or deduct and pay contractor taxes for foreign sub-contractors (if any).