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  • 1. MINISTRY OF PLANNING AND INVESTMENT OF VIETNAM FOREIGN INVESTMENT AGENCY - FIA VIETNAM INVESTMENT GUIDE 2009
  • 2. FOREWORDIn recent years, Viet Nam’s economy has benefited from its Government’s open-doorpolicy. With a stable political environment and its economic potentials, Viet Nam is anattractive destination for foreign investors.The Vietnamese Government has been endeavouring to create a favorable investmentenvironment by continuing to complete Viet Nam’s legal system and introducingimportant incentives for foreign investors.To provide an overview of the investment environment in Viet Nam, the ForeignInvestment Agency, Ministry of Planning and Investment has cooperated with Vilaf –Hong Duc and the PricewaterhouseCoopers Viet Nam to compile and issue thisguidebook.The book is divided into three main sections, the first two sections aim to provideforeign investors with an overview of Viet Nam and the economy; the third sectionprovides the legal guide for investing in Vietnam involving such matters as investmentprocedure, taxation, land, employment, foreign exchange, intellectual property, disputeresolution etc.The purpose of this book is not to provide a detailed analysis of Viet Nam’s economyor its foreign investment forms in Viet Nam, but to give a general introduction andsupply the necessary information to foreign investors who are looking at potentialopportunities of investment in the country.We believe that this will be a helpful guidebook for foreign investors in Viet Nam FOREIGN INVESTMENT AGENCY MINISTRY OF PLANNING AND INVESTMENT vi
  • 3. Why Invest in Vietnam?POPULATION• 86.5 million people (13th largest in the ECONOMIC GROWTH world) expected to grow to 100 million • Remains one of the fastest- in 2020 with an annual growth rate of growing Asian economies, with 1.2%. foreign investment a key driver of• 50% of the population is 25 years or growth. younger. • High GDP growth in recent years,• Competitive labor cost. based on the power of FDI & the• Literate & well-trained workforce. private sector.NATURAL RESOURCES SECURITY & POLITICS• Abundant mineral & natural resources. • It is widely acknowledged that• Potential in oil & gas reserves. Vietnam has a stable political and• Competitive advantage in maritime social environment. ports & marine transportation. LEGAL ENVIRONMENT • Vietnam’s legal environment hasGEOGRAPHIC LOCATION significantly improved in recent• Vietnam is located in the center of years in compliance with Southeast Asia, the fastest growing international practices. economic region in the world. GLOBAL INTEGRATION• Vietnam has a 3,260 km of coastline • As the 150th member of the and many sea ports which are ideal for World Trade Organization since international trade. January 2007, Vietnam enjoys vast opportunities for economic growth. vi
  • 4. ABBREVIATION100% FOC Wholly foreign-owned companyAALT Asset Administration and Liquidation TeamASEAN Association of Southeast Asian NationsBCC Business co-operation contractBOM Board of Management of IZs, EPZs, HTZs and EZsBOT Build-operate-transfer (including its derivative forms, BTO and BT)BT Build-transferBTO Build-transfer-operateCEPT Common Effective Preferential Tariff SchemeCIT Corporate income taxCPC Civil Proceedings CodeDOLISA Department of Labour, War Invalids and Social Affairs under a provincial People’s CommitteeDPI Department of Planning and Investment under a provincial Peoples CommitteeDTA Double Tax AgreementEIAR Environmental impact assessment reportEL Enterprise LawENT Economic needs testEPC Environment protection commitmentEPZ Export processing zoneEU European UnionEVN Vietnam Electricity GroupEZ Economic zoneFIC Foreign-invested companyFCT Foreign contractor taxFOB Free on boardHTZ High-tech zoneIL Investment LawIZ Industrial zoneJVC Joint venture companyJSC Joint stock companyLLC Limited liability companyLTT Law on Technology TransferLUR Land use rightsLURC Certificate of land use rightsMFN Most Favoured Nation vi
  • 5. MOF Ministry of FinanceMOIT Ministry of Industry and TradeMOLISA Ministry of Labour, War Invalids and Social AffairsMONRE Ministry of Natural Resources and EnvironmentMOST Ministry of Science and TechnologyMPI Ministry of Planning and InvestmentNOIP National Office of Intellectual PropertyODA Official development assistancePCT Patent Cooperation TreatyPIT Personal income taxRO Representative OfficeSBV State Bank of VietnamSCT Special consumption taxSOE State-owned enterpriseTTC Technology transfer contractUSD United States of America dollarVAS Vietnamese accounting systemVAT Value-added taxVCAD Vietnam Competition Administration DepartmentVIAC Vietnam International Arbitration CentreVND Vietnamese DongWTO World Trade Organisation vi
  • 6. TABLE OF CONTENTPART I: VIETNAM: COUNTRY AND PEOPLE .................................................... 1 1. Key facts ...................................................................................................... 1 2. Political structure ........................................................................................ 2 3. International Relations ................................................................................ 3 4. Infrastructure ............................................................................................... 4 4.1. Highway system ................................................................................ 4 4.2. Railway ............................................................................................... 5 4.3. Inland Waterways .............................................................................. 6 4.4. Ports ................................................................................................... 7 4.5. Airports and Civil Aviation ............................................................... 7 4.6. Industrial Zones, Export Processing Zones, High-Tech Zones and Economic Zones.............................................................................................. 8 5. Energy ........................................................................................................ 11 6. Telecommunications ................................................................................. 13PART II. THE ECONOMY .................................................................................. 14 1. Overview .................................................................................................... 14 2. Principal economic sectors ...................................................................... 15 3. External Trade ........................................................................................... 18 4. Foreign Direct Investment ........................................................................ 20 5. Equitization of State-owned enterprises ................................................. 22 6. Viet Nam’s WTO Accession ...................................................................... 22PART III. LEGAL GUIDE FOR INVESTING IN VIETNAM ................................. 24 I: INTRODUCTION ........................................................................................ 24 1. Overview ............................................................................................ 24 2. Licensing ........................................................................................... 24 3. Licensing Authority .......................................................................... 27 4. Corporate Forms ............................................................................... 29 5. WTO Update ...........................오류! 책갈피가 정의되어 있지 않습니다. II: TAXATION ................................................................................................. 29 1. Corporate Income Tax ...................................................................... 30 2. Capital Transfer Tax ......................................................................... 33 3. Value-Added Tax ............................................................................... 33 4. Personal Income Tax ........................................................................ 33 5. Import and Export Duties ............................................................... 37 III: LAND LAW .............................................................................................. 38 1. Land Use Rights and Land Use Right Certificate........................... 39 2. Land Lease ........................................................................................ 39 3. Land Price ......................................................................................... 41 4. Lease of Commercial Property ........................................................ 41 5. Land Clearance ................................................................................. 41 6. Sale of Apartments ........................................................................... 41 7. Lease of residential houses by foreigners ..................................... 42 IV: FOREIGN EXCHANGE AND LOANS ....................................................... 42 1. Foreign Exchange ............................................................................ 42 2. Loans................................................................................................. 45 V: EMPLOYMENT........................................................................................... 46 vi
  • 7. 1. Recruitment ....................................................................................... 46 2. Labour Contracts .............................................................................. 47 3. Termination of Employment ............................................................ 48 4. Wages, Overtime Payments, and Statutory Minimums ................. 49 5. Work Permits ..................................................................................... 50 6. Collective Labour Agreement .......................................................... 50 7. Trade Unions ..................................................................................... 50 8. Employment Funds........................................................................... 51VI: COMPETITION LAW ................................................................................ 52 1. Unfair Competition............................................................................ 52 2. Practices in Restraint of Competition ............................................. 52 3. Agreements in Restraint of Competition ........................................ 53 4. Monopolies and Market Dominance ................................................ 54 5. Economic Concentration ................................................................. 55 6. Competition Authorities ................................................................... 56VII: ENVIRONMENT ....................................................................................... 56 1. Strategic Environment Assessment Reports ................................. 56 2. Environmental Impact Assessment Report .................................... 57 3. Environmental Protection Commitment ......................................... 58VIII: INTELLECTUAL PROPERTY ............................................................ 58 1. Protection of Intellectual Property Rights in Vietnam ................... 59 2. Trademarks ....................................................................................... 61 3. Patents ............................................................................................... 62 4. Industrial designs ............................................................................. 63 5. Copyright ........................................................................................... 63 6. Transfer of Intellectual Property Rights .......................................... 64 7. Enforcement of Intellectual Property Rights .................................. 65IX: TECHNOLOGY TRANSFER ..................................................................... 66 1. General Principles ............................................................................ 67 2. Technology Transfer Contract ......................................................... 67 3. Governing Law .................................................................................. 68 4. Registration ....................................................................................... 68 5. Pricing................................................................................................ 68 6. Confidentiality ................................................................................... 69X: DISPUTE RESOLUTION ............................................................................ 69 1. Conciliation and Mediation .............................................................. 69 2. International Arbitration ................................................................... 69 3. Foreign Courts .................................................................................. 70 4. Domestic Arbitration ........................................................................ 70 5. Vietnamese Courts ........................................................................... 71 6. Enforcement Process ....................................................................... 72XI: REPRESENTATIVE OFFICE IN VIETNAM............................................... 72 1. Establishment Conditions................................................................ 72 2. Application Procedure...................................................................... 73 3. Press Announcement ....................................................................... 73 4. Licensing Authority .......................................................................... 73 5. Time Limit for Licensing and Licensing Fee .................................. 73 6. Operation ........................................................................................... 73 vi
  • 8. 7. Permitted Activities .......................................................................... 74 8. Reporting ........................................................................................... 74 9. Termination ....................................................................................... 74APPENDICES..................................................................................................... 76 APPENDIX I - SUMMARY OF WTO COMMITMENTS ................................... 76 APPENDIX II - List of major legal document relating to the business activities of foreign investors in Vietnam .................................................................... 80 APPENDIX III - LIST OF SECTORS ENTITLED TO INVESTMENT INCENTIVE 85 APPENDIX IV - List of geographical regions of investment incentives .... 91 APPENDIX V - List of conditional investment sectors applicable to foreign investors ........................................................................................................ 96 APPENDIX VI - USEFUL CONTACTS AND ADDRESSES IN VIETNAM ...... 97 vi
  • 9. PART I: VIETNAM: COUNTRY AND PEOPLE1. KEY FACTS- Official name: The Socialist Republic of Viet Nam- Capital: Hanoi- Location: Viet Nam is located in the eastern part of the Indochina peninsula, bordered by China to the North, Laos and Cambodia to the West, the East Sea and Pacific Ocean to the East and South.- Area: 331,689 square kilometers. Three quarters of the country consists of mountains and tropical forests.- Coastline: 3,260 km- Major cities: North: Ha Noi (capital), Hai Phong Centre: Hue, Da Nang, Quy Nhon South: Ho Chi Minh City, Nha Trang, Can Tho- Typography: The North consists of highlands and the Red River Delta. The South is divided into coastal lowlands, central highlands with a high plateau and the Mekong River Delta. The two “Rice baskets” are the Red River Delta (15,000 sq. km) and the Mekong River Delta (40.000 sq. km) Inland waterways: total length of 41,000km, total annual flow of 3,000 billion m3- Climate: Viet Nam is located in both tropical and temperate zones. The whole country is affected by a strong monsoon influence, with a considerable amount of sunshine and a high rate of rainfall and humidity. The average annual rainfall is around 223cm The climate is tropical in Southern and Central Viet Nam, with a wet and a dry season, and warm and humid weather all year round. In the North, there are four seasons with a distinct winter.- Natural Resource: Energy resources (oil, gas, coal and hydropower); 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.- Population: 86.5 million (2009), expected to grow to 100 million in 2020 with an annual growth rate of 1.2%.- Ethic groups: 1Vietnam Investment Guide 2009
  • 10. There are 54 ethnic groups, of which the largest are Kinh (or ethnic Vietnamese, comprising 87.17% of the population), Tay, Thai, Muong, Chinese and Khmer.- Official language: Vietnamese (for business purposes English, French, Russian, Chinese, Japanese and German are also commonly spoken)- Education and Literacy:In 2003 Vietnam’s literacy rate was 94 percent, including 95.8 percent for men and92.3 percent for women. In the 2006/2007 academic year there were 279,593 schools,12% more than in 2000/2001. In 2006/2007 more than 16 million pupils attendedprimary, lower secondary and upper secondary schools. The national average ofgraduates from upper secondary schools is 93.7%. At the same time close to 1.5million students attended the 253 public universities and colleges and 210,000 wereenrolled in the 46 non-public institutions. In comparison, in 2000, there were only800,000 students in the public and only 100,000 students in the non-publicuniversities and colleges.2. POLITICAL STRUCTUREViet Nam is a socialist country operating under the leadership of the Communist Party.A nationwide congress (“National Congress”) of Viet Nam’s Communist Party is heldevery five years to determine the country’s guiding strategies and adopt its chiefpolicies on solutions for socio-economic development. The National Congress electsthe Central Committee which in turn elects the Politburo. The last congress was heldin April 2006.National AssemblyThe National Assembly is the highest law-making body in the country. It comprisesdelegates who are elected for a five-year term from various strata of the populationincluding different ethnic groups from all around the country. The National Assemblyis both the supreme state authority and the unique legislative body and has the powerto promulgate and amend the Constitution and Laws. The National Assembly meetstwice yearly. The Standing Committee of the National Assembly is the permanentexecutive body of the National Assembly. Its principal functions are the interpretationof the Constitution, Laws and Ordinances, the control of their implementation and thesupervision of the activity of the Government, the Supreme People’s Court and theSupreme People’s Procuracy.The President of Viet NamThe President, as the Head of State, is elected by the National Assembly from itsmembers to represent Viet Nam in domestic and foreign affairs for a five-year tenure.The President has the right to proclaim Laws and Ordinances passed by the NationalAssembly and the Standing Committee. The President is the commander-in-chief ofthe armed forces and Chairman of the Council of Defence and Security. In foreignaffairs, the President has the authority to appoint ambassadors and to signinternational agreements and treaties. The President appoints and dismisses thePrime Minister and the members of the Government on the basis of resolutions of the 2Vietnam Investment Guide 2009
  • 11. National Assembly or its Standing Committee. Furthermore, the President has theright to nominate key officials such as the Chief Justice of the Supreme Court and theChief Procurator of the Supreme Procuracy, subject to the National Assembly’sapproval. The current president of Viet Nam is Mr Nguyen Minh Triet and the currentPrime Minister of Viet Nam is Mr. Nguyen Tan Dung.The GovernmentThe Government is the highest executive organ of the State. The Prime Minister is theleader of the Government. The Prime Minister is responsible for the day-to-dayoperations of the Government. The Vietnamese Government currently has 18ministries and 4 ministerial-level bodies.The People’s Councils and People’s CommitteesViet Nam has 58 provinces (*) and 5 cities directly under central authority (includingHanoi, Ho Chi Minh City, Haiphong, Da Nang, and Can Tho). Provinces aresubdivided into districts, provincial cities and municipalities. Districts are furtherdivided into communes and townships. Cities directly under the central authorities aremade up of districts. Urban districts are divided into precincts, and rural districts aremade up of communes.People’s Councils of various administrative levels are elected by the population of thelocality. People’s Councils are responsible for the supervision of the implementation ofthe laws, policies and tasks at the local level, and for taking decisions on local socio-economic development programs and budgets.People’s Committees of various levels are the executive arm of the People’s Councils.They are also local administrative authorities, and report to the People’s Councils ofthe same level. Chairmen, vice chairmen and members of the People’s Committeesare elected by People’s Councils.(*) Hanoi expansion: On 29th May 2008, the National Assembly approved theexpansion of Hanoi into the neighbouring HaTay province, Melinh district of Vinh Phucprovince, and four communes in Luong Son district of Hoa Binh province. Theexpansion took effect from 1st August 2008. With this expansion the area andpopulation of Hanoi have increased to 3,344.7 sq. km from 921.8 sq. km and 6.44million from 3.39 million, respectively.The People’s Courts and People’s ProsecutorsThe Constitution establishes a three-level judicial system comprising District Courts,Provincial Courts and the Supreme People’s Court. In addition, there is a system ofpeople’s organs of control acting as a procuracy or public prosecutor to oversee theobservance of laws by judicial bodies and to exercise the power of public prosecution.3. INTERNATIONAL RELATIONSAt present, Viet Nam has established diplomatic relations with 172 countries, and ithas economic and trading relations with about 165 countries and territories. Vietnamholds membership in 63 international organizations and over 650 non-governmentalorganizations 3Vietnam Investment Guide 2009
  • 12. Viet Nam joined the United Nations in 1977, became an official member of theAssociation of South East Asian Nations (ASEAN) in 1995, and has concluded acooperation agreement with the European Union. Relationships with multi-nationalfinancial institutions such as the World Bank (WB), the International Monetary Fund(IMF) and the Asian Development Bank (ADB) have been re-established. Viet Namhas been participating in the ASEAN Free Trade Area (“AFTA”) since 1996 andbecame a member of the Asia Pacific Economic Cooperation Forum (APEC) in 1998.Viet Nam signed the bilateral trade agreement (BTA) with the United States in 2000.Besides aspects of international trade, the BTA covers a variety of other areas,including intellectual property rights, trade in services, development of investmentrelations, business facilitation and the obligation to ensure transparency of laws andregulations. The BTA essentially constitutes a commitment by both countries to opentheir markets to each other. In October 2004, Vietnam hosted the 5th Asia-EuropeMeeting (ASEM). In November 2006, Vietnam hosted the APEC Summit. On 11January 2007 Viet Nam became an official member of the World Trade Organisation(WTO), and in January 2008 the country started a two-year term as an elected non-permanent member of the UN Security Council.4. INFRASTRUCTUREInfrastructure has always been considered a crucial element of the Vietnam’s nationaldevelopment and competitiveness. Being aware of the decisive role infrastructureplays in the country’s economic development process, the Vietnamese Governmentdetermines that for Vietnam to become a modernized industrial nation by the 2020s,infrastructure has to take a significant step forward with large-scale projects, andconsistently be developed and connected with the nation’s key economic regions.It is estimated that about VND400,000 billion (about USD25 billion) is needed for theinfrastructure development of Vietnam in the period between 2006-2010. This isequivalent to 18% of the total investment of the society. To realize this target, besidespromoting the effective use of the investments from the State budget and ODA fund,promoting the participation of the private sector in infrastructure development is also apriority of the Vietnamese Government.4.1. Highway systemVietnam has a dense road system extending over 251,786 km country-wide. The roadsystem is divided, by administrative levels, into: - National Roads (17,295km) which are administered by the central level,linking the country’s cities and provinces together as well as with Vietnam’s bordergates with neighboring countries (China, Laos and Cambodia); and - Local roads, which include Provincial Roads (23,138km) managed by theprovincial level, linking the province’s districts; District Roads (54,962km), managedby the district level, linking the district’s communes; Commune Roads (141,442km)managed by the commune level; Urban Roads (8,536km) managed by cities andtowns; and specialized roads (4,414km) used for special purposes. 4Vietnam Investment Guide 2009
  • 13. The most important road pivot in the Vietnamese road system is the North-South pivot,which includes 2 routes: the 1A National Highway and the Ho Chi Minh Highway. The1A National Highway is 2,260km in length with Lang Son province and Ca Mauprovince at its two ends running through 31 cities and provinces of Vietnam.The Ho Chi Minh Highway is to the west of the 1A National Highway, designed to be3,167km in length to connect Cao Bang province in the North with Ca Mau province inthe South. Phase 1 of the Ho Chi Minh Highway running from Hoa Lac (Ha Noi) toNgoc Hoi (Kon Tum province) with a total length of 1,234km was completed in 2005.4.2. RailwayThe rail network of Vietnam has a total length of 2,632 km of which the meter gauge(1,000mm), standard gauge (1,435mm) and mixed gauge are 2,169 km, 178 km and253 km, respectively.Vietnam Rail Network Regional Rail network:The length of Vietnam railway network and gauge are represented in the followingtable 5Vietnam Investment Guide 2009
  • 14. The length of Vietnam railway network Main routes Length Track gauge (km) Ha Noi - Ho Chi Minh 1726 1000 mm Ha Noi - Hai Phong 102 1000 mm Ha Noi - Lao Cai 296 1000 mm Ha Noi - Dong Dang 163 dual gauge (1435 &1000 mm) Ha Noi - Quan Trieu 75 dual gauge (1435 &1000 mm) Kep - Uong Bi - Ha 106 1435 mm Long Kep - Luu Xa 57 1435 mm(Source: Vietnam Railway Corporation – VRC)There are 278 stations in the rail network country-wide. The longest and mostimportant route is the Hanoi – Ho Chi Minh City line, which stretches for 1,726 km.This line is now serviced by an express train, which makes the journey inapproximately 29.5 hours.Vietnam’s railways is linked to China in two lines, one from Lao Cai province toYunnan province, and one from Lang Son province to Kwangsi province of China.Construction of the railway lines connecting with Laos and Cambodia has beenincluded in the Government’s development strategy for the Railway industry ofVietnam.4.3. Inland WaterwaysThe inland waterway system offers a cheap and flexible mode of transport. Viet Namhas more than 2,300 rivers and canals with total length of 198,000 km. Currently, theinland waterway has a system of over 61,000 km The two major inland waterwaysystems serve as major transportation outlets. The first major inland waterway systemis in the Red River area in the north which stretches for approximately 2,500 km.Along this system there are five main ports, of which Hanoi is the largest. The secondmajor inland waterway extends 4,500 km along the Mekong River and its tributaries inthe South and boasts about 30 ports, including Ho Chi Minh City.Inland waterway transport in Vietnam is very developed, and ranked the second indomestic passenger and cargo transport (especially coal, rice, sand, stone, gravel,and other usually high weight low value goods), accounting for 25-30% of totaldomestic transported volume, especially in the Mekong river delta, and reach 60-70% 6Vietnam Investment Guide 2009
  • 15. in some provinces, contributing significantly to the socio-economic development of theregion and the country.4.4. PortsVietnam has a 3,260km coastline, a strategic position close to international shippingroutes and favoured natural conditions of foundation, sea depth, current, tidal,sedimentation and channels for developing seaport business. There are currently119 seaports which are organised into 8 geographical groups:1. North: Quang Ninh to Ninh Binh2. North of Central: Thanh Hoa to Ha Tinh3. Middle of Central: Quang Binh to Quang Ngai4. South of Central: Binh Dinh to Ninh Thuan5. Ho Chi Minh City - Dong Nai - Ba Ria - Vung Tau6. Mekong Delta7. Phu Quoc8. Con Dao and international transhipment groupsIn May 2004, the government endorsed the master plan to address majorshortcomings: a lack of deep seaports, in particular, and to raise the competitivenessof local facilities to the standards of other countries in the region. Vietnam is planningto boost the development of seaports from now until 2020 to meet the increasingdemand for cargo handling and transport in the future. Some key regional ports whichrequire investment include Hai Phong and Cai Lan in the North; Nghi Son, Cua Lo,Vung Ang, Chan May in the North of Central; Da Nang, Dung Quat in the Middle ofCentral; Quy Nhon, Nha Trang, Van Phong in the South of Central; and Ho Chi MinhCity, Vung Tau and Can Tho in the South.Meanwhile, existing ports will be upgraded and some will be built in focal economiczones to accommodate vessels of more than 30,000DWT. Ports for containers, loosegoods, liquid commodities and international transhipment will also be developed.Under the plan, the maritime sector will complete the upgrading and expansion of 10key ports namely Cai Lan, Hai Phong in the North; Cua Lo, Da Nang, Dung Quat, QuyNhon, Nha Trang in the Central region; and Thi Vai, Ho Chi Minh City and Can Tho inthe South. In addition, the sector will develop key projects including the Lach HuyenSeaport in the city of Haiphong, the Lien Chieu Seaport in the central city of Da Nang,and the Cai Mep-Thi Vai Seaport in the southern province of Ba Ria-Vung Tau.4.5. Airports and Civil AviationVietnam is divided into 3 air traffic regions. There are four international airports, two inthe North (Hanoi and Dien Bien Phu), one in the centre (Da Nang) and one in theSouth, (Ho Chi Minh City) and 19 domestic airports. Six airports are located in theNorth, eight in the Centre and nine in the South.Currently, the Government has significantly upgraded international airports to handlethe increase in the volume of traffic associated with Viet Nams invigorated economy. 7Vietnam Investment Guide 2009
  • 16. A new international terminal of the Tan Son Nhat airport in Ho Chi Minh City, capableof handling up to 10 million passengers a year was opened in December 2007. NoiBai airport in Hanoi was upgraded, enlarged and completed for operation in 2002,construction of a second terminal is expected to be completed in 2010. Four newinternational airports are planned to be constructed in Phu Quoc, Dong Nai, Lao Caiand Quang Ninh provinces. Preparations are underway for the new Long ThanhInternational Airport, 40 kilometers from Ho Chi Minh City in Dong Nai province. Theairport is scheduled to open in 2010 and by 2015 it will be further expanded to reachan annual transportation capacity of 80 to 100 million passengers, becoming one ofthe biggest airports in the region.Apart from the state-owned Vietnam Airlines, three private Vietnamese airlines havereceived operational license in 2007 and 2008 (i.e. Jetstar-Pacific Airlines, VietJetAir,Indochina Airlines), and Phu Quoc Air is expected to hand in its application for alicense shortly.The government has opened-up for foreign investment in airports and airportconstruction (BOT and other models) as a necessary means to accelerate themodernisation of this important service industry.4.6. INDUSTRIAL ZONES, EXPORT PROCESSING ZONES, HIGH-TECH ZONESAND ECONOMIC ZONESIn 1991, the Vietnamese Government introduced a policy to develop these specialadministrative zones, including Industrial Zones, Export Processing Zones, High-TechZones and Economic Zones, in an effort to geographically diversify investmentlocations, to accelerate export, and to create more jobs.Since then, the “zones” system has been developed across the country, playing animportant role in attracting foreign investment to Viet Nam. There are currently over190 IZs have been licensed with 11 IZs established by 100% foreign-owned entities,19 established by joint venture enterprises, and 160 by Vietnamese enterprises. Thetotal land area available for industrial development in the zones amounted to close to29,800 hectares, almost 50% of which has been leased out. In addition, thirteeneconomic zones have also been licensed with a total area of over 270,000 hectares.The majority of investment in the zones has been in the manufacturing sector, initiallyin textile and garment, but increasingly also in other higher value added sectors suchas consumer electronics, as the recent investments from Intel, Foxconn and Nidecshow.The most important factor contributing to the success of the zones is the higherquality of infrastructure. In addition, transport and telecommunications infrastructurehas also been improved in and around the zones. Another key factor is the availabilityof land. The zones offer already cleared and registered-for-industrial-use land by thetime the investor is ready to build its factory. The Government has not only made thezones easily accessible to investors, but also offers fiscal incentives to zone investors(details are given below). Many zones also offer more expedited licensing processand consultative services that help investors prepare applications.Industrial Zone & Export Processing Zone 8Vietnam Investment Guide 2009
  • 17. Industrial Zone (“IZ”) is a zone in which enterprises specialising in the production ofindustrial goods and the provision of services for industrial production areconcentrated.Export Processing Zone (“EPZ”) is an industrial zone specialising in the production ofgoods for export and the provision of services for such production and export activities.Investment in IZs and EPZs is generally regulated by Decree No. 29/2008/ND-CP ofthe Government dated 14 March 2008 providing Regulations on Industrial Zones andExport Processing Zones (“Decree 29”).Developers of IZs and EPZs and investors operating and doing business in thesezones (collectively referred to herein as “IZs Developers,” “IZ Enterprises,” and “EPZEnterprises,” respectively) are granted the following preferential treatment:* Import duties and value-added tax: IZ Developers, IZ Enterprises and EPZEnterprises may be exempt from payment of import duties and value-added tax ongoods imported for the establishment and implementation of their investment projects.* Land use: - Incentives include preferential land rental rates, exemption from payment of land use fees for the land area allocated to the investor by the State, or, in the case of a land lease, exemption from payment of land rental for the life of the projects. - Where IZ Developers, IZ Enterprises and EPZ Enterprises pay their land rental on an annual basis, they have the right to: (i) mortgage or use as a guarantee assets attached to land; (ii) sell or contribute as capital assets attached to land; (iii) sell or lease out factories, offices and warehouse built in the IZ; and (iv) sub-lease the land area on which infrastructure facilities have been completed (please note that the right mentioned in (iv) is only applicable to IZ Developers). - Such IZ Developers, IZ Enterprises and EPZ Enterprises who pay the land rental for the entire term of their lease at once are entitled to additional rights. In particular, during the term of their land lease or sub-lease, they are permitted to: (i) assign the value of their LUR and assets attached to the land leased out to them; (ii) sub-lease LUR and assets attached to land; (iii) contribute the value of LUR and assets attached to land as capital to joint ventures; (iv) mortgage or use as a guarantee LUR and assets to credit institutions operating in Viet Nam.High-Tech Zone A High-Tech Zone is multi-function economic-technical zone with a defined boundaryestablished in accordance with a decision of the Prime Minister to conduct high-techresearch, development and applications, to nurture high-tech enterprises, to trainhigh-tech human resources and to manufacture and trade high-tech products1.1 High-tech products are defined as “products created on the basis of application of high technology”. “High technology” isdefined as “the technology integrated from achievement of advanced technology and science which has the ability to create a 9Vietnam Investment Guide 2009
  • 18. Investment in high-tech zones is subject to the Regulations on High-Tech Zones(“HTZs”) as stipulated in Decree No. 99/2003/ND/CP of the Government on 28 August2003 (“Decree 99”) and Decision 53/2004/QD/TTg of the Government dated 5 April2004.The Vietnamese government strongly encourages investment in the following high-tech sectors:Information technology, communications, and computer software technology; - Bio-technology serving agricultural, aquaculture and medical sectors; - Microelectronic, fine mechanical, mechanical-electronic, optical-electronic and automatic technologies; - New material technology and new energy technology; and - Other special technologies.Under the applicable laws of Viet Nam, foreign and domestic investors operating anddoing business in HTZs and foreign and Vietnamese individuals working forinvestment projects in HTZs are entitled to the following preferential treatment: - CIT: newly-established projects in HTZs are entitled to: (i) the preferential CIT rate of 10% for 15 years; (ii) a 4-year CIT exemption beginning from the year taxable income is earned; and (iii) a 50% CIT reduction for the following 9 years. - Land use: A uniform land lease pricing applies to both foreign and domestic investors in HTZs. Exemptions of land rent may be granted to those investors of projects on research and development of technology or on high-level skills training in science and technology. During the term of leasing or sub-leasing land, investors are allowed to sub-lease, assign and mortgage land use rights and assets attached to their leased land plots to credit institutions operating in Viet Nam. - Housing: Favourable conditions may be made available to the investors and workers in HTZs in terms of their housing and residence. - Visas: Multiple-entry visas with a term compatible with the term of employment are issued to foreign individuals and overseas Vietnamese who invest or work in HTZs. - Credit assistance: The Development Assistance Fund of Viet Nam is ready to extend medium or long-term credit with soft interest rates and issue loan guarantees to Vietnamese manufacturers in HTZs. In addition, all investors directly exporting their products may be entitled to an export credit assistance and an export award. - Additional incentives may be granted to the investors in “especially important projects.”sudden increase in labour productivity, features, quality and added value of products, to form new production or serviceindustries with high socio-economic effectiveness,a great effect on socio-economic development and national defence and security.” 10Vietnam Investment Guide 2009
  • 19. Economic ZoneAn Economic Zone (“EZ”) is a zone that has an economic area separate from thegeneral investment and business environment and with especially favourableconditions for investors.An EZ is an identified geographical zone with privileges regarding the investmentenvironment, preferential stable policies, and flexible management, creating the bestconditions for the business activities of the domestic and foreign investor.Investment in EZs is currently regulated by Decree 108 and special Decision issuedby the Prime Minister.Developers of EZs and investors operating and doing business in these zones(collectively referred to herein as “EZs Developers” and “EZ Enterprises”) are grantedthe following preferential treatment: - CIT: newly-established projects in EZs are entitled to: (i) the preferentialCIT rate of 10% for 15 years; (ii) a 4-year CIT exemption beginning from the yeartaxable income is earned; and (iii) a 50% CIT reduction for the following 9 years. - Import duties and value-added tax: EZ Developers and EZ Enterprises areentitled, for a term of 5 years from the commencement of their operations, to: (i) anexemption from payment of import duties on materials, equipment, components andsemi- products that have not yet been produced domestically and that must beimported for the purpose of production within the EZ.Import and export duties are not levied upon the following imports and exports: (i) Goods imported from abroad to a non-tariff area; (ii) Goods exported from a non-tariff area abroad; (iii) Goods transferred from or sold by a non-tariff area to an EPZ or any enterprise; and (iv) Goods not subject to export duty, with Vietnamese origin, and transported into a non-tariff area.* VAT: Goods produced and services provided in non-tariff areas and goods importedand services provided from abroad to non-tariff areas are exempt from VAT.* Special sales tax (“SST”): Goods produced and services provided in non-tariff areasand goods imported and services provided from abroad to non-tariff areas are exemptfrom SST (except for certain types goods or services).5. ENERGYVietnam is a net energy exporter, and is expected to remain such for the foreseeablefuture. The country is endowed with offshore oil and gas resources in the south, coalin the north, and hydroelectric power resources in the mountains running from north tosouth along the countrys western regions. Hydro power accounts for close to 40% ofthe electricity generating capacity of Viet Nam. Gas fired turbines generate around37% of electricity and coal accounts for 11%. The remaining needs are met by variousoil fuelled plants and also by imports. In line with further industrialization and 11Vietnam Investment Guide 2009
  • 20. electrification, growth in demand is likely to remain very strong and accordingly thegovernment has set high priority for significant investments in the sector. While theelectricity industry is currently run by the state owned Electricity of Viet NamCorporation (“EVN”), foreign companies have entered the market in the form of Build-Operate-Transfer (BOT) projects. Other players such as Vinacomin, Petrovietnamhave recently entered the power production market. Furthermore, the Electricity Lawof 2004 envisages a competitive market in the future and draft roadmaps indicatecompetition to the wholesale market could be introduced possibly in 2014.Electricity output in 2006 reached 59 billion kWh with Foreign Invested Enterprisesaccounting for 5.6%. The EVN aims to generate about 70-78 billion KWh in 2010 andas high as 167-201 billion kWh in 2020. Achieving this goal requires the developmentof approximately 32 to 37 new power generation projects, totalling 12,400 MW incapacity, including up to 20 hydroelectric plants with 4,000 MW capacity; eight gas oroil power plants (5,200 MW), and seven coal-fired plants (3,200 MW). Implementationof these projects also requires the construction of about 15,000 km of 110 – 500kVtransmission lines, together with 300,000 km of low medium and low voltagedistribution lines. In order to achieve the above targets, the annual power growthduring 2000-2020 should achieve 8.8% to 10% to keep pace with the annual GDPgrowth of 6.6% to 8%. The annual investment required to achieve the set target isestimated to be US$1.5 to US$2 billion per year. Over the last few years, an array oflarge capacity power plants were built and put into operation, such as Pha Lai ThermoPower Plant with capacity of 440MW, Tri An Hydroelectric with a capacity of 400MWand Hoa Binh Hydroelectric Power Plant with a capacity of 1,920 MW. Build-Operate-Transfer (BOT) projects are also in operation including the 715-MW Phu My 2-2 plantcommencing operations in January 2003 and the similar capacity Phu My 3 Plant thatcommenced operations in March 2004. These plants in Ba Ria Vung Tau are fuelledby gas from the Nam Con Son Basin. Further large power plants are underconstruction or to be constructed, such as the Ca Mau gas fired power complex with acapacity of 1,500 MW, O Mon gas fired power complex with a capacity of 2,640 MWYaly Hydroelectric with capacity of 720 MW, Mong Duong coal fired Power Complexwith capacity of over 2,000 MW. In addition, a 3,600 MW hydropower complex at SonLa in the North is also under construction.Furthermore, Viet Nam plans to complete its first nuclear power plant by 2020 as analternative means on meeting electricity demand. The primary sources of finance forinvestment in the power sector are from Official Development Assistance (ODA)grants and loans committed by such international donors as the World Bank (WB), theAsian Development Bank (ADB), bilateral funds from various foreign governments,and funds from the Vietnamese Government. Other crucial sources of finance overthe next decade include foreign suppliers’ credits and EVN’s retained earnings. In therecent years, a number of domestic investors have entered the power productionmarket such as Vinacomin focussing on small size coal fired power plant with capacityof below 600 MW (e.g. Uong Bi, Mong Duong 1, Son Dong, Cam Pha 2, Na Duong)and PetroVietnam focusing on gas fired power plant (e.g. Ca Mau 1 & 2, Nhon Trach1&2). Local commercial banks have been active in providing finance for powergeneration projects developed by EVN and other state-owned enterprises. Viet Nam 12Vietnam Investment Guide 2009
  • 21. has signed up for a US$165 million loan from the WB and the ADB to finance therehabilitation of the electricity transmission and distribution systems in Ho Chi MinhCity, Hanoi, Nha Trang and Hue. Soft loans and aid from foreign governments arealso being spent to improve the system.Additionally, Viet Nam has great potential of renewable energy, and its consumption ison the rise. Under the solar power cooperation program between France and VietNam, a solar station was installed in Ho Chi Minh City to provide electricity for theprovinces Gia Lai, Quang Nam, and Binh Phuoc.6. TELECOMMUNICATIONSViet Nam has made great strides in upgrading its telecommunications systems. In thelast six years, the annual growth of the telecommunication market in Viet Namreached 30%. To date, Vietnam has achieved more than 30 phones per 100 peoplewith 19 million mobile subscribers. The Government’s relaxation with regard tointernational calls made over the internet and the spread of mobile phonesubscriptions have further improved the telecommunications landscape, especially inrural areas. Internet usage has also rapidly risen and by the end of 2008 there wereover an estimated 21.5 million users. The bigger growth is seen in the mobile sectorand wireless networks. Viettel is the largest mobile service provider in Vietnam. Thesecond largest provider is MobiFone followed by Vinaphone. Both MobiFone andVinaphone are VNPT subsidiaries. Other service providers are S-Fone, EVN Telecomand Ha Noi Telecom.The table below illustrates the rapid development.Vietnam’s demand for IT and Telecommunications is expected to continue to increaseover the next 5 years in line with continued growth in disposable incomes. Entry to theWorld Trade Organisation (WTO) in January 2007 has provided the industry withmore private competition which will increase the number of actors in the market. Thismakes telecommunications and technology services cheaper and moreaccessible. The government has already promised to lower telecoms charges andInternet access fees in the country by 2010. The government is also planning toupgrade the country’s information, communications and technology (ICT)infrastructure. Furthermore, the government is trying to break the virtual monopoly ofthe state-owned telecoms company, Vietnam National Post and Telecommunications 13Vietnam Investment Guide 2009
  • 22. (VNPT), by licensing other state-owned and joint-stock telecommunications’ firms andto partly privatise some of VNPT’s market leading subsidiaries. Currently, foreign firmsare allowed to own 51 % of the shares in Vietnamese telecommunications firms. In2010 this limit will be raised to 65%.Today, almost every commune in Vietnam has at least limited access to the fixed-linetelephone network, compared to less than 60 % ten years ago. The government plansto improve the quality of access through a rural telecommunications’ developmentproject that will make use of the existing Code Division Multiple Access (CDMA)network.The PC penetration rate has risen in recent years. The number of Internet users hasmore than doubled since 2005. Most people who are interested in using the Internetdo so through Internet cafés, which are common in urban areas. The number ofInternet users is expected to continue to rise and the government hopes that around25%-30 % will use the Internet by 2010PART II. THE ECONOMY1. OVERVIEWViet Nam has undertaken a remarkable economic transformation over the past 20years. Confronted with the failure of the centrally planned economy, which had beenput in place after the country’s reunification in 1975, the Government of Viet Namlaunched the “Doi Moi” (“Renovation”) initiative in 1986. Doi Moi sought to reviveeconomic growth and development by starting a gradual transition from centralplanning to a market-based economy, and by progressively integrating into the worldeconomy. Reforms under Doi Moi have gradually removed the dominance of thepublic sector in the economy and allowed private investment and initiative. Keymeasures include the transfer of agricultural land from large State-owned farms tohousehold farms, price liberalization and private ownership in industry and commerce.Viet Nam also started reforming its State-owned enterprises (SOEs) and graduallyopened to foreign direct investment (FDI).Helped by a strong culture of entrepreneurship and high literacy rates, the economyresponded strongly and rapidly to Doi Moi. The private sector took off at once from avirtually non-existent base. To date, there are about 240,000 registered national 14Vietnam Investment Guide 2009
  • 23. private companies. The Vietnamese non-State sector represented approximately 45per cent of Vietnam’s GDP, compared with 40 per cent for the State sector and 15 percent for the foreign-invested sector.As a result of Doi Moi and the development of the private sector, annual real grossdomestic product (GDP) growth averaged 6.8 per cent in the period 1986–2006, withrelatively little volatility and moderate inflation. Viet Nam has become one of thefastest-growing economies in the world, averaging around 8.4% annual grossdomestic product (GDP) growth from 1990-1997, 7.5% from 2000 to 2006, and 8.5%in 2007. The economy grew by a multiple of 10 from the late-1980s to 2006, reaching$61 billion and making Viet Nam the 58th largest economy in the world, up from 76thin 1986. In addition to growing rapidly, the economy also diversified significantly. In1990, agriculture represented over 30 per cent of GDP; by 2006 it had declined tounder 19 per cent. In contrast, industry increased from 25 per cent to 41 per cent overthe same period, creating a large number of jobs in the industrial sector (see belowfigure).The economic transformation and high growth rates have been accompanied byunprecedented progress in poverty reduction. The poverty rate plunged from 58 percent in 1993 to 37.4 per cent in 1998 and 19.5 per cent in 2004. Similarly, the WorldBank estimates that the population living with less than $1 a day was only 2 per centof the total in 2002. It also estimates per capita GDP on a parity of purchasing power(PPP) basis at $3,384 in 2006, up from $941 in 1990.2. PRINCIPAL ECONOMIC SECTORSGDP Growth Rate by Economic Sectors (%) 15Vietnam Investment Guide 2009
  • 24. 200 200 200 200 200 2000 2002 2005 2007 1 3 4 6 8 8.4 GDP 6.7 6.8 7.0 7.3 7.6 8.4 8.23 6.18 8 Agriculture, 3.4 4.0 aquaculture, forestry 4.0 2.7 4.1 3.6 3.5 4.0 3.69 1 7 & fishery Industry & 10. 10. 10. 10.3 10. 10.4 9.4 10.6 6.11 construction 1 4 2 8 6 8.6 7.1 Services 5.6 6.1 6.5 6.4 7.4 7.5 8.29 8 8Source: General Statistics OfficeAgriculture/aquaculture – as one of the bases for Viet Nams socio-economicdevelopment, this industry has continued to maintain its stable growth rate of over3.8% annually over the past five years. This has helped contribute to the maintenanceof socio-economic stability and the provision of improved support to the hungereradication, poverty alleviation and employment generation programs. The cropstructure has also changed and agricultural productivity has increased in manyregions. In recent years aquaculture has increased rapidly, and in 2008 accounted for23.63% of the total value of agricultural/aquacultural production. Export income fromaquatic products has also been increasing considerably, reaching USD 4.6 billion in2008.Industry - Difficulties and challenges in the industrial sector have been overcome,bringing about positive results. The industrial growth rate averaged 17% over the lastfive years. In 2007, industrial production value increased by 17.1%, with a growth ratein private businesses of 20.9%. This is attributed to the encouraging policies andpositive impacts of the former Enterprise Law. Production capacity has risen inseveral industries, resulting in increased exports. The industrial structure has changedconsiderably, by 2007, manufacturing accounted for 87.6% of industrial production, ofwhich the food processing industry accounted for 20.6%. Power supply anddistribution (5.2%) and water supply (0.4%) accounted for 5.6%. mining and quarrying,particularly the extraction of oil and gas accounted for 6.8% of the total value ofindustrial production.Industrial growth (% increase on 1994 price) Total By ownership 16Vietnam Investment Guide 2009
  • 25. State Non-state FDI 1996 14.2 11.6 11.5 21.7 1997 13.8 10.8 9.5 23.2 1998 12.5 7.7 7.5 24.4 1999 11.6 5.4 10.9 21.0 2000 17.5 13.2 19.2 21.8 2001 14.6 12.7 21.5 12.6 2002 14.8 12.5 18.3 15.2 2003 16.8 11.9 23.3 18.0 2004 16.6 11.9 22.3 17.4 2005 17.2 8.7 24.1 20.9 2006 17 9.1 23.9 18.8 2007 17.1 10.3 20.9 18.2 2008 14.6 4 18.8 18.6Source: General Statistics OfficeServices - The services sector has maintained its operations despite variousdifficulties, and has still improved its quality, meeting the demands of economicgrowth and the people. Trade has increased relatively well. Markets are more openand transparent with the participation of all economic sectors. Business methods havebecome more diversified, and there has been an annual average increase of about20.1% in total retail sales. Further progress has been recorded in the tourism industry.Numerous tourist attractions have been built, upgraded or renovated, and the types oftourism have diversified, resulting in a continuous increase in tourism revenue. Inaddition to business conferences, very notably Viet Nam hosted the APEC summit inNovember 2006. International arrivals in 2007 were estimated at 4.23 million, up by18% against 2006. Generally, transport services are meeting the basic demands ofcargo and passenger transportation. However in certain parts of the country roadcongestion is an increasing problem. Floods and other natural disasters also causedifficulties from time to time. The physical infrastructure of the transport sector hasimproved in recent years, albeit trailing the rate of economic growth. Moreachievements are expected in the next few years with improved roads and portfacilities. Post and telecommunications services have developed rapidly. The basic 17Vietnam Investment Guide 2009
  • 26. telecommunications network has been modernised. During 2008, the number oftelephone subscribers grew by 27.6 million reaching over 79.4 million. The mobilesector is particularly vibrant with a number of ambitious local companies competing forsubscribers. The insurance services market has grown rapidly with the participation ofstate-owned, joint-stock, joint-venture and wholly foreign-owned companies. Totalpremiums increased more than five times from approximately USD 190 million in 2000.Non life premiums in 2007 were USD 522 million, 30% higher than in 2006 and lifepremiums at USD 600 million were 12% higher. Total premiums representapproximately 1.5% of GDP and the government targets 4.2% by 2010. Currently,there are 37 businesses from all economic sectors operating in the insurance sector,of which 8 cover life insurance, 1 composite, 21 non-life and 8 in brokerage. Inaddition, there are approximately 30 representative offices of foreign insurancecompanies operating in Viet Nam. As of January 1, 2008, pursuant to the nationsWTO commitments, foreign insurers are allowed to provide compulsory insuranceproducts.In 2007, the total value of services increased by 8.7%. The total revenue from theretail sale of domestic goods and services increased by 23.3% compared to 2006,with private domestic business accounting for 85%, foreign invested enterprisesaccounting for 4.1% of turnover and State Owned Enterprises for 10.9%.3. EXTERNAL TRADEDuring the 2002-2008 period, total export revenue increased by 23.8% per year. Boththe composition and quality of exports have improved significantly. The proportion ofindustrial products has risen considerably. The five biggest export categories are oil,textiles, footwear, seafood and wood products. During the same period, total importshave increased by 25.5% per year.Exports reached US$62.9 billion in 2008, an increase of 29.5% compared to 2007.However, due to considerable imports of equipment and materials used for theindustrialisation and modernisation process, and for foreign investment projects, thetrade deficit has increased over the past three years. Imports in 2008 reachedUS$ 80.4 billion. Trade relations with foreign countries, especially other countries inthe region, have expanded. In 2008, the biggest regions and countries buying fromViet Nam were America US$ 11.6 billion, ASEAN US$ 10.2 billion, the EuropeanUnion US$ 10 billion, and Japan US$ 8.8 billion.Figure 1:Export, Import and Trade deficit 18Vietnam Investment Guide 2009
  • 27. 90000 80000 70000 60000 50000 Export 40000 Import 30000 Trade deficit 20000 10000 0 -10000 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20Figure 2: Major economic indicators 35% 30% 25% 20% 15% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 GDP Growth rate (%) Inflation (%) Export growth rate (%) 19Vietnam Investment Guide 2009
  • 28. Figure 3: Top 10 export markets of Vietnam in 2008 and prior year comparables 2008 2007 2006 14,000 12,000 10,000 USD Million 8,000 6,000 4,000 2,000 0 USA Japan China Australia Singapore Germany Malaysia Philippines Korea UKFigure 4: The Top 10 import markets of Vietnam in 2008 and prior yearcomparables 2008 2007 2006 18,000 16,000 14,000 12,000 USD million 10,000 8,000 6,000 4,000 2,000 0 China Singapore Taiw an Japan Korea Thailand USA Hongkong Malaysia India4. FOREIGN DIRECT INVESTMENTSince the introduction of the Law on Foreign Investment in 1987, leaving asideprojects which have expired or been withdrawn, by the end of 2008, there have beenover 9,800 active licensed projects with a total registered capital of close toUS$ 149.8 billion. To date, investors from 84 countries and territories have committedinvestments in Viet Nam. Asia accounts for 69.8%, Europe 16.7%, and America 6% ofthe total FDI, with other areas totaling 7.5%. Taiwan, Malaysia, Japan, Republic ofKorea and Singapore are the top five countries and territories investing in Vietnam,accounting for 61% of the licensed projects with a total investment capital account of57.8% of the total foreign investment capital of Viet Nam. The next five countries andterritories are British Virgin Islands, Hongkong, Thailand, Canada and Brunei 20Vietnam Investment Guide 2009
  • 29. Darussalam. These “top ten” countries and territories account for over three quartersof the total licensed projects and foreign registered capital in Viet Nam.Figure 5: FDI Flow into Viet Nam in the period 1988-2008 To tal investment Disbursement No . of project 64 ,0 0 0 1800 60,000 1600 50,000 1400 1200 No. of project 40,000 US$ million 1000 30,000 800 21,3 4 7 600 20,000 8,0 3 6 11,50 0 400 10,000 200 0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Since 1996 there has been a tendency towards investment in producing goods forexport, infrastructure construction, producing import substitutes and in labour-intensive industries. There are more than 6,303 projects in the manufacturing andconstruction industries with a total capital of about US$87,7 billion, accounting for58.6% of the registered capital.While there are foreign invested projects in most provinces and cities in Viet Nam,most investment has been in the key economic areas in the South including Ho ChiMinh City, Dong Nai, Binh Duong, Ba Ria, Vung Tau, and in the North including Hanoi,Hai Duong, Hai Phong and Quang Ninh.Particular focus has been in Hanoi and Ho Chi Minh City which have more developedinfrastructure, higher purchasing power and a more skilled labour force. With thedevelopment of the first oil refinery in Dung Quat and the implementation of aneffective investment promotion policy, Da Nang is becoming a new key economicarea – the third link in an emerging economic triangle.In recent years there has also been an increase in 100% foreign owned projects.These projects now account for 77% of the total licensed projects and 58.5% of theregistered capital, while joint venture enterprises make up 20% and 34% respectively.There are also 9 licensed foreign invested BOT projects in Viet Nam (water supplyand electricity plants) with a total registered capital of US$1.75 billion. The foreign invested sector has seen rapid growth, gradually asserting itself as adynamic component of the economy, and has made an important contribution toenhancing the competitiveness and efficiency of the economy. In 2008, the foreign 21Vietnam Investment Guide 2009
  • 30. invested sector has accounted for 29.8% of the countrys total investment, 40.2% ofindustrial output, 40% of the national export, and 22% (2007) of the GDP of Viet Nam.5. EQUITIZATION OF STATE-OWNED ENTERPRISESSince the undertaking of Doi Moi initiative, together with encouraging national privateinvestment and progressively opening the economy to foreign investors, theGovernment of Viet Nam has pursued its reform program for the State-ownedEnterprises (SOEs) with an aim to improve their productivity and efficiency. Thereform has been conducted in three phases (restructure, renovate and develop)through the implementation of 4 key measures:(i) reform of SOE management;(ii) reorganise and reinforce state owned general corporations;(iii) SOE equitisations;(iv) Transferring, contracting, leasing and selling of SOEs.The equitization process, which consists of transforming SOEs into shareholdingcompanies and selling part or all of the capital to employees and/or private investors,was initiated in 1991.To date, over 3,800 SOEs has been equitised accounting for25% of the state-owned capital and 70% of the total SOEs in the list to be equitized.There are now 1,720 wholly state-owned enterprises (100% SOEs) including 7Groups, 86 General Corporations, 4 state-owned commercial banks2 and over 1,000independent SOEs.Since 2005, the equitisation is not only limited to small and medium SOEs, but alsocovers large General Corporations. It is estimated that the remaining 2,000 SOEs stillaccount for 40% of GDP and over 50% of tax revenue. It is planned that 70 stateowned general corporations are to be equitised over the period 2007 to 2011.Particularly notetable are the equitisation of the National Insurance Corporation (BaoViet) in July 2007 and Vietcombank in December 2007. Other General Corporationsand State Owned Commercial Banks which have been or will be equitised includebeer companies Sabeco (Saigon Beer–Alcohol–Beverage JSC) and Habeco (HanoiBeer–Alcohol–Beverage JSC), Vinatex (Vietnam National Textile Garment Group),Mobifone (Vietnam Mobile Telecom Services Company), BIDV and Vietinbank.6. VIET NAM’S WTO ACCESSIONViet Nam officially joined the WTO on 7 November 2006 and put the commitmentsinto effect on 11 January 2007. A summary of the WTO commitments is attached atthe end of this book.In the commodities market, Vietnam pledged to maintain the average level for all(10,600) tariffs and, on average, reduce tariffs from the current level of 17.4 % to13.4% within five to seven years. The average tariff level for agricultural productswould decrease from the current level of 23.5% to 20.9% within about five years. Withregard to industrial products, the average level would drop from 16.8% to 12.6%2 Bank for Investment and Development of Vietnam (BIDV), Vietnam Bank for Industry and Trade (VietinBank), Vietnam Bank forAgriculture and Rural Development (AgriBank) and Mekong Housing Bank (MHB). 22Vietnam Investment Guide 2009
  • 31. within five to seven years. In the services sectors, Vietnam has committed to open 11out of 12 services categories, including 110 sub-categories, in conformity with WTOregulations. These include several important services such as: business services,telecommunications, distribution, insurance, banking, stock exchange, transportation,health service, education, culture and the environment. Besides, Vietnam alsocommits to follow the WTO’s strict requirements in transparency, includingtransparency in the formulation process and enforcement of legal documents as wellas of the conditions and procedures for investment licensing.One of the most important positive influences for Vietnam after joining the WTO is thedrive this created for the government to continue to improve the businessenvironment and increase foreign investment. This is a clear signal that the WTOentry has provided Vietnam with motivation to further socio-economic development.Despite the short time, the business environment has improved as confirmed by theinternational community and partly shown in some global reports like the Word Bankreport on business environment. Owing to the improvement in business environmentand legal system, Vietnam has had two years of impressive FDI inflows in 2007 and2008. In addition, exports also saw a very impressive growth of over 20% in 2007 and2008. 23Vietnam Investment Guide 2009
  • 32. PART III. LEGAL GUIDE FOR INVESTING IN VIETNAMI: INTRODUCTIONOn 1 July 2006, the investment regime comprised of a unified Enterprise Law (“EL”),which regulates corporations, and a common Investment Law (“IL”), which regulatesinvestment, came into effect. The promulgation of these two important legislations isconsidered a significant watershed for improvement of the legal environment oninvestment activities and corporate governance in Vietnam.1. OverviewTo do business under the IL and EL, foreign investors are required to obtaininvestment certificates from an appropriate Licensing Authority.Under the IL, investors may invest in all sectors not prohibited by law. Areasprohibited 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. LicensingInvestors must follow the licensing and registration steps depending on the size andthe sector of the investment project.Conditional sectors: In common with all countries, Vietnam reserves its sovereign rightto restrict foreign investment in sensitive fields, namely the “conditional sectors”.Investment projects in conditional sectors must satisfy certain conditions in order to belicensed. 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. 24Vietnam Investment Guide 2009
  • 33. • Catching of aquaculture. • Production of tobacco. • Real estate business. • Import, export and distribution business. • Education and training. • Hospitals and clinics. • Other investment sectors in international treaties of which Vietnam is a member and which restrict the opening of the market to foreign investors.Most importantly for foreign investors, “conditional sectors” also include all“investment fields under international treaties to which Vietnam is a membercommitting to limited market access to foreign investors”. For example, this covers themarket access roadmaps contained in Vietnam’s WTO accession package.For business sectors that are made “conditional” by international commitments,Decree No. 108/2006/ND-CP dated 22 September 2006 of the Government, whichimplements certain provisions of the IL (“Decree 108”), provides that the applicablerequirements are those specified in the treaty or other agreement relating tointernational commitments. For example, under WTO commitments, investors fromWTO member countries are permitted to establish engineering firms in Vietnam on thecondition that for 02 years after the date of Vietnam’s accession, 100% foreign-ownedcompanies may only provide such services to other foreign investment enterprises inVietnam.For sectors which are declared conditional but are not mentioned in internationalagreements, investors must look at domestic laws to find the applicable conditions.For example, the relevant conditions for investment in “real estate business” arecontained in the Law on Real Estate Business.Level 1 (Business Registration): Domestic enterprises with an invested capital of lessthan VND15 billion that do not operate in the conditional sectors are only subject to“business registration”. Business Registration Domestic investment projects with invested capital of less than VND15 billion 25Vietnam Investment Guide 2009
  • 34. Level 2 (Investment Registration): Foreign investment projects with a total investedcapital of less than VND300 billion not falling in a conditional sector are subject to“investment registration” and foreign investors of such projects must carry out theprocedures for investment registration in order to be granted an investment certificate.The investment certificate also serves as the business registration of the corporateentity.Domestic investment projects with a total invested capital from VND15 billion to lessthan VND300 billion are also subject to “investment registration”. Subject to a requestof the local investor, the Licensing Authority will issue an investment certificate tosuch investor.Enterprises can subsequently register additional investment projects without the needto create a separate entity. Investment Registration Investment Domestic Certificate investment projects with total invested capital from Foreign VND15 to less investment than VND300 projects with total billion invested capital of less than VND300 billionThe procedure for “investment registration” is set out in Decree 108. According toDecree 108, the investor must submit application documents for investmentregistration to the Licensing Authority. The Licensing Authority shall check thedocuments and issue the investment certificate to the investors within 15 workingdays of receiving the valid application.Level 3 (Investment Evaluation): Any investment project with a total invested capital ofVND300 billion or more or investment projects falling in conditional sectors mustundergo “an investment evaluation” by the Licensing Authority and other relevantauthorities. 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. 26Vietnam Investment Guide 2009
  • 35. For the evaluation of investment projects with total invested capital of VND 300 billionor more, along with the application documents, the applicant must also 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, andtechnological and environmental solutions of the investment project.For the evaluation of investment projects falling in conditional sectors, in addition tothe application documents, the investor must also demonstrate compliance withrequirements specific to that conditional sector.When assessing the application documents, the Licensing Authority may liaise withother 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 IL stipulates that 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, theabove time-limit may be extended, but not beyond forty five (45) days. Investment Evaluation Foreign and domestic Foreign and domestic investment projects investment projects with regardless of total total invested capital of invested capital falling VND300 billion or more in conditional sectors not falling in conditional sectors3. Licensing Authority3.1 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 BOT projects are licensed by the Ministry of Planning and Investment (“MPI”).3.3 The Provincial People’s Committee is the authority responsible for all other foreign investments. Licensing applications shall be submitted to these bodies, 27Vietnam Investment Guide 2009
  • 36. 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:(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; - 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.In cases where the investment projects stipulated above are included in the masterplan approved by the Prime Minister (or by an entity authorized by him) and satisfythe conditions in accordance with the laws of Vietnam and international treaties towhich Vietnam is a member, the Licensing Authority will issue an investmentcertificate to the investor without making a submission to the Prime Minister fordeciding an investment policy.In cases where the investment projects stipulated above are not included in themaster plan approved by the Prime Minister (or by an entity authorized by him) or donot satisfy conditions in international treaties to which Vietnam is a member, theLicensing Authority will obtain opinions from the relevant Ministries, MPI and other 28Vietnam Investment Guide 2009
  • 37. relevant bodies in order to collate and submit them to the Prime Minister for hisdecision on investment policy.In cases where the investment projects stipulated above are in a sector for whichthere is no master plan yet, the Licensing Authority will obtain opinions from therelevant Ministries, MPI and other relevant bodies in order to collate and submit themto the Prime Minister for his decision on investment policy.4. Forms of InvestmentUnder the “Law on Investment” and the “Law on Enterprises” foreign investors maychoose the following forms of investment in Viet Nam:a) Business cooperation contractA contractual BCC entails a written contract between a foreign investor and aVietnamese party to jointly conduct one or more business projects in Viet Nam, basedon mutual allocation of responsibilities and the sharing of production, profits or losses,without creating a separate legal entity. The contract should stipulate the terms andconditions for the business as well as the rights and obligations of each party.b) Limited Liability CompanyLimited Liability Company, which is currently the standard form of investment forforeign investors in Viet Nam, is a legal entity. The liability of the company and theMembers is limited to the amount of capital registered and displayed in the businessregistration certificate as charter capital.A LLC may be established by one or more Members, which may be individuals ororganizations. The maximum number of Members is limited by law to a maximum offifty. Members generally share profits and losses in accordance with their capitalcontributions.c) Shareholding Company/Joint Stock CompanyA shareholding company, also known as joint stock company (JSC), must have aminimum of three shareholders and has legal entity status. The company may issuesecurities (debt and equity) to the public in accordance with legislation on securities,but is not required to be listed at a stock market. The shares may be freely assignedto other persons except for preferred shares as for example voting preference shares.Shareholders are liable for debts and other liabilities of the company within theamount of capital that they contributed.d) PartnershipA partnership is defined as an enterprise with at least two partners with unlimitedliability. Additionally partners with limited liability can be incorporated. As the term 29Vietnam Investment Guide 2009
  • 38. suggests, unlimited liability partners are liable for the obligations of the partnershipwith all of their personal assets, limited liability partners are only liable up to the extentof their capital contribution. A partnership is prohibited from issuing securities of anytype. From the day of issuance of the Business Registration Certificate thepartnership shall enjoy legal entity statuse) Private Enterprise/Sole proprietorshipA private enterprise is an economic organization owned by an individual above theage of 18 being liable for all activities of the enterprise to the extent of all his or herpersonal assets.II: TAXATIONThe following taxes may affect foreign-invested projects and foreigners working inVietnam:• Corporate Income Tax;• Capital Transfer Tax;• Value-Added Tax; and• Personal Income Tax.1. Corporate Income Tax1.1 CIT ratesWith effect from 1 January 2009, the new Law on CIT introduces a standard CIT rateof 25% (as opposed to 28% previously applicable to FICs and foreign parties toBCCs) for both local enterprises operating under the Law on Enterprises and FICs,including foreign parties to BCCs. FICs and foreign parties to BCCs which obtainedinvestment licences or certificates before 1 January 2009 will continue to enjoy thepreferential tax incentives as stipulated in their investment licence or certificate.Preferential ratesOther than the standard rate, preferential rates of 10% and 20% apply to a number ofinvestment projects which satisfy certain conditions such as investment in certainfields of business and/or encouraged geographical locations. Specifically:(a) CIT at 10% for 15 years: The preferential tax rate applies to newly-established FICs from investment projects in areas with specially difficult socio-economic conditions as listed in the Appendix issued with Decree No.124/2008/ND-CP dated 11 December 2008 (“Decree 124”) and in EZs and HTZs or newly-established FICs from investment projects in the sectors of (i) high-tech; scientific research and technological development; (ii) investment in development of water plants, power plants and water supply systems; in bridges, roads and railways; in airports, seaports and river-ports; in air fields, stations and other specially 30Vietnam Investment Guide 2009
  • 39. important infrastructure works as decided by the Prime Minister of the Government; and (iii) computer software products (the “Sectors”).(b) CIT at 10% for up to 30 years In the case of newly-established FICs from investment projects in the Sectors which are on a large scale, with high-tech or new tech and which have a special need to attract investment, the duration of applicability of the preferential tax rate may be extended but the total duration shall not exceed 30 years.(c) CIT at 10% for the whole operational period The preferential tax rate applies during the whole operational period to that part of income of any enterprise operating in the sectors of education and training, occupational or vocational training, medical health care, culture, sport and the environment (“Socialization Sectors”).(d) CIT at 20% for 10 years The preferential tax rate applies to newly-established FICs from investment projects in areas with difficult socio-economic conditions as listed in the Appendix of Decree 124.The duration of applicability of the preferential tax rates is calculated consecutivelyfrom the first year in which the enterprise has turnover from the activity or operationentitled to the preferential tax rate. After the stated preferential tax rate expires, thenormal CIT of 25% will be applicable for the remaining years of the relevant project.With respect to oil and gas or rare and precious mineral exploitation projects, the CITrate, subject to various conditions, ranges between 32% and 50%. A specific rate forthese types of projects will be determined by the Prime Minister at the proposal ofMOF.1.2 CIT exemptions and reductionsIn addition to preferential CIT rates, FICs and foreign parties to BCCs may enjoy CITexemption between 02 to 04 years and a 50% reduction in CIT between 04 to 09years subsequently. Specifically:(a) Newly-established FICs from investment projects in (i) areas with specially difficult socio-economic conditions as listed in the Appendix of Decree 124, (ii) EZs and HTZs, and (iii) the Sectors are exempted from CIT for a period of 04 years and are entitled to a 50% reduction of the amount of CIT payable for a period of 09 subsequent years.(b) Newly-established FICs in the Socialization Sectors operating in areas other than areas with difficult or especially difficult socio-economic conditions as listed in the Appendix of Decree 124 are exempted from CIT for a period of 04 years and are entitled to a 50% reduction of the amount of CIT payable for a period of 05 subsequent years.(c) Newly-established FICs from investment projects in areas with difficult socio- economic conditions as listed in the Appendix of Decree 124 are exempted from 31Vietnam Investment Guide 2009
  • 40. CIT for a period of 02 years and are entitled to a 50% reduction of the amount of CIT payable for a period of 04 subsequent years. The duration of tax exemption and reduction is calculated consecutively from the first year in which the FIC has taxable income from an investment project. If an FIC does not have taxable income in the first three years as from the first year in which it has turnover from an investment project, then the duration of tax exemption and reduction is calculated from the fourth year. The table below summarises the CIT preferential rates, exemptions and reductions: 50% CIT reductionCIT Period CIT when CIT CriteriaRate applicable exemption* exemption period expired* Newly established enterprises in: Locations: with specially difficult socio- 15 years from the 9 years economic conditions; Economic Zones, first year of revenue High Tech Zone established under PM’s (5 years for newly- generation decision established enterprises in the Sectors: high technology, scientific research Socialization 15 years from the10% and technology development, 4 years Sectors operating in first year of revenue investment in development of specially areas other than generation important areas with difficult (maximum 30 years infrastructure facilities of the State; or specially difficult at PM’s approval) production of software products. socio-economic conditions) Enterprise operating in the field of socialization During the whole (education – training, occupational training, operation period health care, culture, sport and the environment) 10 years from the Newly established enterprise in areas of difficult first year of revenue 2 years 4 years socio-economic conditions generation20% Agricultural service cooperatives and people’s During the whole N/A N/A credit fund operation period Standard rate for all projects except for projects in the field of oil and gas or rare and precious25% N/A N/A N/A mineral exploitation, which are subject to 32- 50% CIT rates 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. 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 32 Vietnam Investment Guide 2009
  • 41. from taxable income. Losses may be carried forward for a maximum period of 05consecutive years as from the year following the year in which the loss arose.Carrying-back of losses is not permitted.1.4 Profit remittance taxFrom 01 January 2004, profits derived from foreign investments in Vietnam have notbeen subject to profit remittance tax when remitted out of Vietnam.2. Capital Transfer TaxThe tax rate applied to capital transfer is 25% and 20% of the assessable income withrespect to corporations and individual tax residents, respectively, and 0.1% of thetransfer price with respect to individual non-tax residents.Upon obtaining the amendment to the investment certificate, the transferor is requiredto register the transfer of capital with the tax authority.3. Value-Added TaxValue-Added Tax (“VAT”) applies to the supply of goods and services for use inproduction, business or consumption in Vietnam. VAT is calculated on thesale/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% isapplicable to most goods and services; 5% for a number of encouraged goods andservices; and 0% for exported ones and international transportation. Certain goodsand services are exempt from VAT, e.g., unprocessed agricultural products sold bythe producer, certain insurance services and certain imported equipment. Thedifference between being subject to VAT at 0% and being exempt from VAT is that, inthe former case, the input VAT can be claimed from the tax authority.VAT exemptionsForeign-invested projects shall be exempt from VAT with respect to the followingimported 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.4. Personal Income TaxOn 21 November 2007, the National Assembly of Vietnam passed the new Law onPersonal Income Tax (“PIT”), which comes into force on 01 January 2009. The 33Vietnam Investment Guide 2009
  • 42. Government issued Decree No. 100/2008/ND-CP dated 8 September 2008 (“Decree100”) and MOF issued Circular No. 84/2008/TT-BTC dated 30 September 2008(“Circular 84”) for providing guidance on the Law on Personal Income Tax.4.1 TaxpayersUnder the new Law on Personal Income Tax, taxpayers include tax residents andnon-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 deductionsExempt 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 34Vietnam Investment Guide 2009
  • 43. humanitarian purpose.Family deductions:Under the new PIT regime, sums called as “family deductions” may be deducted fromthe taxable business incomes and employment incomes of tax residents prior to theassessment of tax. Family deductions include:• Personal deduction of VND4 million/month (approx. USD240.00/month); and• Dependent deduction of VND1.6 million (approx. USD100.00/dependent/month).Under Circular 84, a dependent means a person that a taxpayer has obligations tofeed up or support, including (a) infant or offspring being handicapped or incapable towork, and (b) individuals having no income or having incomes not exceedingVND500,000/month (approx. USD31.00/month) including offspring studying inuniversities, colleges, high schools or technical and vocational schools; spouse who isincapable of working; parents over the working age or incapable of working; and otherpersons directly reared or cared for by taxpayers who are over the working age, orwithin the working age but is disabled, with no residence.There is no limit on the number of dependent reported by each taxpayer but eachdependent must be reported once by taxpayers.Other deductions:Taxpayers can claim deductions from their business incomes and employmentincomes for the compulsory contributions of Social Insurance, Health Insurance,professional indemnity insurances, and other statutory insurances.Furthermore, donations to licensed charity organizations including humanitarian fundsand study encouragement funds established and operating under Decree No.148/2007/ND-CP dated 25 September 2007 may also be deducted from businessincomes 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 tobusiness income and employment income are as follows:Exchange rate: USD1=approx. VND17,000 Portion of Annual Portion of Annual Tax Assessable Income Assessable Income Tax Rate Bracket (%) (million VND) (million VND) 1 Up to 60 Up to 5 5 2 Over 60 to 120 Over 5 to 10 10 3 Over 120 to 216 Over 10 to 18 15 4 Over 216 to 384 Over 18 to 32 20 35Vietnam Investment Guide 2009
  • 44. 5 Over 384 to 624 Over 32 to 52 25 6 Over 624 to 960 Over 52 to 80 30 7 Over 960 Over 80 35(b) Flat tax rates for other taxable income Tax Rate Assessable Income (%) Capital investment, royalties 5 Franchise, interests and dividends 5 Inheritances 10 Winning or prizes, gifts 10 Capital transfer 20 Gains transfer of securities 20 Value transfer of securities (Gains are unable to be determined) 0.1 Gains on transfer of immovable properties 25 Value transfer of immovable properties (Gains are unable to be 2 determined)4.4 PIT rates applicable to non-tax residentsFlat tax rates are applicable to non-tax residents as follows: Tax Rate Income Items (%) 1. Business income (on turnover arising from provision of goods & services): (a) For trading activities 1 (b) For services 5 (c) For production, construction, transportation and other business 2 activities 2. Employment income (irrespective of where the income is paid or 20 36Vietnam Investment Guide 2009
  • 45. received) 3. Capital investment (on total amount receivable from the 5 investment) 4. Capital transfer (on transfer price) 0.1 5. Transfer of immovable properties (on transfer price) 2 6. Royalty and franchise (on the portion of income exceeding VND10 5 million) 7. Prizes, inheritances and gifts (on the portion of income exceeding 10 VND10 million)5. Import and Export Duties5.1 Tax ratesExport 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% ofthe FOB price of exported goods (in accordance with Resolution 977 passed on 13December 2005 by the Standing Committee of the National Assembly). Petroleum oilis 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 in accordance with Resolution 977. Preferential rates are applied to goods imported from one of some 60 countries 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 under the CEPT and EU member countries under the Textile- Garment Treaty between Vietnam and EU. • 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 importedgoods must be accompanied by an appropriate Certificate of Origin.5.2 Import duty exemptionsFICs and parties to BCCs shall be exempted from import duty with respect to thefollowing goods, provided that: (a) they are implementing a project in an encouragedfield of business set out in Appendix I, or in a geographical location set out inAppendix II, of Decree 108 of the Government dated 22 September 2006; and (b)such goods are imported to form the fixed assets of the enterprise: 37Vietnam Investment Guide 2009
  • 46. i. equipment and machinery; ii. specialised means of transport that are used to carry materials between parts of a production line as certified by the MOST, and means of transport to be used for carrying workers (automobiles having 24 seats or more, and watercraft); iii. components, details, detachable parts, spare parts, accessories, moulds and supplements pertaining to or accompanying the equipment and machinery, and specialised means of transport as specified above; iv. raw materials and materials imported for the manufacturing of the equipment and machinery which are parts of the production line or the manufacturing of components, parts, detached devices, spare parts, installations, moulds and accessories which accompany the equipment and machinery; v. construction materials which cannot be manufactured domestically; and vi. goods and materials imported by BOT companies and contractors for the performance of BOT, BTO and BT projects.The above exemption of import duty is also applicable in the case of a projectsexpansion or replacement or renovation of technology.Under Circular 113 of the MOF dated 13 December 2005, import duty is also exempton one-off purchases of certain equipment for "encouraged investment projects" inhotels, offices, apartments for lease, residential properties, commercial centres,technical services, supermarkets, golf courses, tourist areas, sports areas, recreationand entertainment parks, health-care facilities, training centres, cultural, finance,banking, insurance, auditing and consulting services. This equipment is specified inAppendix III of Decree 149 of the Government dated 8 December 2005.Projects that fall under the list of projects in which investment is especiallyencouraged are entitled to exemption of import duty for the raw materials used forproduction for a period of 5 years from the commencement of production.In addition, goods and products imported in a number of circumstances also enjoyimport duty exemption.5.3 Approval for import duty exempted itemsBased on the investment certificate, the feasibility study and the technical design of aproject, the MOIT or an agency authorised by it will approve the list of import dutyexempted goods.The imported goods mentioned above must not be assigned or sold in theVietnamese market except as approved by the MOIT. Otherwise the relevant taxesmust be paid in accordance with laws.III: LAND LAWThe Land Law was passed by the National Assembly of Vietnam on 06 November2003, effective as of 01 July 2004 (the “Land Law”). The Land Law is in the processof being amended in 2009. 38Vietnam Investment Guide 2009
  • 47. 1. Land Use Rights and Land Use Right CertificatePrivate ownership of land is not permitted in Vietnam and the people hold allownership rights with the State as the administrator. However, the laws of Vietnamallow ownership of a right to use land. This right is called the Land Use Right (“LUR”).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.• 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 localVietnamese partner contribute LUR as capital contribution, or (b) by way of landleased directly from certain permitted lessors such as the State.2. Land LeaseA foreign investor may lease the land directly from the Government after he/sheestablishes an FIC in Vietnam.Lessors permitted to lease land to FICsPreviously, FICs in Vietnam could only lease land from the Government or subleaseland from an infrastructure developer. In addition to these lessors, Articles 93.3 of thecurrent Land Law has allowed FICs, which are set up by foreign investors in Vietnam,to lease land from:• Vietnamese economic organisations (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. Theone exception where the land obtained by the lessor under the “lease” regime can besubleased to FICs is when, in accordance with Article 111.1(dd) of the Land Law:• 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 39Vietnam Investment Guide 2009
  • 48. It is a matter of practice that Joint Ventures in Vietnam have local partners contributetheir portion of capital in the form of the LUR value. In this case, the local partner’sland payment must not be sourced directly from the State budget.Under the Land Law, the Vietnamese party to a Joint Venture may make capitalcontributions 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” hasbeen made. Where the land usage fee payment is deferred, the contribution of theLUR into foreign investment projects is still permissible as far as the deferment isallowed in writing by the relevant Peoples 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 to a JointVenture. This exception requires the two conditions as explained above to be satisfiedin accordance with Article 111.1(dd) of the Land Law.After the Joint Venture is incorporated as a result of the issuance of the investmentcertificate by the Licensing Authority, the LURC will be issued to and in the name ofthe Joint Venture.Lease termThe lease term must be consistent with the duration of the approved project providedthat 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 thelessee 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 sounder Decree 181. Foreign investors must apply for an extension 06 months beforeexpiration of their LURs and include in their applications an amended business orproduction plan approved by the relevant authorities.Rights of foreign investors to the land leasedThe LUR of foreign investors shall vary depending on the payment arrangement ofland rentals. Where land is being leased from the Government, the Land Lawcontemplates 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 andis not allowed to transfer, sub-lease, or mortgage the LUR.In addition to the LUR given under the Annual Arrangement regime, FICs adopting theOne-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); 40Vietnam Investment Guide 2009
  • 49. • 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.3. Land PriceLand Price is determined in three ways:(i) by the relevant People’s Committee;(ii) via auction; or(iii) by land users upon transfer/lease, sublease of LURs, or contribution of LURs as capital.(i) 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 Peoples 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.4. Lease of Commercial PropertyAs an alternative to leasing a piece of land, service or software companies mayconsider leasing an office in a commercial building. The procedure for leasing such anoffice is comparatively simple and is not subject to any approval by Vietnameseauthorities.Another alternative is to lease an office or factory from another company located in anIZ or EPZ.5. Land ClearanceUnder the Land Law, foreign organisations and individuals and overseas Vietnameseinvesting in Vietnam are not required to pay compensation and assistance for theresettlement of residents. However, if these have been paid in advance, it will bededucted from the relevant rental.The State will take charge of site clearance and compensation to displaced land userswhen withdrawing land for use by foreign organisations and individuals and overseasVietnamese. Foreign investors may enter negotiations directly with the current landusers regarding site clearance and compensation.6. Sale of ApartmentsUnder the law, potential buyers of real estate projects include the following:(a) Local Vietnamese individuals and organizations;(b) Overseas Vietnamese who satisfy legal requirements under the laws to purchase apartments/houses in Vietnam; 41Vietnam Investment Guide 2009
  • 50. (c) From 01 January 2009, 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) foreigners who have direct investments in Vietnam or holding management position in a company operating in Vietnam; (ii) foreigners who have made contribution to Vietnam and such contribution has been recognized by the President or the Prime Minister of Vietnam; (iii) 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; (iv) foreigners married to Vietnamese citizens; (v) 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 yearsand foreign companies are permitted to own apartments for a term equal to the termrecorded in its investment certificate.7. Lease of residential houses by foreignersCurrently, not every foreigner or foreign entity entering Vietnam is entitled to leaseresidential houses or apartments. According to Article 131 of the Law on ResidentialHousing, only the following are eligible to lease residential houses in Vietnam:(a) Foreign organizations and individuals who are allowed to enter Vietnam for a period of at least 03 consecutive months;(b) Vietnamese residing overseas who currently reside in Vietnam and have a need to lease a residential house.IV: FOREIGN EXCHANGE AND LOANS1. Foreign ExchangeWhile the Government is responsible for the macro-economic foreign exchangepolicies, the State Bank of Viet Nam (SBV) is responsible for regulating andimplementing those policies and for overseeing currency transactions to ensure itscompliance with relevant guidelines. A significant step forward in State managementon foreign exchange is the adoption of the Foreign Exchange Ordinance (the“Ordinance”). The Ordinance was passed by the Standing Committee of the NationalAssembly on 13 December 2005 with the expectation that this legislation will regulatethe high level foreign exchange market in Vietnam and will satisfy the conditions forthe countrys integration into the WTO. The Ordinance became effective on 1 June2006.1.1 Bank AccountsAccounts in Vietnam 42Vietnam Investment Guide 2009
  • 51. All FICs and foreign parties to BCCs must open a capital account3 with an authorizedbank in Vietnam to monitor the flow of capital in foreign currency into and out ofVietnam. Therefore, certain transfers of capital (e.g., transfer of capital/equity, profitsor off-shore loans) must be effected through this capital account.In addition to the capital account, FICs and foreign parties to BCCs can open otherforeign currency and VND accounts at other banks in Vietnam.Accounts outside VietnamThe opening and operation of offshore accounts must be approved by the SBV. FICsare allowed to open offshore accounts in certain special circumstances. For example,the opening of offshore accounts by BOT companies in Vietnam for securitypurposes as required under financing agreements or for the remittance of equity.1.2 ConversionAll FICs and foreign parties to BCCs are entitled to buy foreign currency for currenttransactions and other permitted transactions in accordance with the foreignexchange regulations.Not being required to obtain approval for conversion, the ability of FICs and foreignparties to BCCs to convert VND into foreign currency is only subject to foreigncurrency being available from banks.Government guaranteeThe Government shall support foreign exchange balancing in cases where authorizedcredit institutions are not able to satisfy the demand for foreign currency of investorswith respect to a number of important projects in the sectors of Energy; Wastetreatment; and Construction of traffic infrastructure.Conversion purposesUnder the Ordinance, all residents are entitled to buy foreign currency to meet theirpayment requirements for legitimate purposes, subject to the selling banksverification.In the territory of Vietnam, all transactions being payments and remittance of moneyrelating to current transactions of residents and non-residents shall be conductedfreely in compliance with relevant regulations. According to Decree 160 dated 28December 2006 implementing the Ordinance (“Decree 160”), payment for currenttransactions includes the following: (i) repayment of principal, interest and fees underforeign loans; (ii) overseas remittance of net income and depreciation of investmentcapital (if applicable); (iii) payment for imports of goods and services and other currenttransactions; and (iv) other remittance for consumption purposes and similartransactions.1.3 Remittance of Capital and ProfitsAfter a foreign investor has discharged fully its financial obligations to the State ofVietnam, it shall be permitted to remit abroad the following:3 Specialized capital deposit account of an FIC or a foreign party to a BCC 43Vietnam Investment Guide 2009
  • 52. (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;(dd) Other sums of money and assets lawfully owned by the investor.A foreigner working in Vietnam for an investment project shall be permitted to remitabroad his or her lawful income after having discharged fully his or her financialobligations to the State of Vietnam.The remittance of the above sums of money shall be made in a freely convertiblecurrency in accordance with the trading exchange rate published by a commercialbank selected by the investor.Procedures for remitting abroad the sums of money relating to an investment activityshall be subject to the laws on foreign exchange control.1.4 Foreign Currency PaymentsForeign currency payments within Vietnam, except for certain limited circumstances,are strictly prohibited under the Ordinance and are subject to the strict control of theSBV. Except for certain circumstances provided by Decree 160, residents and non-residents are prohibited from effecting a sale/purchase, making a payment, orgranting loans in foreign currency and posting notice of goods and services in aforeign currency.Examples of permissible circumstances provided by Decree 160 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 44Vietnam Investment Guide 2009
  • 53. organizations providing customs bond warehouse services are entitled to receive payments in foreign currencies and Vietnam dong from the supply of goods and services.• Residents being customs and police offices at international bordergates and customs bond warehouses are entitled to receive foreign currencies from non- residents with regard to taxes and fees for entry or exit visas or for the provision of services.• Non-residents being diplomatic missions or consulates are entitled to collect fees for entry or exit visas or other charges and fees in foreign currencies.• 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.It should be noted that a breach of the above requirements may make the wholecontract, to which the payment relates to, invalid.1.5 Rates of ExchangeEach day the SBV announces in the mass media an average exchange rate in theForeign Currency Interbank Market of VND against USD. This official exchange rate isused 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 announcetheir buying/selling rates of VND against USD within the range permitted by the SBV.2. LoansSubject to the laws of Vietnam, from the date of receiving an investment certificate bya Licensing Authority, FICs in Vietnam are entitled to obtain loans from (and grantsecurity to) both onshore and offshore lenders.Borrowing limitThe investment certificate of an FIC stipulates its total investment capital and chartercapital. The difference between the total investment capital and the charter capital isthe loan capital of the FIC. All loans obtained by an FIC from onshore and offshorelenders (including loans from shareholders) must not exceed the amount of the loancapital. Exceptions are made in the following circumstances: 45Vietnam Investment Guide 2009
  • 54. • 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 theborrower 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 inVietnam.RegistrationOffshore loans with a term of up to 1 year (or short-term loans) for working capitalpurposes 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 aterm of more than 1 year must be registered with the SBV within 30 days from thedate of execution of the loan agreement and prior to the first drawdown under the loanagreement. For the purpose of registration with the SBV, the borrower is required tosubmit a standard application form to the SBV and the loan agreement must betranslated into Vietnamese. It should be noted, however, that a prior approval fromSBV must be obtained if a provision of the finance documents is not consistent withthe laws of Vietnam.Any amendment to the details of the SBV registration certificate (including loanassignments) must also be registered with SBV within 30 days of the date of theamendment agreement and before the effective date of such amendment.Withholding taxPayment of interest to offshore lenders is subject to withholding tax of 10%.V: EMPLOYMENTFollowing the promulgation of the Labour Code in June 1994, as amended from timeto time, a series of implementing regulations have been issued to govern particularareas of labour law, including labour contracts, employment procedures, workinghours, and salaries/remunerations (referred to collectively as the “Labour Code”).1. RecruitmentUnder the Labour Code, FICs are allowed to recruit Vietnamese employees directly orthrough a recruitment centre. Not less than 07 days before recruiting, FICs arerequired to publicly announce (on either local or central mass media) and post at itshead 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 recruitedlabourers to the relevant DOLISA.International or foreign organisations, including any representative offices andbranches in Vietnam, are required to recruit Vietnamese employees through a 46Vietnam Investment Guide 2009
  • 55. recruitment centre. In the event that the recruitment centre fails to supply the requiredcandidates within 15 days of a recruitment request, the foreign organisation is entitledto recruit employees directly.Foreigners may work in Vietnam in the following forms: (a) pursuant to a labourcontract; (b) internal transfer within an enterprise which has a commercial presencein 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 Vietnamand who does not receive remuneration from any source in Vietnam) offering servicesby participating in activities relating to representation of a service supplier in order tonegotiate the sale or consumption of services of such supplier, on condition thatforeigner does not directly sell such services to the public and does not directlyparticipate 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 jobrequirements; (iii) either a manager, executive director, or an expert as defined underthe law; (iv) not have a criminal record for a national security offence; (v) not currentlysubject to criminal prosecution or any criminal sentence in accordance with the lawsof Vietnam and foreign laws; and (vi) with a work permit issued by the authorizedState body of Vietnam if required.2. Labour ContractsA labour contract must, with the exception of contracts with a term of less than 03months, be in writing and signed directly between an employee and the legalrepresentative of the employer. The contract must be made on the standard formissued by MOLISA. The contract must contain the following details: the work to becarried 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 theemployer 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 andany collective labour agreement of the relevant company.Types of labour contractsThe 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 periodA probationary period can be applied before execution of a labour contract. During theprobationary period, either party can terminate the employment contract without priornotice. The probationary period must be: 47Vietnam Investment Guide 2009
  • 56. (a) no more than 60 days for positions requiring college level qualifications;(b) no more than 30 days for positions requiring secondary level qualifications, or with respect to technicians and trade persons; and(c) no more than 06 days for manual labour.3. Termination of EmploymentUnilateral terminationThe Labour Code only allows unilateral termination of a labour contract in limitedcircumstances, irrespective of any mutual agreement or other circumstances. Thereare different procedures for termination by employers and employees. Generally, aparty terminating a labour contract unilaterally must give prior notice of termination tothe other party.Unilateral termination by an employeeAn employee who signs a labour contract with a fixed term from 12-36 months, or forseasonal work or a specific task of less than 12 months, is entitled to unilaterallyterminate the contract prior to expiration if the employee:(i) is not assigned to the work, workplace, or working conditions agreed under the labour contract;(ii) is not paid the full amount or at the time specified in the labour contract;(iii) is subject to maltreatment or forced labour;(iv) cannot continue their employment due to adverse personal or family difficulties;(v) is elected to a full-time position in a representative public office or is appointed to an office in a State body;(vi) 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(vii) 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 unilaterallyterminate the contract whenever he/she wishes so provided that 45-day prior notice isduly given to the employer.Unilateral termination by an employerDuring the term of a labour contract, unilateral termination by an employer ispermitted in the following circumstances:(i) the employee regularly fails to perform his contractual duties;(ii) 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); 48Vietnam Investment Guide 2009
  • 57. (iv) the employer is forced to make cuts in the production and workforce due to force majeure events such as fire or natural disaster; or(v) the company or organisation ceases operations.4. Wages, Overtime Payments, and Statutory MinimumsThe Labour Code allows foreign-invested projects to denominate and pay wages toVietnamese employees in Dong. Salaries for foreigners may be denominated andpaid in foreign currency.The Government decides and publishes a minimum wage which varies depending ongeographical regions and types of work. The current minimum wage is VND1,200,000per month (approx. USD72.00) for employees within Area 1 which includes the urbandistricts and Ha Dong City of Hanoi and the urban districts of Ho Chi Minh City;VND1,080,000 per month (approx. USD65.00) for employees within Area 2 such asthe rural districts of Hanoi and Ho Chi Minh City, some districts of Hai Phong City, DaNang City, etc.; and VND950,000 per month (approx. USD57.00) for employeeswithin Area 3 such as other provincial cities, the remaining districts of Hanoi, somedistricts of Bac Ninh province, Bac Giang province, Hung Yen province, etc. For therest of the country, the minimum wage is VND920,000 (approx. USD55.00).Overtime on a normal working day (six days of the week and including non-publicholidays) must be at least one and a half times the normal hourly rate. On non-working 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 payrate. Overtime may not exceed 04 hours a day or 16 hours a week, or 200 hours in ayear or 300 hours in a year for special circumstances which require the approval ofthe provincial People’s Committee.The normal number of working hours in a week is 48 hours, comprising six 8-hourworking days and extendable by mutual agreement. Employees working in dangerous,noxious, or especially toxic jobs (as defined by MOLISA) have their work dayshortened to 06 or 07 hours.An employee working for at least 12 months is entitled to annual leave of 12 days inaddition to public holidays. Certain especially hazardous and toxic jobs are entitled toeither 14 or 16 days annual leave as determined by the Government. An employermay set the schedule of annual leave after consulting with the Executive Committeeof the enterprise trade union and notifying his employees. Employees will becompensated for remaining leave prior to departure from work.An employee is entitled to paid leave for the following personal reasons: marriage (03days leave); marriage of a son or daughter (01 day leave); and the death of aperson’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 anallowance equal to 100% of their salary to be paid by the Social Insurance Fund. Atleast 02 months of the maternity leave must be taken post-birth. 49Vietnam Investment Guide 2009
  • 58. 5. Work PermitsExpatriates working in Vietnam for 03 months or more must obtain a work permit. Theterm 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 employers request.Not less than twenty days before an expatriate’s estimated date of commencement ofwork, an FIC must apply to MOLISA or its authorised agency to obtain a work permitfor that expatriate. MOLISA or its authorised agency is obliged to give its decisionwithin 15 days of its receipt of such application. Clear reasons must be provided if theapplication is refused. In addition, a work permit can be withdrawn in certaincircumstances, including for a breach of the laws of Vietnam by the expatriate.Five groups of foreigners working in Vietnam are exempt from the requirement ofobtaining a work permit: (i) foreigners entering Vietnam to work for less than 03months; (ii) a member of a limited liability company with two or more members; (iii) theowner of a one member limited liability company; (iv) a member of the board ofmanagement of a shareholding company; (v) a foreigner entering Vietnam to offerservices; (vi) foreigners entering Vietnam to work to resolve an emergency situationsuch as a breakdown or a technically or technologically complex situation arising andaffecting, or with the risk of affecting, production and/or business which Vietnameseexperts or foreign experts currently in Vietnam are unable to deal with. Suchforeigners must carry out procedures for issuance of a work permit if their workextends for more than 03 months; and (vii) a foreign lawyer to whom the Ministry ofJustice has issued a certificate to practice law in Vietnam.Not less than seven days prior to the date of commencement of work, foreigners whoare exempted from work permit requirements must be registered at DOLISA wherethe employer’s head office is located. The registration must state the name, age,nationality and passport number of the employee, the dates of commencement andtermination of employment, and a description of the work to be done.6. Collective Labour AgreementAn FIC must negotiate a collective labour agreement if requested by the trade unionat the company. This agreement is valid only if at least 50% of the employees agreeto the provisions of the agreement.The collective labour agreement covers matters such as wages for differentcategories of employees and working conditions. A copy of the collective labouragreement must be filed with DOLISA within 10 days of the signing of the agreementand will come into effect from the date agreed by the parties as stated in theagreement, or from the signing date where no such date is specified. The term of thecollective labour agreement can be of 01 to 03 years subject to renewals thereafter.7. Trade UnionsWithin 06 months of the commencement of a companys operations, the provincialfederation of trade union must set up a provisional trade union organisation at thecompany to represent and protect the rights and interests of employees and theworkforce. 50Vietnam Investment Guide 2009
  • 59. An employer must recognise a trade unions status once it is validly organised. Thereare strict rules protecting the trade union and its members from any coercion ordiscrimination from employers regarding activity within the trade union. The employeris responsible for ensuring an environment conducive to the activities of the tradeunion.8. Employment FundsThe Social Insurance Fund, Health Insurance Fund, and Unemployment InsuranceFund only cover Vietnamese employees.Social Insurance FundContribution to the State Social Insurance Fund is a statutory obligation of both theemployer and employee in all contractual employment relationships longer than 03months. The Social Insurance Fund provides benefits such as pensions, salariesduring sick days, salaries and treatment for labour-related accidents and occupationalillnesses, maternity benefits, and death benefits. The contributions are made asfollows:• 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 FundThe Health Insurance Fund covers 100% of medical expenses, except for caseswhere high cost treatments are involved. In such cases, the Health Insurance Fundcovers 100% of medical expenses incurred by working employees provided that theyare less than VND7 million and 60% of such medical expenses with a cap of VND20million if they are above VND7 million.An employer is obliged to pay 2% of the monthly salary pool to the Health InsuranceFund. Each employee must also contribute by paying 1% of his or her monthly salaryto the Health Insurance Fund.Unemployment Insurance FundThe provision of the law on Unemployment Insurance Fund takes effect on 01January 2009. Unemployment insurance covers unemployment allowance, job-learning 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 AllowancesA company is required to place 1-3% of the total wages paid into a RetrenchmentAllowance Fund. When an employee loses his or her job due to restructuring ortechnological advances affecting a company, the employer has the responsibility toretrain the employee. If a new job cannot be created, the employee is entitled to a 51Vietnam Investment Guide 2009
  • 60. severance pay of one months salary for each year employment, with at least twomonths of such pay guaranteed.VI: COMPETITION LAWThe Competition Law of Vietnam, having been in effect since 1 July 2005, was draftedwith reference to the statutes of nine nation-states and territories, and the model lawspromoted by international institutions like the United Nations’ Conference on Tradeand Development (UNCTAD) and the World Bank (WB), as well as with influencesfrom the enforcement practices and experiences of other countries.The Law applies to all business enterprises and professional and trade associations inVietnam; overseas enterprises and associations registered in Vietnam; public utilitiesand state monopoly enterprises; and State administrative bodies. It has supersedingpower over all other enacted laws of Vietnam regarding restrictive business practiceand unfair trade practices. In the Competition Law, there is no regulation providing forcases of exception or exemption based on ownership types of enterprises. The lawprohibits anticompetitive behaviour/decisions by officials or State administrativeagencies, taking advantage of their authority.1. Unfair CompetitionVietnamese Competition Law defines “unfair competition activities” as activities whichcontravene normal standards of business ethics to customers, other enterprises, orthe State, including:• infringement of business secrets, including breaches of confidential agreements;• coercion of customers or other business counterparts;• defamation of other enterprises;• 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 schemes2. Practices in Restraint of CompetitionUnder the Law, activities in restraint of competition are defined as those which willreduce, deviate or restrain competition in the market including agreements in restraintof competition, abuse of a dominant or monopoly position in the market, andeconomic concentration. 52Vietnam Investment Guide 2009
  • 61. Practices in Restraint of Competition Agreements in Abuse of Dominant Economic Restraint of Market / Monopoly Concentration Competition Position3. Agreements in Restraint of CompetitionAll enterprises are strictly prohibited from entering into agreements which restrict theentry or development of other businesses, exclude other enterprises from the market,or collaborate to manipulate bids. Other agreements restraining competition areprohibited only where the parties to the agreement have a combined market share of30% or more of the relevant market.Parties with a combined market share of 30% or more are prohibited from enteringinto:• 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. Market share<30% Agreement is allowed Agreement in Restraint of Agreement is Competition prohibited No Does exemption apply to the Agreement? Market share>30% Yes Agreement is allowed 53Vietnam Investment Guide 2009
  • 62. Exemptions are generally available where a prohibited agreement provides economicbenefits to consumers that outweigh the restriction on competition, and theseexemptions are decided by MOIT. An exemption must be obtained before executionof the agreement and the exemption may only be enjoyed during the period specifiedin the decision of MOIT. In order to be exempted, the agreement in restraint ofcompetition 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 DominanceThe Law defines a monopoly as an enterprise holding a position in the relevantmarket with no competitor of the same goods or services. An enterprise is deemed tobe in a dominant position in the relevant market if it holds a share of 30% or more oris capable of restricting competition significantly. A group of enterprises is consideredholding a dominant position in the relevant market if they attempt to restraincompetition 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• 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 abuseof these positions that is unlawful. A dominant enterprise or group of enterprises isprohibited from engaging in any of the following activities which are considered to bean 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 54Vietnam Investment Guide 2009
  • 63. 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 aslisted above. They are also prohibited from imposing unfavourable conditions oncustomers and abusing the monopoly position to unilaterally unreasonably modify orcancel a contract.5. Economic ConcentrationWhen a merger, consolidation, acquisition (with some exceptions), joint venture, orother type of “economic concentration” results in a combined market share of between30% to 50% of relevant market, the Vietnam Competition Administration Department(“VCAD”) must be notified, unless the concentration results in a small or mediumenterprise. Under the Law, acquisition is defined as the purchase by one enterprise ofall or part of the assets of another enterprise sufficient to control the activities of oneor all of the businesses of the acquired enterprise.An economic concentration (“EC”) resulting in a market share of 50% or above isprohibited, unless the concentration results in a small or medium sized enterprise oran exemption is granted.Exemptions are available when one of the parties is at risk of being dissolved orinsolvent, or where economic concentration enhances export, socio-economicdevelopment or technical progress, which shall be assessed by VCAD and MOIT. Market share<30% EC is allowed without notification Economic 30%<Market share<50% EC must be notified to Concentration VCAD EC is prohibited No Does exemption Yes apply to the EC? Market share>50% Yes EC is allowed 55Vietnam Investment Guide 2009
  • 64. 6. Competition AuthoritiesCompetition authorities are comprised of VCAD and Vietnam Competition Council.VCAD is an organization under MOIT and has the function of assisting MOIT inundertaking State administration of competition, anti-dumping and anti-subsidymeasures; application of self-protective measures with respect to goods imported intoVietnam; protection of consumers’ rights; and co-ordination with enterprises, industryor trade associations in dealing with proceedings in international trade involvingdumping, subsidies and application of self-protective measures.Vietnam Competition Council is an independent executive body that deals withcompetition cases and resolves complaints with respect to practices in restraint ofcompetition.VII: ENVIRONMENTSubject to the nature, scale and environmental impact level of projects, authoritiesand investors are required to prepare strategic environment assessment reports andeither environmental impact assessment reports (“EIAR”) or environment protectioncommitments (“EPC”) as conditions for the establishment and operation of certainprojects in Vietnam.1. Strategic Environment Assessment ReportsProjects that are subject to strategic environment assessment reports includestrategies and plans on national socio-economic development at the national orprovincial level. The agency responsible for building a national strategic project mustprepare and submit a strategic environment assessment report to the relevantappraisal body. The appraisal is one of the grounds for approving the project. Astrategic environment assessment report must include the following contents:(i) general descriptions of the objectives, size and features of the project;(ii) descriptions of the natural, economic, social and environmental conditions of the project;(iii) a prediction of possible negative effects on the environment;(iv) sources of data and appraisal methods; and(v) proposed solutions and directions for the implementation of the project.MONRE is responsible for forming a Strategic Environment Assessment ReportAppraisal Board with regard to projects within the authority of the National Assembly,the Government and or Prime Minister. The relevant ministries have a responsibility toform Strategic Environment Assessment Report Appraisal Boards with regard to theprojects under their respective authority. Provincial People’s Committees areresponsible for forming Strategic Environment Assessment Report Appraisal Boardswith regard to the projects under their respective authority or provincial People’sCouncils’ authority. 56Vietnam Investment Guide 2009
  • 65. 2. Environmental Impact Assessment ReportInvestment projects subject to compulsory “EIARs” cover the following maincategories:(i) nationally important projects;(ii) 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;(iii) projects with a potentially adverse impact on a river watercourse, coastal area or area containing a protected ecosystem;(iv) 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 residentialareas;(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 theenvironment.Contents of EIARAn EIAR is required to have the following main contents:(i) enumeration and detailed description of the project’s construction components, construction area, time and workload; operational technology for each component and the entire project;(ii) overall assessment of the environmental status at the project site and neighbouring areas; the sensitivity and load capacity of the environment;(iii) detailed assessment of possible environmental impacts when the project is executed and environmental components and socio-economic elements to be impacted by the project; prediction of environmental incidents possibly caused by the project;(iv) specific measures to minimize bad environmental impacts, prevent and respond to environmental incidents;(v) commitments to take environmental protection measures during project construction and operation;(vi) lists of project items, the program on management and supervision of environmental issues during project execution;(vii) 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 57Vietnam Investment Guide 2009
  • 66. 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 EIARMONRE is responsible for establishing appraisal boards for appraisal of EIARs forprojects 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 forestablishing appraisal boards for appraisal of EIARs for projects within their respectivedecision-making authority (excluding projects under MONRE responsibility).Provincial People’s Committees are responsible for establishing appraisal boards forestablishing appraisal boards for appraisal of EIARs for projects located in theirrespective localities and within the decision-making authority of their People’s Council.The time-limits for appraisal of strategic environmental assessment reports and EIARsare as follows: (i) a maximum of 45 working days from the date of receipt of acomplete and valid application file shall apply to appraisal of projects which theappraisal councils established by MONRE; and (ii) a maximum of 30 working daysfrom the date of receipt of a complete and valid application file shall apply to appraisalof other projects.3. Environmental Protection CommitmentProjects subject to Environmental Protection Commitments (“EPCs”):Any project which is not subject to strategic environment assessment reports andEIARs must make a written EPC. The main contents of an EPC are as follows:(i) location of execution of the project;(ii) type and scale of production, business or service and materials and fuel used;(iii) kinds of wastes generated;(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 EPCsDistrict People’s Committees are required to organize registration of EPCs. Whennecessary, they may authorize this work to People’s Committees at the lower level.The time limit for acceptance of EPCs is 05 working days after the date of receipt ofvalid EPCs.The project owners may commence production, business or service activities afterregistration of EPCs.VIII: INTELLECTUAL PROPERTYOn 1 January 2006, the Civil Code came into force, and on 1 July 2006, the Law onIntellectual Property, which codified the government regulations on intellectual 58Vietnam Investment Guide 2009
  • 67. property, came into force. These are the two principal laws governing the protection ofintellectual property rights in Vietnam and adopted by Vietnam to conform to WTOstandards on intellectual property protection.In addition to these laws, Vietnam is also a State Party to the Paris Convention, theMadrid Agreement, Madrid Protocol, and the Stockholm Convention of 1967 (whichestablished the World Intellectual Property Organisation). Vietnam is also a memberof the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPsAgreement), the Berne Convention for the Protection of Literary and Artistic Workswith effect from 26 October 2004, the Geneva Convention for the Protection ofProducers of Phonograms against Unauthorised Duplication of their Phonograms witheffect from 06 July 2005, the Brussels Convention Relating to the Distribution ofProgramme-Carrying Signals Transmitted by Satellite with effect from 12 January2006, the International Convention for the Protection of New Varieties of Plant witheffect from 24 December 2006, and the Rome Convention for the Protection ofPerformers, Producers of Phonograms and Broadcasting Organizations with effectfrom 01 March 2007.Vietnam’s industrial property regime is administered principally by MOST actingthrough NOIP. The copyright regime is administered by the Ministry of Culture, Sportsand Tourism, acting through the Copyright Department.1. Protection of Intellectual Property Rights in VietnamGenerally, except for trade secrets, geographic indications, and trade names (whichare 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-filepriority basis..Below is a summary of the various types of intellectual property rights protected inVietnam and the duration of the protection: Type Brief Description Duration of ProtectionPatent for A technical solution presenting worldwide 20 years from theInvention novelty and an inventive step applicable in date of application socio-economic fieldsPatent for A new technical solution in comparison with 10 years from theUtility existing technology and achievable in current date of applicationSolution economic technological conditionsIndustrial The external appearance of a product 05 years from theDesign embodied by lines, three dimensional forms, date of application colours, or a combination of these that is which is renewable novel, inventive throughout the world, and for an additional capable of serving as a pattern for an two periods 05 59Vietnam Investment Guide 2009
  • 68. industrial or handcrafted product years (a total of 15 years maximum)Layout Three dimensional circuit elements and their The earlier of: (i)Design of interconnections in the integrated circuit which 10 years from theIntegrated is original and not widely known in the relevant date of grant; (ii)Circuit field 10 years from the date of the first commercial use by owner or an assignee; (iii) 15 years from the creation of the design.Trademark Marks used to distinguish goods or services of 10 years from the one person from similar goods and services of date of application another person. They may take the form of (renewable for words, images, or any combination presented successive 10- in one or more colours year periods without limit)Geographic Information indicating territorial origin of a In perpetuity fromIndication product with characteristics or qualities the certification of pertaining to the territory protectionTrade Name Names of individuals or entities used in As long as it is in business activities formation and usageTrade Secret Confidential trade information which could As long as it is in enable the possessor to gain economic formation and advantage usageNew Plant New plant variety with a recognisable name 20 years from theVariety among relevant species as created by certification of selection or development which is of protection (25 distinctiveness, uniformity, and stability for years for timber plantation. trees and vines)Copyright Moral and material rights with respect to Author’s life plus original literary, artistic and scientific works 50 years (except including software for movies, photographs, plays, applied fine 60Vietnam Investment Guide 2009
  • 69. art works, which enjoy 50-year protection)Copyright- Moral and material rights in respect of 50 yearsrelated rights performance show, audio record, visual record, radio program, and satellite program- coded signal2. TrademarksTrademarks 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• misleading, deceptive, or identical to or confusingly similar to existing registrations.2.1 Priority rightsVietnam adopts a first-to-file rather than a first-to-use priority system, so that an earlierapplication for a trademark establishes a right of first priority. The date of priority isgenerally the date of application, but this can be earlier if a qualifying application hasbeen made in another member country of the international trademark treaties.Trademarks that have been internationally registered in accordance with aninternational treaty can also be established in Vietnam once accepted for protectionby the trademark office. Applicants who wish to rely on international treaties inestablishing a right of priority must make an express statement to that effect in theirapplication for protection and present evidence in support of their claim of priority.2.2 Registration procedureVietnam has adopted the classification of goods and services as specified in the NiceAgreement for the purposes of trademark registration although Vietnam is not amember of the Nice Agreement. A preliminary trademark search can be conducted bythe applicant to establish whether the mark or any similar mark has already beenregistered 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. 61Vietnam Investment Guide 2009
  • 70. 2.3 “Well-known” trademarksTrademarks 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 bedeemed well-known if it has wide public recognition as evaluated on the followingcriteria:• 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. Patents3.1 Invention and utility solutionAn invention is defined as a technical solution which is new in comparison to existingtechnology, which is of a creative character, and is applicable to various social andeconomic fields.The following are excluded from patent protection: scientific discoveries, theories, ormathematical methods; schemes, plans, rules and methods for performing mentalacts; methods of training domestic animals, playing games, and doing business;computer programs; the presentation of information; solutions of aestheticcharacteristics only; plant varieties or animal breeds; processes of plant or animalproduction which are principally of a biological nature, other than microbiologicalprocesses; and human and animal disease prevention methods, diagnostic andtreatment methods.An applicant unable to secure protection as an invention patent may qualify forprotection as a utility solution patent (which is essentially an invention withoutinvolving an inventive step).3.2 Priority rightsThe priority of applications for patent protection is determined by either the date onwhich NOIP receives the application or in accordance with the applicable internationaltreaties. Applicants relying on international treaties to establish a right of priority mustmake an express statement to that effect in their application and present evidence insupport of their claim of priority.Vietnam is a State Party to the Patent Cooperation Treaty (“PCT”). State Parties tothe PCT have agreed to permit an applicant to wait for up to 30 months after the initial 62Vietnam Investment Guide 2009
  • 71. filing of a patent application in one country to begin prosecuting the application inother countries. Vietnamese law extends this period to 31 months.3.3 Registration procedurePatent applications can be made either for international registration under the PCTprocedure or directly in Vietnam.Applying for patent protection directly in Vietnam will only be possible if the inventionor utility solution has not been made public anywhere in the world by being used ordescribed 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 preliminaryexamination and acceptance of the application. A substantive examination will only becarried out upon request by the applicant or a third party. A substantive examinationdetermines the patentability of the invention or utility solution and its scope ofprotection.4. Industrial designsAn industrial design is evaluated for worldwide novelty in the same way as aninvention which requires a substantial distinction and uniqueness when evaluated bya person having ordinary skill in the relevant area. Excluded from the protection ofindustrial 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 productwhich is invisible during the use of the product.A technical design should not be disclosed in any form or in any jurisdiction until thedate of filing for protection. This is to maintain its worldwide novelty.Priority rights over protection of industrial designs are achieved by the same way asfor trademarks and patents.Since international applications are not available for protection of industrial designs,applicants need to register in Vietnam through NOIP.5. Copyright5.1 Owners and authors of copyrightThere is a distinction between owners and authors of works. An author is a personwho 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 ofworks may be authors or co-authors, authorities or organisations which delegate aduty to an author to create a work, individuals or organisations which contract with anauthor for the creation of a work, heirs who inherit a work from an author who wasalso the owner of a work, and individuals and organisations to which ownership rightsover a work are transferred by contract.Rights over a work include personal rights (including the right to name a work and topermit others to use the work) and property rights (including the right to receiveroyalties and to rent out the work). These rights are divided into three types: (i) rights 63Vietnam Investment Guide 2009
  • 72. of an author; (ii) rights of an owner; and (iii) rights of an author who is concurrently theowner of a work and therefore holds full personal and property rights over a work.5.2 Establishment of copyrightCopyright arises from the moment a work is created in a definite form. The Civil Codeprovides that copyright protection in respect of foreign individuals and entities will belimited to works which are first published or disseminated in Vietnam, or which arecreated and take a definite form in Vietnam. Works of foreign authors not firstpublished in Vietnam must be published in Vietnam within thirty days of firstpublication. Vietnam has acceded to the Berne Convention for the Protection ofLiterary and Artistic Works that provides the protection of Vietnamese copyright law toqualifying works under the Berne Convention.5.3 Registration of copyrightAuthors, co-authors and owners of works have the right to apply for the registrationand protection of copyright and ownership of such works to the Copyright Departmentunder the Ministry of Culture, Sports and Tourism.The application must be supported by evidence of the applicant’s authorship and/orownership of the work. Where the application is in order, the applicant will be issuedwith a Copyright Certificate4 within 15 working days from the receipt of the application.The Ministry of Culture, Sports and Tourism has primary responsibility for theprotection of copyright in Vietnam and is assisted at the local level by a network ofCulture, Sports and Tourism Inspectors.6. Transfer of Intellectual Property Rights6.1 Industrial propertyOwners of industrial property that is protected in Vietnam (except for “geographicindications”) may license the right to use or transfer ownership of such objects to athird party. Exclusive licensees of the right to use industrial property may further sub-license their right to use.6.2 Registration requirementLicence 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 lawsuch as the particulars of the parties, price, rights and obligations, scope, term, andterritory for licensing. Assignment of certain types of industrial property, includinginventions, industrial designs, layout designs of an integrated circuit, and trademarks,must be registered with NOIP. The licensing of industrial property rights is binding onthe licensor and the licensee without registration with NOIP, but is ineffective againstthird-parties until registration with NOIP.6.3 DurationThe duration of licensing contracts is limited to the valid duration of the certificate ofprotection5 for each type of industrial property.4 Certificate of ownership rights over copyright works 64Vietnam Investment Guide 2009
  • 73. 6.4 Prohibited termsCertain terms restricting a licensee’s rights may be invalid, especially those terms thatdo 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 restrictionsThe licence or assignment of the trademark must not cause confusion in relation tothe characteristics and origin of the goods or services bearing the trademark. Thecurrent regulations prohibit the licence or assignment of industrial property rights forthe purpose of squeezing out competitors and attempting to monopolise the market.6.6 Licence of copyright and related rightsAuthors and owners of copyrights may transfer all or part of the property rights over awork to others under a contract or under the laws on inheritance. The personal rightsof an author are not generally transferable, but an author who is concurrently theowner of a work has a limited right to transfer some of his/her personal rights.7. Enforcement of Intellectual Property Rights7.1 Course of actionThe remedies for industrial property infringement fall into two categories - judicial andadministrative. An owner or registered user of industrial property is entitled tocommence proceedings in court for infringement of their intellectual property rightsand the courts have the power to issue an injunction preventing the infringement fromcontinuing and to award damages. The competent authorities have the powers toenforce such an injunction.Proceedings can be filed at NOIP for verification of the infringement. The customsauthorities, market management authorities and economic police have the power toregulate 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 of5 Certificate of ownership rights over inventions, utility solutions, industrial designs and trademarks, and the right to use anappellation of origin of goods 65Vietnam Investment Guide 2009
  • 74. premises; temporary detention of persons; temporary custody of goods; and thesuspension of production and sale of goods.7.2 Administrative penalties for infringementInfringement of rights over industrial property objects shall be subject to penalties inthe form of either a warning or a fine. Other sanctions may also be applied such asthe suspension of a business licence; confiscation of counterfeit goods, facilities ormaterials used in the infringement; compelled destruction of counterfeit goods;distribution or use of counterfeit goods for non-commercial purposes; andcompensation for damages.Penalties must be applied within one year, or two years for business activities whichinfringe legal rights of registered trademarks, geographical indications, inventions, orindustrial designs, following the date of the infringement. After these statutory timelimits have passed, infringers will not be subject to penalties.7.3 Border controlThe Law on Intellectual Property allows customs authorities to apply border controlmeasures for all goods that infringe on intellectual property rights. Border controlmeasures 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 requestfrom the intellectual property right holder; (b) production of protection certificates andevidence of infringement, and (c) a sum of money has been deposited or a bankguarantee has been provided for possible compensation to persons later determinedto have not infringed on intellectual property rights.IX: TECHNOLOGY TRANSFERTechnology transfer in Vietnam is regulated by the following:(i) Law on Technology Transfer (“LTT”) which took effect on 01 July 2007;(ii) Decree 133/2008/ND-CP of the Government dated 31 December 2008 guiding the implementation of LTT (“Decree 133”).The LTT has seven chapters with 61 articles, dealing with objects eligible for transfer;technologies encouraged for, restricted to, and prohibited from transfer; technologytransfer agreements; technology transfer services (including technology transferbrokerage, appraisal, evaluation, assessment and promotion); measures forencouraging and boosting technology transfers; approval and registration oftechnology transfers; and handling disputes, claims, denouncements and breaches intechnology transfers. 66Vietnam Investment Guide 2009
  • 75. 1. General PrinciplesThe LTT defines technology as “solutions, processes and know-how, which may ormay 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 fromtransfer. Decree 133 provides a list of technologies encouraged, restricted, andprohibited, for transfer.The term “transfer of technology” refers to either the transfer of the right to own thetechnology or the licensing/sublicensing of the right to use the technology either by anindividual or a corporation.In cases where objects of the technology transfer have already been protected asobjects of industrial property, the transfer of ownership of such technology must beimplemented together with transfer of ownership of the industrial property rights inaccordance with the law on intellectual property. The actual transfer of such industrialproperty rights is subject to intellectual property regulations and falls outside the ambitof the technology transfer regulations.The transfer of a technology may be in the form of an independent technology transfercontract 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 atechnology is attached.2. Technology Transfer ContractThe contract is the basis for performance, ensuring the legality of the transfer oftechnology, and setting payments and methods to resolve disputes. TechnologyTransfer Contracts (“TTCs”) can be agreed in a written contract or other equivalentforms, such as telegram, telex, fax, data messages and other forms as permitted bylaw. The parties are also allowed to choose the language of the TTC. In the case of atransaction in Vietnam, a Vietnamese version is required. The Vietnamese andforeign 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;• 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; 67Vietnam Investment Guide 2009
  • 76. • 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 LawThe parties are allowed to agree on foreign governing law, together with other termsand conditions which are not contrary to Vietnamese law.Article 776 of the Civil Code 2005 provides that technology transfer with a foreignelement (i.e., between a Vietnamese entity and foreign entity and technology transferfrom any foreign country into Vietnam or from Vietnam to any foreign country) mustcomply with (i) provisions of the Civil Code 2005 and other legal documents ofVietnam concerning technology transfers; (ii) international treaties to which Vietnam isa contracting party; or (iii) foreign law, if the application of such foreign law or theconsequence of its application does not contradict “the basic principles of the law ofVietnam”.The LTT provides that any disputes arising out of TTCs with a foreign party can besettled by either local or international competent arbitrator or courts which the partiesspecifically chose to the extent that the foreign jurisdiction choice does not contradict“the basic principles of the law of Vietnam”.4. RegistrationThe LTT provides the right of the parties to register on a voluntary basis with respectto “unrestricted” TTCs “in order to set the ground [for the parties] to enjoy incentivesgiven in this Law and other relevant laws”. It is therefore suggested that partiesregister TTCs in order to enjoy incentives under the LTT and other laws.The LTT requires that “restricted” technology transfers are subject to approval by thetechnology management authority (the “Technology Authority”) before the TTC isentered into by the parties, and then a permit is issued after the TTC’s execution..5. PricingParties 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 instalments 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; 68Vietnam Investment Guide 2009
  • 77. • other payment methods as agreed by the parties.6. ConfidentialityCompetent authorities responsible for the issuance of technology transfer permits andcertificates of registration of TTCs are obligated to maintain confidentiality of thetechnologies and business secrets in application files for issuance of technologytransfer permits and registration of technology transfer contracts.X: DISPUTE RESOLUTION1. Conciliation and MediationThe laws of Vietnam emphasise the need for parties to settle their disputes byconciliation and mediation. Parties are encouraged to seek the assistance of therelevant authorities to arrive at an amicable solution to any dispute. A settlementagreement reached between the parties during mediation or conciliation is currentlytreated in the same way as a normal contractual agreement, with the usualcontractual remedies available for breach of its provisions.Where litigants are required to attend conciliation meetings chaired by a judge, thesettlement agreements reached, and thereafter recognised by judges’ decisions, arefinal 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, Vietnamesecourts, or foreign courts.2. International ArbitrationIn 1995, Vietnam ratified the Convention on the Recognition and Enforcement ofForeign Arbitral Awards (“New York Convention”). Shortly thereafter, the Ordinanceon Foreign Arbitral Awards was passed providing for domestic enforcement of foreignarbitral awards. This was subsequently repealed by the new Civil Proceedings Code(“CPC”) which took effect on 01 January 2005.GeneralUnder the CPC, foreign arbitral awards are defined as arbitral awards renderedoutside Vietnam or within Vietnam by non-Vietnamese arbitrators. Vietnamese courtconsiders the recognition and enforcement of a foreign arbitral award when the awardhas been rendered in or by arbitrators of a country being a party to the New YorkConvention or, in case of a country not being a party to the New York Convention, tothe extent that such country grants reciprocal treatment to Vietnam.Organisations and individuals who obtain favourable foreign arbitral awards or theirlawful representatives may file a petition with Vietnamese court to request for therecognition and enforcement of the award, provided that: (i) in respect of anorganisation, the obliged organization has its head office in Vietnam; (ii) in respect ofan individual, the obliged individual resides or works in Vietnam; or (iii) the propertiessubject of the enforcement of civil decision, judgment of foreign court, or decision offoreign arbitration, are in Vietnam at the time the petition is filed. 69Vietnam Investment Guide 2009
  • 78. The CPC has significantly broadened the scope of recognition and enforcement offoreign arbitral awards in relation to business and commercial disputes so that thescope covers most commercial relations.3. Foreign CourtsUnder the laws of Vietnam, FICs may not be able to refer their disputes to a foreigncourt.Judgments issued by foreign courts are not enforceable in Vietnam unless Vietnamhas signed a bilateral treaty with the relevant country regarding enforcement of thatcountrys court judgments.4. Domestic ArbitrationSince the issuance of the Ordinance on Commercial Arbitration on 25 February 2003,Vietnam has significantly improved its legislation on the operation of commercialarbitrators in Vietnam. It is expected that more economic arbitration centres will beestablished in the near future.Under the Ordinance on Commercial Arbitration, commercial disputes may beresolved by an arbitration tribunal organised by an arbitration centre or set up by theparties (ad hoc arbitration). The arbitration tribunal may consist of three arbitrators ora single arbitrator as agreed by the parties.Commercial arbitrators in Vietnam have jurisdiction to arbitrate commercial disputes.Under the Ordinance on Commercial Arbitration “commercial disputes” includesdisputes 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) appointforeigners as their arbitrators provided that the appointed foreigners are qualified toact as arbitrators in their own countries, and (ii) to agree on the application of aforeign substantive law, foreign arbitration rules, foreign language for arbitralproceedings, and an appropriate location for arbitral proceedings inside or outsideVietnam.Arbitral awards issued by commercial arbitrators in Vietnam will be enforced inVietnam. Arbitral awards given by the commercial arbitrators under the Ordinance onCommercial Arbitration do not need to be recognised by a Vietnamese court.Following the arbitration proceeding, a successful claimant is entitled to bring therelevant arbitral award to the relevant enforcement agency for enforcement unlesssuch arbitral award is cancelled by a Vietnamese court.Although the Ordinance on Commercial Arbitration gives parties to a dispute anopportunity to request a relevant Vietnamese court to cancel an arbitral award, thecourt may only review procedural matters and cannot re-hear the dispute. The courtmay, at the request of a party to the dispute, cancel an arbitral award given under theOrdinance on Commercial Arbitration in the following circumstances: 70Vietnam Investment Guide 2009
  • 79. • 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.Unless otherwise stipulated by law, the statute of limitation for arbitration proceedingsis two years from the date of the dispute. The parties have 30 days after the arbitralaward is given to apply to the court for cancellation of the award.The Ordinance on Commercial Arbitration imposes the following restrictions on theselection 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 CourtsThe Vietnamese court system consists of the Administrative Court, Economic Court,Civil Court, Labour Court and Criminal Court. The jurisdiction of each type of court isdifferent, depending on the type of dispute. The Economic Court has jurisdiction overmost commercial and financial disputes.Vietnam has unified its court procedures for the different courts under the CPC. Underthe CPC, all disputes, whether civil, commercial or labour, are now subject to thesame set of procedural rules. A dispute may, depending on the type of dispute andthe value of the dispute, either be heard at the district court or the provincial court atfirst instance. The recognition of foreign judgments and foreign arbitral awards fallunder the jurisdiction of the provincial courts.Generally speaking, court procedures in Vietnam can be divided into three distinctstages: first instance, appeal and review (second appeal). Most cases go to both firstinstance and appeal as parties are entitled to appeal against a judgment within 15days of the judgment. In this case, first instance judgments are not enforceable untilthe 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 aparty to the proceedings or not. The decision to grant such a review is made 71Vietnam Investment Guide 2009
  • 80. administratively by either the Chief Judge or Chief Prosecutor of a competent court orProsecutor.The CPC and its guiding regulations provide for a much more comprehensive set ofrules on the application of important remedies such as preliminary injunctive relief. Incertain cases, the CPC also allows parties to apply for temporary measures evenbefore 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, theCPC provides that the statute of limitation for initiating court proceeding is 02 yearsfrom the date the dispute arises.6. Enforcement ProcessFollowing the court or the arbitration proceeding, the successful claimant is requiredto initiate the enforcement process by sending an application to the enforcementauthority in cases where the involved parties fail to voluntarily execute the judgmentor decision. The statute of limitation for filing an application for enforcement of a courtjudgement or decision is three years from the effective date of the court judgment ordecision. Except for limited cases wherein claimants are exempted from enforcementfee obligation. The claimant is responsible for paying an enforcement fee inaccordance to a scale based on the value of the assets which such claimant actuallyreceives.XI: REPRESENTATIVE OFFICE IN VIETNAMA representative office (“RO”) is the simplest form of presence for a foreign company inVietnam. It is intended to promote business opportunities for its head office and tosupervise or speed up the performance of contracts that the head office has enteredinto with Vietnamese parties. An RO is subject to the following regulations:(a) Decree No. 72/2006/ND-CP of the Government dated 25 July 2006;(b) Circular No. 11/2006/TT-BTC of Ministry of Trade dated 28 September 2006.An RO is not regarded as an investment in Vietnam since such an office cannotconduct any revenue-generating activities. A foreign company can open more than oneRO in Vietnam.The establishment and operation of ROs of credit institutions, education establishments,and insurance companies are subject to different regulations.1. Establishment ConditionsA foreign company that wants to set up an RO in Vietnam must, in general, satisfy thefollowing 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 72Vietnam Investment Guide 2009
  • 81. • its proposed operating activities in Vietnam must not be prohibited by the laws of Vietnam.2. Application ProcedureTo establish an RO in Vietnam, foreign companies are required to file the followingdocuments with the relevant licensing authority: • Application form for issuance of a license for establishment of a representative office; • 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 Representative Office • Notarized copy of passport / identity card of the Chief of Representative OfficeNon-Vietnamese documents must be legalized in accordance with the law of Vietnamand translated into Vietnamese whereby such translation must be certified.3. Press AnnouncementWithin 45 days from the issuance date of the licence, ROs are required to publishdetails of its name, name of its parent company, office location, chief representative,etc., for 03 consecutive issues of a printed or electronic newspaper.4. Licensing AuthorityThe Department of Industry and Trade is responsible for issuing licences for ROs. Forspecific business sectors (Banking, Tourism etc.) other authorities are responsible.5. Time Limit for Licensing and Licensing FeeWithin 15 days after the date of receipt of all documents, a licence for the establishmentof an RO is issued by the relevant licensing agency. In the event that the application isnot made in compliance with the law, the relevant licensing authority will give a writtennotice 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.USD60.00).6. OperationThe 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 itsoperation by way of a written notice to the relevant licensing authority indicating its 73Vietnam Investment Guide 2009
  • 82. office address, number of Vietnamese staff and foreign staff working at the RO and itschief representative, and obtain an acknowledgement from the relevant licensingauthority.For the purpose of the above registration, the relevant licensing authority may require acopy of the lease agreement of the RO in Vietnam. Following the registration, and onthe basis of a letter of introduction issued by the provincial Department of Industry andTrade, 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 theparent company, or the name of the RO, (ii) the number of staff, (iii) the content of theRO’s activities, or (iv) the RO’s address, must be reported to the relevant licensingauthority.7. Permitted ActivitiesThe RO is permitted to carry out the activities specified in its licence. Such permittedactivities include non-revenue generating activities such as market research, customersupport, and marketing or feasibility studies for investment projects.Foreign companies are not permitted to use the RO as a vehicle to carry on actualbusiness in Vietnam. For example, the RO cannot be used to conclude or executecommercial contracts. However, the chief representative of the RO may be authorisedby the parent company to negotiate and to sign contracts on its behalf, under a powerof attorney on a case-by-case basis, provided that such contracts may only beperformed by the parent company itself. It should be noted that there may be a taximplications for authorizing a representative in Vietnam to sign a contract on behalf ofthe parent company.ROs may (i) lease an office, residential accommodation and other facilities necessaryfor its activities (but no sublease by the ROs is permitted), (ii) import equipment andfacilities necessary for its operation and (iii) employ Vietnamese and expatriates. It mayalso open a bank account in foreign and Vietnamese currency at a bank in Vietnam, butany conversion or remittance of currencies must comply with the foreign exchange lawsof Vietnam. The purpose of this account is to pay for the expenses of a representativeoffice 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 payingpersonal income tax on behalf of its employees.8. ReportingROs are required to file an annual report regarding its operation in the previous yearwith the relevant licensing authority before the last working day of January in thefollowing year. If necessary, and upon the written request of the competent authority, anRO may also be obliged to make a report and/or supply information and documentsrelating to its operation.9. TerminationThe operations of an RO may be terminated in any of the following circumstances:(a) where the parent company so requests; 74Vietnam Investment Guide 2009
  • 83. (b) where the parent company terminates its operations;(c) where the authorised State body makes a decision to withdraw or revoke the licence in accordance with the law of Vietnam;In case of termination of operations under items (a) and (b) above, the parentcompany must forward a notice of termination of operation of the RO to the relevantlicensing authority at least 30 days prior to the date of termination of operation of theRO, and is required to return the licence to the relevant licensing authority. 75Vietnam Investment Guide 2009
  • 84. APPENDICESAPPENDIX I - SUMMARY OF WTO COMMITMENTSThe package of Viet Nam’s accession documents consists of: • Viet Nam’s commitments on goods – the 560-page list for “schedule of tariffs, quotas and ceilings on agricultural subsidies, and in some cases the timetable for phasing in the cuts. • Viet Nam’s commitments on services – the 60-page document (also a “schedule”) describing in which services it is giving access to foreign service providers and any additional conditions, including limits on foreign ownership • The working party’s 260-page report – describing Viet Nam’s legal and institutional set up for trade, along with commitments it has made in many of these areas.Followings are some highlights:GOODS: Schedule of Concessions and Commitments on GoodsFor the majority of agricultural and non-agricultural goods, Viet Nam is promisingceilings (or “bound” rates) on duties ranging between zero and 35%. Some of theseinvoice reductions phased over periods up to 2014, the precise end date varying fromproduct to product.Among products with higher ceilings are: alcoholic drinks, tobacco products, instantcoffee and some related products, new and used motor vehicles and components, androof tiles. Used vehicles less than five years old can be charged additional flat-rateduties up to specified limits.These “bound” rates are legal ceilings. The actual duties that Viet Nam can charge(the “applied” rates) can be lower than the committed rates. Among the details of VietNam’s commitments is a promise not to charge higher applied rates on rapeseed (alsoknown as cotza or canola) and derived meal, oil and other products than the dutiesactually charged on soy products – allowing the oilseed products to compete with soy.In the separate working party report, Viet Nam has also reserved the right to chargeapplied duties in the form of specific duties (e.g. dollars per ton) instead ofpercentages of the price (“advalorem”) so long as the result stays below the committedceilings.A handful of products are going to be protected with tariff quotas (higher duties forquantities outside the quotas, and lower duties for quantities within the quotas): eggs,tobacco, sugar, and salt (which Viet Nam says is the main income source for 100,000poor farmers in coastal areas). But Viet Nam will expand the quotas until theydisappear according to agreed timetables. 76Vietnam Investment Guide 2009
  • 85. Viet Nam has also signed the “plurilateral” Information Technology Agreement(“plurilateral” meaning only some WTO members have signed). For these products,Viet Nam has agreed to allow imports in duty-free. In some cases, the zero duty willapply immediately; in others it will be achieved gradually over periods ending in 2010to 2014.In agriculture, Viet Nam has promised not to subsidize exports. It will be allowed tosupport its farmers domestically with trade-distorting supports (“Amber Box” or“Aggregate Measurement of Support”, i.e. supports that have a direct impact on pricesor quantities produced) of up to 3,961.5 billion Vietnamese dong (currently aboutUS$246 million) in addition to the usual allowance for developing countries (known as“deminimis”) of up to 10% of the value of domestic agricultural production. As with allWTO members, Viet Nam can also spend unlimited amounts on supports that do notdistort trade (“Green Box” supports).SERVICES: Schedule of Specific Commitments on Trade in ServicesViet Nam has made commitments on a range of services. In some cases Viet Namreserves the right to limit foreign ownership of service companies operating in VietNam – for example in some telecommunications services the eventual limits can be49% or 65%, depending on the service. In a few cases, permitted foreign ownership isimmediately 100% (for example accountancy). In many cases, the permitted foreignownership is phased in to reach 100% after a few years (for example express deliverycourier services after five years).As is normal in this sector, the effect of the commitments depends also on complexrelationships with domestic regulations – for example in the first two years, 100%-foreign-owned architectural firms can only serve foreign companies. The commitmentsand some of the regulations are in the “schedule” (lists) of commitments; otherinformation on the regulations is in the working party report.THE WORKING PARTY REPORT: Report of the Working Party on the Accessionof VietNamThe working party report outlines the economic context, and the institutional and legalframework. It includes Viet Nam’s commitments to undertake reforms or to preservereforms that have been introduced in order to secure membership. Among thecommitments are:Foreign exchange: Viet Nam will abide by IMF and WTO rulesState enterprises: commercial business (i.e. except for supplying the government)will be conducted on commercial terms without interference from the government. Anumber of products are listed as subject to state trading enterprises because ofconsumption restrictions, for cultural and moral reasons, or because they are “naturalmonopolies”: tobacco products, petroleum, cultural products such as newspapers,journals and audio-visual materials, and aircraft. 77Vietnam Investment Guide 2009
  • 86. Privatization and equitization of state enterprises: this will be handledtransparently, with Viet Nam supplying annual reports while the program lastsPricing and price controls: Viet Nam will comply with WTO agreements and notifythe WTO of actions it takes to control prices.Policy-making and enforcing framework: a number of administrative and legalstructures have been introduced or strengthened so that WTO provisions are applied,including the possibility of investigation and judicial view to deal with complaints aboutthis.Trading rights (the right to import and export): this was a subject of toughnegotiations partly because of different registration procedures for foreign anddomestic traders. A new law has now harmonized the procedure for both.Among the many additional details are a commitment that all foreign firms andindividuals will be able to engage in importing and exporting as importers/exporters “ofrecord” so long as they register, and importers will be able to choose their domesticdistributors.Exercise duties: the different duties charged on alcoholic drinks attracted particularattention in the negotiations. Viet Nam has agreed to simplify the structure within 3years by applying a single rate for all forms of beer and a single rate for all spiritscontaining 20% alcohol or more. This has allayed concerns from some countries thatthe previous structure might discriminate against imported beers that have differentpackaging, or against imported spirits with higher alcohol content.Quantitative and other restrictions: quotas, bans and other restrictions will beabolished, including import bans on cigarettes, cigars and used vehicles, or onlyapplied according to WTO rules.WTO agreements dealing with rules: Viet Nam will comply with the CustomsValuation, Rules of Origin, Pre-shipment inspection, Anti-dumping, Safeguards,Subsidies, and Trade-Related Investment Measures agreements, with someprovisions phased in over a period.Export restrictions: Viet Nam maintains export controls on some products such asrice, and some wood products and minerals (to prevent illegal exploitation). It ispledging to apply controls on these products in a way that conforms to WTOagreements.Standards: Viet Nam will apply the Technical Barriers to Trade, and Sanitary andPhytosanitary Measures agreements without a transition period.Government procurement: Viet Nam will consider signing the GovernmentProcurement Agreement after it has become a WTO member.Intellectual property: almost 33 pages of the report describe in detail theadministrative and legal set up in the country. Viet Nam will comply with the Trade- 78Vietnam Investment Guide 2009
  • 87. Related Aspects of Intellectual Property Rights (TRIPS) Agreement immediately,without any transition period. 79Vietnam Investment Guide 2009
  • 88. APPENDIX II - LIST OF MAJOR LEGAL DOCUMENT RELATING TO THE BUSINESS ACTIVITIES OF FOREIGN INVESTORS IN VIETNAMNo. Legal document Issued by Content of legal document No AuthoritiesForeign Investment1 Law No. National Law on Investment providing investment 59/2005/QH11 Assembly procedure, investment incentives, right dated 29/11/2005 and obligations of the investors.2 Law No. National Law on Enterprises providing type of 60/2005/QH11 Assembly enterprise, establishment procedures, dated 29/11/2005 organisation and operation of enterprises3 Decree Government Decree on business registration 88/2006/ND-CP dated 29/8/20064 Decree Government Decree providing guidelines for 108/2006/ND-CP implementation of a number of articles of dated 22/9/2006 Law on investment5 Decree Government Decree providing guidelines for 139/2007/ND-CP implementation of a number of articles of dated 05/09/2007 Law on enterprises6 Decree Government Providing regulations on re-registration or 101/2006/ND-CP conversion by enterprises with foreign dated 21/9/2006 invested capital, and registration for change [of investment licences] for investment certificates by enterprises with foreign invested capital in accordance with the Law on Enterprises and the Law on Investment7 Decision Ministry of Decision on promulgating sample form of 1088/2006/QD-BKH Planning and documents for carrying out investment dated 19/10/2006 Investment procedures in Vietnam8 Circular Ministry of Providing guidelines for implementation 03/2006/TT-BTC Finance Decree 88 dated 19/10/2006Foreign ExchangeControl9 Ordinance No. The Standing Ordinance on foreign exchange control 28/2005/PL- Committee of UBTVQH 11dated National 13/12/2005 Assembly 80 Vietnam Investment Guide 2009
  • 89. 10 Decree Government Providing guidance for implementing 160/2006/ND-CP Ordinance on foreign exchange control dated 28/12/200611 Decree Government Regulation on Foreign Borrowing and 134/2005/ND-CP on Repayment of Enterprises 1/11/2005Labour12 Labour Code dated National Law on Labour 23/6/1994 Assembly13 Law No. National Law on amendments and supplements to 35/2002/QH10 Assembly a number of articles of the Labour Code dated 2/4/2002 dated 23/6/1994 Law No. 74/2006/QH11 dated 29/11/200614 Decree Government Regulation on recruitment and 34/2008/ND-CP management of foreigners working in dated 25/3/2008 VietnamLand15 Law National Law on land No.13/2003/QH11 Assembly dated 26/11/200316 Decree 181/ND-CP Government Providing guidance for the dated 29/10/2004 implementation of a number of article of the Law on land17 Decree 182/ND-CP Government Sanctioning administration violation in the dated 29/10/2004 area of landIntellectual Property18 Law No. 50/2005/ National Law on Intellectual Property QH11 dated Assembly 29/11/200519 Law No. Government Law on Technology Transfer 80/2006/QH11 dated 29/11/2006Import - Export20 Law No. National Law on Import – Export 45/2005/QH11 Assembly dated 27/6/200521 Law National Customs Law 81 Vietnam Investment Guide 2009
  • 90. No.29/2001/QH10 Assembly dated 29 June 2001, and the Law No.42/2005/QH11 dated 14 June 200522 Decree Government Making detailed provisions for the 149/2005/ND-CP implementation of dated 8/12/2005 the Law on Export and Import DutiesVarious Taxes23 Law No. National Law on tax management 78/2006/QH11 Assembly dated 29/11/200624 Law No. National Law on Corporate Income Tax 14/2008/QH12 Assembly dated 12/06/200825 Decree Government Providing guidance on the 124/2008/ND-CP implementation of Corporate Income Tax dated 11/12/2008 Law26 Circular Ministry of Regulating in detail the implementation of 130/2008/TT-BTC Finance the Decree 124 on Corporate Income Tax dated 26/12/200827 Law No. National Law on Value Added Tax 13/2008/QH12 Assembly dated 12/06/200828 Decree Government Regulating in detail the implementation of No.123/2008/ND- the Law on VAT CP dated 08/12/200829 Circular Ministry of Providing guidance on the 129/2008/TT-BTC Finance implementation of Decree No. 123 on dated 26/12/2008 Value Added Tax (VAT)30 Law National Law on Special Sales Tax No.27/2008/QH12 Assembly dated 28/11/200831 Decree Government Providing guidance on the 26/2009/ND-CP implementation of Special Sales Tax Law dated 16/03/200932 Circular Ministry of Providing guidance on the 64/2009/TT-BTC Finance implementation of Decree 26 on Special dated 27/03/2009 Sales Tax 82 Vietnam Investment Guide 2009
  • 91. 33 Law The Standing Law on personal income tax No.04/2007/QH12 Committee of on Personal Income the National Tax dated Assembly 05/12/200734 Decree No Government Stipulating in detail the implementation of 100/2008/ND-CP the Law on personal income tax dated 08/09/200835 Circular Ministry of Providing guidelines for implementation of 84/2008/TT-BTC Finance Government Decree 100 on Personal dated 30/09/2008 Income Tax and Circular No.62/2009/TT-BTC dated 27/03/2009List of document relating to the sectors in which investment is conditionalapplicable to investorsReal Estate Business36 Law No. National Law on real estate business 63/2006/QH11 Assembly dated 29/6/200637 Law No. National Law on Resident Housing 56/2005/QH11 Assembly dated 29/11/2005Education38 Law No. National Education Law 38/2005/QH11 Assembly dated 14/6/200539 Decree Government Cooperation and investment with foreign 06/2000/ND-CP countries in the areas of examination and dated 6/3/2000 treatment of diseases, training and education, scientific research40 Circular Ministry of Providing guidance to implement of 14/2005/TTLT- Education Decree 06 BGD&DT – &Training – BKH&DT dated Ministry of 14/4/2005 Planning & InvestmentPost & Telecommunication41 Ordinance dated National Post & Telecommunication 25/5/2002 Assembly 83 Vietnam Investment Guide 2009
  • 92. Transportation42 Law No. National Law on Rail Way 35/2005/QH11 Assembly dated 14/6/200543 Law No. National Law on Civil Aviation 66/2006/QH11 Assembly dated 29/6/200644 Law No. National Maritime Law 40/2005/QH11 Assembly dated 14/6/200545 Decree Government Conditions for operating business 10/2001/ND-CP maritime services dated 19/3/2001 84 Vietnam Investment Guide 2009
  • 93. APPENDIX III - LIST OF SECTORS ENTITLED TO INVESTMENT INCENTIVE(Issued together with Government Decree No.108 /2006/ND-CP dated 22 September2006. making detailed regulations and providing guidelines for implementation of theLaw on Investment)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 manufacturedmechanical products1. 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 info-technology 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. 85Vietnam Investment Guide 2009
  • 94. III. Use of high-technology; modern technology; protection of ecologicalenvironment; 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-technologyIV. Employment of large number of employees18. Projects regularly employing 5,000 or more employees.V. Construction and development of infrastructures and important projects19. Construction and operation of infrastructure facilities in industrial zones, exportprocessing zones, high-tech zones and economic zones, and of important projectsestablished under a decision of the Prime Minister.VI. Development of facilities in educational, training, medical, gymnastic andsports sectors20. 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 service24. 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: 86Vietnam Investment Guide 2009
  • 95. I. Production of new materials, new energy; production of high-tech products, bio-technology products, info-technology products, manufactured mechanical products1. 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. 87Vietnam Investment Guide 2009
  • 96. 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 animals20. 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 ecologicalenvironment; research on, development and fostering of high technology26. 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 facilities30. 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. 88Vietnam Investment Guide 2009
  • 97. 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, sportsand national cultural sectors35. 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.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 trades40. 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 sectors41. 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. 89Vietnam Investment Guide 2009
  • 98. 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. 90Vietnam Investment Guide 2009
  • 99. APPENDIX IV - LIST OF GEOGRAPHICAL REGIONS OF INVESTMENTINCENTIVES(issued together with Decree No 108/2006/ND-CP dated 22 September 2006, makingdetailed regulations and providing guidelines for implementation of the Law onInvestment)No Province Regions with Regions with difficult specially difficult socio-economic socio-economic conditions conditions1 Bac Kan All districts and towns2 Cao Bang All districts and towns3 Ha Giang All districts and towns4 Lai Chau All districts and towns5 Son La All districts and towns6 Dien Bien All districts and Dien Bien city7 Lao Cai All districts Lao Cai city8 Tuyen Quang Na Hang and Chiem Ham Yen, Son Duong and Hoa districts Yen Son districts, and Tuyen Quang town9 Bac Giang Son Dong district Luc Ngan, Luc Nam,Yen The and Hiep Hoa districts10 Hoa Binh Da Bac and Mai Chau Kim Boi, Ky Son, Luong districts Son, Lac Thuy, Tan Lac, Cao Phong, Lac Son and Yen Thuy districts11 Lang Son Binh Gia, Dinh Lap, Bac Son, Chi Lang and Huu Cao Loc, Loc Binh, Lung districts Trang Dinh, Van Lang and Van Quan districts12 Phu Tho Thanh Son and Yen Doan Hung. Ha Hoa, Phu 91Vietnam Investment Guide 2009
  • 100. Lap districts Ninh, Song Thao, Thanh Ba, Tam Nong and Thanh Thuy districts13 Thai Nguyen Vo Nhai and Dinh Hoa Dai Tu, Pho Yen, Phu districts Luong, Phu Binh and Dong Hy districts14 Yen Bai Luc Yen, Mu Cang Tran Yen, Van Chan, Van Chai and Tram Tau Yen and Yen Binh districts, districts and Nghia Lo town15 Quang Ninh Ba Che and Binh Lieu Cam Pha district districts, Co To island district, and other islands and isles of the province16 Hai Phong Island districts of Bach Long Vy and Cat Hai17 Ha Nam Ly Nhan and Thanh Liem districts18 Nam Dinh Giao Thuy, Xuan Truong, Hai Hau and Nghia Hung districts19 Thai Binh Thai Thuy and Tien Hai districts20 Ninh Binh Nho Quan, Gia Vien, Kim Son, Tam Diep and Yen Mo districts21 Thanh Hoa Muong Lat, Quan Hoa, Thach Thanh and Nong Ba Thuoc, Lang Cong districts Chanh, Thuong Xuan, Cam Thuy, Ngoc Lac, Nhu Thanh and Nhu Xuan districts22 Nghe An Ky Son, Tuong Duong, Tan Ky, Nghia Dan and Con Cuong, Que Thanh Chuong districts 92Vietnam Investment Guide 2009
  • 101. Phong, Quy Hop, Quy Chau and Anh Son districts23 Ha Tinh Huong Khe, Huong Duc Tho, Ky Anh, Nghi Son and Vu Quang Xuan, Thach Ha, Cam districts Xuyen and Can Loc districts24 Quang Binh Tuyen Hoa, Minh Hoa The remaining districts and Bo Trach districts except Tuyen Hoa, Minh Hoa and Bo Trach districts25 Quang Tri Huong Hoa and Dac The remaining districts Krong districts except Huong Hoa and Dac Krong districts26 Thua Thien – A Luoi district Phong Dien, Nam Dong, Hue Quang Dien, Huong Tra, Phu Loc and Phu Vang districts27 Da Nang Hoang Sa island district28 Quang Nam Dong Giang, Tay Dai Loc and Duy Xuyen Giang, Nam Giang, districts Phuoc Son, Bac Tra My, Nam Tra My, Hiep Duc, Tien Phuoc, Nui Thanh districts, and Cu Lao Cham island29 Quang Ngai Ba To, Tra Bong, Son Nghia Hanh and Son Tinh Tay, Son Ha, Minh districts Long, Binh Son and Tay Tra districts, and Ly Son island district30 Binh Dinh An Lao, Vinh Thanh, Hoai An and Phu My Van Canh, Phu Cat districts and Tay Son districts31 Phu Yen Song Hinh, Dong Song Cau, Tuy Hoa and Xuan, Son Hoa and Tuy An districts 93Vietnam Investment Guide 2009
  • 102. Phu Hoa districts32 Khanh Hoa Khanh Vinh and Khanh Van Ninh, Dien Khanh and Son districts, Truong Ninh Hoa districts, Cam Son island district, and Ranh town other islands of the province33 Ninh Thuan All districts34 Binh Thuan Phu Quy island district Bac Binh, Tuy Phong, Duc Linh, Tanh Linh, Ham Thuan Bac and Ham Thuan Nam ditricts35 Dac Lac All districts36 Gia Lai All districts and town37 Kon Tum All districts and town38 Dak Nong All districts39 Lam Dong All districts Bao Loc town40 Ba Ria – Vung Con Dao island district Tan thanh district Tau41 Tay Ninh Tan Bien, Tan Chau, The remaining districts Chau Thanh and Ben except Tan Bien, Tan Chau, Cau districts Chau Thanh and Ben Cau districts42 Binh Phuoc Loc Ninh, Bu Dang and Dong Phu, Binh Long, Bu Dop districts Phuoc Long and Chon Thanh districts43 Long An Duc Hue, Moc Hoa, Tan Thanh, Duc Hoa, Vinh Hung and Tan Hung districts44 Tien Giang Tan Phuoc district Go Cong Dong and Go Cong Tay districts45 Ben Tre Thanh Phu, Ba Tri and The remaining districts 94Vietnam Investment Guide 2009
  • 103. Binh Dai districts except Thanh Phu, Ba Tri and Binh Dai districts46 Tra Vinh Chau Thanh and Tra Cau Ngang, Cau Ke and Cu districts Tieu Can districts47 Dong Thap Hong Ngu, Tan Hong, The remaining districts Tam Nong and Thap except Hong Ngu, Tan Muoi districts Hong, Tam Nong and Thap Muoi districts48 Vinh Long Tra On district49 Soc Trang All districts Soc Trang town50 Hau Giang All districts Vi Thanh town51 An Giang An Phu, Tri Ton, Thoai The remaining districts Son, Tan Chau and except An Phu, Tri Ton, Tinh Bien districts Thoai Son, Tan Chau and Tinh Bien districts52 Bac Lieu All districts Bac Lieu town53 Ca Mau All districts Ca Mau city54 Kien Giang All districts, and Ha Tien town, Rach Gia islands and isles of the town province55 Other regions High-tech zones and Industrial zones and export economic zones processing zones entitled to incentives, established under a established under a decision of the Prime decision of the Prime Minister Minister 95Vietnam Investment Guide 2009
  • 104. APPENDIX V - LIST OF CONDITIONAL INVESTMENT SECTORS APPLICABLE TOFOREIGN INVESTORS(issued together with Decree No. 108/2006/ND-CP dated 22 September 2006, making detailed regulations and providing guidelines for implementation of the Law on Investment)1. Radio-broadcasting, televising2. Production, publication and distribution of cultural products.3. Exploitation and processing of minerals.4. Establishment of infrastructure facilities of telecommunications networks, broadcasting and transmission networks, provision of telecommunications and Internet services.5. Construction of public postal networks, provision of postal and express services.6. Construction and operation of river ports, sea ports, airports.7. Transportation of cargoes and passengers by railroad, by air, by land, by sea, by inland waterway.8. Catching of marine products.9. Production of cigarettes.10. Trade in properties.11. Doing business in export-import and distribution sectors.12. Investment in education and training sector.13. Hospitals, clinics;14. Other investment sectors in international treaties of which Vietnam is a member and which require Vietnam to commit to restricting the opening of the market to foreign investors.Investment conditions applicable to foreign investors with investment projects includedin investment sectors that are stipulated in this Appendix must conform to provisions ofinternational treaties of which Vietnam is a member. 96Vietnam Investment Guide 2009
  • 105. APPENDIX VI - USEFUL CONTACTS AND ADDRESSES IN VIETNAMGOVERNMENT AGENCIES MINISTRY OF NATURAL RESOURCES AND ENVIRONMENTMINISTRY OF FOREIGN AFFAIRS No. 83 Nguy n Chí Thanh, Ha Noi1 Ton That Dam, Hanoi Tel: 84-4-37732731 ; 84-4-38343005Tel.: (84-4) 38458201 Fax: 84-4-38359221Fax: (84-4) 38436488 MINISTRY OF LABOR, WAR INVALIDS ANDMINISTRY OF PLANNING AND SOCIAL AFFAIRSINVESTMENT No. 12 Ngô Quy n, Ha Noi2 Hoang Van Thu, Hanoi Tel: 84-4-38269557; 84-4-38269558Tel.: (84-4) 38455298 Fax: 84-4-38248036Fax: (84-4) 38234453 MINISTRY OF SCIENCE AND TECHNOLOGYMINISTRY OF FINANCE 39 Tran Hung Dao, Hanoi28 Tran Hung Dao, Hanoi Tel. : (84-4)38252731Tel.: (84-4)22202828 Fax: (84-4)38252733Fax: (84-4)22208020/2208021 MINISTRY OF NATURAL RESOURCES ANDMINISTRY OF INDUSTRY AND ENVIRONMENTTRADE 83 Nguyen Chi Thanh, HanoiNo. 54, Hai Bà Trưng St., Ha Noi Tel: (84-4)38343914Tel.: 84-4-22202101 - 84-4-22202568 Fax: (84-4)38352131Fax: 84-4-22202525 - 84-4-38264696 MINISTRY OF INFORMATION &MINISTRY OF AGRICULTURE AND TELECOMMUNICATIONRURAL DEVELOPMENT 18 Nguyen Du, Hanoi2 Ngoc Ha, Hanoi Tel: (84-4)39435602Tel.: (84-4)38459670 Fax: (84-4)38263477Fax: (84-4)37330752 MINISTRY OF JUSTICEMINISTRY OF TRANSPORT 58-60 Tran Phu, Hanoi80 Tran Hung Dao, Hanoi Tel: (84-4)37336213Tel.: (84-4) 39422079 Fax: (84-4)38431431Fax: (84-4)39422386 OFFICE OF GOVERNMENTMINISTRY OF CONSTRUCTION 1A Hoang Hoa Tham , Hanoi37 Le Dai Hanh, Hanoi Tel. : (84)8043579Tel.: (84-4)39760271Fax: (84-4)39762153 STATE BANK OF VIETNAM No. 49 Lý Thái T , Ha NoiMINISTRY OF CULTURE, SPORTS Tel: 84-4-38254845 ; 84-4-38268779AND TOURISM Fax: 84-4-39349569No. 51 Ngô Quy n, Ha NoiTel: 84-4-39436615 - 84-4-39439265Fax: 84-4-39439009 - 84-4-39454330 97 Vietnam Investment Guide 2009
  • 106. PROVINCIAL DEPARTMENTS OF PLANNING AND INVESTMENT (DPI) Hanoi DPI Quang Ninh DPI 17 Tran Nguyen Han - Hoan Kiem - Hong Ha ward, Ha Long city, Quang Ninh Hanoi province Tel: 04.38256637/ 04.38260257 Tel: 033.3835687/033.3835693 Fax: 04.38251733 Fax: 033.3838072 Hai Phong DPI Cao Bang DPI No. 1 Dinh Tien Hoang, Hong Bang, Xuan Truong str. Hop Giang, Cao Bang town, Hai Phong Cao Bang province Tel: 031.3842614/031. 3842119 Tel: 026.3858743 /026.3852535 Fax: 031.3842021 Fax: 026.3853335 Bac Can DPI Lang Son DPI Group 4, Duc Xuan ward, Bac Kan No 2 Hoang Van Thu, Chi Lang, Lang Son town, Bac Kan province town, Lang Son province Tel: 0281.3871287 Tel: 025.3812122/ 025.3812561 Fax: 0281.3871287 Fax: 025.3813067 Ha Giang DPI Tuyen Quang DPI 156 Tran Hung Dao, Ha Giang Tran Hung Dao str, Minh Xuan, Tuyen Quang town, Ha Giang province town, Tuyen Quang province Tel: 019.3866256/ 019.3867051 Tel: 027.3822814/027.3821366 Fax: 019.3867623 Fax: 027.3823160 Thai Nguyen DPI Dien Bien DPI No. 17 Doi Can, Thai Nguyen city, Muong Thanh ward, Dien Bien city, Dien Bien Thai Nguyen province province Tel: 0280.3855688/0280.3854211/ Tel: 023.3825409/ 023.3825896 0280.3759605 Fax: 023.3825944 Fax: 0280.3851363 Lai Chau DPI Son La DPI Phong Chau 1, Phong Tho town, Khau Ca str, Son La town, Son La province Tam Duong district, Lai Chau Tel : 022.3859866/ province Fax: 022.3852032 Tel: 023.3876501/ 023.3876735 Fax: 023.3876437 Lao Cai DPI Yen Bai DPI 266 Hoang Lien str, Kim Tan, Lao Yen Ninh str, Dong Tam, Yen Bai city, Yen Cai town, Lao Cai province Bai province Tel: 020.3840810 Tel: 029.3852409/029.3853052 Fax: 020.3842411 Fax: 029.3851626 Hoa Binh DPI Phu Tho DPI No. 3 Tran Hung Dao str, Hoa Binh Tran Phu str, Tan Dan, Viet Tri city, Phu Tho town, Hoa Binh province province Tel: 018.3851457 Tel: 0210.3847778 Fax: 018.3853152 Fax: 0210.3840955/ 0210.3847419 Vinh Phuc DPI Bac Giang DPI No 40, Nguyen Trai str, Vinh Yen Nguyen Gia Thieu str, Bac Giang town, Bac town, Vinh Phuc province Giang province Tel: 0211.3862480 /0211.3842743 Tel: 0240.3854317/0240.3859606 Fax: 0211.3862480 Fax: 0240.3854923 98 Vietnam Investment Guide 2009
  • 107. Bac Ninh DPI Ha Tay DPINo 6 Ly Thai To str, Suoi Hoa ward, No 2 Phung Hung - Ha Đong city, Ha TayBac Ninh town, Bac Ninh province provinceTel: 0241.3822569/0241.3824902 Tel: 034.3824184/ 034.3828064Fax: 0241.3825777 Fax: 034.3824608Hung Yen DPI Ha Nam DPINo 8 Chua Chuong, Hien Nam, 15 Tran Phu, Phu Ly, Ha Nam province.Hung Yen, Hung Yen province Tel: 0351.3852701/ 0351.3854317Tel: 0321.3865127 Fax: 0351.3852701Fax:Hai Duong DPI Thai Binh DPI58 Quang Trung, Hai Duong city, 233 duong Hai Ba Trung, Thai Binh city, ThaiHai Duong province Binh provinceTel: 0320.3853574/0320.855762 Tel: 036.3831774/ 036.3830437Fax: 0320.3850814 Fax: 036.3830326Nam Dinh DPI Ninh Binh DPI172 Han Thuyen, Nam Dinh city, 15 Le Hong Phong, Ninh Binh town, NinhNam D nh province. Binh provinceTel: 0350.3648482/0350.3645227 Tel: 030.3871156/ 030.3874913Fax: 0350.3647120 Fax: 030.3873381Thanh Hoa DPI Nghe An DPI45B Le Loi str, Lam Son ward, Truong Thi ward, Vinh city, Nghe An provinceThanh Hoa city, Thanh Hoa Tel: 038.3844636/ 038.3843102province Fax: 038.3592246Tel: 037.3852366/037.3756149Fax: 037.3851451Ha Tinh DPI Quang Binh DPIPhan Dinh Phung, Ha Tinh town, No 9 Quang Trung, Dong Hoi, Quang Binh.Ha Tinh province Tel: 052.3824611/052.3824635Tel: 039.3856750 /039.3881267 Fax: 052.3821520Fax: 039.3855576Quang Tri DPI Da Nang DPI34 Hung Vuong, Dong Ha town, No 47 Ngo Gia Tu, Hai Chau 1 ward, HaiQuang Tri province Chau, Da Nang cityTel: 053.3550167 Tel: 0511.3822759Fax: 053.3851760 Fax:Thua Thien Hue DPI Quang Nam DPITon Duc Thang str, Hue city No 02 Tran Phu, Tam Ky town, Quang NamTel: 054.3822538 /054.3824680 provinceFax: 054.3821264 Tel: 0510.3810394 /0510.3810866 Fax: 0510.3810396Quang Ngai DPI Binh Dinh DPINo. 96 Nguyen Nghiem, Quang No 35 Le Loi str, Quy Nhon city, Binh DinhNgai city, Quang Ngai province provinceTel: 055.3822868/055.3826266 Tel: 056.3818888/056.3818889Fax: Fax: 056.3824509/056.3818887Phu Yen DPI Khanh Hoa DPINo 2A Dien Bien Phu, Tuy Hoa No 01 Tran Phu str, Nha Trang city, Khanhtown, Phu Yen province Hoa province.Tel: 057.3841112 Tel:058.3824243 99Vietnam Investment Guide 2009
  • 108. Fax: Fax: 058.3812943/058.3824243Ninh Thuan DPI Binh Thuan DPIThe 16th April str, Phan Rang town, No 290 Tran Hung Dao, Binh Hung ward,Thap Cham, Ninh Thuan province Phan Thiet city, Binh Thuan provinceTel: 068.3822694/068.825880 Tel: 062.3821128/062.3827170/062.3831890Fax: 068.3825488 Fax: 062.3828656Gia Lai DPI Kon Tum DPINo 02 Hoang Hoa Tham str, Pleiku 123B Tran Phu str, KonTum town, Kon Tumcity, Gia Lai province provinceTel: 059.3822204/059.3823717 Tel: 060.3862710/060.3862546Fax: 059.3823808 Fax: 060.3864253Dak Nong DPI Dak Lak DPIGia Nghia town, Dac Nong province No. 17 Le Duan str, Buon Ma Thuot city, DakTel: 050.3543689/050.3544676 Lak provinceFax: Tel: 050.3852702 Fax: 050.3812187Lam Dong DPI Ho Chi Minh City DPINo 04 Tran Hung Dao str, Da Lat No. 32 Le Thanh Ton, District 1, Ho Chi Minhcity, Lam Dong province cityTel: 063.3822311/063.3830306 Tel: 08.38297834/08.38272192/08.38293174Fax: 063.3834806 Fax: 08.38295008Can Tho DPI Ba Ria - Vung Tau DPI61/21 Ly Tu Trong, An Phu ward, No. 01 Nguyen Chi Thanh, ward 2, Vung TauCan Tho city, Can Tho province city.Tel: Tel:071.3830235/071.3730259/071.383 (064)3852401/3852320/3858286/3851381/380630 52502 (ext. 0 or 25)Fax: 071.3830570Dong Nai DPI Tay Ninh DPINo 2 Nguyen Van Tri, Thanh Binh, 300 Cach Mang Thang tam, ward 2, Tay NinhBien Hoa city, Dong Nai province town, Tay Ninh provinceTel: 061.3824283/061.3827116 Tel: 066.3822166/066.3827638Fax: 061.3941718 Fax: 066.3827947Binh Duong DPI Binh Phuoc DPINo 188, Binh Duong str, Phu Hoa The 14th National Highway, Dong Xoi town,ward, Thu Dau Mot town, Binh Binh Phuoc provinceDuong province Tel: 0651.3879253/0651.3870772Tel: 0650.3822926/0650.3827954 Fax: 0651.3887088Fax: 0650.3825194Long An DPI Tien Giang DPINo. 61 Truong Cong Dinh, ward 1, No.38 Nam Ky Khoi Nghia str, My Tho city,Tan An town, Long An province Tien Giang province.Tel: 072.3823461/072.3286199 Tel: 073.3873381/073.3871961Fax: 072.3825044 Fax: 073.3875487Vinh Long DPI Tra Vinh DPINo. 1 Trung Nu Vuong, ward 1, No.19A Nam Ky Khoi Nghia, Tra Vinh townVinh Long town, Vinh Long province Tel: 074.3862289/074.3866300Tel: 070.3823319/070.3834031 Fax: 074.3864348Fax: 070.3828033Ben Tre DPI Hau Giang DPI 100Vietnam Investment Guide 2009
  • 109. No. 6 Cach Mang Thang Tam str, No. 2 Hoa Binh, Vi Thanh town, Hau Giang ward 3, Ben Tre town, Ben Tre province province Tel: 071.3870214/071.3870210 Tel: 075.3821280/075.3817358 Fax: 071.3878871 Fax: 075.3825543 Dong Thap DPI An Giang DPI No. 11, Vo Truong Toan, ward 1, No. 8/18 Ly Thuong Kiet, Long Xuyen town, Cao Lanh town, Dong Thap An Giang province. province Tel: 076.3852913 Tel: 067.3851101/1960 Fax: 076.3853380 Fax: 067.3852955 Kien Giang DPI Soc Trang DPI No. 29 Bach Dang, Rach gia town, No.21B Tran Hung Dao, Soc Trang town, Soc Kien Giang province Trang province Tel: 077.3862037 Tel: 079.3822333 Fax: 077.3862037 Fax: 079.3822333 Bac Lieu DPI Ca Mau DPI No.23 Hai Ba Trung, ward 3, Bac No. 93 Ly Thuong Kiet, ward 5, Ca Mau city Lieu town, Bac Lieu province Tel: 0780.3831332/0780.3825972 Tel: 0781.3827616 Fax: 0780.3830773 Fax: 0781.3823874MANAGEMENT BOARDS (MB) OF INDUSTRIAL ZONES/EXPORT PROCESSINGZONES/ECONOMIC ZONES/HI-TECH ZONES (IZ/EPZ/EZ/HTZ) Hanoi IZs/EPZs MB Hoa Lac HTZ MB D8A, D8B Giang Vo, Ba Dinh, Ha First floor, Building 17T7, Trung Hoa - Nhan Noi Chinh New City Town, Hoang Dao Thuy str, Tel: 04.37721156 Thanh Xuan, Hanoi Fax: 04.37721152 Tel: 04.32511478 Fax: 04.32511529 Hai Phong IZs MB Quang Ninh IZs MB No. 24 Cu Chinh Lan, Hong Bang, Nguyen Van Cu, Ha Long city, Quang Ninh Hai Phong city province Tel: 031.3823206 Tel: 033.3836573 Fax: 031.3842426 Fax: 033.3838022 Thai Nguyen IZs MB Phu Tho IZs MB Tan Quang commune, Song Cong Tan Dan ward, Viet Tri city, Phu Tho town, Thai Nguyen province Tel: 0280.3845435 Tel: 0210.3843021 Fax: 0280.3845434 Fax: 0210.3844997 Vinh Phuc IZs MB Bac Giang IZs MB Third floor, Vinh Phuc Provincial No 48 Ngo Gia Tu str, Bac Giang city, Bac People’s Committee, Nguyen Trai Giang province str, Vinh Yen town, Vinh Phuc Tel: 0240.3554133 province Fax: 0240.3554133 Tel: 0211.3843403 Fax: 0211.3843407 Bac Ninh IZs MB Ha Tay IZs MB No. 10 Phu Dong Thien Vuong str, No. 2 Phung Hung - Ha Dong town - Ha Tay 101 Vietnam Investment Guide 2009
  • 110. Bac Ninh town, Bac Ninh province provinceTel: 0241.3825232 Tel: 034.3501388Fax: 0241.3825236 Fax:Hung Yen IZs MB Ha Nam IZs MBPho Noi, My Hao district, Hung Yen Ho Chau Giang, Quang Trung ward, Phu Lyprovince town, Ha Nam provinceTel: 0321.3942862 Tel: 0351.3850569Fax: 0321.3942927 Fax: 0351.3850569Hai Duong IZs MB Thai Binh IZs MBNo. 57 Quang Trung str, Hai Duong No. 81, Bo Xuyen str, Thai Binh city, Thaicity Binh provinceTel: 0320.3844723 Tel: 036.3740872Fax: 0320.3844723 Fax: 036.3740872Nam Dinh IZs MB Ninh Binh IZs MBKm 105, National Highway No. 10, No. 2 Vo Thi Sau str, Dong Thanh ward,Loc Vuong ward, Nam Dinh city Ninh Binh town, Ninh Binh provinceTel: 0350.3680806 Tel: 030.3876129Fax: 0350.3680335 Fax: 030.3873302Thanh Hoa IZs MB Nghe An IZs MBNo. 15A Hac Thanh str, Lam Son Highway 3/2 Hung Phuc ward, Vinh city,ward, Thanh Hoa city Nghe An provinceTel: 037.3850107 Tel: 038.3835146/038.3520354Fax: 037.3850105 Fax: 038.3832657Ha Tinh IZs MB Thua Thien Hue IZs MBNo. 75 Nguyen Chi Thanh str, Ha Unit 8 Phu Bai town, Huong Thuy district,Tinh town, Ha Tinh province Thua Thien Hue provinceTel: 039.3881237 Tel: 054.3861765Fax: 039.3881237/ 039.3882992 Fax: 054.3861805Da Nang IZs/EPZs MB Quang Nam IZs MBNo. 58 Nguyen Chi Thanh, Da No. 30 Hung Vuong str, Tam Ky town,Nang city Quang Nam provinceTel: 0511.3810653 Tel: 0510.3811589Fax: 0511.3830015 Fax: 0510.3859869Quang Ngai IZs MB Dung Quat IZs MB25 Hung Vuong Highway, Quang No. 39 Hai Ba Trung str, Quang Ngai city,Ngai city, Quang Ngai province Hai Ba Trung str, Quang Ngai city, QuangTel: 055.3828514 Ngai provinceFax: 055.3828514 Tel: 055.3711788 Fax: 055.3825828Binh Dinh IZs MB Phu Yen IZs MBNo. 65 Tay Son, Quy Nhon city, No. 353 Tran Hung Dao, Tuy Hoa town, PhuBinh Dinh province Yen provinceTel: 056.3646257 Tel: 057.3828250Fax: 056.3846616 Fax: 057.3828949Khanh Hoa IZs MB Binh Thuan IZs MBNo. 13B Hoang Hoa Tham, Nha No. 119 Tran Hung Dao str, Phan Thiet city,Trang city, Khanh Hoa province Binh Thuan provinceTel: 058.3527872 Tel: 062.3821243Fax: 058.3527873 Fax: 062.3821243Dak Nong IZs MB Ho Chi Minh City IZs/EPZs MB 102Vietnam Investment Guide 2009
  • 111. No. 1 Le Lai, Gia Nghia town, Dak No. 35 Nguyen Binh Khiem, Dakao ward,Nong province Distric 1, Ho Chi Minh cityTel: 050.3544592 Tel: 08.38290405/08.38290414Fax: 050.3544591 Fax: 08.38294271Ba Ria - Vung Tau IZs MB Can Tho IZs/EPZs MBNo.124 Vo Thi Sau str, Thang Tam No. 105 Tran Hung Dao, Ninh Kieu district,ward, Vung Tau city, Ba Ria - Vung Can Tho city, Can Tho provinceTau province Tel: 071.3830238Tel: 064.3816640 Fax: 071.3830773Fax: 064.3858531Dong Nai IZs MB Tay Ninh IZs MBNo. 26 2A road, Bien Hoa 2 Km 32, An Binh, An Tinh commune, TrangIndustrial Zone, Dong Nai province Bang, Tay Ninh provinceTel: 061.3892378 Tel: 066.3882300Fax: 061.3892379 Fax: 066.3882300Binh Duong IZs MB Vietnam - Singapore IZs MBNo. 5 Quang Trung, Thu Dau Mot No. 8 Huy Nghi highway, Thuan An, Binhtown, Binh Duong province DuongTel: 0650.3831215 Tel:Fax: 0650.3823984 0650.3743901/0650.3743902/0650.3743904 Fax: 0650.3743903Binh Phuoc IZs MB Long An IZs MBHighway 14, Tan Phu district, Dong 65B Bao Dinh str, District 2, Tan An town,Xoai town, Binh Phuong province Long An provinceTel: 0651.3887524 Tel: 072.3825449Fax: 0651.3887523 Fax: 072.3825442Tien Giang IZs MB Vinh Long IZs MBNo. 27 Nam Ky Khoi Nghia, district No.85 Trung Nu Vuong, district 1, Vinh Long4, My Tho city, Tien Giang province town, Vinh Long provinceTel: 073.3871808 Tel: 070.3820972Fax: 073.3871808 Fax: 070.3820972Dong Thap IZs MB Quang Binh IZs MBNo. 466 Nguyen Sinh Sac, district No. 317 Ly Thuong Kiet str, Dong Hoi city,1, Sa Dec town, Dong Thap Quang Binh provinceTel: 067.3865471 Tel: 052.3828513Fax: 067.3865471 Fax: 052.3828516Chu Lai Open Economic Zone Kon Tum IZs MBMB No. 145 Ure str, Kon Tum town, Kon TumNo. 1 Tran Phu, Tam Ky town, provinceQuang Nam province Tel: 060.3910606Tel: 0510.3812847 Fax: 060.3910606Fax: 0510.3812842Nhon Hoi Economic Zone MB Soc Trang IZs MBNo. 83 Le Hong Phong, Quy Nhon No. 146 Hai Ba Trung, district 1, Soc Trangcity, Binh Dinh province town, Soc Trang provinceTel: Tel: 079.3611936056.3820957/056.3820958(ext.105) Fax: 079.3611187Fax: 056.3820965Ben Tre IZs MB Dak Lak IZs MBNo. 20 3/2 Str, District 2, Ben Tre No. 01A, Ba Trieu, Buon Ma Thuot city, Dak 103Vietnam Investment Guide 2009
  • 112. town, Ben Tre province Lak province Tel: 075.3817718 Tel: 050.3856339 Fax: 075.3817718 Fax: 050.3856339 FOREIGN EMBASSIES IN VIET NAM Algeria, 13 Phan Chu Trinh, Hanoi Italy, 9 Le Phung Hieu, Hanoi Tel: (84-4)38253865 Tel: (84-4)38256256 Fax: (84-4)38260830 Fax:(84-4)38267602 Argentina, 8th F, Daeha Business Japan, 27 Lieu Giai, HanoiCentre, Tel: (84-4)8463000 360 Kim Ma, Hanoi Fax: (84-4)8463043 Tel:(84- 4)38315578/38315262/38315263 Korea (Democratic People’s Republic Fax: (84-4)38315577 of), 25 Cao Ba Quat, Hanoi Tel: (84-4)38453008 Austria, 8th F, Prime Centre, Fax: (84-4)38231221 53 Quang Trung, Hanoi Tel: (84-4)39433050/39433501 Laos, 22 Tran Binh Trong, Hanoi Fax: (84-4)39433055 Tel: (84-4)39424576 Fax:(84-4)38228414 Australia, 8 Dao Tan St., Hanoi Tel. (84-4)38317755 Lybia, A3 Van Phuc Quarter, Fax: (84-4)38317711 Kim Ma, Hanoi Tel: (84-4) 38453379 Bangladesh, 7thF, Daeha Centre, Fax: (84-4) 38454977 360 Kim Ma, Hanoi Tel: (84-4)37716625 Malaysia, 43-45 Dien Bien Phu, Hanoi Fax: (84-4)37716628 Tel: (84-4)37343836 Fax: (84-4)37343829 Belarus, 52 Tay Ho, Hanoi Tel: (84-4)37197126 Mexico, T11, 14 Thuy Khue, Hanoi Fax: (84-4)3719 7125 Tel: (84-4)38470947/ 48 Fax: (84-4)38470949 Belgium, 9thF, 49 Hai Ba Trung, Hanoi Tel: (84-4)39346179-81 Mongolia, V5, Van Phuc Quarter, Hanoi Fax:(84-4)39346183 Tel: (84-4)38453009 Fax: (84-4)38454954 Brazil, 14 Thuy Khue, Hanoi Tel: (84-4)38432544 Myanmar, A3 Van Phuc Quater, Fax: (84-4)38432542 Kim Ma, Hanoi Tel: (84-4)38453369 Brunei, 27 Quang Trung, Hanoi fax: (84-4)38452404 Tel: (84-4)9435249/50/51 Fax: (84-4)9435201 Netherlands, 6th F, Daeha Business Centre, 360 Kim Ma, Hanoi Bulgaria, 5 Van Phuc Quater, Tel: (84-4)38315650 Kim Ma, Hanoi Fax: (84-4)38315655 Tel: (84-4)38252908 104 Vietnam Investment Guide 2009
  • 113. Fax: (84-4)38460856 New Zealand, 5th Floor, 63 Ly Thai To, HanoiCambodia, 71A Tran Hung Dao, Hanoi Tel: (84-4)38241481Tel: (84-4)39424788 Fax: (84-4)38241480Fax: (84-4)38265225 Norway, 56 Ly Thai To, HanoiCanada, 31 Hung Vuong, Hanoi Tel: (84-4) 38262111Tel: (84-4)37345000 Fax:(84-4)38260222Fax: (84-4)37345049 Palestine, E4B Trung Tu DiplomaticChile, Suite 1201-1203, 12F, Tung Quarter, HanoiShing Square, 2 Ngo Quyen, Hanoi Tel: (84-4)38524013Tel: (84-4)39351147/48Fax: (84-4)39351150 Panama, Hanoi Central Office Building, 44B Ly Thuong Kiet, HanoiChina, 46 Hoang Dieu St., Hanoi Tel: (84-4)39365213Tel. (84-4) 38453736, Fax: (84-4)39365214Fax: (84-4) 38232826 Philippines, 27B Tran Hung Dao, HanoiCuba, 65 Ly Thuong Kiet, Hanoi Tel: (84-4)39437948Tel: (84-4)39424775 Fax: (84-4)38265760Fax: (84-4)39422426 Poland, 3 Chua Mot Cot St., HanoiCzech Republic, 13 Chu Van An, Hanoi Tel: (84-4)38452027Tel: (84-4)38454131 Fax:(84-4)38236914Fax: (84-4)38233996 Romania, 5 Le Hong Phong, HanoiDenmark, 19 Dien Bien Phu, Hanoi Tel: (84-4)38452014Tel: (84-4) 38231888 Fax: (84-4)38430922Fax: (84-4)38231999 Russian, 191 La Thanh, HanoiEgypt, 63 To Ngoc Van, Hanoi Tel: (84-4)38336991/2Tel: (84-4)38294999 Fax: (84-4)38336995Fax: (84-4)38294997 Singapore, 41-43 Tran Phu St. HanoiEuropean Union (EU), 56 Ly Thai To, Tel: (84-4)8233966,Hanoi Fax: (84-4)7337627Tel: (84-4)39341300Fax: (84-4)39341361 South Africa, 3F, 31 Hai Ba Trung, Hanoi Tel: (84-4)39362000Finland, 31 Hai Ba Trung, Hanoi Fax:(84-4)39361991Tel: (84-4)8266788Fax: (84-4)8266766 South Korea , Deaha Business Center, 360 Kim Ma, HanoiFrance, 57 Tran Hung Dao St., Hanoi Tel: (84-4)38315111- 6Tel. (84-4)39437719 Fax: (84-4)38315117Fax: (84-4)38437236 Spain, Deaha Business Center,Germany, 29 Tran Phu St., Hanoi 360 Kim Ma, Hanoi 105 Vietnam Investment Guide 2009
  • 114. Tel: (84-4)38430245 Tel: (84-4)37715207Fax: (84-4)38453838 Fax: (84-4)37715206 Sweden, 2 Nui Truc, HanoiHungary, 12thF, Daeha Business Tel: (84-4)37260400Centre, Fax: (84-4)38232195360 Kim Ma, HanoiTel: (84-4)37715714 Switzerland, 15thF, G.P.O. Box 42, Fax:(84-4)37715716 44B Ly Thuong Kiet, Hanoi Tel: (84-4)39346589India, 58-60 Tran Hung Dao, Hanoi Fax:(84-4)39346591Tel: (84-4)38244989Fax:(84-4)38244998 Turkey, 4 Da Tuong, Hanoi Tel: (84-4)38222460Indonesia, 50 Ngo Quyen St., Hanoi Fax:(84-4)38222458Tel: (84-4)38253353Fax: (84-4)38259274 Thailand, 63-65 Hoang Dieu St., Hanoi Tel: (84-4)38235092Iran, 54 Tran Phu, Hanoi Fax: (84-4)38235088Tel: (84-4)38232068Fax: (84-4)38232120 Ukraine, 6B Le Hong Phong, Hanoi Tel: (84-4)37344484Iraq, 66 Tran Hung Dao, Hanoi Fax: (84-4)37344497Tel: (84-4)39424141Fax: (84-4)39424055 United Kingdom, Central Building, 31 Hai Ba Trung, HanoiIsrael, 68 Nguyen Thai Hoc, Hanoi Tel: (84-4)39360500Tel: (84-4)38433140 Fax: (84-4)39360561Fax: (84-4)38435760 United States, 7 Lang Ha, Hanoi Tel: (84-4)37721500 Fax: (84-4)37721510 106 Vietnam Investment Guide 2009