Vietnam Economics 2011-NGO

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Vietnam Economics 2011-NGO

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Vietnam Economics 2011-NGO

  1. 1. Ease of Doing Business in VietnamEconomy Overview Region East Asia & Pacific Income Category Lower middle income Population 87,279,754 GNI Per Capita (US$) 1,010.00 Doing Business 2011 Rank Doing Business 2010 Rank 78 88Topic Rankings DB 2011 RankStarting a Business 100Dealing with Construction Permits 62Registering Property 43Getting Credit 15Protecting Investors 173Paying Taxes 124Trading Across Borders 63Enforcing Contracts 31Closing a Business 124Starting a BusinessDB 2011 Rank 100Indicator VietnamProcedures (number) 9Time (days) 44Cost (% of income per capita) 12.1Paid-in Min. Capital (% of income per capita) 0No. Procedure Check the proposed company name; obtain a business registration certificate as well as a tax registration 1 certificate from the local business registration office under the Department of Planning and Investment 2 Make a company seal
  2. 2. Registration of the sea-sample at the 3 Police Department 4 Open a bank account Publish announcement in a daily 5 newspaper Buy pre-printed VAT invoices from the Municipal Taxation Department or 6 obtain and print self-printed VAT invoices Register with the local labor office to declare use of labor (Municipal *7 Department for Labor, Invalids and Social Affairs). Register employees with the Social Insurance Fund for the payment of 8 health insurance and social insurance. Register for trade union with Vietnam *9 General Confederation of Labour* Takes place simultaneously with another procedure.Dealing with Construction PermitsDB 2011 Rank 62Indicator VietnamProcedures (number) 13Time (days) 194Cost (% of income per capita) 128.4No. Procedure Request and obtain construction 1 permit from the District Department of Construction of Ho Chi Minh City Receive inspection by the Department 2 of Construction of Ho Chi Minh City Receive inspection from the 3 municipality after completion of foundation works Receive inspection from the 4 municipality at completion of building surroundings 5 Request power connection *6 Receive inspection by power provider
  3. 3. *7 Connect to power services Request water and sewage *8 connection *9 Receive inspection by water company Connect to water and sewage * 10 services * 11 Request and connect to phone line Notify and receive inspection from the 12 municipality after completion of building Register the building at the 13 Department of Construction of Ho Chi Minh City* Takes place simultaneously with another procedure.Registering PropertyDB 2011 Rank 43Indicator VietnamProcedures (number) 4Time (days) 57Cost (% of property value) 0.6No. Procedure Build a dossier on land-use right 1 transfer The transferor and transferee will sign the contract which will be witnessed 2 and certified by a notary located in the same area as the property The parties pay income tax on assignment of the land-use right and 3 the registration fee at the relevant District Department of Taxation
  4. 4. The parties pay income tax on assignment of the land-use right and 3 the registration fee at the relevant District Department of Taxation The land-use right transferee shall 4 register the right to use landGetting CreditDB 2011 Rank 15Indicator VietnamStrength of legal rights index (0-10) 8Depth of credit information index (0-6) 5Public registry coverage (% of adults) 26.4Private bureau coverage (% of adults) 0Depth of credit information index (0-6) Private credit bureauAre data on both firms and individualsdistributed? NoAre both positive and negative datadistributed? NoDoes the registry distribute creditinformation from retailers, tradecreditors or utility companies as wellas financial institutions? NoAre more than 2 years of historicalcredit information distributed? NoIs data on all loans below 1% ofincome per capita distributed? NoIs it guaranteed by law that borrowerscan inspect their data in the largestcredit registry? No Score ("yes" to either public bureau or private registry)Strength of legal rights index (0-10)
  5. 5. Can any business use movable assetsas collateral while keepingpossession of the assets; and anyfinancial institution accept suchassets as collateral ? YesDoes the law allow businesses togrant a non possessory security rightin a single category of movableassets, without requiring a specificdescription of collateral? YesDoes the law allow businesses togrant a non possessory security rightin substantially all of its assets,without requiring a specificdescription of collateral? YesMay a security right extend to futureor after-acquired assets, and may itextend automatically to the products,proceeds or replacements of theoriginal assets ? NoIs a general description of debts andobligations permitted in collateralagreements, so that all types ofobligations and debts can be securedby stating a maximum amount ratherthan a specific amount between theparties ? YesIs a collateral registry in operation,that is unified geographically and byasset type, as well as indexed by thegrantors name of a security right ? YesDo secured creditors have absolutepriority to their collateral outsidebankruptcy procedures? YesDo secured creditors have absolutepriority to their collateral inbankruptcy procedures? Yes
  6. 6. During reorganization, are securedcreditors claims exempt from anautomatic stay on enforcement? NoDoes the law authorize parties toagree on out of court enforcement? Yes Score (number of "yes" responses) 8Coverage Private credit bureauNumber of individuals 0Number of firms 0 Percent of total 0Protecting InvestorsDB 2011 Rank 173Indicator VietnamExtent of disclosure index (0-10) 6Extent of director liability index (0-10) 0Ease of shareholder suits index (0-10) 2Strength of investor protection index (0-10) 2.7Nature of ProcedureExtent of disclosure index (0-10) What corporate body provides legally sufficient approval for the transaction? Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? Whether immediate disclosure of the transaction to the public and/or shareholders is required? Whether disclosure of the transaction in published periodic filings (annual reports) is required? Whether an external body must review the terms of the transaction before it takes place?Extent of director liability index (0-10)
  7. 7. Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? Whether fines and imprisonment can be applied against Mr. James?Ease of shareholder suits index (0-10) Whether shareholders owning 10% or less of Buyers shares can inspect transaction documents before filing suit? Whether shareholders owning 10% or less of Buyers shares can request an inspector to investigate the transaction?
  8. 8. Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? Whether the plaintiff can directly question the defendant and witnesses during trial? Whether the level of proof required for civil suits is lower than that of criminal cases?Strength of investor protection index (0-10)Notes:Extent of Disclosure Index (0-10)What corporate body provides legally sufficient approval for the transaction?0=CEO or managing director alone; 1=shareholders or board of directors vote and Mr. James can vote; 2=board of directors votesImmediate disclosure to the public and/or shareholders0=none; 1=disclosure on the transaction only; 2=disclosure on the transaction and Mr. James conflict of interestDisclosures in published periodic filings0=none; 1=disclosure on the transaction only; 2=disclosure on the transaction and Mr. James conflict of interestDisclosures by Mr. James to board of directors0=none; 1=existence of a conflict without any specifics; 2= full disclosure of all material factsDirector Liability Index (0-10)Shareholder plaintiff’s ability to hold Mr. James liable for damage the Buyer-Seller transaction causes to the company0= Mr. James is not liable or liable only if he acted fraudulently or in bad faith; 1= Mr. James is liable if he influenced the approvalShareholder plaintiff’s ability to hold the approving body (the CEO or board of directors) liable for for damage to the company0=members of the approving body are either not liable or liable only if they acted fraudulently or in bad faith; 1=liable for negligencWhether a court can void the transaction upon a successful claim by a shareholder plaintiff0=rescission is unavailable or available only in case of Sellers fraud or bad faith; 1=available when the transaction is oppressive o
  9. 9. Shareholder plaintiffs’ ability to sue directly or derivatively for damage the transaction causes to the company0=not available; 1=direct or derivative suit available for shareholders holding 10% of share capital or lessShareholder Suits Index (0-10)Documents available to the plaintiff from the defendant and witnesses during trailScore 1 each for (1) information that the defendant has indicated he intends to rely on for his defense; (2) information that directlydiscovery of relevant information.Ability of plaintiffs to directly question the defendant and witnesses during trial0=no; 1=yes, with prior approval by the court of the questions posed; 2=yes, without prior approvalStrength of Investor Protection Index (0-10)Average of the extent of disclosure index, director liability index, and shareholder suits index.*Largest stock exchange in terms of number of listed companies.Paying TaxesDB 2011 Rank 124Indicator VietnamPayments (number per year) 32Time (hours per year) 941Profit tax (%) 12.5Labor tax and contributions (%) 20.3Other taxes (%) 0.3Total tax rate (% profit) 33.1Tax or mandatory contribution Payments (number)Social Security contributions 12Corporate income tax 5Health insurance contributions 0Unemployment insurance 0Income tax from transfer of land userights 1Business Licensing Tax 1Fuel tax 1Value added tax (VAT) 12Totals: 32Trading Across BordersDB 2011 Rank 63Indicator VietnamDocuments to export (number) 6Time to export (days) 22Cost to export (US$ per container) 555
  10. 10. Documents to import (number) 8Time to import (days) 21Cost to import (US$ per container) 645Nature of Export Procedures Duration (days)Documents preparation 12Customs clearance and technicalcontrol 4Ports and terminal handling 3Inland transportation and handling 3Totals 22Nature of Import Procedures Duration (days)Documents preparation 12Customs clearance and technicalcontrol 4Ports and terminal handling 4Inland transportation and handling 1Totals 21Export documentsBill of ladingCertificate of originCommercial invoiceCustoms export declarationPacking listTechnical standard/health certificateImport documentsBill of ladingCargo release orderCommercial invoiceCustoms import declarationInspection reportPacking listTechnical standard/health certificateTerminal handling receiptsEnforcing ContractsDB 2011 Rank 31Indicator Vietnam
  11. 11. Procedures (number) 34Time (days) 295Cost (% of claim) 28.5Nature of Procedure IndicatorProcedures (number) 34Time (days) 295 Filing and service 25 Trial and judgment 120 Enforcement of judgment 150Cost (% of claim) 28.5 Attorney cost (% of claim) 21 Court cost (% of claim) 5 Enforcement Cost (% of claim) 2.5Number of Procedures 35Specialized commercial courts -1Total Number of Procedures 34Closing a BusinessDB 2011 Rank 124Indicator VietnamRecovery rate (cents on the dollar) 18.6Time (years) 5Cost (% of estate) 15
  12. 12. Change in Rank 10DB 2010 Rank Change in Rank114 1470 839 -430 15172 -1146 2259 -431 No change125 1DB 2010 Rank 114 East Asia & Pacific OECD7.8 5.639 13.827.1 5.350.6 15.3Time to Complete Associated Costs VND 200,000 (official fees) + VND14 days 1,000,000 (business license tax) VND 165,000 - VND 370,000 for bronze6 days seal
  13. 13. 4 days VND 20,0001 day no charge5 days VND 700,000 If buying the pre-printed VAT Invoices:14 days VND 20,000 per book (50 copies)1 day (simultaneous with previousprocedure) no charge1 day (simultaneous with previousprocedure) no charge7 days (simultaneous with previousprocedure) no chargeDB 2010 Rank 70 East Asia & Pacific OECD18.7 15.8167.2 166.3168.7 62.1Time to Complete Associated Costs90 days VND 100,0001 day no charge1 day no charge1 day no charge1 day VND 680,0001 day no charge
  14. 14. 20 days no charge1 day VND 4,000,0001 day no charge14 days no charge7 days VND 800,0001 day no charge90 days VND 17,825,000DB 2010 Rank 39 East Asia & Pacific OECD5 4.886.7 32.74.1 4.4Time to Complete Associated Costs1 day VND 4,0002-12 days 0.1% of the property value The registration fee (paid by the transferee) is 0,5% (Circular 79/2008/TT- BTC dated 15/9/2008 replaced Item II Section II Circular 95/2005/TT- BTC guiding on registration fee). The tax rate of the income tax from the assigment of land use right (paid by the transferor) is 25% (Based on Part G Section II.2 Circular 130/2008/TT-BTC dated 26/12/2008 guiding of implementation of Corporate income tax).
  15. 15. The transferor is required to declare the corporate income tax for each time of transfering property. The taxation authority will base on the declaration to record, adjust the payable tax and issue a tax notice to the taxpayer within 3 working days from the day of receiving such declaration. (Part G Section II & III Circular 130/2008/TT-BTC dated 26/12/2008 guiding on implement of corporate25-30 days income tax).15-30 days VND 20,000DB 2010 Rank 30 East Asia & Pacific OECD6.1 6.92.1 4.78.2 817.3 61Public credit registry ScoreYes 1Yes 1No 0Yes 1Yes 1Yes 1 5
  16. 16. Public credit registry16,500,000459,14026.4DB 2010 Rank 172 East Asia & Pacific OECD5.2 64.5 5.26.3 6.85.3 6Indicator 6 2 2 0 2 0 0
  17. 17. 0000000200
  18. 18. 0 0 2 0 2.7Mr. James can vote; 2=board of directors votes and Mr. James cannot vote; 3 = shareholders vote and Mr. James cannot voteMr. James conflict of interestMr. James conflict of interestller transaction causes to the companyr. James is liable if he influenced the approval or was negligent; 2= Mr. James is liable if the transaction was unfair, oppressive or prejudicial todirectors) liable for for damage to the companyaudulently or in bad faith; 1=liable for negligence in the approval of the transaction; 2=liable if the transaction is unfair, oppressive, or prejudicia=available when the transaction is oppressive or prejudicial to minority shareholders; 2=available when the transaction is unfair or entails a con
  19. 19. saction causes to the companyof share capital or less on for his defense; (2) information that directly proves specific facts in the plaintiff’s claim; (3) any information that is relevant to the subjecut prior approval DB 2010 Rank 146 East Asia & Pacific OECD 24.5 14.2 218.2 199.3 18.3 16.8 10.3 23.3 6.8 3 35.4 43 Notes on Payments Time (hours) 372 233 paid jointly paid jointly 336 941 DB 2010 Rank 59 East Asia & Pacific OECD 6.4 4.4 22.7 10.9 889.8 1,058.70
  20. 20. 6.9 4.924.1 11.4934.7 1,106.30US$ Cost125100150180555US$ Cost9595175280645DB 2010 Rank 31 East Asia & Pacific OECD
  21. 21. 37.3 31.2531.8 517.548.5 19.2DB 2010 Rank 125 East Asia & Pacific OECD34.4 69.12.7 1.723.2 9.1
  22. 22. Change in Rank 14
  23. 23. Change in Rank 8
  24. 24. Change in Rank -4
  25. 25. Change in Rank 15
  26. 26. Change in Rank -1
  27. 27. e and Mr. James cannot votensaction was unfair, oppressive or prejudicial to minority shareholderse transaction is unfair, oppressive, or prejudicial to minority shareholderse when the transaction is unfair or entails a conflict of interest
  28. 28. 3) any information that is relevant to the subject matter of the claim; and (4) any information that may lead to the Change in Rank 22 Statutory tax rate Tax base Total tax rate (% profit) Notes on TTR 15.00% gross salaries 16.9 25.00% taxable profit 11.6 2.00% gross salaries 2.3 1.00% gross salaries 1.1 25.00% capital gains 0.9 fixed fee (VND 1,000,000) 0.2 5.00% fuel consumption 0.2 10.00% value added not included 33.1 Change in Rank -4
  29. 29. Change in Rank 0
  30. 30. Change in Rank 1

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