Japan assists Vietnam in managing construction projects

The Japan International Cooperation Agency (JICA) and Vietnam’s Construction Ministry co-organized a training workshop on management of construction projects in HCMC on June 22 as part of a technical assistance program by Japan to help Vietnam improve construction quality and better control costs.

The training workshop within the project titled “Capacity Enhancement in Cost Estimation, Contract Management, Quality and Safety in Construction Investment Projects in Vietnam” is intended to review the outcomes of construction projects and discuss focal points relating to Vietnam’s law and regulations on construction. Attending the seminar were representatives from relevant agencies in both central and provincial levels, project management units, as well as contractors and consultants.

The JICA-funded project, set up by Vietnamese and Japanese experts, is aimed to enhance the capacity of staff and related organizations under the Construction Ministry directly involved in construction projects.

The ultimate goal is that local construction projects are run in line with international standards and regulations on managing public construction projects.

The workshop focused on contractor capacity evaluation and contract management. These main outputs are expected to help improve the monitoring of State-funded projects and their effectiveness as a result.

Vietnam has carried out a large number of major infrastructure projects in recent years. However, many construction accidents have been recorded, due to insufficient project management, and poor quality and safety management of construction works.

Besides, construction contracts have been insufficiently managed, leading to disputes which have obstructed the smooth execution of projects.

Therefore, the Vietnamese Government had requested JICA to provide assistance via the project in a bid to address the issue. The project kicked off in April 2015, and is scheduled to run until next March.

Source: The Saigon Times

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VND300 trillion needed for infrastructure projects in HCMC

HCMC – The HCMC government will need around VND300 trillion (US$13.2 billion) for its urban infrastructure projects by 2020 but its budget can meet half the amount at best, heard a meeting on June 13. The city will be able to arrange a mere VND164 trillion for these projects by 2020, said Le Thi Huynh Mai, deputy director of the HCMC Department of Planning and Investment. City vice chairman Tran Vinh Tuyen said the city’s population had grown to a whopping 13 million, including migrants from other parts of the country, so the city had come under huge pressure to carry out new infrastructure projects, especially in the inner-city districts which account for 12 million residents. The city is in dire need of new hospitals and schools while the city is working hard to pay for about 199,000 State employees. The central Government has asked the city to reorganize its administrative agencies and make some of them financially independent to ease the burden for the State budget, he added. According to a Department of Planning and Investment plan presented on June 13, the city will opt for public-private partnership (PPP) as a key investment format for future infrastructure projects, including 54 projects previously allowed to use State capital, totaling more than VND18.4 trillion. The city will push for 105 PPP projects worth a total of VND334.6 trillion and encourage the private sector to participate in 98 others capitalized at about VND128.8 trillion, according to the department. The department said the city will introduce an attractive mechanism for luring private capital into vital projects, especially for social housing, resettlement and infrastructure.

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CAAV insists on granting air transport license for Bamboo Airways

 Viet Bamboo Airlines Co Ltd (Bamboo Airways) has yet to produce a financial confirmation statement as required by the current civil aviation rules, but the Civil Aviation Authority of Vietnam (CAAV) has proposed the Ministry of Transport ask the Prime Minister for issuing a business license for it.

In a document sent to CAAV on June 12, Bamboo Airways, a unit of property developer FLC Group, has promised to submit a confirmation statement on its chartered capital once the scheme for the establishment of Bamboo Airways is appraised by authorities.

CAAV said the company’s documents for a business license basically meet business conditions in the aviation sector under Decree 92/2016, although it has shown no financial confirmation statement as needed.

Under the prevailing regulations, civil aviation investors must submit a capital confirmation statement issued by a bank. Otherwise, they must send a relevant document from a price appraisal agency approved by the Finance Ministry to confirm the balance of an escrow account is equivalent to their chartered capital.

In case of Bamboo Airways, its total chartered capital must be at least VND700 billion (US$30.8 million). In fact, FLC Group set up the company with the same chartered capital last month, which is required for the carrier to be licensed with a fleet of 10 planes to operate domestic and international flights.

CAAV’s deputy head Vo Huy Cuong said projects in the air transport sector must be approved in principle by the Prime Minister, according to Article 31 of the 2014 Investment Law. Therefore, if capital is paid in sufficiently, or the balance of an escrow account meets the minimum capital requirement, a long time of consideration will make life difficult for investors.

Thus, CAAV has proposed that the Transport Ministry petition the Prime Minister to approve the appraisal procedures for issuing a business license for Bamboo Airways.

The Government declined approving an application for establishment of Vietstar Airlines last year, as its investor had yet to meet the chartered capital requirement. Its paid-in capital at the time was over VND70 billion short of the required VND700 billion.

A civil aviation firm must have chartered capital of at least VND700 billion to establish an airline with 10 planes. However, at the time of application, Vietstar had only VND625.7 billion.

Source: The Saigon Times

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Benefits of Investors in Setting up a Business in Da Nang

Da Nang is one of the five major cities in Vietnam, having a geographical location that is particularly conducive to rapid and sustainable economic development. Da Nang has important transportation routes such as the China-ASEAN international railway crossings, seaports and international airports.

Da Nang is one of the tourist centers of the country, has rich tourism potential including natural tourism resources and humanities. Da Nang has many famous scenic spots such as Hai Van pass, Son Tra mountain, Ba Na hills, Ngu Hanh Son, Cham Museum or My Khe beach have been voted by Forbes magazine as one of the six most beautiful beaches in the world. These conditions are favorable for the development of diversified forms of tourism such as travel, research, cultural.

Da Nang have infrastructure development, four types of roads are popular: high way, rail way, International airport and International sea way. Da Nang have the sea lanes to most major ports in Vietnam and around the world. It helps investor more convenient to travel everywhere in Vietnam and other countries. Moreover, Da Nang’s water supply, electricity supply and communication system has developed rapidly and is increasingly modernized, ranking third in the whole country after Hanoi and Ho Chi Minh City. Da Nang have Da Nang Port, which help investor in import/export activities easily.

The first advantage of the policy mechanism is that Da Nang has also had great support the mechanism and policies for socio-economic development of Da Nang. Since Da Nang was recognized as a national grade I city in 2003, Da Nang has implemented guidelines, regulatory directions and the issuance of specific regulatory mechanisms. With the support from the Central Government, Da Nang authorities have also developed appropriate policies and mechanisms to facilitate the development of the economy, such as the one-stop-shopping mechanism, so Da Nang which is considered as a locality with attracting investment policies in Vietnam. Examples: Procedures related to investment, investment locations, clearance and handover plan, the granting of business registration certificates and investment preference certificates shall be carried out under the one-stop-shopping mechanism at the provincial municipal all of them are resolved at Da Nang Administration Center. Investors shall be exempt from all expenses related to the settlement of investment procedures apart from the payment of business registration fees according to the provisions of law. When investing in Da Nang, investors not only enjoy many preferential policy from city government but also have chance to find clients from many countries or compete with other companies in Vietnam and foreign countries.

Tradition of unity, consensus of people and the dynamism and creativity of the leadership, these advantages has aroused, mobilized the strength, the most important and decisive resource for the development of Da Nang. The determination of leaders, city authorities in building programs, projects with the support of the people, investors, enterprises, ect that help investors who will invest in Da Nang have highest benefits.

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The Australian Anti-Dumping Commission has opened an anti-dumping investigation on wire rod in coil imports from Vietnam and other exporters

On June 7th, 2017, the Anti-Dumping Commission of Australia (ADC) initiated the anti-dumping investigation against rod in coil originating from Indonesia, Korea and Vietnam.

At present, rod in coil is not applied tax when being exported from Vietnam into Australia.

Investigated product includes HS code: 7213.91.00.44, 7227.90.90.02 and 7227.90.90.42

The company that filed claim for investigation: OneSteels Company.

Period of investigation: 1/4/2016 to 31/3/2017.

Period of damage investigation:1/1/2013 up to present.

Dumping margin of product as allegation of plaintiff is 30,6% for Vietnam, 30,6% for Indonesia and 43,3 % for Korea

However, as preliminary calculation of ADC, expected dumping margin should be: 20,9% for Vietnam, 29,8% for Indonesia and 20,9 % for Korea

The filing party alleges that Vietnam belongs to particular market situation because of the level tax of two primary input material types, accordingly, the normal price shall be calculated by using the selling price in Vietnam but using the cost of a similar producer. The ADC may apply temporary anti-dumping measures but not earlier than 60 days since the date of initiation.

As expected, ADC shall issue Essential Facts on Sep 25th, 2017 and concerned parties shall have 20 days to comment.

The concerned parties could send the comment through their anti-dumping lawyers or law firm in Vietnam and Australia whom is familiar with the process and procedures in Australia.

In the past, Australia implemented anti-dumping investigation against this product originating from Indonesia, Taiwan and Turkey. Accordingly, Indonesia and Turkey were applied tax in 2015 but after the on review in 2016, tax has been lifted for product from Indonesia (due to causing no damage for Australian manufacturing industry).

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Granting Certificate of eligibility for business in accounting services

Legal Based:

• Law on Accounting 2015;
• Circular 297/2016/TT-BTC on granting, management and usage of certificates of eligible for providing accounting services.

1. Form of business

a. An accounting firm may be established in the form as follows:

• A multi-member limited liability company;
• A partnership;
• A private enterprise.

The accounting firm must not contribute capital to establishment of another accounting firm, except for contribution of capital together with a foreign accounting firm to establishment of an accounting firm in Vietnam.

b. A foreign accounting firm is allowed to provide accounting services in Vietnam as follow manners:

• Contributing capital together with an existing accounting firm in Vietnam to establish an accounting firm;
• Establishing branches of the foreign accounting firm;
• Provide accounting services across the border as prescribed by the Goverment.

2. Conditions for granting Certificate of eligibility to provide accounting services

a. For a multi-member limited liability company

• Having an Enterprise Registration Certificate, Investment Registration Certificate or an equivalent document as prescribed by law;
• Having at least two capital contributors (members) are accounting practitioners;
• The legal representative, director or general director of the company is an accounting practitioner;
• Ensuring the proportion of capital contribution by accounting practitioners over 50%; Ensuring the maximum proportion of captital contribution of organization members equal to 35% of charter of an accounting firm.

b. For a partnership

• Having an Enterprise Registration Certificate, Investment Registration Certificate or an equivalent document as prescribed by law;
• Having at least two general partners are accounting practitioners;
• The legal representative, Director or General Director of the partnership is an accounting practitioner.

c. For a private enterprise

• Having an Enterprise Registration Certificate, Investment Registration Certificate or an equivalent document as prescribed by law;
• Having at least two accounting practitioners in the enterprise;
• The owner of the private company, who holds the position of Director, is an accounting practitioner.

d. A branch in Vietnam of a foreign accounting firm

• The foreign accounting firm is permitted to provide accounting services according to regulations of law of its home country;
• Having at least two accounting practitioners, including the Director or General Director of the branch;
• The Director or General Director of the branch does not concurrently hold the position of manager or executive officer of another enterprise in Vietnam;
• The foreign accounting firm has submitted a document to the Ministry of Finance that it is responsible for every obligations and commitments of the branch in Vietnam.

3. Granting Certificate of eligibility for business in accounting services

a. Preparation of Dossier

• An application form for the Certificate of eligibility to provide accounting services;
• Copies of the Certificate of Enterprise Registration, Investment Registration Certificate, or an equivalent document;
• Copies of Certificates of Accounting Practice Registration of accounting practitioners;
• Employment contracts between the accounting firm and accounting practitioners;
• Documents proving capital contribution (for limited liability companies);
• The company’s charter (for partnerships and limited liability companies);
• A written commitment to take responsibility by the foreign firm; documents proving the foreign firm is permitted to provide accounting services (for branches in Vietnam of foreign accounting firms).

b. Order and procedure

• Enterprises submit dossier to Ministry of Finance;
• Within 15 days form the day of receiving valid dossier. Ministry of Finance shall issue the Certificate of eligibility to provide accounting services to enterprises;
• In case need to clarify the matters related to the dossier. Ministry of Finance shall request enterprises to explain and then granting Certificate to enterprise within 15 days form the day of receiving the valid additional document.

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Vietnam M&A market hits US$1.8 billion in Jan-May

 Capital contributions and share purchases by foreign investors via mergers and acquisitions (M&A) deals amounted to around US$1.8 billion in the first five months of the year, up a whopping 116.2% compared to the same period last year.

Foreign investors engaged in 2,061 M&A transactions in the period, according to the Foreign Investment Agency under the Ministry of Planning and Investment. Foreign investors via M&A deals have now entered various sectors, including production and services.

For example, Thailand’s Siam Cement Group acquired the entire stake worth US$156 million in a cement manufacturer, Vietnam Construction Materials JSC, in the central province of Quang Binh, while South Korean food firm CJ CheilJedang Corporation raised its controlling stake to 71.6% in the former Cau Tre Export Processing JSC late last year.

In regard to the real estate sector, Singapore’s Keppel Land Limited through its subsidiary Krystal Investments Pte Ltd clinched a deal with the Southern Waterborne Transport Corporation (Sowatco) to acquire an additional 16% stake worth VND845.9 billion in the Saigon Centre property in downtown HCMC.

M&A deals in the real estate market could hit a record high this year as many investors are sounding out opportunities to pour billions of dollars in budget and mid-end apartments, offices, hotels and industrial parks, according to property services provider Jones Lang LaSalle Vietnam.

The European Chamber of Commerce in Vietnam (EuroCham) says many investors consider M&A deals as the most effective way to penetrate the Vietnamese market and expand their business as well. This investment trend is expected to continue next year.

The growth of M&A deals is thanks to the 2014 Investment Law that clarifies some previously ambiguous regulations, according to analysts.

Specifically, foreign investors have no need to go through investment procedures if they choose investment capital contributions and share purchases.

Notably, Decree No. 60/2015/ND-CP allows investors to increase their ownership at many listed and public companies from 49% to 100%, except for those active in conditional business sectors.

Besides, they have seen more opportunities emerging, especially the Government’s effort to equitize State-owned enterprises to divest State stakes from non-core business operations.

Source The Saigon Times

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Five types of real estate contracts abolished mandatory notarization procedure

As stipulated in Vietnam Civil Code 2005, almost all types of contract involving the transactions in real estate, notarization, and registration at competent authority are compulsory.  As real estate transactions are normally at high value, the process of notarization and registration would help parties involved to be protected from falsified transactions.  In order to improve the administrative procedure, government has simplified the process as regulated in Resolution 52/2010/NQ-CP under which five types of real estate contracts do not require mandatory notarization:

i) Leasing land use right and properties belonging to land;

ii) Transferring agricultural land use right;

iii) Land use right on loan or in due;

iv) Leasing residential house;

v) Authorizing management of residential house.

Accordingly, both parties may negotiate, make contract in writing and sign, stamp as required by laws. However, as real estate transactions are normally at high value, the process of notarization and registration would help parties involved to be protected from falsified transactions.  Our real estate lawyers in Vietnam recommend client to have house leasing contracts voluntarily notarized to better protect their interests in disputes or any future issues.

For more information or legal advice in real estate transactions, we are glad to assist.  ANT Lawyers, your lawyers in Vietnam.

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