2009 investment guidebook vietnam

MINISTRY OF PLANNING AND INVESTMENT OF VIETNAM FOREIGN INVESTMENT AGENCY - FIA

VIETNAM INVESTMENT GUIDE

2009

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FOREWORD

In recent years, Viet Nam’s economy has benefited from its Government’s open-door policy. With a stable political environment and its economic potentials, Viet Nam is an attractive destination for foreign investors.

The Vietnamese Government has been endeavouring to create a favorable investment environment by continuing to complete Viet Nam’s legal system and introducing important incentives for foreign investors.

To provide an overview of the investment environment in Viet Nam, the Foreign Investment Agency, Ministry of Planning and Investment has cooperated with Vilaf – Hong Duc and the PricewaterhouseCoopers Viet Nam to compile and issue this guidebook.

The book is divided into three main sections, the first two sections aim to provide foreign investors with an overview of Viet Nam and the economy; the third section provides the legal guide for investing in Vietnam involving such matters as investment procedure, taxation, land, employment, foreign exchange, intellectual property, dispute resolution etc.

The purpose of this book is not to provide a detailed analysis of Viet Nam’s economy or its foreign investment forms in Viet Nam, but to give a general introduction and supply the necessary information to foreign investors who are looking at potential opportunities 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

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Why Invest in Vietnam?

POPULATION

• 86.5 million people (13th largest in the

world) expected to grow to 100 million

in 2020 with an annual growth rate of

1.2%.

• 50% of the population is 25 years or

younger.

• Competitive labor cost.

• Literate & well-trained workforce.

ECONOMIC GROWTH

• Remains one of the fastest-

growing Asian economies, with

foreign investment a key driver of

growth.

• High GDP growth in recent years,

based on the power of FDI & the

private sector.

NATURAL RESOURCES

• Abundant mineral & natural resources.

• Potential in oil & gas reserves.

• Competitive advantage in maritime

ports & marine transportation.

SECURITY & POLITICS

• It is widely acknowledged that

Vietnam has a stable political and

social environment.

GEOGRAPHIC LOCATION

• Vietnam is located in the center of

Southeast Asia, the fastest growing

economic region in the world.

• Vietnam has a 3,260 km of coastline

and many sea ports which are ideal for

international trade.

LEGAL ENVIRONMENT

• Vietnam’s legal environment has

significantly improved in recent

years in compliance with

international practices.

GLOBAL INTEGRATION

• As the 150th member of the

World Trade Organization since

January 2007, Vietnam enjoys

vast opportunities for economic

growth.

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ABBREVIATION

100% FOC Wholly foreign-owned company

AALT Asset Administration and Liquidation Team

ASEAN Association of Southeast Asian Nations

BCC Business co-operation contract

BOM Board of Management of IZs, EPZs, HTZs and EZs

BOT Build-operate-transfer (including its derivative forms, BTO and BT)

BT Build-transfer

BTO Build-transfer-operate

CEPT Common Effective Preferential Tariff Scheme

CIT Corporate income tax

CPC Civil Proceedings Code

DOLISA Department of Labour, War Invalids and Social Affairs under a provincial People’s Committee

DPI Department of Planning and Investment under a provincial People's Committee

DTA Double Tax Agreement

EIAR

EL

Environmental impact assessment report

Enterprise Law

ENT

EPC

EPZ

Economic needs test

Environment protection commitment

Export processing zone

EU

EVN

EZ

FIC

European Union

Vietnam Electricity Group

Economic zone

Foreign-invested company

FCT

FOB

Foreign contractor tax

Free on board

HTZ High-tech zone

IL Investment Law

IZ Industrial zone

JVC Joint venture company

JSC Joint stock company

LLC Limited liability company

LTT

LUR

Law on Technology Transfer

Land use rights

LURC Certificate of land use rights

MFN Most Favoured Nation

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MOF Ministry of Finance

MOIT

MOLISA

Ministry of Industry and Trade

Ministry of Labour, War Invalids and Social Affairs

MONRE Ministry of Natural Resources and Environment

MOST Ministry of Science and Technology

MPI Ministry of Planning and Investment

NOIP National Office of Intellectual Property

ODA Official development assistance

PCT

PIT

Patent Cooperation Treaty

Personal income tax

RO

SBV

Representative Office

State Bank of Vietnam

SCT Special consumption tax

SOE State-owned enterprise

TTC Technology transfer contract

USD United States of America dollar

VAS Vietnamese accounting system

VAT

VCAD

VIAC

VND

Value-added tax

Vietnam Competition Administration Department

Vietnam International Arbitration Centre

Vietnamese Dong

WTO World Trade Organisation

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TABLE OF CONTENT PART 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 ................................................................................. 13

PART 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 ...................................................................... 22

PART 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

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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 ........................................................................... 51

VI: 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 ................................................................... 56

VII: ENVIRONMENT ....................................................................................... 56 1. Strategic Environment Assessment Reports ................................. 56 2. Environmental Impact Assessment Report .................................... 57 3. Environmental Protection Commitment ......................................... 58

VIII: 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 .................................. 65

IX: TECHNOLOGY TRANSFER ..................................................................... 66 1. General Principles ............................................................................ 67 2. Technology Transfer Contract ......................................................... 67 3. Governing Law .................................................................................. 68 4. Registration ....................................................................................... 68 5. Pricing ................................................................................................ 68 6. Confidentiality ................................................................................... 69

X: 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 ....................................................................... 72

XI: 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

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7. Permitted Activities .......................................................................... 74 8. Reporting ........................................................................................... 74 9. Termination ....................................................................................... 74 APPENDICES ..................................................................................................... 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

Vietnam Investment Guide 2009

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PART I: VIETNAM: COUNTRY AND PEOPLE

1. 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:


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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 and 92.3 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 attended primary, lower secondary and upper secondary schools. The national average of graduates from upper secondary schools is 93.7%. At the same time close to 1.5 million students attended the 253 public universities and colleges and 210,000 were enrolled in the 46 non-public institutions. In comparison, in 2000, there were only 800,000 students in the public and only 100,000 students in the non-public universities and colleges.

2. POLITICAL STRUCTURE

Viet 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 held every five years to determine the country’s guiding strategies and adopt its chief policies on solutions for socio-economic development. The National Congress elects the Central Committee which in turn elects the Politburo. The last congress was held in April 2006.

National Assembly

The National Assembly is the highest law-making body in the country. It comprises delegates who are elected for a five-year term from various strata of the population including different ethnic groups from all around the country. The National Assembly is both the supreme state authority and the unique legislative body and has the power to promulgate and amend the Constitution and Laws. The National Assembly meets twice yearly. The Standing Committee of the National Assembly is the permanent executive body of the National Assembly. Its principal functions are the interpretation of the Constitution, Laws and Ordinances, the control of their implementation and the supervision of the activity of the Government, the Supreme People’s Court and the Supreme People’s Procuracy.

The President of Viet Nam

The President, as the Head of State, is elected by the National Assembly from its members 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 National Assembly and the Standing Committee. The President is the commander-in-chief of the armed forces and Chairman of the Council of Defence and Security. In foreign affairs, the President has the authority to appoint ambassadors and to sign international agreements and treaties. The President appoints and dismisses the Prime Minister and the members of the Government on the basis of resolutions of the


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National Assembly or its Standing Committee. Furthermore, the President has the right to nominate key officials such as the Chief Justice of the Supreme Court and the Chief Procurator of the Supreme Procuracy, subject to the National Assembly’s approval. The current president of Viet Nam is Mr Nguyen Minh Triet and the current Prime Minister of Viet Nam is Mr. Nguyen Tan Dung.

The Government

The Government is the highest executive organ of the State. The Prime Minister is the leader of the Government. The Prime Minister is responsible for the day-to-day operations of the Government. The Vietnamese Government currently has 18 ministries and 4 ministerial-level bodies.

The People’s Councils and People’s Committees

Viet Nam has 58 provinces (*) and 5 cities directly under central authority (including Hanoi, Ho Chi Minh City, Haiphong, Da Nang, and Can Tho). Provinces are subdivided into districts, provincial cities and municipalities. Districts are further divided into communes and townships. Cities directly under the central authorities are made up of districts. Urban districts are divided into precincts, and rural districts are made up of communes.

People’s Councils of various administrative levels are elected by the population of the locality. People’s Councils are responsible for the supervision of the implementation of the 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 of the same level. Chairmen, vice chairmen and members of the People’s Committees are elected by People’s Councils.

(*) Hanoi expansion: On 29th May 2008, the National Assembly approved the expansion of Hanoi into the neighbouring HaTay province, Melinh district of Vinh Phuc province, and four communes in Luong Son district of Hoa Binh province. The expansion took effect from 1st August 2008. With this expansion the area and population of Hanoi have increased to 3,344.7 sq. km from 921.8 sq. km and 6.44 million from 3.39 million, respectively.

The People’s Courts and People’s Prosecutors

The Constitution establishes a three-level judicial system comprising District Courts, Provincial Courts and the Supreme People’s Court. In addition, there is a system of people’s organs of control acting as a procuracy or public prosecutor to oversee the observance of laws by judicial bodies and to exercise the power of public prosecution.

3. INTERNATIONAL RELATIONS

At present, Viet Nam has established diplomatic relations with 172 countries, and it has economic and trading relations with about 165 countries and territories. Vietnam holds membership in 63 international organizations and over 650 non-governmental organizations


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Viet Nam joined the United Nations in 1977, became an official member of the Association of South East Asian Nations (ASEAN) in 1995, and has concluded a cooperation agreement with the European Union. Relationships with multi-national financial institutions such as the World Bank (WB), the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have been re-established. Viet Nam has been participating in the ASEAN Free Trade Area (“AFTA”) since 1996 and became 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 investment relations, business facilitation and the obligation to ensure transparency of laws and regulations. The BTA essentially constitutes a commitment by both countries to open their markets to each other. In October 2004, Vietnam hosted the 5th Asia-Europe Meeting (ASEM). In November 2006, Vietnam hosted the APEC Summit. On 11 January 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. INFRASTRUCTURE

Infrastructure has always been considered a crucial element of the Vietnam’s national development and competitiveness. Being aware of the decisive role infrastructure plays in the country’s economic development process, the Vietnamese Government determines that for Vietnam to become a modernized industrial nation by the 2020s, infrastructure has to take a significant step forward with large-scale projects, and consistently 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 the infrastructure development of Vietnam in the period between 2006-2010. This is equivalent to 18% of the total investment of the society. To realize this target, besides promoting 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 a priority of the Vietnamese Government.

4.1. Highway system

Vietnam has a dense road system extending over 251,786 km country-wide. The road system 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 border gates with neighboring countries (China, Laos and Cambodia); and

- Local roads, which include Provincial Roads (23,138km) managed by the provincial level, linking the province’s districts; District Roads (54,962km), managed by the district level, linking the district’s communes; Commune Roads (141,442km) managed by the commune level; Urban Roads (8,536km) managed by cities and towns; and specialized roads (4,414km) used for special purposes.


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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. The 1A National Highway is 2,260km in length with Lang Son province and Ca Mau province 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 be 3,167km in length to connect Cao Bang province in the North with Ca Mau province in the South. Phase 1 of the Ho Chi Minh Highway running from Hoa Lac (Ha Noi) to Ngoc Hoi (Kon Tum province) with a total length of 1,234km was completed in 2005.

4.2. Railway

The 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 and 253 km, respectively.

Vietnam Rail Network Regional Rail network

:

The length of Vietnam railway network and gauge are represented in the following

table


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The length of Vietnam railway network

Main routes Length

(km) Track gauge

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

Long 106 1435 mm

Kep - Luu Xa 57 1435 mm

(Source: Vietnam Railway Corporation – VRC)

There are 278 stations in the rail network country-wide. The longest and most important 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 in approximately 29.5 hours.

Vietnam’s railways is linked to China in two lines, one from Lao Cai province to Yunnan province, and one from Lang Son province to Kwangsi province of China. Construction of the railway lines connecting with Laos and Cambodia has been included in the Government’s development strategy for the Railway industry of Vietnam.

4.3. Inland Waterways

The inland waterway system offers a cheap and flexible mode of transport. Viet Nam has more than 2,300 rivers and canals with total length of 198,000 km. Currently, the inland waterway has a system of over 61,000 km The two major inland waterway systems serve as major transportation outlets. The first major inland waterway system is 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 second major inland waterway extends 4,500 km along the Mekong River and its tributaries in the South and boasts about 30 ports, including Ho Chi Minh City.

Inland waterway transport in Vietnam is very developed, and ranked the second in domestic passenger and cargo transport (especially coal, rice, sand, stone, gravel, and other usually high weight low value goods), accounting for 25-30% of total domestic transported volume, especially in the Mekong river delta, and reach 60-70%


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in some provinces, contributing significantly to the socio-economic development of the region and the country.

4.4. Ports

Vietnam has a 3,260km coastline, a strategic position close to international shipping routes and favoured natural conditions of foundation, sea depth, current, tidal, sedimentation and channels for developing seaport business. There are currently 119 seaports which are organised into 8 geographical groups:

1. North: Quang Ninh to Ninh Binh

2. North of Central: Thanh Hoa to Ha Tinh

3. Middle of Central: Quang Binh to Quang Ngai

4. South of Central: Binh Dinh to Ninh Thuan

5. Ho Chi Minh City - Dong Nai - Ba Ria - Vung Tau

6. Mekong Delta

7. Phu Quoc

8. Con Dao and international transhipment groups

In May 2004, the government endorsed the master plan to address major shortcomings: a lack of deep seaports, in particular, and to raise the competitiveness of local facilities to the standards of other countries in the region. Vietnam is planning to boost the development of seaports from now until 2020 to meet the increasing demand for cargo handling and transport in the future. Some key regional ports which require 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 of Central; Quy Nhon, Nha Trang, Van Phong in the South of Central; and Ho Chi Minh City, Vung Tau and Can Tho in the South.

Meanwhile, existing ports will be upgraded and some will be built in focal economic zones to accommodate vessels of more than 30,000DWT. Ports for containers, loose goods, liquid commodities and international transhipment will also be developed. Under the plan, the maritime sector will complete the upgrading and expansion of 10 key ports namely Cai Lan, Hai Phong in the North; Cua Lo, Da Nang, Dung Quat, Quy Nhon, Nha Trang in the Central region; and Thi Vai, Ho Chi Minh City and Can Tho in the South. In addition, the sector will develop key projects including the Lach Huyen Seaport 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 Aviation

Vietnam is divided into 3 air traffic regions. There are four international airports, two in the North (Hanoi and Dien Bien Phu), one in the centre (Da Nang) and one in the South, (Ho Chi Minh City) and 19 domestic airports. Six airports are located in the North, eight in the Centre and nine in the South.

Currently, the Government has significantly upgraded international airports to handle the increase in the volume of traffic associated with Viet Nam's invigorated economy.


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A new international terminal of the Tan Son Nhat airport in Ho Chi Minh City, capable of handling up to 10 million passengers a year was opened in December 2007. Noi Bai 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 new international airports are planned to be constructed in Phu Quoc, Dong Nai, Lao Cai and Quang Ninh provinces. Preparations are underway for the new Long Thanh International Airport, 40 kilometers from Ho Chi Minh City in Dong Nai province. The airport is scheduled to open in 2010 and by 2015 it will be further expanded to reach an annual transportation capacity of 80 to 100 million passengers, becoming one of the biggest airports in the region.

Apart from the state-owned Vietnam Airlines, three private Vietnamese airlines have received 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 a license shortly.

The government has opened-up for foreign investment in airports and airport construction (BOT and other models) as a necessary means to accelerate the modernisation of this important service industry.

4.6. INDUSTRIAL ZONES, EXPORT PROCESSING ZONES, HIGH-TECH ZONES

AND ECONOMIC ZONES

In 1991, the Vietnamese Government introduced a policy to develop these special administrative zones, including Industrial Zones, Export Processing Zones, High-Tech Zones and Economic Zones, in an effort to geographically diversify investment locations, to accelerate export, and to create more jobs.

Since then, the “zones” system has been developed across the country, playing an important role in attracting foreign investment to Viet Nam. There are currently over 190 IZs have been licensed with 11 IZs established by 100% foreign-owned entities, 19 established by joint venture enterprises, and 160 by Vietnamese enterprises. The total land area available for industrial development in the zones amounted to close to 29,800 hectares, almost 50% of which has been leased out. In addition, thirteen economic 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, initially in textile and garment, but increasingly also in other higher value added sectors such as consumer electronics, as the recent investments from Intel, Foxconn and Nidec show.

The most important factor contributing to the success of the zones is the higher quality of infrastructure. In addition, transport and telecommunications infrastructure has also been improved in and around the zones. Another key factor is the availability of land. The zones offer already cleared and registered-for-industrial-use land by the time the investor is ready to build its factory. The Government has not only made the zones easily accessible to investors, but also offers fiscal incentives to zone investors (details are given below). Many zones also offer more expedited licensing process and consultative services that help investors prepare applications.

Industrial Zone & Export Processing Zone


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Industrial Zone (“IZ”) is a zone in which enterprises specialising in the production of industrial goods and the provision of services for industrial production are concentrated.

Export Processing Zone (“EPZ”) is an industrial zone specialising in the production of goods 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 of the Government dated 14 March 2008 providing Regulations on Industrial Zones and Export Processing Zones (“Decree 29”).

Developers of IZs and EPZs and investors operating and doing business in these zones (collectively referred to herein as “IZs Developers,” “IZ Enterprises,” and “EPZ Enterprises,” respectively) are granted the following preferential treatment:

* Import duties and value-added tax: IZ Developers, IZ Enterprises and EPZ Enterprises may be exempt from payment of import duties and value-added tax on goods 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 boundary established in accordance with a decision of the Prime Minister to conduct high-tech research, development and applications, to nurture high-tech enterprises, to train high-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” is defined as “the technology integrated from achievement of advanced technology and science which has the ability to create a


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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 August 2003 (“Decree 99”) and Decision 53/2004/QD/TTg of the Government dated 5 April 2004.

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 and doing business in HTZs and foreign and Vietnamese individuals working for investment 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 service industries with high socio-economic effectiveness, a great effect on socio-economic development and national defence and security.”


11

Economic Zone

An Economic Zone (“EZ”) is a zone that has an economic area separate from the general investment and business environment and with especially favourable conditions for investors.

An EZ is an identified geographical zone with privileges regarding the investment environment, preferential stable policies, and flexible management, creating the best conditions for the business activities of the domestic and foreign investor.

Investment in EZs is currently regulated by Decree 108 and special Decision issued by 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 granted the following preferential treatment:

- CIT: newly-established projects in EZs 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.

- Import duties and value-added tax: EZ Developers and EZ Enterprises are entitled, for a term of 5 years from the commencement of their operations, to: (i) an exemption from payment of import duties on materials, equipment, components and semi- products that have not yet been produced domestically and that must be imported 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 imported and services provided from abroad to non-tariff areas are exempt from VAT.

* Special sales tax (“SST”): Goods produced and services provided in non-tariff areas and goods imported and services provided from abroad to non-tariff areas are exempt from SST (except for certain types goods or services).

5. ENERGY

Vietnam is a net energy exporter, and is expected to remain such for the foreseeable future. The country is endowed with offshore oil and gas resources in the south, coal in the north, and hydroelectric power resources in the mountains running from north to south along the country's western regions. Hydro power accounts for close to 40% of the electricity generating capacity of Viet Nam. Gas fired turbines generate around 37% of electricity and coal accounts for 11%. The remaining needs are met by various oil fuelled plants and also by imports. In line with further industrialization and


12

electrification, growth in demand is likely to remain very strong and accordingly the government has set high priority for significant investments in the sector. While the electricity industry is currently run by the state owned Electricity of Viet Nam Corporation (“EVN”), foreign companies have entered the market in the form of Build-Operate-Transfer (BOT) projects. Other players such as Vinacomin, Petrovietnam have recently entered the power production market. Furthermore, the Electricity Law of 2004 envisages a competitive market in the future and draft roadmaps indicate competition to the wholesale market could be introduced possibly in 2014.

Electricity output in 2006 reached 59 billion kWh with Foreign Invested Enterprises accounting for 5.6%. The EVN aims to generate about 70-78 billion KWh in 2010 and as high as 167-201 billion kWh in 2020. Achieving this goal requires the development of approximately 32 to 37 new power generation projects, totalling 12,400 MW in capacity, including up to 20 hydroelectric plants with 4,000 MW capacity; eight gas or oil power plants (5,200 MW), and seven coal-fired plants (3,200 MW). Implementation of these projects also requires the construction of about 15,000 km of 110 – 500kV transmission lines, together with 300,000 km of low medium and low voltage distribution lines. In order to achieve the above targets, the annual power growth during 2000-2020 should achieve 8.8% to 10% to keep pace with the annual GDP growth of 6.6% to 8%. The annual investment required to achieve the set target is estimated to be US$1.5 to US$2 billion per year. Over the last few years, an array of large capacity power plants were built and put into operation, such as Pha Lai Thermo Power Plant with capacity of 440MW, Tri An Hydroelectric with a capacity of 400MW and 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 plant commencing operations in January 2003 and the similar capacity Phu My 3 Plant that commenced operations in March 2004. These plants in Ba Ria Vung Tau are fuelled by gas from the Nam Con Son Basin. Further large power plants are under construction or to be constructed, such as the Ca Mau gas fired power complex with a capacity of 1,500 MW, O Mon gas fired power complex with a capacity of 2,640 MW Yaly Hydroelectric with capacity of 720 MW, Mong Duong coal fired Power Complex with capacity of over 2,000 MW. In addition, a 3,600 MW hydropower complex at Son La in the North is also under construction.

Furthermore, Viet Nam plans to complete its first nuclear power plant by 2020 as an alternative means on meeting electricity demand. The primary sources of finance for investment in the power sector are from Official Development Assistance (ODA) grants and loans committed by such international donors as the World Bank (WB), the Asian Development Bank (ADB), bilateral funds from various foreign governments, and funds from the Vietnamese Government. Other crucial sources of finance over the next decade include foreign suppliers’ credits and EVN’s retained earnings. In the recent years, a number of domestic investors have entered the power production market such as Vinacomin focussing on small size coal fired power plant with capacity of 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 Trach 1&2). Local commercial banks have been active in providing finance for power generation projects developed by EVN and other state-owned enterprises. Viet Nam


13

has signed up for a US$165 million loan from the WB and the ADB to finance the rehabilitation of the electricity transmission and distribution systems in Ho Chi Minh City, Hanoi, Nha Trang and Hue. Soft loans and aid from foreign governments are also being spent to improve the system.

Additionally, Viet Nam has great potential of renewable energy, and its consumption is on the rise. Under the solar power cooperation program between France and Viet Nam, a solar station was installed in Ho Chi Minh City to provide electricity for the provinces Gia Lai, Quang Nam, and Binh Phuoc.

6. TELECOMMUNICATIONS

Viet Nam has made great strides in upgrading its telecommunications systems. In the last six years, the annual growth of the telecommunication market in Viet Nam reached 30%. To date, Vietnam has achieved more than 30 phones per 100 people with 19 million mobile subscribers. The Government’s relaxation with regard to international calls made over the internet and the spread of mobile phone subscriptions have further improved the telecommunications landscape, especially in rural areas. Internet usage has also rapidly risen and by the end of 2008 there were over an estimated 21.5 million users. The bigger growth is seen in the mobile sector and wireless networks. Viettel is the largest mobile service provider in Vietnam. The second largest provider is MobiFone followed by Vinaphone. Both MobiFone and Vinaphone are VNPT subsidiaries. Other service providers are S-Fone, EVN Telecom and Ha Noi Telecom.

The table below illustrates the rapid development.

Vietnam’s demand for IT and Telecommunications is expected to continue to increase over the next 5 years in line with continued growth in disposable incomes. Entry to the World Trade Organisation (WTO) in January 2007 has provided the industry with more private competition which will increase the number of actors in the market. This makes telecommunications and technology services cheaper and more

accessible. The government has already promised to lower telecoms charges and Internet access fees in the country by 2010. The government is also planning to upgrade the country’s information, communications and technology (ICT) infrastructure. Furthermore, the government is trying to break the virtual monopoly of the state-owned telecoms company, Vietnam National Post and Telecommunications


14

(VNPT), by licensing other state-owned and joint-stock telecommunications’ firms and to partly privatise some of VNPT’s market leading subsidiaries. Currently, foreign firms are allowed to own 51 % of the shares in Vietnamese telecommunications firms. In 2010 this limit will be raised to 65%.

Today, almost every commune in Vietnam has at least limited access to the fixed-line telephone network, compared to less than 60 % ten years ago. The government plans to improve the quality of access through a rural telecommunications’ development project 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 has more than doubled since 2005. Most people who are interested in using the Internet do so through Internet cafés, which are common in urban areas. The number of Internet users is expected to continue to rise and the government hopes that around 25%-30 % will use the Internet by 2010

PART II. THE ECONOMY

1. OVERVIEW

Viet Nam has undertaken a remarkable economic transformation over the past 20 years. Confronted with the failure of the centrally planned economy, which had been put in place after the country’s reunification in 1975, the Government of Viet Nam launched the “Doi Moi” (“Renovation”) initiative in 1986. Doi Moi sought to revive economic growth and development by starting a gradual transition from central planning to a market-based economy, and by progressively integrating into the world economy. Reforms under Doi Moi have gradually removed the dominance of the public sector in the economy and allowed private investment and initiative. Key measures include the transfer of agricultural land from large State-owned farms to household farms, price liberalization and private ownership in industry and commerce. Viet Nam also started reforming its State-owned enterprises (SOEs) and gradually opened to foreign direct investment (FDI).

Helped by a strong culture of entrepreneurship and high literacy rates, the economy responded strongly and rapidly to Doi Moi. The private sector took off at once from a virtually non-existent base. To date, there are about 240,000 registered national


15

private companies. The Vietnamese non-State sector represented approximately 45 per cent of Vietnam’s GDP, compared with 40 per cent for the State sector and 15 per cent for the foreign-invested sector.

As a result of Doi Moi and the development of the private sector, annual real gross domestic product (GDP) growth averaged 6.8 per cent in the period 1986–2006, with relatively little volatility and moderate inflation. Viet Nam has become one of the fastest-growing economies in the world, averaging around 8.4% annual gross domestic 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 76th in 1986. In addition to growing rapidly, the economy also diversified significantly. In 1990, agriculture represented over 30 per cent of GDP; by 2006 it had declined to under 19 per cent. In contrast, industry increased from 25 per cent to 41 per cent over the same period, creating a large number of jobs in the industrial sector (see below figure).

The economic transformation and high growth rates have been accompanied by unprecedented progress in poverty reduction. The poverty rate plunged from 58 per cent in 1993 to 37.4 per cent in 1998 and 19.5 per cent in 2004. Similarly, the World Bank estimates that the population living with less than $1 a day was only 2 per cent of 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 SECTORS

GDP Growth Rate by Economic Sectors (%)


16

Source: General Statistics Office

Agriculture/aquaculture – as one of the bases for Viet Nam's socio-economic development, this industry has continued to maintain its stable growth rate of over 3.8% annually over the past five years. This has helped contribute to the maintenance of socio-economic stability and the provision of improved support to the hunger eradication, poverty alleviation and employment generation programs. The crop structure has also changed and agricultural productivity has increased in many regions. In recent years aquaculture has increased rapidly, and in 2008 accounted for 23.63% of the total value of agricultural/aquacultural production. Export income from aquatic products has also been increasing considerably, reaching USD 4.6 billion in 2008.

Industry - Difficulties and challenges in the industrial sector have been overcome, bringing about positive results. The industrial growth rate averaged 17% over the last five years. In 2007, industrial production value increased by 17.1%, with a growth rate in private businesses of 20.9%. This is attributed to the encouraging policies and positive impacts of the former Enterprise Law. Production capacity has risen in several industries, resulting in increased exports. The industrial structure has changed considerably, by 2007, manufacturing accounted for 87.6% of industrial production, of which the food processing industry accounted for 20.6%. Power supply and distribution (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 of industrial production.

Industrial growth (% increase on 1994 price)

Total By ownership

2000 200

1 2002

200

3

200

4 2005

200

6 2007

200

8

GDP 6.7 6.8 7.0 7.3 7.6 8.4 8.23 8.4

8 6.18

Agriculture, aquaculture, forestry & fishery

4.0 2.7 4.1 3.6 3.5 4.0 3.69 3.41

4.07

Industry & construction

10.1

10.4 9.4 10.4

10.2

10.6 10.38

10.6

6.11

Services 5.6 6.1 6.5 6.4 7.4 7.5 8.29 8.68

7.18


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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 18.6

Source: General Statistics Office

Services - The services sector has maintained its operations despite various difficulties, and has still improved its quality, meeting the demands of economic growth and the people. Trade has increased relatively well. Markets are more open and transparent with the participation of all economic sectors. Business methods have become more diversified, and there has been an annual average increase of about 20.1% 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 of tourism have diversified, resulting in a continuous increase in tourism revenue. In addition to business conferences, very notably Viet Nam hosted the APEC summit in November 2006. International arrivals in 2007 were estimated at 4.23 million, up by 18% against 2006. Generally, transport services are meeting the basic demands of cargo and passenger transportation. However in certain parts of the country road congestion is an increasing problem. Floods and other natural disasters also cause difficulties from time to time. The physical infrastructure of the transport sector has improved in recent years, albeit trailing the rate of economic growth. More achievements are expected in the next few years with improved roads and port facilities. Post and telecommunications services have developed rapidly. The basic


18

telecommunications network has been modernised. During 2008, the number of telephone subscribers grew by 27.6 million reaching over 79.4 million. The mobile sector is particularly vibrant with a number of ambitious local companies competing for subscribers. The insurance services market has grown rapidly with the participation of state-owned, joint-stock, joint-venture and wholly foreign-owned companies. Total premiums 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 life premiums at USD 600 million were 12% higher. Total premiums represent approximately 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. In addition, there are approximately 30 representative offices of foreign insurance companies operating in Viet Nam. As of January 1, 2008, pursuant to the nation's WTO commitments, foreign insurers are allowed to provide compulsory insurance products.

In 2007, the total value of services increased by 8.7%. The total revenue from the retail sale of domestic goods and services increased by 23.3% compared to 2006, with private domestic business accounting for 85%, foreign invested enterprises accounting for 4.1% of turnover and State Owned Enterprises for 10.9%.

3. EXTERNAL TRADE

During the 2002-2008 period, total export revenue increased by 23.8% per year. Both the composition and quality of exports have improved significantly. The proportion of industrial products has risen considerably. The five biggest export categories are oil, textiles, footwear, seafood and wood products. During the same period, total imports have increased by 25.5% per year.

Exports reached US$62.9 billion in 2008, an increase of 29.5% compared to 2007. However, due to considerable imports of equipment and materials used for the industrialisation and modernisation process, and for foreign investment projects, the trade deficit has increased over the past three years. Imports in 2008 reached US$ 80.4 billion. Trade relations with foreign countries, especially other countries in the region, have expanded. In 2008, the biggest regions and countries buying from Viet Nam were America US$ 11.6 billion, ASEAN US$ 10.2 billion, the European Union US$ 10 billion, and Japan US$ 8.8 billion.

Figure 1:Export, Import and Trade deficit


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-10000

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

1990199119921993199419951996199719981999200020012002200320042005200620072008

Export

Import

Trade deficit

Figure 2: Major economic indicators

0%

5%

10%

15%

20%

25%

30%

35%

2000 2001 2002 2003 2004 2005 2006 2007 2008

GDP Growth rate (%) Inflation (%) Export growth rate (%)


20

Figure 3: Top 10 export markets of Vietnam in 2008 and prior year comparables

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

USA Japan China Australia Singapore Germany Malaysia Philippines Korea UK

USD Million

2008 2007 2006

Figure 4: The Top 10 import markets of Vietnam in 2008 and prior year

comparables

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

China Singapore Taiw an Japan Korea Thailand USA Hongkong Malaysia India

USD million

2008 2007 2006

4. FOREIGN DIRECT INVESTMENT

Since the introduction of the Law on Foreign Investment in 1987, leaving aside projects which have expired or been withdrawn, by the end of 2008, there have been over 9,800 active licensed projects with a total registered capital of close to US$ 149.8 billion. To date, investors from 84 countries and territories have committed investments in Viet Nam. Asia accounts for 69.8%, Europe 16.7%, and America 6% of the total FDI, with other areas totaling 7.5%. Taiwan, Malaysia, Japan, Republic of Korea 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 of 57.8% of the total foreign investment capital of Viet Nam. The next five countries and territories are British Virgin Islands, Hongkong, Thailand, Canada and Brunei


21

Darussalam. These “top ten” countries and territories account for over three quarters of the total licensed projects and foreign registered capital in Viet Nam.

Figure 5: FDI Flow into Viet Nam in the period 1988-2008

Since 1996 there has been a tendency towards investment in producing goods for export, infrastructure construction, producing import substitutes and in labour-intensive industries. There are more than 6,303 projects in the manufacturing and construction industries with a total capital of about US$87,7 billion, accounting for 58.6% 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 Chi Minh 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 developed infrastructure, higher purchasing power and a more skilled labour force. With the development of the first oil refinery in Dung Quat and the implementation of an effective investment promotion policy, Da Nang is becoming a new key economic area – 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 the registered capital, while joint venture enterprises make up 20% and 34% respectively. There are also 9 licensed foreign invested BOT projects in Viet Nam (water supply and electricity plants) with a total registered capital of US$1.75 billion.

The foreign invested sector has seen rapid growth, gradually asserting itself as a dynamic component of the economy, and has made an important contribution to enhancing the competitiveness and efficiency of the economy. In 2008, the foreign

64,000

8,036 11,500

21,347

0

10,000

20,000

30,000

40,000

50,000

60,000

19

91

19

92

19

93

19

94

19

95

19

96

19

97

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98

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99

20

00

20

01

20

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20

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20

08

US$ million

0

200

400

600

800

1000

1200

1400

1600

1800

No. of project

Total investment Disbursement No. of project


22

invested sector has accounted for 29.8% of the country's total investment, 40.2% of industrial output, 40% of the national export, and 22% (2007) of the GDP of Viet Nam.

5. EQUITIZATION OF STATE-OWNED ENTERPRISES

Since the undertaking of Doi Moi initiative, together with encouraging national private investment and progressively opening the economy to foreign investors, the Government of Viet Nam has pursued its reform program for the State-owned Enterprises (SOEs) with an aim to improve their productivity and efficiency. The reform 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 shareholding companies 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 for 25% 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 7 Groups, 86 General Corporations, 4 state-owned commercial banks2 and over 1,000 independent SOEs.

Since 2005, the equitisation is not only limited to small and medium SOEs, but also covers large General Corporations. It is estimated that the remaining 2,000 SOEs still account for 40% of GDP and over 50% of tax revenue. It is planned that 70 state owned general corporations are to be equitised over the period 2007 to 2011. Particularly notetable are the equitisation of the National Insurance Corporation (Bao Viet) in July 2007 and Vietcombank in December 2007. Other General Corporations and State Owned Commercial Banks which have been or will be equitised include beer companies Sabeco (Saigon Beer–Alcohol–Beverage JSC) and Habeco (Hanoi Beer–Alcohol–Beverage JSC), Vinatex (Vietnam National Textile Garment Group), Mobifone (Vietnam Mobile Telecom Services Company), BIDV and Vietinbank.

6. VIET NAM’S WTO ACCESSION

Viet Nam officially joined the WTO on 7 November 2006 and put the commitments into effect on 11 January 2007. A summary of the WTO commitments is attached at the 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 % to 13.4% within five to seven years. The average tariff level for agricultural products would decrease from the current level of 23.5% to 20.9% within about five years. With regard 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 for Agriculture and Rural Development (AgriBank) and Mekong Housing Bank (MHB).


23

within five to seven years. In the services sectors, Vietnam has committed to open 11 out of 12 services categories, including 110 sub-categories, in conformity with WTO regulations. 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 also commits to follow the WTO’s strict requirements in transparency, including transparency in the formulation process and enforcement of legal documents as well as of the conditions and procedures for investment licensing.

One of the most important positive influences for Vietnam after joining the WTO is the drive this created for the government to continue to improve the business environment and increase foreign investment. This is a clear signal that the WTO entry has provided Vietnam with motivation to further socio-economic development.

Despite the short time, the business environment has improved as confirmed by the international community and partly shown in some global reports like the Word Bank report on business environment. Owing to the improvement in business environment and legal system, Vietnam has had two years of impressive FDI inflows in 2007 and 2008. In addition, exports also saw a very impressive growth of over 20% in 2007 and 2008.


24

PART III. LEGAL GUIDE FOR INVESTING IN VIETNAM

I: INTRODUCTION

On 1 July 2006, the investment regime comprised of a unified Enterprise Law (“EL”), which regulates corporations, and a common Investment Law (“IL”), which regulates investment, came into effect. The promulgation of these two important legislations is considered a significant watershed for improvement of the legal environment on investment activities and corporate governance in Vietnam.

1. Overview

To do business under the IL and EL, foreign investors are required to obtain investment certificates from an appropriate Licensing Authority.

Under the IL, investors may invest in all sectors not prohibited by law. Areas prohibited by law include:

• investment projects detrimental to national defence, security, and the public interest;

• investment projects detrimental to historical and cultural traditions and the ethics or customs of Vietnam;

• investment projects harming people’s health or destroying natural resources and the environment; and

• investment projects treating toxic waste imported to Vietnam and investment projects manufacturing toxic chemicals banned by international law.

2. Licensing

Investors must follow the licensing and registration steps depending on the size and the sector of the investment project.

Conditional sectors: In common with all countries, Vietnam reserves its sovereign right to restrict foreign investment in sensitive fields, namely the “conditional sectors”. Investment projects in conditional sectors must satisfy certain conditions in order to be licensed. Conditional sectors include:

• Broadcasting and television.

• Production, publishing and distribution of cultural products.

• Exploration and exploitation of minerals.

• Establishment of infrastructure for telecommunications network, transmission and provision of internet and telecommunications services.

• Establishment of public postal network and provision of postal services and express services.

• Construction and operation of river ports, sea ports, terminals and airports.

• Transportation of goods and passengers by railway, airway, roadway and sea and inland waterways.


25

• 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 member committing to limited market access to foreign investors”. For example, this covers the market 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, which implements certain provisions of the IL (“Decree 108”), provides that the applicable requirements are those specified in the treaty or other agreement relating to international commitments. For example, under WTO commitments, investors from WTO member countries are permitted to establish engineering firms in Vietnam on the condition that for 02 years after the date of Vietnam’s accession, 100% foreign-owned companies may only provide such services to other foreign investment enterprises in Vietnam.

For sectors which are declared conditional but are not mentioned in international agreements, investors must look at domestic laws to find the applicable conditions. For example, the relevant conditions for investment in “real estate business” are contained in the Law on Real Estate Business.

Level 1 (Business Registration): Domestic enterprises with an invested capital of less than 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


26

Level 2 (Investment Registration): Foreign investment projects with a total invested capital 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 the procedures for investment registration in order to be granted an investment certificate. The investment certificate also serves as the business registration of the corporate entity.

Domestic investment projects with a total invested capital from VND15 billion to less than VND300 billion are also subject to “investment registration”. Subject to a request of the local investor, the Licensing Authority will issue an investment certificate to such investor.

Enterprises can subsequently register additional investment projects without the need to create a separate entity.

The procedure for “investment registration” is set out in Decree 108. According to Decree 108, the investor must submit application documents for investment registration to the Licensing Authority. The Licensing Authority shall check the documents and issue the investment certificate to the investors within 15 working days of receiving the valid application.

Level 3 (Investment Evaluation): Any investment project with a total invested capital of VND300 billion or more or investment projects falling in conditional sectors must undergo “an investment evaluation” by the Licensing Authority and other relevant authorities. There are two different types of evaluation:

• evaluation for investment projects regardless of total invested capital falling into conditional sectors; and

• evaluation for investment projects with total invested capital of VND300 billion or more that do not fall into conditional sectors.

Investment Registration

Domestic investment projects with total invested capital from VND15 to less than VND300

billion

Investment Certificate

Foreign investment

projects with total invested capital of less than VND300

billion


27

Investment Evaluation

Foreign and domestic investment projects with total invested capital of VND300 billion or more not falling in conditional

sectors

Foreign and domestic investment projects regardless of total

invested capital falling in conditional sectors

For the evaluation of investment projects with total invested capital of VND 300 billion or more, along with the application documents, the applicant must also submit an “economic - technical explanation” of the investment project to the Licensing Authority. This covers the economic – technical explanatory statement, objectives, scale, location, investment capital, implementation schedule, land use needs, and technological and environmental solutions of the investment project.

For the evaluation of investment projects falling in conditional sectors, in addition to the application documents, the investor must also demonstrate compliance with requirements specific to that conditional sector.

When assessing the application documents, the Licensing Authority may liaise with other relevant Ministries and authorities in evaluating the proposed investment project. Items to be evaluated shall comprise:

• compliance with master planning/zoning for technical infrastructure, master planning/zoning for land use, master planning for construction, master planning for utilization of minerals and other natural resources;

• land use requirements;

• project implementation schedule;

• Environmental solutions.

The 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, the above time-limit may be extended, but not beyond forty five (45) days.

3. Licensing Authority

3.1 The Board of Management (“BOM”) of industrial zones (“IZs”), export processing zones (“EPZs”), high-tech zones (“HTZs”), and economic zones (“EZs”) are responsible for licensing foreign investments within their zones.

3.2 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,


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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 master plan approved by the Prime Minister (or by an entity authorized by him) and satisfy the conditions in accordance with the laws of Vietnam and international treaties to which Vietnam is a member, the Licensing Authority will issue an investment certificate to the investor without making a submission to the Prime Minister for deciding an investment policy.

In cases where the investment projects stipulated above are not included in the master plan approved by the Prime Minister (or by an entity authorized by him) or do not satisfy conditions in international treaties to which Vietnam is a member, the Licensing Authority will obtain opinions from the relevant Ministries, MPI and other


29

relevant bodies in order to collate and submit them to the Prime Minister for his decision on investment policy.

In cases where the investment projects stipulated above are in a sector for which there is no master plan yet, the Licensing Authority will obtain opinions from the relevant Ministries, MPI and other relevant bodies in order to collate and submit them to the Prime Minister for his decision on investment policy.

4. Forms of Investment

Under the “Law on Investment” and the “Law on Enterprises” foreign investors may

choose the following forms of investment in Viet Nam:

a) Business cooperation contract

A contractual BCC entails a written contract between a foreign investor and a

Vietnamese party to jointly conduct one or more business projects in Viet Nam, based

on mutual allocation of responsibilities and the sharing of production, profits or losses,

without creating a separate legal entity. The contract should stipulate the terms and

conditions for the business as well as the rights and obligations of each party.

b) Limited Liability Company

Limited Liability Company, which is currently the standard form of investment for

foreign investors in Viet Nam, is a legal entity. The liability of the company and the

Members is limited to the amount of capital registered and displayed in the business

registration certificate as charter capital.

A LLC may be established by one or more Members, which may be individuals or

organizations. The maximum number of Members is limited by law to a maximum of

fifty. Members generally share profits and losses in accordance with their capital

contributions.

c) Shareholding Company/Joint Stock Company

A shareholding company, also known as joint stock company (JSC), must have a

minimum of three shareholders and has legal entity status. The company may issue

securities (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 assigned

to other persons except for preferred shares as for example voting preference shares.

Shareholders are liable for debts and other liabilities of the company within the

amount of capital that they contributed.

d) Partnership

A partnership is defined as an enterprise with at least two partners with unlimited

liability. Additionally partners with limited liability can be incorporated. As the term


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suggests, unlimited liability partners are liable for the obligations of the partnership

with all of their personal assets, limited liability partners are only liable up to the extent

of their capital contribution. A partnership is prohibited from issuing securities of any

type. From the day of issuance of the Business Registration Certificate the

partnership shall enjoy legal entity status

e) Private Enterprise/Sole proprietorship

A private enterprise is an economic organization owned by an individual above the

age of 18 being liable for all activities of the enterprise to the extent of all his or her

personal assets.

II: TAXATION

The following taxes may affect foreign-invested projects and foreigners working in Vietnam:

• Corporate Income Tax;

• Capital Transfer Tax;

• Value-Added Tax; and

• Personal Income Tax.

1. Corporate Income Tax

1.1 CIT rates

With effect from 1 January 2009, the new Law on CIT introduces a standard CIT rate of 25% (as opposed to 28% previously applicable to FICs and foreign parties to BCCs) for both local enterprises operating under the Law on Enterprises and FICs, including foreign parties to BCCs. FICs and foreign parties to BCCs which obtained investment licences or certificates before 1 January 2009 will continue to enjoy the preferential tax incentives as stipulated in their investment licence or certificate.

Preferential rates

Other than the standard rate, preferential rates of 10% and 20% apply to a number of investment projects which satisfy certain conditions such as investment in certain fields 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


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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 consecutively from the first year in which the enterprise has turnover from the activity or operation entitled to the preferential tax rate. After the stated preferential tax rate expires, the normal 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 CIT rate, subject to various conditions, ranges between 32% and 50%. A specific rate for these types of projects will be determined by the Prime Minister at the proposal of MOF.

1.2 CIT exemptions and reductions

In addition to preferential CIT rates, FICs and foreign parties to BCCs may enjoy CIT exemption between 02 to 04 years and a 50% reduction in CIT between 04 to 09 years subsequently. 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


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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:

CIT Rate

Criteria Period

applicable CIT

exemption*

50% CIT reduction when CIT

exemption period expired*

10%

Newly established enterprises in:

4 years

9 years

(5 years for newly-established enterprises in the Socialization Sectors operating in areas other than areas with difficult or specially difficult socio-economic conditions)

Locations: with specially difficult socio-economic conditions; Economic Zones, High Tech Zone established under PM’s decision

15 years from the first year of revenue generation

Sectors: high technology, scientific research and technology development, investment in development of specially important infrastructure facilities of the State; production of software products.

15 years from the first year of revenue generation (maximum 30 years at PM’s approval)

Enterprise operating in the field of socialization (education – training, occupational training, health care, culture, sport and the environment)

During the whole operation period

20%

Newly established enterprise in areas of difficult socio-economic conditions

10 years from the first year of revenue generation

2 years 4 years

Agricultural service cooperatives and people’s credit fund

During the whole operation period

N/A N/A

25%

Standard rate for all projects except for projects in the field of oil and gas or rare and precious mineral exploitation, which are subject to 32-50% CIT rates

N/A N/A N/A

Certain expenditures of enterprises in manufacturing, construction and transportation for female or ethnic minority labor are deducted from CIT

* The application of tax exemption/ reduction from the first profitable year. 3 year limit is introduced.

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


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from taxable income. Losses may be carried forward for a maximum period of 05 consecutive years as from the year following the year in which the loss arose. Carrying-back of losses is not permitted.

1.4 Profit remittance tax

From 01 January 2004, profits derived from foreign investments in Vietnam have not been subject to profit remittance tax when remitted out of Vietnam.

2. Capital Transfer Tax

The tax rate applied to capital transfer is 25% and 20% of the assessable income with respect to corporations and individual tax residents, respectively, and 0.1% of the transfer price with respect to individual non-tax residents.

Upon obtaining the amendment to the investment certificate, the transferor is required to register the transfer of capital with the tax authority.

3. Value-Added Tax

Value-Added Tax (“VAT”) applies to the supply of goods and services for use in production, business or consumption in Vietnam. VAT is calculated on the sale/purchase price of the relevant goods or service before the addition of VAT.

The applicable VAT rates are 0%, 5% and 10%, of which the normal rate of 10% is applicable to most goods and services; 5% for a number of encouraged goods and services; and 0% for exported ones and international transportation. Certain goods and services are exempt from VAT, e.g., unprocessed agricultural products sold by the producer, certain insurance services and certain imported equipment. The difference between being subject to VAT at 0% and being exempt from VAT is that, in the former case, the input VAT can be claimed from the tax authority.

VAT exemptions

Foreign-invested projects shall be exempt from VAT with respect to the following imported items:

(a) machinery, equipment and materials which are not yet able to be produced domestically and which are required to be imported for direct use in scientific research and technological development activities;

(b) machinery, equipment, replacement parts, specialised means of transportation and materials which are not yet able to be produced domestically and which are required to be imported to carry out prospecting, exploration and development of petroleum and natural gas field; and

(c) aircraft, drilling platforms and watercraft which are not yet able to be produced domestically and which are required to be imported to form fixed assets of enterprises or which are leased from foreign parties for use in production and business and in order to be sub-leased.

4. Personal Income Tax

On 21 November 2007, the National Assembly of Vietnam passed the new Law on Personal Income Tax (“PIT”), which comes into force on 01 January 2009. The


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Government issued Decree No. 100/2008/ND-CP dated 8 September 2008 (“Decree

100”) 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 Taxpayers

Under the new Law on Personal Income Tax, taxpayers include tax residents and non-tax residents.

• A tax resident who (a) stayed in Vietnam for 183 days or more within a calendar year or within a consecutive 12 month period from his/her arrival in Vietnam or (b) has a registered permanent residence in Vietnam or has a house rented in Vietnam under a lease contract of 90 days or more in a tax year, is subject to PIT on worldwide-sourced income (regardless of where the income is paid) and Vietnam-sourced income.

• A non-tax resident who does not fall under the category of tax resident above is subject to PIT on income sourced in Vietnam.

4.2 Exempt income and allowable deductions

Exempt income:

The following incomes, among others, are not subject to PIT:

• Income from the transfer of immovable properties between spouses; parents and children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grandchildren; and between siblings;

• Income from the transfer of residential houses, residential land use right and properties attached thereto in case the house or the land is the only place for accommodation of the transferor;

• Income being receipt of an inheritance or gift of real property as between husband and wife; as between parents and children, including foster parents and adopted children; as between parents-in-law and children-in-law; as between grandparents and grandchildren; and as between siblings;

• Interest income from deposits or savings in credit institutions/banks and interest from life insurance policies;

• Income from overseas remittances from Vietnamese relatives;

• Salary for night-shifts and excessive amount of overtime income;

• Pension paid by the Social Insurance;

• Income from the scholarships granted by the State budget or by national and international organizations;

• Insurance compensation payments under life insurance policies, non-life insurance policies, compensations for accidents at work;

• Income earned from charity (non-profit) funds; and

• Income from governmental or non-governmental foreign aids for charity and


35

humanitarian purpose.

Family deductions:

Under the new PIT regime, sums called as “family deductions” may be deducted from the taxable business incomes and employment incomes of tax residents prior to the assessment of tax. Family deductions include:

• Personal deduction of VND4 million/month (approx. 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 to feed up or support, including (a) infant or offspring being handicapped or incapable to work, and (b) individuals having no income or having incomes not exceeding VND500,000/month (approx. USD31.00/month) including offspring studying in universities, colleges, high schools or technical and vocational schools; spouse who is incapable of working; parents over the working age or incapable of working; and other persons directly reared or cared for by taxpayers who are over the working age, or within the working age but is disabled, with no residence.

There is no limit on the number of dependent reported by each taxpayer but each dependent must be reported once by taxpayers.

Other deductions:

Taxpayers can claim deductions from their business incomes and employment incomes for the compulsory contributions of Social Insurance, Health Insurance, professional indemnity insurances, and other statutory insurances.

Furthermore, donations to licensed charity organizations including humanitarian funds and study encouragement funds established and operating under Decree No. 148/2007/ND-CP dated 25 September 2007 may also be deducted from business incomes and employment incomes of taxpayers.

4.3 PIT rates applicable to tax residents

(a) The scale of progressive tax rates on each portion of income that applies to business income and employment income are as follows:

Exchange rate: USD1=approx. VND17,000

Tax

Bracket

Portion of Annual

Assessable Income

(million VND)

Portion of Annual

Assessable Income

(million VND)

Tax Rate

(%)

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


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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

Assessable Income Tax Rate

(%)

Capital investment, royalties 5

Franchise, interests and dividends 5

Inheritances 10

Winning or prizes, gifts 10

Capital transfer 20

Gains transfer of securities

Value transfer of securities (Gains are unable to be determined)

20

0.1

Gains on transfer of immovable properties

Value transfer of immovable properties (Gains are unable to be determined)

25

2

4.4 PIT rates applicable to non-tax residents

Flat tax rates are applicable to non-tax residents as follows:

Income Items Tax Rate

(%)

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 activities

2

2. Employment income (irrespective of where the income is paid or 20


37

received)

3. Capital investment (on total amount receivable from the investment)

5

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 million)

5

7. Prizes, inheritances and gifts (on the portion of income exceeding VND10 million)

10

5. Import and Export Duties

5.1 Tax rates

Export duties are charged on a few items, primarily agricultural products (e.g. rice, forest products and fish) and natural minerals. Rates vary between 0% and 50% of the FOB price of exported goods (in accordance with Resolution 977 passed on 13 December 2005 by the Standing Committee of the National Assembly). Petroleum oil is subject to an export duty rate between 0% and 8%.

Import duty rates are now classified into three categories as follows:

• preferential rates vary between 0% and 150% of the CIF price of imported goods 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 imported goods must be accompanied by an appropriate Certificate of Origin.

5.2 Import duty exemptions

FICs and parties to BCCs shall be exempted from import duty with respect to the following goods, provided that: (a) they are implementing a project in an encouraged field of business set out in Appendix I, or in a geographical location set out in Appendix II, of Decree 108 of the Government dated 22 September 2006; and (b) such goods are imported to form the fixed assets of the enterprise:


38

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 project's expansion or replacement or renovation of technology.

Under Circular 113 of the MOF dated 13 December 2005, import duty is also exempt on one-off purchases of certain equipment for "encouraged investment projects" in hotels, offices, apartments for lease, residential properties, commercial centres, technical services, supermarkets, golf courses, tourist areas, sports areas, recreation and entertainment parks, health-care facilities, training centres, cultural, finance, banking, insurance, auditing and consulting services. This equipment is specified in Appendix III of Decree 149 of the Government dated 8 December 2005.

Projects that fall under the list of projects in which investment is especially encouraged are entitled to exemption of import duty for the raw materials used for production for a period of 5 years from the commencement of production.

In addition, goods and products imported in a number of circumstances also enjoy import duty exemption.

5.3 Approval for import duty exempted items

Based on the investment certificate, the feasibility study and the technical design of a project, the MOIT or an agency authorised by it will approve the list of import duty exempted goods.

The imported goods mentioned above must not be assigned or sold in the Vietnamese market except as approved by the MOIT. Otherwise the relevant taxes must be paid in accordance with laws.

III: LAND LAW

The Land Law was passed by the National Assembly of Vietnam on 06 November 2003, effective as of 01 July 2004 (the “Land Law”). The Land Law is in the process of being amended in 2009.


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1. Land Use Rights and Land Use Right Certificate

Private ownership of land is not permitted in Vietnam and the people hold all ownership rights with the State as the administrator. However, the laws of Vietnam allow ownership of a right to use land. This right is called the Land Use Right (“LUR”).

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 local Vietnamese partner contribute LUR as capital contribution, or (b) by way of land leased directly from certain permitted lessors such as the State.

2. Land Lease

A foreign investor may lease the land directly from the Government after he/she establishes an FIC in Vietnam.

Lessors permitted to lease land to FICs

Previously, FICs in Vietnam could only lease land from the Government or sublease land from an infrastructure developer. In addition to these lessors, Articles 93.3 of the current 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. The one exception where the land obtained by the lessor under the “lease” regime can be subleased 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


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It is a matter of practice that Joint Ventures in Vietnam have local partners contribute their portion of capital in the form of the LUR value. In this case, the local partner’s land payment must not be sourced directly from the State budget.

Under the Land Law, the Vietnamese party to a Joint Venture may make capital contributions in the form of the LUR only after it has received a land “allocation”, rather than a land “lease”, and where a payment in full for the land “allocation” has been made. Where the land usage fee payment is deferred, the contribution of the LUR into foreign investment projects is still permissible as far as the deferment is allowed in writing by the relevant People's Committee.

There is one exception under the Land Law where a Vietnamese party which “leases” land from the Government can make its contribution in the form of the LUR to a Joint Venture. This exception requires the two conditions as explained above to be satisfied in accordance with Article 111.1(dd) of the Land Law.

After the Joint Venture is incorporated as a result of the issuance of the investment certificate by the Licensing Authority, the LURC will be issued to and in the name of the Joint Venture.

Lease term

The lease term must be consistent with the duration of the approved project provided that it must not exceed 50 years or, in some special circumstances, 70 years.

The extension of the lease term may be allowed by the Government upon expiry if the lessee wants to continue to use the land, provided that:

• the lessee has complied with the land regulations during its use period; and

• the use of land is consistent with the approved land plan.

Foreign investors wishing to extend their lease term must obtain approval to do so under Decree 181. Foreign investors must apply for an extension 06 months before expiration of their LURs and include in their applications an amended business or production plan approved by the relevant authorities.

Rights of foreign investors to the land leased

The LUR of foreign investors shall vary depending on the payment arrangement of land rentals. Where land is being leased from the Government, the Land Law contemplates two payment arrangements of land rental:

• annual rental payment (the “Annual Arrangement”); and

• one-off payment of rental for the entire lease term (the “One-off Arrangement”).

Under a land lease for the Annual Arrangement, the FIC could use the land only and is not allowed to transfer, sub-lease, or mortgage the LUR.

In addition to the LUR given under the Annual Arrangement regime, FICs adopting the One-off Arrangement regime have the additional rights as follows:

• rights to transfer LURs and assets attached to the land (foreign investors with an Annual Arrangement may only transfer assets attached to the land);


41

• 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 Price

Land 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 People's Committee issues an official land price for each specific type of land on the first of January every year. The official land price must not be 20% higher than the maximum price or 20% lower than the minimum price of the land price framework provided by the Government.

4. Lease of Commercial Property

As an alternative to leasing a piece of land, service or software companies may consider leasing an office in a commercial building. The procedure for leasing such an office is comparatively simple and is not subject to any approval by Vietnamese authorities.

Another alternative is to lease an office or factory from another company located in an IZ or EPZ.

5. Land Clearance

Under the Land Law, foreign organisations and individuals and overseas Vietnamese investing in Vietnam are not required to pay compensation and assistance for the resettlement of residents. However, if these have been paid in advance, it will be deducted from the relevant rental.

The State will take charge of site clearance and compensation to displaced land users when withdrawing land for use by foreign organisations and individuals and overseas Vietnamese. Foreign investors may enter negotiations directly with the current land users regarding site clearance and compensation.

6. Sale of Apartments

Under 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;


42

(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 years and foreign companies are permitted to own apartments for a term equal to the term recorded in its investment certificate.

7. Lease of residential houses by foreigners

Currently, not every foreigner or foreign entity entering Vietnam is entitled to lease residential houses or apartments. According to Article 131 of the Law on Residential Housing, 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 LOANS

1. Foreign Exchange

While the Government is responsible for the macro-economic foreign exchange policies, the State Bank of Viet Nam (SBV) is responsible for regulating and implementing those policies and for overseeing currency transactions to ensure its compliance with relevant guidelines. A significant step forward in State management on foreign exchange is the adoption of the Foreign Exchange Ordinance (the “Ordinance”). The Ordinance was passed by the Standing Committee of the National Assembly on 13 December 2005 with the expectation that this legislation will regulate the high level foreign exchange market in Vietnam and will satisfy the conditions for the country's integration into the WTO. The Ordinance became effective on 1 June 2006.

1.1 Bank Accounts

Accounts in Vietnam


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All FICs and foreign parties to BCCs must open a capital account3 with an authorized bank in Vietnam to monitor the flow of capital in foreign currency into and out of Vietnam. Therefore, certain transfers of capital (e.g., transfer of capital/equity, profits or off-shore loans) must be effected through this capital account.

In addition to the capital account, FICs and foreign parties to BCCs can open other foreign currency and VND accounts at other banks in Vietnam.

Accounts outside Vietnam

The opening and operation of offshore accounts must be approved by the SBV. FICs are allowed to open offshore accounts in certain special circumstances. For example, the opening of offshore accounts by BOT companies in Vietnam for security purposes as required under financing agreements or for the remittance of equity.

1.2 Conversion

All FICs and foreign parties to BCCs are entitled to buy foreign currency for current transactions and other permitted transactions in accordance with the foreign exchange regulations.

Not being required to obtain approval for conversion, the ability of FICs and foreign parties to BCCs to convert VND into foreign currency is only subject to foreign currency being available from banks.

Government guarantee

The Government shall support foreign exchange balancing in cases where authorized credit institutions are not able to satisfy the demand for foreign currency of investors with respect to a number of important projects in the sectors of Energy; Waste treatment; and Construction of traffic infrastructure.

Conversion purposes

Under the Ordinance, all residents are entitled to buy foreign currency to meet their payment requirements for legitimate purposes, subject to the selling bank's verification.

In the territory of Vietnam, all transactions being payments and remittance of money relating to current transactions of residents and non-residents shall be conducted freely in compliance with relevant regulations. According to Decree 160 dated 28 December 2006 implementing the Ordinance (“Decree 160”), payment for current transactions includes the following: (i) repayment of principal, interest and fees under foreign loans; (ii) overseas remittance of net income and depreciation of investment capital (if applicable); (iii) payment for imports of goods and services and other current transactions; and (iv) other remittance for consumption purposes and similar transactions.

1.3 Remittance of Capital and Profits

After a foreign investor has discharged fully its financial obligations to the State of Vietnam, it shall be permitted to remit abroad the following:

3 Specialized capital deposit account of an FIC or a foreign party to a BCC


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(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 remit abroad his or her lawful income after having discharged fully his or her financial obligations to the State of Vietnam.

The remittance of the above sums of money shall be made in a freely convertible currency in accordance with the trading exchange rate published by a commercial bank selected by the investor.

Procedures for remitting abroad the sums of money relating to an investment activity shall be subject to the laws on foreign exchange control.

1.4 Foreign Currency Payments

Foreign currency payments within Vietnam, except for certain limited circumstances, are strictly prohibited under the Ordinance and are subject to the strict control of the SBV. Except for certain circumstances provided by Decree 160, residents and non-residents are prohibited from effecting a sale/purchase, making a payment, or granting loans in foreign currency and posting notice of goods and services in a foreign currency.

Examples of permissible circumstances 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


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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 whole contract, to which the payment relates to, invalid.

1.5 Rates of Exchange

Each day the SBV announces in the mass media an average exchange rate in the Foreign Currency Interbank Market of VND against USD. This official exchange rate is used in the following circumstances:

• to calculate import/export duties;

• to consider bidding for national projects at the time of the opening of bids; and

• to calculate the value of capital contributions made to a JVC or a BCC at the time of the capital contribution.

Commercial banks (including foreign bank branches) shall determine and announce their buying/selling rates of VND against USD within the range permitted by the SBV.

2. Loans

Subject to the laws of Vietnam, from the date of receiving an investment certificate by a Licensing Authority, FICs in Vietnam are entitled to obtain loans from (and grant security to) both onshore and offshore lenders.

Borrowing limit

The investment certificate of an FIC stipulates its total investment capital and charter capital. The difference between the total investment capital and the charter capital is the loan capital of the FIC. All loans obtained by an FIC from onshore and offshore lenders (including loans from shareholders) must not exceed the amount of the loan capital. Exceptions are made in the following circumstances:


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• offshore loans for working capital with a term of one year or less if the loan is obtained after the completion of construction and the project is already in operation; and

• refinancing (i.e., when an existing loan is paid out by another new loan).

Approval from the Licensing Authority will be required if the loan amount results in the borrower exceeding the loan capital unless that loan falls under the above exceptions. On this basis, due consideration should be given to the capital structure of an FIC in Vietnam.

Registration

Offshore loans with a term of up to 1 year (or short-term loans) for working capital purposes are not subject to registration with the SBV. A short-term loan, however, must be registered with the SBV if the loan is extended and the total loan term (including both original term and extended term) is over 1 year.

All loans obtained from offshore lenders (including offshore shareholders) and with a term of more than 1 year must be registered with the SBV within 30 days from the date of execution of the loan agreement and prior to the first drawdown under the loan agreement. For the purpose of registration with the SBV, the borrower is required to submit a standard application form to the SBV and the loan agreement must be translated into Vietnamese. It should be noted, however, that a prior approval from SBV must be obtained if a provision of the finance documents is not consistent with the laws of Vietnam.

Any amendment to the details of the SBV registration certificate (including loan assignments) must also be registered with SBV within 30 days of the date of the amendment agreement and before the effective date of such amendment.

Withholding tax

Payment of interest to offshore lenders is subject to withholding tax of 10%.

V: EMPLOYMENT

Following the promulgation of the Labour Code in June 1994, as amended from time to time, a series of implementing regulations have been issued to govern particular areas of labour law, including labour contracts, employment procedures, working hours, and salaries/remunerations (referred to collectively as the “Labour Code”).

1. Recruitment

Under the Labour Code, FICs are allowed to recruit Vietnamese employees directly or through a recruitment centre. Not less than 07 days before recruiting, FICs are required to publicly announce (on either local or central mass media) and post at its head office the recruitment requirements such as a job description, job qualifications, number of labourers to be recruited, the contract term, salary, and working conditions. Within 07 days from the recruitment, FICs are required to provide a list of recruited labourers to the relevant DOLISA.

International or foreign organisations, including any representative offices and branches in Vietnam, are required to recruit Vietnamese employees through a


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recruitment centre. In the event that the recruitment centre fails to supply the required candidates within 15 days of a recruitment request, the foreign organisation is entitled to recruit employees directly.

Foreigners may work in Vietnam in the following forms: (a) pursuant to a labour contract; (b) internal transfer within an enterprise which has a commercial presence in Vietnam; (c) performance of contracts that are economic, commercial, financial, banking, insurance, scientific, cultural, sports, education, or medical health; (d) service providers pursuant to a contract; (e) foreigners (who does not live in Vietnam and who does not receive remuneration from any source in Vietnam) offering services by participating in activities relating to representation of a service supplier in order to negotiate the sale or consumption of services of such supplier, on condition that foreigner does not directly sell such services to the public and does not directly participate in the provision of services; or (f) foreigners representing a foreign non-governmental organization which is permitted to operate in Vietnam.

Foreigners must satisfy all of the following conditions in order to work in Vietnam: (i) be at least 18 years of age; (ii) in good health as necessary to satisfy the job requirements; (iii) either a manager, executive director, or an expert as defined under the law; (iv) not have a criminal record for a national security offence; (v) not currently subject to criminal prosecution or any criminal sentence in accordance with the laws of Vietnam and foreign laws; and (vi) with a work permit issued by the authorized State body of Vietnam if required.

2. Labour Contracts

A labour contract must, with the exception of contracts with a term of less than 03 months, be in writing and signed directly between an employee and the legal representative of the employer. The contract must be made on the standard form issued by MOLISA. The contract must contain the following details: the work to be carried out, working hours and length of breaks, the wage, workplace, term of contract, health and safety provisions, and social insurance. The standard form also allows the employer and employee to agree on other employment terms and conditions.

The contents of a labour contract must be in compliance with the laws of Vietnam and any collective labour agreement of the relevant company.

Types of labour contracts

The Labour Code introduced three types of labour contracts:

• non-fixed term labour contract;

• fixed term labour contract (from 12 to 36 months); and

• “seasonal” labour contract (less than 12 months).

Probationary period

A probationary period can be applied before execution of a labour contract. During the probationary period, either party can terminate the employment contract without prior notice. The probationary period must be:


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(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 Employment

Unilateral termination

The Labour Code only allows unilateral termination of a labour contract in limited circumstances, irrespective of any mutual agreement or other circumstances. There are different procedures for termination by employers and employees. Generally, a party terminating a labour contract unilaterally must give prior notice of termination to the other party.

Unilateral termination by an employee

An employee who signs a labour contract with a fixed term from 12-36 months, or for seasonal work or a specific task of less than 12 months, is entitled to unilaterally terminate the contract prior to expiration if the employee:

(i) 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 unilaterally terminate the contract whenever he/she wishes so provided that 45-day prior notice is duly given to the employer.

Unilateral termination by an employer

During the term of a labour contract, unilateral termination by an employer is permitted in the following circumstances:

(i) 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);


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(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 Minimums

The Labour Code allows foreign-invested projects to denominate and pay wages to Vietnamese employees in Dong. Salaries for foreigners may be denominated and paid in foreign currency.

The Government decides and publishes a minimum wage which varies depending on geographical regions and types of work. The current minimum wage is VND1,200,000 per month (approx. USD72.00) for employees within Area 1 which includes the urban districts 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 as the rural districts of Hanoi and Ho Chi Minh City, some districts of Hai Phong City, Da Nang City, etc.; and VND950,000 per month (approx. USD57.00) for employees within Area 3 such as other provincial cities, the remaining districts of Hanoi, some districts of Bac Ninh province, Bac Giang province, Hung Yen province, etc. For the rest 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-public holidays) 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 pay rate. Overtime may not exceed 04 hours a day or 16 hours a week, or 200 hours in a year or 300 hours in a year for special circumstances which require the approval of the provincial People’s Committee.

The normal number of working hours in a week is 48 hours, comprising six 8-hour working days and extendable by mutual agreement. Employees working in dangerous, noxious, or especially toxic jobs (as defined by MOLISA) have their work day shortened to 06 or 07 hours.

An employee working for at least 12 months is entitled to annual leave of 12 days in addition to public holidays. Certain especially hazardous and toxic jobs are entitled to either 14 or 16 days annual leave as determined by the Government. An employer may set the schedule of annual leave after consulting with the Executive Committee of the enterprise trade union and notifying his employees. Employees will be compensated for remaining leave prior to departure from work.

An employee is entitled to paid leave for the following personal reasons: marriage (03 days leave); marriage of a son or daughter (01 day leave); and the death of a person’s parents, spouse’s parents, spouse, son, or daughter (03 days leave). Female employees are entitled to maternity leave of at least 04 months, with an allowance equal to 100% of their salary to be paid by the Social Insurance Fund. At least 02 months of the maternity leave must be taken post-birth.


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5. Work Permits

Expatriates working in Vietnam for 03 months or more must obtain a work permit. The term of a work permit is required to correspond with the length of the labour contract, which is capped at 36 months but may be extended at the employer's request.

Not less than twenty days before an expatriate’s estimated date of commencement of work, an FIC must apply to MOLISA or its authorised agency to obtain a work permit for that expatriate. MOLISA or its authorised agency is obliged to give its decision within 15 days of its receipt of such application. Clear reasons must be provided if the application is refused. In addition, a work permit can be withdrawn in certain circumstances, including for a breach of the laws of Vietnam by the expatriate.

Five groups of foreigners working in Vietnam are exempt from the requirement of obtaining a work permit: (i) foreigners entering Vietnam to work for less than 03 months; (ii) a member of a limited liability company with two or more members; (iii) the owner of a one member limited liability company; (iv) a member of the board of management of a shareholding company; (v) a foreigner entering Vietnam to offer services; (vi) foreigners entering Vietnam to work to resolve an emergency situation such as a breakdown or a technically or technologically complex situation arising and affecting, or with the risk of affecting, production and/or business which Vietnamese experts or foreign experts currently in Vietnam are unable to deal with. Such foreigners must carry out procedures for issuance of a work permit if their work extends for more than 03 months; and (vii) a foreign lawyer to whom the Ministry of Justice has issued a certificate to practice law in Vietnam.

Not less than seven days prior to the date of commencement of work, foreigners who are exempted from work permit requirements must be registered at DOLISA where the employer’s head office is located. The registration must state the name, age, nationality and passport number of the employee, the dates of commencement and termination of employment, and a description of the work to be done.

6. Collective Labour Agreement

An FIC must negotiate a collective labour agreement if requested by the trade union at the company. This agreement is valid only if at least 50% of the employees agree to the provisions of the agreement.

The collective labour agreement covers matters such as wages for different categories of employees and working conditions. A copy of the collective labour agreement must be filed with DOLISA within 10 days of the signing of the agreement and will come into effect from the date agreed by the parties as stated in the agreement, or from the signing date where no such date is specified. The term of the collective labour agreement can be of 01 to 03 years subject to renewals thereafter.

7. Trade Unions

Within 06 months of the commencement of a company's operations, the provincial federation of trade union must set up a provisional trade union organisation at the company to represent and protect the rights and interests of employees and the workforce.


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An employer must recognise a trade union's status once it is validly organised. There are strict rules protecting the trade union and its members from any coercion or discrimination from employers regarding activity within the trade union. The employer is responsible for ensuring an environment conducive to the activities of the trade union.

8. Employment Funds

The Social Insurance Fund, Health Insurance Fund, and Unemployment Insurance Fund only cover Vietnamese employees.

Social Insurance Fund

Contribution to the State Social Insurance Fund is a statutory obligation of both the employer and employee in all contractual employment relationships longer than 03 months. The Social Insurance Fund provides benefits such as pensions, salaries during sick days, salaries and treatment for labour-related accidents and occupational illnesses, maternity benefits, and death benefits. The contributions are made as follows:

• Employer pays 15% of the monthly salary pool to the Social Insurance Fund.

• Employee pays 5% of his/her monthly salary to the Social Insurance Fund.

Health Insurance Fund

The Health Insurance Fund covers 100% of medical expenses, except for cases where high cost treatments are involved. In such cases, the Health Insurance Fund covers 100% of medical expenses incurred by working employees provided that they are less than VND7 million and 60% of such medical expenses with a cap of VND20 million if they are above VND7 million.

An employer is obliged to pay 2% of the monthly salary pool to the Health Insurance Fund. Each employee must also contribute by paying 1% of his or her monthly salary to the Health Insurance Fund.

Unemployment Insurance Fund

The provision of the law on Unemployment Insurance Fund takes effect on 01 January 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 Allowances

A company is required to place 1-3% of the total wages paid into a Retrenchment Allowance Fund. When an employee loses his or her job due to restructuring or technological advances affecting a company, the employer has the responsibility to retrain the employee. If a new job cannot be created, the employee is entitled to a


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severance pay of one month's salary for each year employment, with at least two months of such pay guaranteed.

VI: COMPETITION LAW

The Competition Law of Vietnam, having been in effect since 1 July 2005, was drafted with reference to the statutes of nine nation-states and territories, and the model laws promoted by international institutions like the United Nations’ Conference on Trade and Development (UNCTAD) and the World Bank (WB), as well as with influences from the enforcement practices and experiences of other countries.

The Law applies to all business enterprises and professional and trade associations in Vietnam; overseas enterprises and associations registered in Vietnam; public utilities and state monopoly enterprises; and State administrative bodies. It has superseding power over all other enacted laws of Vietnam regarding restrictive business practice and unfair trade practices. In the Competition Law, there is no regulation providing for cases of exception or exemption based on ownership types of enterprises. The law prohibits anticompetitive behaviour/decisions by officials or State administrative agencies, taking advantage of their authority.

1. Unfair Competition

Vietnamese Competition Law defines “unfair competition activities” as activities which contravene normal standards of business ethics to customers, other enterprises, or the State, including:

• infringement of business secrets, including breaches of confidential agreements;

• coercion of customers or other business counterparts;

• defamation of other enterprises;

• causing disruption to business activities of other enterprises

• misrepresentation in relation to trade name, slogan, symbol, packaging design, geographic indications and other factors;

• advertising and promotion aimed at unfair competition;

• discrimination against enterprises by professional associations; and

• illegal multi-level selling or pyramid schemes

2. Practices in Restraint of Competition

Under the Law, activities in restraint of competition are defined as those which will reduce, deviate or restrain competition in the market including agreements in restraint of competition, abuse of a dominant or monopoly position in the market, and economic concentration.


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3. Agreements in Restraint of Competition

All enterprises are strictly prohibited from entering into agreements which restrict the entry or development of other businesses, exclude other enterprises from the market, or collaborate to manipulate bids. Other agreements restraining competition are prohibited only where the parties to the agreement have a combined market share of 30% or more of the relevant market.

Parties with a combined market share of 30% or more are prohibited from entering into:

• agreements fixing prices directly or indirectly;

• agreements dividing markets or distribution of supplies;

• agreements limiting or controlling the volume of products or services in production or supply;

• agreement for the restraint of technical or technological development or for the restraint of investment;

• agreements imposing conditions on other businesses to enter into contracts for the sale of goods or services, or forcing other businesses to accept contractual obligations which are not related to the subject matter of the contract.

Agreement in Restraint of Competition

Market share<30%

Market share>30%

Agreement is allowed

Does exemption apply to the Agreement?

No

Yes

Agreement is prohibited

Agreement is allowed

Practices in Restraint of Competition

Abuse of Dominant Market / Monopoly

Position

Agreements in Restraint of Competition

Economic Concentration


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Exemptions are generally available where a prohibited agreement provides economic benefits to consumers that outweigh the restriction on competition, and these exemptions are decided by MOIT. An exemption must be obtained before execution of the agreement and the exemption may only be enjoyed during the period specified in the decision of MOIT. In order to be exempted, the agreement in restraint of competition must satisfy one of the following criteria:

• rationalising organisation structure, business model, raising business efficiency;

• promoting technical and technological advances, raising goods and service quality;

• promoting the uniform application of quality standards and technical norms of different kinds of products;

• harmonising business, goods delivery and payment conditions, which have no connection with prices and price factors;

• enhancing the competitiveness of small-and medium-sized enterprises;

• enhancing the competitiveness of Vietnamese enterprises on the international market.

4. Monopolies and Market Dominance

The Law defines a monopoly as an enterprise holding a position in the relevant market with no competitor of the same goods or services. An enterprise is deemed to be in a dominant position in the relevant market if it holds a share of 30% or more or is capable of restricting competition significantly. A group of enterprises is considered holding a dominant position in the relevant market if they attempt to restrain competition in one of the following circumstances:

• two enterprises hold a combined market share of 50% or more in the relevant market in question;

• three enterprises hold a combined market share of 65% or more in the relevant market in question; or

• four enterprises hold a combined market share of 75% or more in the relevant market in question.

Market dominance and monopolies are not prohibited by the Law, but it is the abuse of these positions that is unlawful. A dominant enterprise or group of enterprises is prohibited from engaging in any of the following activities which are considered to be an abuse of dominance or monopoly position:

• artificially lowering prices to exclude competitors;

• fixing prices unreasonably or setting minimum prices which cause damage to customers;restraining production or distribution of goods or services, limiting the


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market, or impeding technical or technological development, thereby causing loss to customers;

• imposing discriminatory condition for similar transactions to cause inequality in competition;

• imposing conditions on other enterprises signing contracts for the purchase and sale of goods and services or forcing other enterprises to agree to obligations which are not related in a direct way to the subject matter of the contract;

• preventing new competitors from entering the market.

Monopolies are subject to the same prohibitions for parties in a dominant position as listed above. They are also prohibited from imposing unfavourable conditions on customers and abusing the monopoly position to unilaterally unreasonably modify or cancel a contract.

5. Economic Concentration

When a merger, consolidation, acquisition (with some exceptions), joint venture, or other type of “economic concentration” results in a combined market share of between 30% to 50% of relevant market, the Vietnam Competition Administration Department (“VCAD”) must be notified, unless the concentration results in a small or medium enterprise. Under the Law, acquisition is defined as the purchase by one enterprise of all or part of the assets of another enterprise sufficient to control the activities of one or all of the businesses of the acquired enterprise.

An economic concentration (“EC”) resulting in a market share of 50% or above is prohibited, unless the concentration results in a small or medium sized enterprise or an exemption is granted.

Exemptions are available when one of the parties is at risk of being dissolved or insolvent, or where economic concentration enhances export, socio-economic development or technical progress, which shall be assessed by VCAD and MOIT.

Economic Concentration

Market share<30%

Market share>50%

EC is allowed without notification

No

Yes

Yes

30%<Market share<50% EC must be notified to VCAD

EC is prohibited

EC is allowed

Does exemption apply to the EC?


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6. Competition Authorities

Competition authorities are comprised of VCAD and Vietnam Competition Council.

VCAD is an organization under MOIT and has the function of assisting MOIT in undertaking State administration of competition, anti-dumping and anti-subsidy measures; application of self-protective measures with respect to goods imported into Vietnam; protection of consumers’ rights; and co-ordination with enterprises, industry or trade associations in dealing with proceedings in international trade involving dumping, subsidies and application of self-protective measures.

Vietnam Competition Council is an independent executive body that deals with competition cases and resolves complaints with respect to practices in restraint of competition.

VII: ENVIRONMENT

Subject to the nature, scale and environmental impact level of projects, authorities and investors are required to prepare strategic environment assessment reports and either environmental impact assessment reports (“EIAR”) or environment protection commitments (“EPC”) as conditions for the establishment and operation of certain projects in Vietnam.

1. Strategic Environment Assessment Reports

Projects that are subject to strategic environment assessment reports include strategies and plans on national socio-economic development at the national or provincial level. The agency responsible for building a national strategic project must prepare and submit a strategic environment assessment report to the relevant appraisal body. The appraisal is one of the grounds for approving the project. A strategic environment assessment report must include the following contents:

(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 Report Appraisal Board with regard to projects within the authority of the National Assembly, the Government and or Prime Minister. The relevant ministries have a responsibility to form Strategic Environment Assessment Report Appraisal Boards with regard to the projects under their respective authority. Provincial People’s Committees are responsible for forming Strategic Environment Assessment Report Appraisal Boards with regard to the projects under their respective authority or provincial People’s Councils’ authority.


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2. Environmental Impact Assessment Report

Investment projects subject to compulsory “EIARs” cover the following main categories:

(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 residential areas;

(vi) projects for exploitation and utilization of groundwater or natural resources on a large scale; and

(vii) other projects with a potential risk of causing an adverse impact on the environment.

Contents of EIAR

An EIAR is required to have the following main contents:

(i) 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


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against the project location or against environmental protection solutions must be presented in the environmental impact assessment report;

(ix) citation of sources of figures and data, assessment methods.

Procedures for Consideration and Approval of an EIAR

MONRE is responsible for establishing appraisal boards for appraisal of EIARs for projects approved by the National Assembly, the Government or the Prime Minister, and also for inter-branch or inter-provincial projects.

Ministries, ministerial equivalent bodies or Government bodies are responsible for establishing appraisal boards for appraisal of EIARs for projects within their respective decision-making authority (excluding projects under MONRE responsibility). Provincial People’s Committees are responsible for establishing appraisal boards for establishing appraisal boards for appraisal of EIARs for projects located in their respective localities and within the decision-making authority of their People’s Council.

The time-limits for appraisal of strategic environmental assessment reports and EIARs are as follows: (i) a maximum of 45 working days from the date of receipt of a complete and valid application file shall apply to appraisal of projects which the appraisal councils established by MONRE; and (ii) a maximum of 30 working days from the date of receipt of a complete and valid application file shall apply to appraisal of other projects.

3. Environmental Protection Commitment

Projects subject to Environmental Protection Commitments (“EPCs”):

Any project which is not subject to strategic environment assessment reports and EIARs must make a written EPC. The main contents of an EPC are as follows:

(i) 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 EPCs

District People’s Committees are required to organize registration of EPCs. When necessary, 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 of valid EPCs.

The project owners may commence production, business or service activities after registration of EPCs.

VIII: INTELLECTUAL PROPERTY

On 1 January 2006, the Civil Code came into force, and on 1 July 2006, the Law on Intellectual Property, which codified the government regulations on intellectual


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property, came into force. These are the two principal laws governing the protection of intellectual property rights in Vietnam and adopted by Vietnam to conform to WTO standards on intellectual property protection.

In addition to these laws, Vietnam is also a State Party to the Paris Convention, the Madrid Agreement, Madrid Protocol, and the Stockholm Convention of 1967 (which established the World Intellectual Property Organisation). Vietnam is also a member of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), the Berne Convention for the Protection of Literary and Artistic Works with effect from 26 October 2004, the Geneva Convention for the Protection of Producers of Phonograms against Unauthorised Duplication of their Phonograms with effect from 06 July 2005, the Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite with effect from 12 January 2006, the International Convention for the Protection of New Varieties of Plant with effect from 24 December 2006, and the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations with effect from 01 March 2007.

Vietnam’s industrial property regime is administered principally by MOST acting through NOIP. The copyright regime is administered by the Ministry of Culture, Sports and Tourism, acting through the Copyright Department.

1. Protection of Intellectual Property Rights in Vietnam

Generally, except for trade secrets, geographic indications, and trade names (which are entitled to legal protection as far as it fulfils the conditions of formation and usage), intellectual property rights are protected in Vietnam upon registration on a first-to-file priority basis..

Below is a summary of the various types of intellectual property rights protected in Vietnam and the duration of the protection:

Type Brief Description Duration of

Protection

Patent for Invention

A technical solution presenting worldwide novelty and an inventive step applicable in socio-economic fields

20 years from the date of application

Patent for Utility Solution

A new technical solution in comparison with existing technology and achievable in current economic technological conditions

10 years from the date of application

Industrial Design

The external appearance of a product embodied by lines, three dimensional forms, colours, or a combination of these that is novel, inventive throughout the world, and capable of serving as a pattern for an

05 years from the date of application which is renewable for an additional two periods 05


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industrial or handcrafted product years (a total of 15 years maximum)

Layout Design of Integrated Circuit

Three dimensional circuit elements and their interconnections in the integrated circuit which is original and not widely known in the relevant field

The earlier of: (i) 10 years from the date of grant; (ii) 10 years from the date of the first commercial use by owner or an assignee; (iii) 15 years from the creation of the design.

Trademark Marks used to distinguish goods or services of one person from similar goods and services of another person. They may take the form of words, images, or any combination presented in one or more colours

10 years from the date of application (renewable for successive 10-year periods without limit)

Geographic Indication

Information indicating territorial origin of a product with characteristics or qualities pertaining to the territory

In perpetuity from the certification of protection

Trade Name Names of individuals or entities used in business activities

As long as it is in formation and usage

Trade Secret Confidential trade information which could enable the possessor to gain economic advantage

As long as it is in formation and usage

New Plant Variety

New plant variety with a recognisable name among relevant species as created by selection or development which is of distinctiveness, uniformity, and stability for plantation.

20 years from the certification of protection (25 years for timber trees and vines)

Copyright Moral and material rights with respect to original literary, artistic and scientific works including software

Author’s life plus 50 years (except for movies, photographs, plays, applied fine


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art works, which enjoy 50-year protection)

Copyright-related rights

Moral and material rights in respect of performance show, audio record, visual record, radio program, and satellite program-coded signal

50 years

2. Trademarks

Trademarks are generally protected by registration but certain marks, including logos, cannot be registered if they are:

• not distinctive;

• widely used;

• descriptive of the goods or services in question; or

• misleading, deceptive, or identical to or confusingly similar to existing registrations.

2.1 Priority rights

Vietnam adopts a first-to-file rather than a first-to-use priority system, so that an earlier application for a trademark establishes a right of first priority. The date of priority is generally the date of application, but this can be earlier if a qualifying application has been made in another member country of the international trademark treaties.

Trademarks that have been internationally registered in accordance with an international treaty can also be established in Vietnam once accepted for protection by the trademark office. Applicants who wish to rely on international treaties in establishing a right of priority must make an express statement to that effect in their application for protection and present evidence in support of their claim of priority.

2.2 Registration procedure

Vietnam has adopted the classification of goods and services as specified in the Nice Agreement for the purposes of trademark registration although Vietnam is not a member of the Nice Agreement. A preliminary trademark search can be conducted by the applicant to establish whether the mark or any similar mark has already been registered before applying for a trademark in Vietnam.

Applications can be made either for international registration (including Vietnam) through the World Intellectual Property Organisation or directly in Vietnam.


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2.3 “Well-known” trademarks

Trademarks may still be protected in Vietnam in the absence of first-to-file priority. "Well-known" trademarks in Vietnam are protected in perpetuity. A trademark will be deemed well-known if it has wide public recognition as evaluated on the following criteria:

• number of customers;

• location for sales;

• sales turnover;

• the number of years in continuous use;

• reputation of goods or services bearing the mark;

• the number of countries where the trademark has been protected or recognised as well-known; and

• costs for an assignment or licensing of the mark, or investment capital contribution value of the mark.

3. Patents

3.1 Invention and utility solution

An invention is defined as a technical solution which is new in comparison to existing technology, which is of a creative character, and is applicable to various social and economic fields.

The following are excluded from patent protection: scientific discoveries, theories, or mathematical methods; schemes, plans, rules and methods for performing mental acts; methods of training domestic animals, playing games, and doing business; computer programs; the presentation of information; solutions of aesthetic characteristics only; plant varieties or animal breeds; processes of plant or animal production which are principally of a biological nature, other than microbiological processes; and human and animal disease prevention methods, diagnostic and treatment methods.

An applicant unable to secure protection as an invention patent may qualify for protection as a utility solution patent (which is essentially an invention without involving an inventive step).

3.2 Priority rights

The priority of applications for patent protection is determined by either the date on which NOIP receives the application or in accordance with the applicable international treaties. Applicants relying on international treaties to establish a right of priority must make an express statement to that effect in their application and present evidence in support of their claim of priority.

Vietnam is a State Party to the Patent Cooperation Treaty (“PCT”). State Parties to the PCT have agreed to permit an applicant to wait for up to 30 months after the initial


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filing of a patent application in one country to begin prosecuting the application in other countries. Vietnamese law extends this period to 31 months.

3.3 Registration procedure

Patent applications can be made either for international registration under the PCT procedure or directly in Vietnam.

Applying for patent protection directly in Vietnam will only be possible if the invention or utility solution has not been made public anywhere in the world by being used or described in a written publication before the filing date or priority date, as applicable. A patent application must be submitted to NOIP.

NOIP publishes the application in the industrial property gazette after preliminary examination and acceptance of the application. A substantive examination will only be carried out upon request by the applicant or a third party. A substantive examination determines the patentability of the invention or utility solution and its scope of protection.

4. Industrial designs

An industrial design is evaluated for worldwide novelty in the same way as an invention which requires a substantial distinction and uniqueness when evaluated by a person having ordinary skill in the relevant area. Excluded from the protection of industrial designs are mere functional or technical features of a product’s appearance, external features of civil or industrial construction works, and the shape of a product which is invisible during the use of the product.

A technical design should not be disclosed in any form or in any jurisdiction until the date of filing for protection. This is to maintain its worldwide novelty.

Priority rights over protection of industrial designs are achieved by the same way as for trademarks and patents.

Since international applications are not available for protection of industrial designs, applicants need to register in Vietnam through NOIP.

5. Copyright

5.1 Owners and authors of copyright

There is a distinction between owners and authors of works. An author is a person who creates all or part of a literary, artistic or scientific work. Those who translate, adapt or edit works are deemed to be the authors of their derivative work. Owners of works may be authors or co-authors, authorities or organisations which delegate a duty to an author to create a work, individuals or organisations which contract with an author for the creation of a work, heirs who inherit a work from an author who was also the owner of a work, and individuals and organisations to which ownership rights over a work are transferred by contract.

Rights over a work include personal rights (including the right to name a work and to permit others to use the work) and property rights (including the right to receive royalties and to rent out the work). These rights are divided into three types: (i) rights


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of an author; (ii) rights of an owner; and (iii) rights of an author who is concurrently the owner of a work and therefore holds full personal and property rights over a work.

5.2 Establishment of copyright

Copyright arises from the moment a work is created in a definite form. The Civil Code provides that copyright protection in respect of foreign individuals and entities will be limited to works which are first published or disseminated in Vietnam, or which are created and take a definite form in Vietnam. Works of foreign authors not first published in Vietnam must be published in Vietnam within thirty days of first publication. Vietnam has acceded to the Berne Convention for the Protection of Literary and Artistic Works that provides the protection of Vietnamese copyright law to qualifying works under the Berne Convention.

5.3 Registration of copyright

Authors, co-authors and owners of works have the right to apply for the registration and protection of copyright and ownership of such works to the Copyright Department under the Ministry of Culture, Sports and Tourism.

The application must be supported by evidence of the applicant’s authorship and/or ownership of the work. Where the application is in order, the applicant will be issued with a Copyright Certificate4 within 15 working days from the receipt of the application.

The Ministry of Culture, Sports and Tourism has primary responsibility for the protection of copyright in Vietnam and is assisted at the local level by a network of Culture, Sports and Tourism Inspectors.

6. Transfer of Intellectual Property Rights

6.1 Industrial property

Owners of industrial property that is protected in Vietnam (except for “geographic indications”) may license the right to use or transfer ownership of such objects to a third party. Exclusive licensees of the right to use industrial property may further sub-license their right to use.

6.2 Registration requirement

Licence or assignment of industrial property rights must be made by a written contract. A licensing or assignment agreement must include certain provisions set forth by law such as the particulars of the parties, price, rights and obligations, scope, term, and territory for licensing. Assignment of certain types of industrial property, including inventions, industrial designs, layout designs of an integrated circuit, and trademarks, must be registered with NOIP. The licensing of industrial property rights is binding on the licensor and the licensee without registration with NOIP, but is ineffective against third-parties until registration with NOIP.

6.3 Duration

The duration of licensing contracts is limited to the valid duration of the certificate of protection5 for each type of industrial property.

4 Certificate of ownership rights over copyright works


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6.4 Prohibited terms

Certain terms restricting a licensee’s rights may be invalid, especially those terms that do not originate or protect the rights of the licensor. These terms include:

• prohibitions on the licensee’s innovation or improvement of the licensed objects of industrial property (except for trademarks), or any obligation of the licensee to transfer such improvement to the licensor free of charge;

• direct or indirect limits on the licensee’s export of goods or services provided under the industrial property object license contract to territories where the licensor is neither the owner of the corresponding industrial property right nor the exclusive importer of such goods (e.g., where the licensor grants exclusive licence of the industrial property);

• any obligation of the licensee to purchase from a source appointed by the licensor and without product quality assurance of all or a certain percentage of materials, accessories, or equipment from the licensor or another supplier; and

• prohibitions on the licensee’s claim in respect of the validity of the industrial property right or the licensor’s right to license.

6.5 Other statutory obligations and restrictions

The licence or assignment of the trademark must not cause confusion in relation to the characteristics and origin of the goods or services bearing the trademark. The current regulations prohibit the licence or assignment of industrial property rights for the purpose of squeezing out competitors and attempting to monopolise the market.

6.6 Licence of copyright and related rights

Authors and owners of copyrights may transfer all or part of the property rights over a work to others under a contract or under the laws on inheritance. The personal rights of an author are not generally transferable, but an author who is concurrently the owner of a work has a limited right to transfer some of his/her personal rights.

7. Enforcement of Intellectual Property Rights

7.1 Course of action

The remedies for industrial property infringement fall into two categories - judicial and administrative. An owner or registered user of industrial property is entitled to commence proceedings in court for infringement of their intellectual property rights and the courts have the power to issue an injunction preventing the infringement from continuing and to award damages. The competent authorities have the powers to enforce such an injunction.

Proceedings can be filed at NOIP for verification of the infringement. The customs authorities, market management authorities and economic police have the power to regulate infringing goods and to take the necessary action to seize infringing products. The courses of action available to them include: powers of search; sealing up of

5 Certificate of ownership rights over inventions, utility solutions, industrial designs and trademarks, and the right to use an appellation of origin of goods


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premises; temporary detention of persons; temporary custody of goods; and the suspension of production and sale of goods.

7.2 Administrative penalties for infringement

Infringement of rights over industrial property objects shall be subject to penalties in the form of either a warning or a fine. Other sanctions may also be applied such as the suspension of a business licence; confiscation of counterfeit goods, facilities or materials used in the infringement; compelled destruction of counterfeit goods; distribution or use of counterfeit goods for non-commercial purposes; and compensation for damages.

Penalties must be applied within one year, or two years for business activities which infringe legal rights of registered trademarks, geographical indications, inventions, or industrial designs, following the date of the infringement. After these statutory time limits have passed, infringers will not be subject to penalties.

7.3 Border control

The Law on Intellectual Property allows customs authorities to apply border control measures for all goods that infringe on intellectual property rights. Border control measures include:

• suspension of customs procedures for goods suspected of infringing intellectual property rights; and

• inspection of goods so an intellectual property right holder may collect information to exercise the right to request suspension of customs procedures.

Customs authorities can suspend the release of goods where there is: (a) a request from the intellectual property right holder; (b) production of protection certificates and evidence of infringement, and (c) a sum of money has been deposited or a bank guarantee has been provided for possible compensation to persons later determined to have not infringed on intellectual property rights.

IX: TECHNOLOGY TRANSFER

Technology 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; technology transfer agreements; technology transfer services (including technology transfer brokerage, appraisal, evaluation, assessment and promotion); measures for encouraging and boosting technology transfers; approval and registration of technology transfers; and handling disputes, claims, denouncements and breaches in technology transfers.


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1. General Principles

The LTT defines technology as “solutions, processes and know-how, which may or may not be associated with tools and means, to turn resources into products.”.

Technologies are classified under the LTT into technologies encouraged for transfer, technologies the transfer of which are restricted, and technologies prohibited from transfer. Decree 133 provides a list of technologies encouraged, restricted, and prohibited, for transfer.

The term “transfer of technology” refers to either the transfer of the right to own the technology or the licensing/sublicensing of the right to use the technology either by an individual or a corporation.

In cases where objects of the technology transfer have already been protected as objects of industrial property, the transfer of ownership of such technology must be implemented together with transfer of ownership of the industrial property rights in accordance with the law on intellectual property. The actual transfer of such industrial property rights is subject to intellectual property regulations and falls outside the ambit of the technology transfer regulations.

The transfer of a technology may be in the form of an independent technology transfer contract or in a section on technology transfer in the following projects or contracts: investment project; franchising contract; contract transferring industrial property rights; contract for purchase and sale of machinery or equipment to which the transfer of a technology is attached.

2. Technology Transfer Contract

The contract is the basis for performance, ensuring the legality of the transfer of technology, and setting payments and methods to resolve disputes. Technology Transfer Contracts (“TTCs”) can be agreed in a written contract or other equivalent forms, such as telegram, telex, fax, data messages and other forms as permitted by law. The parties are also allowed to choose the language of the TTC. In the case of a transaction in Vietnam, a Vietnamese version is required. The Vietnamese and foreign language versions are of equal validity.

The parties to a TTC may reach an agreement on the following particulars:

• Name of the TTC, clearly stating the name of the transferred technology;

• The technology object which is being transferred and the products created from the technology;

• Transfer of the ownership of and/or right to use the technology;

• Method of transfer of the technology;

• 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;


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• Plan and schedule for transfer of technology, and location for implementing the transfer of technology;

• Liability to provide a warrant for the transferred technology;

• Penalties for breach of the TTC;

• Liability for breach of the TTC;

• Applicable law for dispute resolution;

• Tribunal for dispute resolution;

• Other agreements, on the condition that they are not contrary to the laws of Vietnam.

3. Governing Law

The parties are allowed to agree on foreign governing law, together with other terms and conditions which are not contrary to Vietnamese law.

Article 776 of the Civil Code 2005 provides that technology transfer with a foreign element (i.e., between a Vietnamese entity and foreign entity and technology transfer from any foreign country into Vietnam or from Vietnam to any foreign country) must comply with (i) provisions of the Civil Code 2005 and other legal documents of Vietnam concerning technology transfers; (ii) international treaties to which Vietnam is a contracting party; or (iii) foreign law, if the application of such foreign law or the consequence of its application does not contradict “the basic principles of the law of Vietnam”.

The LTT provides that any disputes arising out of TTCs with a foreign party can be settled by either local or international competent arbitrator or courts which the parties specifically chose to the extent that the foreign jurisdiction choice does not contradict “the basic principles of the law of Vietnam”.

4. Registration

The LTT provides the right of the parties to register on a voluntary basis with respect to “unrestricted” TTCs “in order to set the ground [for the parties] to enjoy incentives given in this Law and other relevant laws”. It is therefore suggested that parties register TTCs in order to enjoy incentives under the LTT and other laws.

The LTT requires that “restricted” technology transfers are subject to approval by the technology management authority (the “Technology Authority”) before the TTC is entered into by the parties, and then a permit is issued after the TTC’s execution..

5. Pricing

Parties are free to agree on the payment price for the technology transfer in the TTC. Payment may be made in one or a combination of the following methods:

• a one-off payment or payments in 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;


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• other payment methods as agreed by the parties.

6. Confidentiality

Competent authorities responsible for the issuance of technology transfer permits and certificates of registration of TTCs are obligated to maintain confidentiality of the technologies and business secrets in application files for issuance of technology transfer permits and registration of technology transfer contracts.

X: DISPUTE RESOLUTION

1. Conciliation and Mediation

The laws of Vietnam emphasise the need for parties to settle their disputes by conciliation and mediation. Parties are encouraged to seek the assistance of the relevant authorities to arrive at an amicable solution to any dispute. A settlement agreement reached between the parties during mediation or conciliation is currently treated in the same way as a normal contractual agreement, with the usual contractual remedies available for breach of its provisions.

Where litigants are required to attend conciliation meetings chaired by a judge, the settlement agreements reached, and thereafter recognised by judges’ decisions, are final and enforceable against the parties.

If conciliation and mediation fail, the parties may refer the matter to various fora, including international arbitrators, commercial arbitrators in Vietnam, Vietnamese courts, or foreign courts.

2. International Arbitration

In 1995, Vietnam ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). Shortly thereafter, the Ordinance on Foreign Arbitral Awards was passed providing for domestic enforcement of foreign arbitral awards. This was subsequently repealed by the new Civil Proceedings Code (“CPC”) which took effect on 01 January 2005.

General

Under the CPC, foreign arbitral awards are defined as arbitral awards rendered outside Vietnam or within Vietnam by non-Vietnamese arbitrators. Vietnamese court considers the recognition and enforcement of a foreign arbitral award when the award has been rendered in or by arbitrators of a country being a party to the New York Convention or, in case of a country not being a party to the New York Convention, to the extent that such country grants reciprocal treatment to Vietnam.

Organisations and individuals who obtain favourable foreign arbitral awards or their lawful representatives may file a petition with Vietnamese court to request for the recognition and enforcement of the award, provided that: (i) in respect of an organisation, the obliged organization has its head office in Vietnam; (ii) in respect of an individual, the obliged individual resides or works in Vietnam; or (iii) the properties subject of the enforcement of civil decision, judgment of foreign court, or decision of foreign arbitration, are in Vietnam at the time the petition is filed.


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The CPC has significantly broadened the scope of recognition and enforcement of foreign arbitral awards in relation to business and commercial disputes so that the scope covers most commercial relations.

3. Foreign Courts

Under the laws of Vietnam, FICs may not be able to refer their disputes to a foreign court.

Judgments issued by foreign courts are not enforceable in Vietnam unless Vietnam has signed a bilateral treaty with the relevant country regarding enforcement of that country's court judgments.

4. Domestic Arbitration

Since the issuance of the Ordinance on Commercial Arbitration on 25 February 2003, Vietnam has significantly improved its legislation on the operation of commercial arbitrators in Vietnam. It is expected that more economic arbitration centres will be established in the near future.

Under the Ordinance on Commercial Arbitration, commercial disputes may be resolved by an arbitration tribunal organised by an arbitration centre or set up by the parties (ad hoc arbitration). The arbitration tribunal may consist of three arbitrators or a single arbitrator as agreed by the parties.

Commercial arbitrators in Vietnam have jurisdiction to arbitrate commercial disputes. Under the Ordinance on Commercial Arbitration “commercial disputes” includes disputes relating to the sale and purchase of goods, provision of services, distribution, business representation and agency, custodianship, leasing or hiring, hire purchase, construction, consultancy, licensing, investment, finance, banking, insurance, exploration and exploitation, transportation, and other commercial activities.

The laws of Vietnam allow parties to a dispute with “foreign elements” to: (i) appoint foreigners as their arbitrators provided that the appointed foreigners are qualified to act as arbitrators in their own countries, and (ii) to agree on the application of a foreign substantive law, foreign arbitration rules, foreign language for arbitral proceedings, and an appropriate location for arbitral proceedings inside or outside Vietnam.

Arbitral awards issued by commercial arbitrators in Vietnam will be enforced in Vietnam. Arbitral awards given by the commercial arbitrators under the Ordinance on Commercial Arbitration do not need to be recognised by a Vietnamese court. Following the arbitration proceeding, a successful claimant is entitled to bring the relevant arbitral award to the relevant enforcement agency for enforcement unless such arbitral award is cancelled by a Vietnamese court.

Although the Ordinance on Commercial Arbitration gives parties to a dispute an opportunity to request a relevant Vietnamese court to cancel an arbitral award, the court may only review procedural matters and cannot re-hear the dispute. The court may, at the request of a party to the dispute, cancel an arbitral award given under the Ordinance on Commercial Arbitration in the following circumstances:


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• 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 proceedings is two years from the date of the dispute. The parties have 30 days after the arbitral award is given to apply to the court for cancellation of the award.

The Ordinance on Commercial Arbitration imposes the following restrictions on the selection of governing law in arbitration proceedings:

• disputes between Vietnamese entities must be resolved in accordance with the laws of Vietnam; and

• disputes involving a “foreign element” may be resolved in accordance with any law agreed between the parties to the dispute, provided that the selection and the application of that law are not contrary to the basic principles of the laws of Vietnam. For this purpose, a “foreign element” means: (i) one party to the dispute is a foreign entity; (ii) the basis of the dispute arises outside of Vietnam; or (iii) the assets relating to the dispute are located outside of Vietnam.

5. Vietnamese Courts

The Vietnamese court system consists of the Administrative Court, Economic Court, Civil Court, Labour Court and Criminal Court. The jurisdiction of each type of court is different, depending on the type of dispute. The Economic Court has jurisdiction over most commercial and financial disputes.

Vietnam has unified its court procedures for the different courts under the CPC. Under the CPC, all disputes, whether civil, commercial or labour, are now subject to the same set of procedural rules. A dispute may, depending on the type of dispute and the value of the dispute, either be heard at the district court or the provincial court at first instance. The recognition of foreign judgments and foreign arbitral awards fall under the jurisdiction of the provincial courts.

Generally speaking, court procedures in Vietnam can be divided into three distinct stages: first instance, appeal and review (second appeal). Most cases go to both first instance and appeal as parties are entitled to appeal against a judgment within 15 days of the judgment. In this case, first instance judgments are not enforceable until the case has been disposed of by the appellate court.

Under the laws of Vietnam, anyone may petition for review (second appeal) of a case (on the grounds of legal errors or newly discovered evidence) whether they are a party to the proceedings or not. The decision to grant such a review is made


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administratively by either the Chief Judge or Chief Prosecutor of a competent court or Prosecutor.

The CPC and its guiding regulations provide for a much more comprehensive set of rules on the application of important remedies such as preliminary injunctive relief. In certain cases, the CPC also allows parties to apply for temporary measures even before the court formally accepts a case for resolution.

Decisions and judgments issued by Vietnamese courts are enforceable in Vietnam. Foreign investors should be aware of certain statutes of limitation. In general, the CPC provides that the statute of limitation for initiating court proceeding is 02 years from the date the dispute arises.

6. Enforcement Process

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

XI: REPRESENTATIVE OFFICE IN VIETNAM

A representative office (“RO”) is the simplest form of presence for a foreign company in Vietnam. It is intended to promote business opportunities for its head office and to supervise or speed up the performance of contracts that the head office has entered into with Vietnamese parties. An RO is 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 cannot conduct any revenue-generating activities. A foreign company can open more than one RO in Vietnam.

The establishment and operation of ROs of credit institutions, education establishments, and insurance companies are subject to different regulations.

1. Establishment Conditions

A foreign company that wants to set up an RO in Vietnam must, in general, satisfy the following requirements:

• it must have obtained a certificate of incorporation in the relevant foreign country where its head office is situated;

• the RO’s parent company must have been in operation for at least 01 year after its lawful establishment or business registration in its country prior to an application for an RO licence; and


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• its proposed operating activities in Vietnam must not be prohibited by the laws of Vietnam.

2. Application Procedure

To establish an RO in Vietnam, foreign companies are required to file the following documents with the relevant licensing authority:

• Application form for issuance of a license for establishment of a

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

Office

Non-Vietnamese documents must be legalized in accordance with the law of Vietnam

and translated into Vietnamese whereby such translation must be certified.

3. Press Announcement

Within 45 days from the issuance date of the licence, ROs are required to publish details 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 Authority

The Department of Industry and Trade is responsible for issuing licences for ROs. For specific business sectors (Banking, Tourism etc.) other authorities are responsible.

5. Time Limit for Licensing and Licensing Fee

Within 15 days after the date of receipt of all documents, a licence for the establishment of an RO is issued by the relevant licensing agency. In the event that the application is not made in compliance with the law, the relevant licensing authority will give a written notice to the applicant within 03 working days after the date of receipt of the application.

The licensing fee for establishment of an RO is currently VND1,000,000 (approx. USD60.00).

6. Operation

The operating duration of an RO in Vietnam is 05 years, which is extendable.

Within forty-five 45 days of issuance of the RO’s licence, the RO must register its operation by way of a written notice to the relevant licensing authority indicating its


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office address, number of Vietnamese staff and foreign staff working at the RO and its chief representative, and obtain an acknowledgement from the relevant licensing authority.

For the purpose of the above registration, the relevant licensing authority may require a copy of the lease agreement of the RO in Vietnam. Following the registration, and on the basis of a letter of introduction issued by the provincial Department of Industry and Trade, the RO will register its seal with the provincial Police Department.

During the term of the RO licence, any change in (i) the name or nationality of the parent company, or the name of the RO, (ii) the number of staff, (iii) the content of the RO’s activities, or (iv) the RO’s address, must be reported to the relevant licensing authority.

7. Permitted Activities

The RO is permitted to carry out the activities specified in its licence. Such permitted activities include non-revenue generating activities such as market research, customer support, and marketing or feasibility studies for investment projects.

Foreign companies are not permitted to use the RO as a vehicle to carry on actual business in Vietnam. For example, the RO cannot be used to conclude or execute commercial contracts. However, the chief representative of the RO may be authorised by the parent company to negotiate and to sign contracts on its behalf, under a power of attorney on a case-by-case basis, provided that such contracts may only be performed by the parent company itself. It should be noted that there may be a tax implications for authorizing a representative in Vietnam to sign a contract on behalf of the parent company.

ROs may (i) lease an office, residential accommodation and other facilities necessary for its activities (but no sublease by the ROs is permitted), (ii) import equipment and facilities necessary for its operation and (iii) employ Vietnamese and expatriates. It may also open a bank account in foreign and Vietnamese currency at a bank in Vietnam, but any conversion or remittance of currencies must comply with the foreign exchange laws of Vietnam. The purpose of this account is to pay for the expenses of a representative office and should not be used for the receipt of payments from other companies.

ROs may be required to obtain a tax code for the purpose of deducting and paying personal income tax on behalf of its employees.

8. Reporting

ROs are required to file an annual report regarding its operation in the previous year with the relevant licensing authority before the last working day of January in the following year. If necessary, and upon the written request of the competent authority, an RO may also be obliged to make a report and/or supply information and documents relating to its operation.

9. Termination

The operations of an RO may be terminated in any of the following circumstances:

(a) where the parent company so requests;


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(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 parent company must forward a notice of termination of operation of the RO to the relevant licensing authority at least 30 days prior to the date of termination of operation of the RO, and is required to return the licence to the relevant licensing authority.


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APPENDICES

APPENDIX I - SUMMARY OF WTO COMMITMENTS

The 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 Goods

For the majority of agricultural and non-agricultural goods, Viet Nam is promising ceilings (or “bound” rates) on duties ranging between zero and 35%. Some of these invoice reductions phased over periods up to 2014, the precise end date varying from product to product.

Among products with higher ceilings are: alcoholic drinks, tobacco products, instant coffee and some related products, new and used motor vehicles and components, and roof tiles. Used vehicles less than five years old can be charged additional flat-rate duties 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 Viet Nam’s commitments is a promise not to charge higher applied rates on rapeseed (also known as cotza or canola) and derived meal, oil and other products than the duties actually 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 charge applied duties in the form of specific duties (e.g. dollars per ton) instead of percentages of the price (“advalorem”) so long as the result stays below the committed ceilings.

A handful of products are going to be protected with tariff quotas (higher duties for quantities 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 100,000 poor farmers in coastal areas). But Viet Nam will expand the quotas until they disappear according to agreed timetables.


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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 will apply immediately; in others it will be achieved gradually over periods ending in 2010 to 2014.

In agriculture, Viet Nam has promised not to subsidize exports. It will be allowed to support its farmers domestically with trade-distorting supports (“Amber Box” or “Aggregate Measurement of Support”, i.e. supports that have a direct impact on prices or quantities produced) of up to 3,961.5 billion Vietnamese dong (currently about US$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 all WTO members, Viet Nam can also spend unlimited amounts on supports that do not distort trade (“Green Box” supports).

SERVICES: Schedule of Specific Commitments on Trade in Services

Viet Nam has made commitments on a range of services. In some cases Viet Nam reserves the right to limit foreign ownership of service companies operating in Viet Nam – for example in some telecommunications services the eventual limits can be 49% or 65%, depending on the service. In a few cases, permitted foreign ownership is immediately 100% (for example accountancy). In many cases, the permitted foreign ownership is phased in to reach 100% after a few years (for example express delivery courier services after five years).

As is normal in this sector, the effect of the commitments depends also on complex relationships with domestic regulations – for example in the first two years, 100%-foreign-owned architectural firms can only serve foreign companies. The commitments and some of the regulations are in the “schedule” (lists) of commitments; other information on the regulations is in the working party report.

THE WORKING PARTY REPORT: Report of the Working Party on the Accession

of VietNam

The working party report outlines the economic context, and the institutional and legal framework. It includes Viet Nam’s commitments to undertake reforms or to preserve reforms that have been introduced in order to secure membership. Among the commitments are:

Foreign exchange: Viet Nam will abide by IMF and WTO rules

State enterprises: commercial business (i.e. except for supplying the government) will be conducted on commercial terms without interference from the government. A number of products are listed as subject to state trading enterprises because of consumption restrictions, for cultural and moral reasons, or because they are “natural monopolies”: tobacco products, petroleum, cultural products such as newspapers, journals and audio-visual materials, and aircraft.


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Privatization and equitization of state enterprises: this will be handled transparently, with Viet Nam supplying annual reports while the program lasts

Pricing and price controls: Viet Nam will comply with WTO agreements and notify the WTO of actions it takes to control prices.

Policy-making and enforcing framework: a number of administrative and legal structures have been introduced or strengthened so that WTO provisions are applied, including the possibility of investigation and judicial view to deal with complaints about this.

Trading rights (the right to import and export): this was a subject of tough negotiations partly because of different registration procedures for foreign and domestic traders. A new law has now harmonized the procedure for both.

Among the many additional details are a commitment that all foreign firms and individuals will be able to engage in importing and exporting as importers/exporters “of record” so long as they register, and importers will be able to choose their domestic distributors.

Exercise duties: the different duties charged on alcoholic drinks attracted particular attention in the negotiations. Viet Nam has agreed to simplify the structure within 3 years by applying a single rate for all forms of beer and a single rate for all spirits containing 20% alcohol or more. This has allayed concerns from some countries that the previous structure might discriminate against imported beers that have different packaging, or against imported spirits with higher alcohol content.

Quantitative and other restrictions: quotas, bans and other restrictions will be abolished, including import bans on cigarettes, cigars and used vehicles, or only applied according to WTO rules.

WTO agreements dealing with rules: Viet Nam will comply with the Customs Valuation, Rules of Origin, Pre-shipment inspection, Anti-dumping, Safeguards, Subsidies, and Trade-Related Investment Measures agreements, with some provisions phased in over a period.

Export restrictions: Viet Nam maintains export controls on some products such as rice, and some wood products and minerals (to prevent illegal exploitation). It is pledging to apply controls on these products in a way that conforms to WTO agreements.

Standards: Viet Nam will apply the Technical Barriers to Trade, and Sanitary and Phytosanitary Measures agreements without a transition period.

Government procurement: Viet Nam will consider signing the Government Procurement Agreement after it has become a WTO member.

Intellectual property: almost 33 pages of the report describe in detail the administrative and legal set up in the country. Viet Nam will comply with the Trade-


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Related Aspects of Intellectual Property Rights (TRIPS) Agreement immediately, without any transition period.


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APPENDIX II - LIST OF MAJOR LEGAL DOCUMENT RELATING TO THE

BUSINESS ACTIVITIES OF FOREIGN INVESTORS IN VIETNAM

No. Legal document No

Issued by Authorities

Content of legal document

Foreign Investment

1 Law No. 59/2005/QH11 dated 29/11/2005

National Assembly

Law on Investment providing investment procedure, investment incentives, right and obligations of the investors.

2 Law No. 60/2005/QH11 dated 29/11/2005

National Assembly

Law on Enterprises providing type of enterprise, establishment procedures, organisation and operation of enterprises

3 Decree 88/2006/ND-CP dated 29/8/2006

Government Decree on business registration


Government Decree providing guidelines for implementation of a number of articles of Law on investment


Government Decree providing guidelines for implementation of a number of articles of Law on enterprises


Government Providing regulations on re-registration or conversion by enterprises with foreign 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 Investment

7 Decision 1088/2006/QD-BKH dated 19/10/2006

Ministry of Planning and Investment

Decision on promulgating sample form of documents for carrying out investment procedures in Vietnam

8 Circular 03/2006/TT-BTC dated 19/10/2006

Ministry of Finance

Providing guidelines for implementation Decree 88

Foreign Exchange Control

9 Ordinance No. 28/2005/PL-UBTVQH 11dated 13/12/2005

The Standing Committee of National Assembly

Ordinance on foreign exchange control


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Government Providing guidance for implementing Ordinance on foreign exchange control

11 Decree 134/2005/ND-CP on 1/11/2005

Government Regulation on Foreign Borrowing and Repayment of Enterprises

Labour

12 Labour Code dated 23/6/1994

National Assembly

Law on Labour

13 Law No. 35/2002/QH10 dated 2/4/2002

Law No. 74/2006/QH11 dated 29/11/2006

National Assembly

Law on amendments and supplements to a number of articles of the Labour Code dated 23/6/1994


Government Regulation on recruitment and management of foreigners working in Vietnam

Land

15 Law No.13/2003/QH11 dated 26/11/2003

National Assembly

Law on land

16 Decree 181/ND-CP dated 29/10/2004

Government Providing guidance for the implementation of a number of article of the Law on land

17 Decree 182/ND-CP dated 29/10/2004

Government Sanctioning administration violation in the area of land

Intellectual Property

18 Law No. 50/2005/ QH11 dated 29/11/2005

National Assembly

Law on Intellectual Property

19 Law No. 80/2006/QH11 dated 29/11/2006

Government Law on Technology Transfer

Import - Export

20 Law No. 45/2005/QH11 dated 27/6/2005

National Assembly

Law on Import – Export

21 Law National Customs Law


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No.29/2001/QH10 dated 29 June 2001, and the Law No.42/2005/QH11 dated 14 June 2005

Assembly


Government Making detailed provisions for the implementation of

the Law on Export and Import Duties

Various Taxes

23 Law No. 78/2006/QH11 dated 29/11/2006

National Assembly

Law on tax management

24 Law No. 14/2008/QH12 dated 12/06/2008

National Assembly

Law on Corporate Income Tax


Government Providing guidance on the implementation of Corporate Income Tax Law


Ministry of Finance

Regulating in detail the implementation of the Decree 124 on Corporate Income Tax

27 Law No. 13/2008/QH12 dated 12/06/2008

National Assembly

Law on Value Added Tax

28 Decree No.123/2008/ND-CP dated 08/12/2008

Government Regulating in detail the implementation of the Law on VAT


Ministry of Finance

Providing guidance on the implementation of Decree No. 123 on Value Added Tax (VAT)

30 Law No.27/2008/QH12 dated 28/11/2008

National Assembly

Law on Special Sales Tax


Government Providing guidance on the implementation of Special Sales Tax Law


Ministry of Finance

Providing guidance on the implementation of Decree 26 on Special Sales Tax


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33 Law No.04/2007/QH12 on Personal Income Tax dated 05/12/2007

The Standing Committee of the National Assembly

Law on personal income tax

34 Decree No 100/2008/ND-CP dated 08/09/2008

Government Stipulating in detail the implementation of the Law on personal income tax

35 Circular 84/2008/TT-BTC dated 30/09/2008 and Circular No.62/2009/TT-BTC dated 27/03/2009

Ministry of Finance

Providing guidelines for implementation of Government Decree 100 on Personal Income Tax

List of document relating to the sectors in which investment is conditional applicable to investors

Real Estate Business

36 Law No. 63/2006/QH11 dated 29/6/2006

National Assembly

Law on real estate business

37 Law No. 56/2005/QH11 dated 29/11/2005

National Assembly

Law on Resident Housing

Education

38 Law No. 38/2005/QH11 dated 14/6/2005

National Assembly

Education Law


Government Cooperation and investment with foreign countries in the areas of examination and treatment of diseases, training and education, scientific research

40 Circular 14/2005/TTLT-BGD&DT – BKH&DT dated 14/4/2005

Ministry of Education &Training – Ministry of Planning & Investment

Providing guidance to implement of Decree 06

Post & Telecommunication

41 Ordinance dated 25/5/2002

National Assembly

Post & Telecommunication


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Transportation

42 Law No. 35/2005/QH11 dated 14/6/2005

National Assembly

Law on Rail Way

43 Law No. 66/2006/QH11 dated 29/6/2006

National Assembly

Law on Civil Aviation

44 Law No. 40/2005/QH11 dated 14/6/2005

National Assembly

Maritime Law


Government Conditions for operating business maritime services


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APPENDIX III - LIST OF SECTORS ENTITLED TO INVESTMENT INCENTIVE

(Issued together with Government Decree No.108 /2006/ND-CP dated 22 September

2006. making detailed regulations and providing guidelines for implementation of the

Law 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 manufactured

mechanical products

1. Production of composite materials, light construction materials, rare and precious materials.

2. Production of high quality steel, alloy, special metals, sponge iron; steel billets.

3. Production of new energy: Construction of plants using solar energy, wind energy, bio-gas, geothermal energy, tides.

4. Production of medical equipment for analytical and extractive technologies in medical sector; orthopaedic instruments, wheelchairs, specialised instruments for the disabled;

5. Projects applying advanced technology, biotechnology to produce medicines meeting international GMP standards; production of drug materials for antibiotics.

6. Production of computers; information, telecommunications and Internet equipment; pivotal 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.


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III. Use of high-technology; modern technology; protection of ecological

environment; research on, development and fostering of high-technology.

14. Application of high-technology; application of new technologies which have not been applied in Vietnam; application of biotechnology.

15. Pollution treatment and environmental protection; manufacture of equipment for treatment of environmental pollution, equipment for observation and analysis of environment.

16. Collection and treatment of liquid waste, gaseous waste, solid waste; recycling and reuse of waste;

17. Research on, development and fostering of high-technology

IV. Employment of large number of employees

18. Projects regularly employing 5,000 or more employees.

V. Construction and development of infrastructures and important projects

19. Construction and operation of infrastructure facilities in industrial zones, export processing zones, high-tech zones and economic zones, and of important projects established under a decision of the Prime Minister.

VI. Development of facilities in educational, training, medical, gymnastic and

sports sectors

20. Construction of drug detoxification centres or tobacco detoxification centres.

21. Setting up establishments providing sanitation services to prevent and fight against epidemics;

22. Establishment of geriatric centres, and relief centres concentrating on care for the disabled and orphans;

23. Construction of sports centres for training and coaching athletes with high performance; sports centres for the disabled; sports centres with equipment and facilities for exercises and contests, meeting requirements of international sporting events;

VII. Other sectors of production and service

24. Investment in research and development (R&D) accounting for 25% or more of turnover;

25. Services of salvage in the sea.

26. Construction of tenements for employees working in industrial zones, export processing zones, high-tech zones, economic zones; construction of dormitories for college students and construction of housing for people entitled to social benefits.

B. LIST OF SECTORS TO WHICH INVESTMENT INCENTIVES SHALL BE GIVEN:


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I. Production of new materials, new energy; production of high-tech products,

bio-technology products, info-technology products, manufactured

mechanical products

1. Production of sonic, electric and thermal highly-insulating materials; wood-substitute synthetic materials; fire-proof materials, construction plastics, fibreglass, special cement,Y

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.


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16. Production of diesel engines; production and building of, and repair to ships; production of equipment and spare parts for cargo ships, fishing boats; manufacture of dynamic and hydraulic machinery and parts, and compressing machines;

17. Production of equipment, vehicles and machinery for construction; production of technical equipment for the transportation industry; production of locomotives and carriages;

18. Production of machine tools, machinery, equipment, spare parts serving agricultural and forestry production; food processors; equipment used in irrigation;

19. Production of equipment and machinery for the textile and garment industry; production of machinery for the leather industry.

II. Cultivation and processing of agricultural, forestry and aquatic products,

making salt; production of man-made strains, seeds and breeds of animals

20. Cultivation of medicinal plants;

21. Preservation of post-harvest agricultural products; preservation of agricultural and aquatic products and foodstuffs;

22. Production of bottled or canned juice from fruits;

23. Production and refining of feed for cattle, poultry, aquatic creatures;

24. Technical services in support of cultivation of industrial plants and forestry plants, animal husbandry, aquaculture, protection of plants and domestic animals.

25. Production, propagation and hybridization of seeds and breeds of animal.

III. Use of high technology, modern technologies; protection of ecological

environment; research on, development and fostering of high technology

26. Production of equipment for dealing with oil-overflow.

27. Production of equipment for waste treatment.

28. Construction of technical establishments and facilities: laboratories, experimental stations for application of new technologies to production; establishment of research institutes.

IV. Employment of lots of employees:

29. Projects regularly employing 500 to 5,000 employees.

V. Construction and development of infrastructure facilities

30. Construction of infrastructure facilities in service of production and operation of cooperatives and community life in rural areas;

31. Projects for operation of infrastructure facilities and production in complexes of industries and trades in rural areas.


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32. Construction of water plants or water supply systems in service of living needs or industries; construction of drainage systems;

33. Construction and improvement of bridges, roads, airports, ports, railroad stations, bus stations, parking lots; opening of more railroad routes;

34. Construction of technical infrastructures for densely-populated areas in localities provided in Appendix B issued together with this Decree.

VI. Development of facilities in educational, training, medical, gymnastic, sports

and national cultural sectors

35. Construction of infrastructure facilities of educational and training establishments. Construction of private and people-founded schools and educational and training establishments at all levels: pre-schools; popular schools; secondary vocational schools; colleges and universities.

36. Establishment of people-founded hospitals and private hospitals.

37. Construction of gymnastic and sports centres, exercising clubs, gymnastic and sports clubs; establishments for production and manufacture of or for repair to equipment and devices used for gymnastic and sports exercises.

38. Establishment of national cultural houses, groups of singers and dancers performing national music and dance; theatres, film studios, film printing and developing establishments, cinemas; production and manufacture of, and repair to national musical instruments; renovation and conservation of museums, national cultural houses and cultural and artistic schools.

39. Construction of national tourism areas, eco-tourism areas; construction of cultural parks including sports areas and entertainment areas.

VII. Development of traditional trades

40. Formulation and development of traditional trades in relation to production of fine-art and handicraft products; processing of agricultural products and food; production of cultural products.

VIII. Other production or service sectors

41. Provision of the Internet connection, access and application services, and establishment of telephone booths in regions included in Appendix B issued together with this Decree.

42. Development of means of public transportation including: development of ships and airplanes, means of railroad transportation, automobiles of 24 seats or more for transportation of passengers by land; modern and high-sped boats for transportation of passengers by river; container ships, ocean-going vessels.

43. Projects for relocation of production establishments out of inner cities.

44. Construction of type-I markets and exhibition areas.


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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.


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APPENDIX IV - LIST OF GEOGRAPHICAL REGIONS OF INVESTMENT

INCENTIVES

(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)

No Province Regions with

specially difficult

socio-economic

conditions

Regions with difficult

socio-economic

conditions

1 Bac Kan All districts and towns

2 Cao Bang All districts and towns

3 Ha Giang All districts and towns

4 Lai Chau All districts and towns

5 Son La All districts and towns

6 Dien Bien All districts and Dien Bien city

7 Lao Cai All districts Lao Cai city

8 Tuyen Quang Na Hang and Chiem Hoa districts

Ham Yen, Son Duong and Yen Son districts, and Tuyen Quang town

9 Bac Giang Son Dong district Luc Ngan, Luc Nam,Yen The and Hiep Hoa districts

10 Hoa Binh Da Bac and Mai Chau districts

Kim Boi, Ky Son, Luong Son, Lac Thuy, Tan Lac, Cao Phong, Lac Son and Yen Thuy districts

11 Lang Son Binh Gia, Dinh Lap, Cao Loc, Loc Binh, Trang Dinh, Van Lang and Van Quan districts

Bac Son, Chi Lang and Huu Lung districts

12 Phu Tho Thanh Son and Yen Doan Hung. Ha Hoa, Phu


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Lap districts Ninh, Song Thao, Thanh Ba, Tam Nong and Thanh Thuy districts

13 Thai Nguyen Vo Nhai and Dinh Hoa districts

Dai Tu, Pho Yen, Phu Luong, Phu Binh and Dong Hy districts

14 Yen Bai Luc Yen, Mu Cang Chai and Tram Tau districts

Tran Yen, Van Chan, Van Yen and Yen Binh districts, and Nghia Lo town

15 Quang Ninh Ba Che and Binh Lieu districts, Co To island district, and other islands and isles of the province

Cam Pha district

16 Hai Phong Island districts of Bach Long Vy and Cat Hai

17 Ha Nam Ly Nhan and Thanh Liem districts

18 Nam Dinh Giao Thuy, Xuan Truong, Hai Hau and Nghia Hung districts

19 Thai Binh Thai Thuy and Tien Hai districts

20 Ninh Binh Nho Quan, Gia Vien, Kim Son, Tam Diep and Yen Mo districts

21 Thanh Hoa Muong Lat, Quan Hoa, Ba Thuoc, Lang Chanh, Thuong Xuan, Cam Thuy, Ngoc Lac, Nhu Thanh and Nhu Xuan districts

Thach Thanh and Nong Cong districts

22 Nghe An Ky Son, Tuong Duong, Con Cuong, Que

Tan Ky, Nghia Dan and Thanh Chuong districts


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Phong, Quy Hop, Quy Chau and Anh Son districts

23 Ha Tinh Huong Khe, Huong Son and Vu Quang districts

Duc Tho, Ky Anh, Nghi Xuan, Thach Ha, Cam Xuyen and Can Loc districts

24 Quang Binh Tuyen Hoa, Minh Hoa and Bo Trach districts

The remaining districts except Tuyen Hoa, Minh Hoa and Bo Trach districts

25 Quang Tri Huong Hoa and Dac Krong districts

The remaining districts except Huong Hoa and Dac Krong districts

26 Thua Thien – Hue

A Luoi district Phong Dien, Nam Dong, Quang Dien, Huong Tra, Phu Loc and Phu Vang districts

27 Da Nang Hoang Sa island district

28 Quang Nam Dong Giang, Tay Giang, Nam Giang, Phuoc Son, Bac Tra My, Nam Tra My, Hiep Duc, Tien Phuoc, Nui Thanh districts, and Cu Lao Cham island

Dai Loc and Duy Xuyen districts

29 Quang Ngai Ba To, Tra Bong, Son Tay, Son Ha, Minh Long, Binh Son and Tay Tra districts, and Ly Son island district

Nghia Hanh and Son Tinh districts

30 Binh Dinh An Lao, Vinh Thanh, Van Canh, Phu Cat and Tay Son districts

Hoai An and Phu My districts

31 Phu Yen Song Hinh, Dong Xuan, Son Hoa and

Song Cau, Tuy Hoa and Tuy An districts


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Phu Hoa districts

32 Khanh Hoa Khanh Vinh and Khanh Son districts, Truong Son island district, and other islands of the province

Van Ninh, Dien Khanh and Ninh Hoa districts, Cam Ranh town

33 Ninh Thuan All districts

34 Binh Thuan Phu Quy island district Bac Binh, Tuy Phong, Duc Linh, Tanh Linh, Ham Thuan Bac and Ham Thuan Nam ditricts

35 Dac Lac All districts

36 Gia Lai All districts and town

37 Kon Tum All districts and town

38 Dak Nong All districts

39 Lam Dong All districts Bao Loc town

40 Ba Ria – Vung Tau

Con Dao island district Tan thanh district

41 Tay Ninh Tan Bien, Tan Chau, Chau Thanh and Ben Cau districts

The remaining districts except Tan Bien, Tan Chau, Chau Thanh and Ben Cau districts

42 Binh Phuoc Loc Ninh, Bu Dang and Bu Dop districts

Dong Phu, Binh Long, Phuoc Long and Chon Thanh districts

43 Long An Duc Hue, Moc Hoa, Tan Thanh, Duc Hoa, Vinh Hung and Tan Hung districts

44 Tien Giang Tan Phuoc district Go Cong Dong and Go Cong Tay districts

45 Ben Tre Thanh Phu, Ba Tri and The remaining districts


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Binh Dai districts except Thanh Phu, Ba Tri and Binh Dai districts

46 Tra Vinh Chau Thanh and Tra Cu districts

Cau Ngang, Cau Ke and Tieu Can districts

47 Dong Thap Hong Ngu, Tan Hong, Tam Nong and Thap Muoi districts

The remaining districts except Hong Ngu, Tan Hong, Tam Nong and Thap Muoi districts

48 Vinh Long Tra On district

49 Soc Trang All districts Soc Trang town

50 Hau Giang All districts Vi Thanh town

51 An Giang An Phu, Tri Ton, Thoai Son, Tan Chau and Tinh Bien districts

The remaining districts except An Phu, Tri Ton, Thoai Son, Tan Chau and Tinh Bien districts

52 Bac Lieu All districts Bac Lieu town

53 Ca Mau All districts Ca Mau city

54 Kien Giang All districts, and islands and isles of the province

Ha Tien town, Rach Gia town

55 Other regions High-tech zones and economic zones entitled to incentives, established under a decision of the Prime Minister

Industrial zones and export processing zones established under a decision of the Prime Minister


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APPENDIX V - LIST OF CONDITIONAL INVESTMENT SECTORS APPLICABLE TO

FOREIGN 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, televising

2. 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 included in investment sectors that are stipulated in this Appendix must conform to provisions of international treaties of which Vietnam is a member.


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APPENDIX VI - USEFUL CONTACTS AND ADDRESSES IN VIETNAM

GOVERNMENT AGENCIES MINISTRY OF FOREIGN AFFAIRS 1 Ton That Dam, Hanoi Tel.: (84-4) 38458201 Fax: (84-4) 38436488 MINISTRY OF PLANNING AND INVESTMENT 2 Hoang Van Thu, Hanoi Tel.: (84-4) 38455298 Fax: (84-4) 38234453 MINISTRY OF FINANCE 28 Tran Hung Dao, Hanoi Tel.: (84-4)22202828 Fax: (84-4)22208020/2208021 MINISTRY OF INDUSTRY AND TRADE No. 54, Hai Bà Trưng St., Ha Noi Tel.: 84-4-22202101 - 84-4-22202568 Fax: 84-4-22202525 - 84-4-38264696 MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT 2 Ngoc Ha, Hanoi Tel.: (84-4)38459670 Fax: (84-4)37330752 MINISTRY OF TRANSPORT 80 Tran Hung Dao, Hanoi Tel.: (84-4) 39422079 Fax: (84-4)39422386 MINISTRY OF CONSTRUCTION 37 Le Dai Hanh, Hanoi Tel.: (84-4)39760271 Fax: (84-4)39762153 MINISTRY OF CULTURE, SPORTS AND TOURISM No. 51 Ngô Quyền, Ha Noi Tel: 84-4-39436615 - 84-4-39439265 Fax: 84-4-39439009 - 84-4-39454330

MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT No. 83 Nguyễn Chí Thanh, Ha Noi Tel: 84-4-37732731 ; 84-4-38343005 Fax: 84-4-38359221 MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS No. 12 Ngô Quyền, Ha Noi Tel: 84-4-38269557; 84-4-38269558 Fax: 84-4-38248036 MINISTRY OF SCIENCE AND TECHNOLOGY 39 Tran Hung Dao, Hanoi Tel. : (84-4)38252731 Fax: (84-4)38252733 MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT 83 Nguyen Chi Thanh, Hanoi Tel: (84-4)38343914 Fax: (84-4)38352131 MINISTRY OF INFORMATION & TELECOMMUNICATION 18 Nguyen Du, Hanoi Tel: (84-4)39435602 Fax: (84-4)38263477 MINISTRY OF JUSTICE 58-60 Tran Phu, Hanoi Tel: (84-4)37336213 Fax: (84-4)38431431 OFFICE OF GOVERNMENT 1A Hoang Hoa Tham , Hanoi Tel. : (84)8043579 STATE BANK OF VIETNAM No. 49 Lý Thái Tổ, Ha Noi Tel: 84-4-38254845 ; 84-4-38268779 Fax: 84-4-39349569


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PROVINCIAL DEPARTMENTS OF PLANNING AND INVESTMENT (DPI)

Hanoi DPI 17 Tran Nguyen Han - Hoan Kiem - Hanoi Tel: 04.38256637/ 04.38260257 Fax: 04.38251733

Quang Ninh DPI Hong Ha ward, Ha Long city, Quang Ninh province Tel: 033.3835687/033.3835693 Fax: 033.3838072

Hai Phong DPI No. 1 Dinh Tien Hoang, Hong Bang, Hai Phong Tel: 031.3842614/031. 3842119 Fax: 031.3842021

Cao Bang DPI Xuan Truong str. Hop Giang, Cao Bang town, Cao Bang province Tel: 026.3858743 /026.3852535 Fax: 026.3853335

Bac Can DPI Group 4, Duc Xuan ward, Bac Kan town, Bac Kan province Tel: 0281.3871287 Fax: 0281.3871287

Lang Son DPI No 2 Hoang Van Thu, Chi Lang, Lang Son town, Lang Son province Tel: 025.3812122/ 025.3812561 Fax: 025.3813067

Ha Giang DPI 156 Tran Hung Dao, Ha Giang town, Ha Giang province Tel: 019.3866256/ 019.3867051 Fax: 019.3867623

Tuyen Quang DPI Tran Hung Dao str, Minh Xuan, Tuyen Quang town, Tuyen Quang province Tel: 027.3822814/027.3821366 Fax: 027.3823160

Thai Nguyen DPI No. 17 Doi Can, Thai Nguyen city, Thai Nguyen province Tel: 0280.3855688/0280.3854211/ 0280.3759605 Fax: 0280.3851363

Dien Bien DPI Muong Thanh ward, Dien Bien city, Dien Bien province Tel: 023.3825409/ 023.3825896 Fax: 023.3825944

Lai Chau DPI Phong Chau 1, Phong Tho town, Tam Duong district, Lai Chau province Tel: 023.3876501/ 023.3876735 Fax: 023.3876437

Son La DPI Khau Ca str, Son La town, Son La province Tel : 022.3859866/ Fax: 022.3852032

Lao Cai DPI 266 Hoang Lien str, Kim Tan, Lao Cai town, Lao Cai province Tel: 020.3840810 Fax: 020.3842411

Yen Bai DPI Yen Ninh str, Dong Tam, Yen Bai city, Yen Bai province Tel: 029.3852409/029.3853052 Fax: 029.3851626

Hoa Binh DPI No. 3 Tran Hung Dao str, Hoa Binh town, Hoa Binh province Tel: 018.3851457 Fax: 018.3853152

Phu Tho DPI Tran Phu str, Tan Dan, Viet Tri city, Phu Tho province Tel: 0210.3847778 Fax: 0210.3840955/ 0210.3847419

Vinh Phuc DPI No 40, Nguyen Trai str, Vinh Yen town, Vinh Phuc province Tel: 0211.3862480 /0211.3842743 Fax: 0211.3862480

Bac Giang DPI Nguyen Gia Thieu str, Bac Giang town, Bac Giang province Tel: 0240.3854317/0240.3859606 Fax: 0240.3854923


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Bac Ninh DPI No 6 Ly Thai To str, Suoi Hoa ward, Bac Ninh town, Bac Ninh province Tel: 0241.3822569/0241.3824902 Fax: 0241.3825777

Ha Tay DPI No 2 Phung Hung - Ha Đong city, Ha Tay province Tel: 034.3824184/ 034.3828064 Fax: 034.3824608

Hung Yen DPI No 8 Chua Chuong, Hien Nam, Hung Yen, Hung Yen province Tel: 0321.3865127 Fax:

Ha Nam DPI 15 Tran Phu, Phu Ly, Ha Nam province. Tel: 0351.3852701/ 0351.3854317 Fax: 0351.3852701

Hai Duong DPI 58 Quang Trung, Hai Duong city, Hai Duong province Tel: 0320.3853574/0320.855762 Fax: 0320.3850814

Thai Binh DPI 233 duong Hai Ba Trung, Thai Binh city, Thai Binh province Tel: 036.3831774/ 036.3830437 Fax: 036.3830326

Nam Dinh DPI 172 Han Thuyen, Nam Dinh city, Nam Dịnh province. Tel: 0350.3648482/0350.3645227 Fax: 0350.3647120

Ninh Binh DPI 15 Le Hong Phong, Ninh Binh town, Ninh Binh province Tel: 030.3871156/ 030.3874913 Fax: 030.3873381

Thanh Hoa DPI 45B Le Loi str, Lam Son ward, Thanh Hoa city, Thanh Hoa province Tel: 037.3852366/037.3756149 Fax: 037.3851451

Nghe An DPI Truong Thi ward, Vinh city, Nghe An province Tel: 038.3844636/ 038.3843102 Fax: 038.3592246

Ha Tinh DPI Phan Dinh Phung, Ha Tinh town, Ha Tinh province Tel: 039.3856750 /039.3881267 Fax: 039.3855576

Quang Binh DPI No 9 Quang Trung, Dong Hoi, Quang Binh. Tel: 052.3824611/052.3824635 Fax: 052.3821520

Quang Tri DPI 34 Hung Vuong, Dong Ha town, Quang Tri province Tel: 053.3550167 Fax: 053.3851760

Da Nang DPI No 47 Ngo Gia Tu, Hai Chau 1 ward, Hai Chau, Da Nang city Tel: 0511.3822759 Fax:

Thua Thien Hue DPI Ton Duc Thang str, Hue city Tel: 054.3822538 /054.3824680 Fax: 054.3821264

Quang Nam DPI No 02 Tran Phu, Tam Ky town, Quang Nam province Tel: 0510.3810394 /0510.3810866 Fax: 0510.3810396

Quang Ngai DPI No. 96 Nguyen Nghiem, Quang Ngai city, Quang Ngai province Tel: 055.3822868/055.3826266 Fax:

Binh Dinh DPI No 35 Le Loi str, Quy Nhon city, Binh Dinh province Tel: 056.3818888/056.3818889 Fax: 056.3824509/056.3818887

Phu Yen DPI No 2A Dien Bien Phu, Tuy Hoa town, Phu Yen province Tel: 057.3841112

Khanh Hoa DPI No 01 Tran Phu str, Nha Trang city, Khanh Hoa province. Tel:058.3824243


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Fax: Fax: 058.3812943/058.3824243 Ninh Thuan DPI The 16th April str, Phan Rang town, Thap Cham, Ninh Thuan province Tel: 068.3822694/068.825880 Fax: 068.3825488

Binh Thuan DPI No 290 Tran Hung Dao, Binh Hung ward, Phan Thiet city, Binh Thuan province Tel: 062.3821128/062.3827170/062.3831890 Fax: 062.3828656

Gia Lai DPI No 02 Hoang Hoa Tham str, Pleiku city, Gia Lai province Tel: 059.3822204/059.3823717 Fax: 059.3823808

Kon Tum DPI 123B Tran Phu str, KonTum town, Kon Tum province Tel: 060.3862710/060.3862546 Fax: 060.3864253

Dak Nong DPI Gia Nghia town, Dac Nong province Tel: 050.3543689/050.3544676 Fax:

Dak Lak DPI No. 17 Le Duan str, Buon Ma Thuot city, Dak Lak province Tel: 050.3852702 Fax: 050.3812187

Lam Dong DPI No 04 Tran Hung Dao str, Da Lat city, Lam Dong province Tel: 063.3822311/063.3830306 Fax: 063.3834806

Ho Chi Minh City DPI No. 32 Le Thanh Ton, District 1, Ho Chi Minh city Tel: 08.38297834/08.38272192/08.38293174 Fax: 08.38295008

Can Tho DPI 61/21 Ly Tu Trong, An Phu ward, Can Tho city, Can Tho province Tel: 071.3830235/071.3730259/071.3830630 Fax: 071.3830570

Ba Ria - Vung Tau DPI No. 01 Nguyen Chi Thanh, ward 2, Vung Tau city. Tel: (064)3852401/3852320/3858286/3851381/3852502 (ext. 0 or 25)

Dong Nai DPI No 2 Nguyen Van Tri, Thanh Binh, Bien Hoa city, Dong Nai province Tel: 061.3824283/061.3827116 Fax: 061.3941718

Tay Ninh DPI 300 Cach Mang Thang tam, ward 2, Tay Ninh town, Tay Ninh province Tel: 066.3822166/066.3827638 Fax: 066.3827947

Binh Duong DPI No 188, Binh Duong str, Phu Hoa ward, Thu Dau Mot town, Binh Duong province Tel: 0650.3822926/0650.3827954 Fax: 0650.3825194

Binh Phuoc DPI The 14th National Highway, Dong Xoi town, Binh Phuoc province Tel: 0651.3879253/0651.3870772 Fax: 0651.3887088

Long An DPI No. 61 Truong Cong Dinh, ward 1, Tan An town, Long An province Tel: 072.3823461/072.3286199 Fax: 072.3825044

Tien Giang DPI No.38 Nam Ky Khoi Nghia str, My Tho city, Tien Giang province. Tel: 073.3873381/073.3871961 Fax: 073.3875487

Vinh Long DPI No. 1 Trung Nu Vuong, ward 1, Vinh Long town, Vinh Long province Tel: 070.3823319/070.3834031 Fax: 070.3828033

Tra Vinh DPI No.19A Nam Ky Khoi Nghia, Tra Vinh town Tel: 074.3862289/074.3866300 Fax: 074.3864348

Ben Tre DPI Hau Giang DPI


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No. 6 Cach Mang Thang Tam str, ward 3, Ben Tre town, Ben Tre province Tel: 075.3821280/075.3817358 Fax: 075.3825543

No. 2 Hoa Binh, Vi Thanh town, Hau Giang province Tel: 071.3870214/071.3870210 Fax: 071.3878871

Dong Thap DPI No. 11, Vo Truong Toan, ward 1, Cao Lanh town, Dong Thap province Tel: 067.3851101/1960 Fax: 067.3852955

An Giang DPI No. 8/18 Ly Thuong Kiet, Long Xuyen town, An Giang province. Tel: 076.3852913 Fax: 076.3853380

Kien Giang DPI No. 29 Bach Dang, Rach gia town, Kien Giang province Tel: 077.3862037 Fax: 077.3862037

Soc Trang DPI No.21B Tran Hung Dao, Soc Trang town, Soc Trang province Tel: 079.3822333 Fax: 079.3822333

Bac Lieu DPI No.23 Hai Ba Trung, ward 3, Bac Lieu town, Bac Lieu province Tel: 0781.3827616 Fax: 0781.3823874

Ca Mau DPI No. 93 Ly Thuong Kiet, ward 5, Ca Mau city Tel: 0780.3831332/0780.3825972 Fax: 0780.3830773

MANAGEMENT BOARDS (MB) OF INDUSTRIAL ZONES/EXPORT PROCESSING ZONES/ECONOMIC ZONES/HI-TECH ZONES (IZ/EPZ/EZ/HTZ)

Hanoi IZs/EPZs MB D8A, D8B Giang Vo, Ba Dinh, Ha Noi Tel: 04.37721156 Fax: 04.37721152

Hoa Lac HTZ MB First floor, Building 17T7, Trung Hoa - Nhan Chinh New City Town, Hoang Dao Thuy str, Thanh Xuan, Hanoi Tel: 04.32511478 Fax: 04.32511529

Hai Phong IZs MB No. 24 Cu Chinh Lan, Hong Bang, Hai Phong city Tel: 031.3823206 Fax: 031.3842426

Quang Ninh IZs MB Nguyen Van Cu, Ha Long city, Quang Ninh province Tel: 033.3836573 Fax: 033.3838022

Thai Nguyen IZs MB Tan Quang commune, Song Cong town, Thai Nguyen Tel: 0280.3845435 Fax: 0280.3845434

Phu Tho IZs MB Tan Dan ward, Viet Tri city, Phu Tho province Tel: 0210.3843021 Fax: 0210.3844997

Vinh Phuc IZs MB Third floor, Vinh Phuc Provincial People’s Committee, Nguyen Trai str, Vinh Yen town, Vinh Phuc province Tel: 0211.3843403 Fax: 0211.3843407

Bac Giang IZs MB No 48 Ngo Gia Tu str, Bac Giang city, Bac Giang province Tel: 0240.3554133 Fax: 0240.3554133

Bac Ninh IZs MB No. 10 Phu Dong Thien Vuong str,

Ha Tay IZs MB No. 2 Phung Hung - Ha Dong town - Ha Tay


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Bac Ninh town, Bac Ninh province Tel: 0241.3825232 Fax: 0241.3825236

province Tel: 034.3501388 Fax:

Hung Yen IZs MB Pho Noi, My Hao district, Hung Yen province Tel: 0321.3942862 Fax: 0321.3942927

Ha Nam IZs MB Ho Chau Giang, Quang Trung ward, Phu Ly town, Ha Nam province Tel: 0351.3850569 Fax: 0351.3850569

Hai Duong IZs MB No. 57 Quang Trung str, Hai Duong city Tel: 0320.3844723 Fax: 0320.3844723

Thai Binh IZs MB No. 81, Bo Xuyen str, Thai Binh city, Thai Binh province Tel: 036.3740872 Fax: 036.3740872

Nam Dinh IZs MB Km 105, National Highway No. 10, Loc Vuong ward, Nam Dinh city Tel: 0350.3680806 Fax: 0350.3680335

Ninh Binh IZs MB No. 2 Vo Thi Sau str, Dong Thanh ward, Ninh Binh town, Ninh Binh province Tel: 030.3876129 Fax: 030.3873302

Thanh Hoa IZs MB No. 15A Hac Thanh str, Lam Son ward, Thanh Hoa city Tel: 037.3850107 Fax: 037.3850105

Nghe An IZs MB Highway 3/2 Hung Phuc ward, Vinh city, Nghe An province Tel: 038.3835146/038.3520354 Fax: 038.3832657

Ha Tinh IZs MB No. 75 Nguyen Chi Thanh str, Ha Tinh town, Ha Tinh province Tel: 039.3881237 Fax: 039.3881237/ 039.3882992

Thua Thien Hue IZs MB Unit 8 Phu Bai town, Huong Thuy district, Thua Thien Hue province Tel: 054.3861765 Fax: 054.3861805

Da Nang IZs/EPZs MB No. 58 Nguyen Chi Thanh, Da Nang city Tel: 0511.3810653 Fax: 0511.3830015

Quang Nam IZs MB No. 30 Hung Vuong str, Tam Ky town, Quang Nam province Tel: 0510.3811589 Fax: 0510.3859869

Quang Ngai IZs MB 25 Hung Vuong Highway, Quang Ngai city, Quang Ngai province Tel: 055.3828514 Fax: 055.3828514

Dung Quat IZs MB No. 39 Hai Ba Trung str, Quang Ngai city, Hai Ba Trung str, Quang Ngai city, Quang Ngai province Tel: 055.3711788 Fax: 055.3825828

Binh Dinh IZs MB No. 65 Tay Son, Quy Nhon city, Binh Dinh province Tel: 056.3646257 Fax: 056.3846616

Phu Yen IZs MB No. 353 Tran Hung Dao, Tuy Hoa town, Phu Yen province Tel: 057.3828250 Fax: 057.3828949

Khanh Hoa IZs MB No. 13B Hoang Hoa Tham, Nha Trang city, Khanh Hoa province Tel: 058.3527872 Fax: 058.3527873

Binh Thuan IZs MB No. 119 Tran Hung Dao str, Phan Thiet city, Binh Thuan province Tel: 062.3821243 Fax: 062.3821243

Dak Nong IZs MB Ho Chi Minh City IZs/EPZs MB


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No. 1 Le Lai, Gia Nghia town, Dak Nong province Tel: 050.3544592 Fax: 050.3544591

No. 35 Nguyen Binh Khiem, Dakao ward, Distric 1, Ho Chi Minh city Tel: 08.38290405/08.38290414 Fax: 08.38294271

Ba Ria - Vung Tau IZs MB No.124 Vo Thi Sau str, Thang Tam ward, Vung Tau city, Ba Ria - Vung Tau province Tel: 064.3816640 Fax: 064.3858531

Can Tho IZs/EPZs MB No. 105 Tran Hung Dao, Ninh Kieu district, Can Tho city, Can Tho province Tel: 071.3830238 Fax: 071.3830773

Dong Nai IZs MB No. 26 2A road, Bien Hoa 2 Industrial Zone, Dong Nai province Tel: 061.3892378 Fax: 061.3892379

Tay Ninh IZs MB Km 32, An Binh, An Tinh commune, Trang Bang, Tay Ninh province Tel: 066.3882300 Fax: 066.3882300

Binh Duong IZs MB No. 5 Quang Trung, Thu Dau Mot town, Binh Duong province Tel: 0650.3831215 Fax: 0650.3823984

Vietnam - Singapore IZs MB No. 8 Huy Nghi highway, Thuan An, Binh Duong Tel: 0650.3743901/0650.3743902/0650.3743904 Fax: 0650.3743903

Binh Phuoc IZs MB Highway 14, Tan Phu district, Dong Xoai town, Binh Phuong province Tel: 0651.3887524 Fax: 0651.3887523

Long An IZs MB 65B Bao Dinh str, District 2, Tan An town, Long An province Tel: 072.3825449 Fax: 072.3825442

Tien Giang IZs MB No. 27 Nam Ky Khoi Nghia, district 4, My Tho city, Tien Giang province Tel: 073.3871808 Fax: 073.3871808

Vinh Long IZs MB No.85 Trung Nu Vuong, district 1, Vinh Long town, Vinh Long province Tel: 070.3820972 Fax: 070.3820972

Dong Thap IZs MB No. 466 Nguyen Sinh Sac, district 1, Sa Dec town, Dong Thap Tel: 067.3865471 Fax: 067.3865471

Quang Binh IZs MB No. 317 Ly Thuong Kiet str, Dong Hoi city, Quang Binh province Tel: 052.3828513 Fax: 052.3828516

Chu Lai Open Economic Zone MB No. 1 Tran Phu, Tam Ky town, Quang Nam province Tel: 0510.3812847 Fax: 0510.3812842

Kon Tum IZs MB No. 145 Ure str, Kon Tum town, Kon Tum province Tel: 060.3910606 Fax: 060.3910606

Nhon Hoi Economic Zone MB No. 83 Le Hong Phong, Quy Nhon city, Binh Dinh province Tel: 056.3820957/056.3820958(ext.105) Fax: 056.3820965

Soc Trang IZs MB No. 146 Hai Ba Trung, district 1, Soc Trang town, Soc Trang province Tel: 079.3611936 Fax: 079.3611187

Ben Tre IZs MB No. 20 3/2 Str, District 2, Ben Tre

Dak Lak IZs MB No. 01A, Ba Trieu, Buon Ma Thuot city, Dak


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town, Ben Tre province Tel: 075.3817718 Fax: 075.3817718

Lak province Tel: 050.3856339 Fax: 050.3856339

FOREIGN EMBASSIES IN VIET NAM Algeria, 13 Phan Chu Trinh, Hanoi Tel: (84-4)38253865 Fax: (84-4)38260830 Argentina, 8th F, Daeha Business

Centre, 360 Kim Ma, Hanoi Tel:(84-4)38315578/38315262/38315263 Fax: (84-4)38315577 Austria, 8th F, Prime Centre, 53 Quang Trung, Hanoi Tel: (84-4)39433050/39433501 Fax: (84-4)39433055 Australia, 8 Dao Tan St., Hanoi Tel. (84-4)38317755 Fax: (84-4)38317711 Bangladesh, 7thF, Daeha Centre, 360 Kim Ma, Hanoi Tel: (84-4)37716625 Fax: (84-4)37716628 Belarus, 52 Tay Ho, Hanoi Tel: (84-4)37197126 Fax: (84-4)3719 7125 Belgium, 9thF, 49 Hai Ba Trung, Hanoi Tel: (84-4)39346179-81 Fax:(84-4)39346183 Brazil, 14 Thuy Khue, Hanoi Tel: (84-4)38432544 Fax: (84-4)38432542 Brunei, 27 Quang Trung, Hanoi Tel: (84-4)9435249/50/51 Fax: (84-4)9435201 Bulgaria, 5 Van Phuc Quater, Kim Ma, Hanoi Tel: (84-4)38252908

Italy, 9 Le Phung Hieu, Hanoi Tel: (84-4)38256256 Fax:(84-4)38267602 Japan, 27 Lieu Giai, Hanoi Tel: (84-4)8463000 Fax: (84-4)8463043 Korea (Democratic People’s Republic of), 25 Cao Ba Quat, Hanoi Tel: (84-4)38453008 Fax: (84-4)38231221 Laos, 22 Tran Binh Trong, Hanoi Tel: (84-4)39424576 Fax:(84-4)38228414 Lybia, A3 Van Phuc Quarter, Kim Ma, Hanoi Tel: (84-4) 38453379 Fax: (84-4) 38454977 Malaysia, 43-45 Dien Bien Phu, Hanoi Tel: (84-4)37343836 Fax: (84-4)37343829 Mexico, T11, 14 Thuy Khue, Hanoi Tel: (84-4)38470947/ 48 Fax: (84-4)38470949 Mongolia, V5, Van Phuc Quarter, Hanoi Tel: (84-4)38453009 Fax: (84-4)38454954 Myanmar, A3 Van Phuc Quater, Kim Ma, Hanoi Tel: (84-4)38453369 fax: (84-4)38452404 Netherlands, 6th F, Daeha Business Centre, 360 Kim Ma, Hanoi Tel: (84-4)38315650 Fax: (84-4)38315655


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Fax: (84-4)38460856 Cambodia, 71A Tran Hung Dao, Hanoi Tel: (84-4)39424788 Fax: (84-4)38265225 Canada, 31 Hung Vuong, Hanoi Tel: (84-4)37345000 Fax: (84-4)37345049 Chile, Suite 1201-1203, 12F, Tung Shing Square, 2 Ngo Quyen, Hanoi Tel: (84-4)39351147/48 Fax: (84-4)39351150 China, 46 Hoang Dieu St., Hanoi Tel. (84-4) 38453736, Fax: (84-4) 38232826 Cuba, 65 Ly Thuong Kiet, Hanoi Tel: (84-4)39424775 Fax: (84-4)39422426 Czech Republic, 13 Chu Van An, Hanoi Tel: (84-4)38454131 Fax: (84-4)38233996 Denmark, 19 Dien Bien Phu, Hanoi Tel: (84-4) 38231888 Fax: (84-4)38231999 Egypt, 63 To Ngoc Van, Hanoi Tel: (84-4)38294999 Fax: (84-4)38294997 European Union (EU), 56 Ly Thai To, Hanoi Tel: (84-4)39341300 Fax: (84-4)39341361 Finland, 31 Hai Ba Trung, Hanoi Tel: (84-4)8266788 Fax: (84-4)8266766 France, 57 Tran Hung Dao St., Hanoi Tel. (84-4)39437719 Fax: (84-4)38437236 Germany, 29 Tran Phu St., Hanoi

New Zealand, 5th Floor, 63 Ly Thai To, Hanoi Tel: (84-4)38241481 Fax: (84-4)38241480 Norway, 56 Ly Thai To, Hanoi Tel: (84-4) 38262111 Fax:(84-4)38260222 Palestine, E4B Trung Tu Diplomatic Quarter, Hanoi Tel: (84-4)38524013 Panama, Hanoi Central Office Building, 44B Ly Thuong Kiet, Hanoi Tel: (84-4)39365213 Fax: (84-4)39365214 Philippines, 27B Tran Hung Dao, Hanoi Tel: (84-4)39437948 Fax: (84-4)38265760 Poland, 3 Chua Mot Cot St., Hanoi Tel: (84-4)38452027 Fax:(84-4)38236914 Romania, 5 Le Hong Phong, Hanoi Tel: (84-4)38452014 Fax: (84-4)38430922 Russian, 191 La Thanh, Hanoi Tel: (84-4)38336991/2 Fax: (84-4)38336995 Singapore, 41-43 Tran Phu St. Hanoi Tel: (84-4)8233966, Fax: (84-4)7337627 South Africa, 3F, 31 Hai Ba Trung, Hanoi Tel: (84-4)39362000 Fax:(84-4)39361991 South Korea , Deaha Business Center, 360 Kim Ma, Hanoi Tel: (84-4)38315111- 6 Fax: (84-4)38315117 Spain, Deaha Business Center, 360 Kim Ma, Hanoi


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Tel: (84-4)38430245 Fax: (84-4)38453838 Hungary, 12thF, Daeha Business Centre, 360 Kim Ma, Hanoi Tel: (84-4)37715714 Fax:(84-4)37715716 India, 58-60 Tran Hung Dao, Hanoi Tel: (84-4)38244989 Fax:(84-4)38244998 Indonesia, 50 Ngo Quyen St., Hanoi Tel: (84-4)38253353 Fax: (84-4)38259274 Iran, 54 Tran Phu, Hanoi Tel: (84-4)38232068 Fax: (84-4)38232120 Iraq, 66 Tran Hung Dao, Hanoi Tel: (84-4)39424141 Fax: (84-4)39424055 Israel, 68 Nguyen Thai Hoc, Hanoi Tel: (84-4)38433140 Fax: (84-4)38435760

Tel: (84-4)37715207 Fax: (84-4)37715206 Sweden, 2 Nui Truc, Hanoi Tel: (84-4)37260400 Fax: (84-4)38232195 Switzerland, 15thF, G.P.O. Box 42, 44B Ly Thuong Kiet, Hanoi Tel: (84-4)39346589 Fax:(84-4)39346591 Turkey, 4 Da Tuong, Hanoi Tel: (84-4)38222460 Fax:(84-4)38222458 Thailand, 63-65 Hoang Dieu St., Hanoi Tel: (84-4)38235092 Fax: (84-4)38235088 Ukraine, 6B Le Hong Phong, Hanoi Tel: (84-4)37344484 Fax: (84-4)37344497 United Kingdom, Central Building, 31 Hai Ba Trung, Hanoi Tel: (84-4)39360500 Fax: (84-4)39360561 United States, 7 Lang Ha, Hanoi Tel: (84-4)37721500 Fax: (84-4)37721510

2009 investment guidebook vietnam

Business

ho chi minhcity

red river delta

mekong river delta

1a national highway

significant step forward

lang son province

upper secondary schools

supreme peoples court