How Does Dispute Settlement Mechanism of WTO Work?

The dispute settlement mechanism of the World Trade Organization (WTO) is a succession of the dispute settlement rules that has been effective for nearly 50 years in the history of GATT 1947. The basic objective of this dispute resolution mechanism is to achieve a positive solution to the dispute. Vietnam is member of WTO therefore it could refer to dispute settlement mechanism of WTO in dispute against other country member.

When a dispute arises at the WTO, the parties will first conduct consultations to come up with a mutually agreed solution to resolve the case (Consultation – the stage of mediation), as usual in each case there is the participation of third parties (who are members of significant interest and desire to participate in the dispute resolution process), if they feel a significant interest in the case and should be considered by the panel. In the case of an unsuccessful inquiry, a panel of 3 to 5 members will be established and tasked with examining a particular issue in dispute on the basis of WTO rules cited by the claimant’s country.

After the establishment of a panel to review the complaint, the first thing that the panel needs to do is to set a timetable for its proceedings (Article 12.3 of the DSU). The panel procedure usually covers the contents set forth in Article 12 and Annex 3 of the DSU, including certain flexibility to ensure the quality of the report without delaying the proceedings. Setting a timetable helps the parties understand the contents and deadlines for each dispute, helping them be more proactive in presenting evidence, bases and arguments in their submitted documents.

After the hearings take place, the panel will enter the internal discussion phase (deliberation), to review the assessment of relevant legal, practical issues in accordance with the provisions of the WTO, the deliberation must be kept secret. These reports were drafted without the presence of the parties to the dispute, but only according to the content of the information provided and the comments made earlier. Individual opinions of jurors presented in a panel report shall not include the names of speakers of such opinions.

After the final report will be sent to the parties to the dispute within 2 weeks after the panel has concluded the mid-term review. Normally, every report of the panel has very large content, to facilitate the study of review by the appellate body and to quote case law, the report must show the table of contents and paragraphs which are separate numbered in the order of the report. If there is no appeal, the dispute resolution process will immediately go to the implementation stage after the DSB adopts a panel report. If there is an appeal, the case will be reviewed at the Appellate level.

It is important for Vietnam as member of WTO to be aware of the dispute settlement mechanism and fully prepared when having dispute against other country members in international trade dispute matters.

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Processing and Manufacturing Industry Attracts Foreign Capital

Although the amount of registered and disbursed FDI capital was lower than the same period in 2019 due to the influence of Covid-19, the reduction has been significantly improved.

The latest report of the Foreign Investment Department (Ministry of Planning and Investment) shows that, as of November 20th 2020, the total newly registered capital, adjusted and contributed capital to buy shares of foreign investors reached 26.43 billion USD, equaling 83.1% compared to the same period in 2019. The realized capital of foreign direct investment projects was estimated at 17.2 billion USD, equaling 97.6% compared to the same period in 2019.

Also according to the report, the processing and manufacturing industry is still the field attracting foreign capital, when there are 12.7 billion USD invested in this field, accounting for 48.2% of total registered investment capital. The field of electricity production and distribution ranked second with total investment capital of over 4.9 billion USD, accounting for 18.7% of total registered investment capital. Followed by the real estate business, wholesale and retail with a total registered capital of nearly 3.8 billion USD and 1.5 billion USD.

In terms of investment partners, Singapore is leading with a total investment of nearly 8.1 billion USD, accounting for 30.6% of total investment in Vietnam; Korea ranked second with a total investment of 3.7 billion USD, accounting for 14% of total investment capital. China ranked third, with a total registered investment capital of 2.4 billion USD, accounting for 9.1% of total investment capital. Followed by Japan, Taiwan, Thailand…

In terms of the number of new projects, Korea ranked first (573 projects); China ranked second (311 projects); Japan ranked third (251 projects); Hong Kong ranked fourth (164 projects)…

Commenting on the foreign investment situation, the Foreign Investment Department assessed that, due to the impact of the Covid-19 pandemic, production and business activities were affected, the implemented investment capital of foreign investment projects in 11 months, although decreasing compared to the same period in 2019, but the decrease rate has improved. Many FDI enterprises are gradually recovering, maintaining good production and business activities, creating momentum for faster growth in the last months of 2020.

Considering the strong decline in global investment due to the effects of the Covid-19 pandemic, this result is better than many other countries, demonstrating Vietnam’s attractiveness in the eyes of international investors.

The Foreign Investment Department forecasts that there are still many foreign investors who are interested, confident and want to invest in Vietnam. But due to the influence of Covid-19, the movement of investors, as well as new investment decisions and the expansion of the scale of foreign investment projects, continue to be affected.

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Quang Ninh Tourism Industry Collect Nearly 29,500 Billion VND in 2019

2019 continues to be evaluated as a year of strong growth of the Quang Ninh tourism industry in both the number of tourists and revenue, contributing to the provincial budget up to 30% compared to 2018, creating an attraction for foreign investors to come and set up company in Quang Ninh.

According to the Quang Ninh Department of Tourism, in 2019, the total tourist arrivals to Quang Ninh reached over 14 million, an increase of 14% compared to 2018, of which international visitors reached 5.7 million. The length of stay has changed significantly from 2.16 days in 2017 to 2.74 days in 2019.

In 2020, Quang Ninh tourism industry strives to welcome 15.5 million visitors, including 6.5 million international visitors; total revenue is more than 34,000 billion VND; The total contribution to the provincial domestic budget is not less than 11.5%. The length of stay of tourists must increase and reach from 2.8 to 2.85 days and the average spending will be 2.3 million VND/tourist.

To accomplish this goal, the Department determined to further promote the promotion of tourism into key domestic and foreign markets, strengthen the state management of the business environment, tourism, travel management, tourist accommodation establishments, shopping establishments. Develop and put into operation strong tourism products, expand tourism space to increase attractiveness and extend the length of stay…

According to the Quang Ninh Department of Tourism, in order to achieve the above results, in 2019, apart from continuing to focus on promoting through Roadshow programs to effectively exploit traditional markets such as China; Northeast Asia (Korea, Japan, Taiwan); ASEAN visitors (Singapore, Malaysia, Thailand…), Quang Ninh tourism industry has focused on promoting the development of large potential and high-paying tourist markets such as tourists traveling by ship, European visitors (England, France, Spain…).

For the domestic market, focusing on promoting and exploiting domestic tourists from southern provinces to Quang Ninh via Van Don international airport. Collaborate with organizations, businesses, media agencies at home and abroad to organize Famtrip delegations, press trips to localities and tourist destinations to enhance the effectiveness of advertisement.

Closing Ceremony of National Tourism Year 2018 – Ha Long – Quang Ninh, ASEAN Tourism Forum 2019 (ATF 2019), North East Asia Tourism Forum Permanent Meeting (EATOP) towards the EATOP General Assembly in 2020 are major events of Quang Ninh tourism industry in particular and of Quang Ninh province in general, contributing strongly to Quang Ninh – Ha Long tourism brand.

In 2020, many new tourism products of Quang Ninh such as Quang Hanh Cam Pha Onsen Resort; tourist service complex in Van Don; tourist destinations in Binh Lieu, Tien Yen… will soon be put into operation together with a series of new transport infrastructure projects. These will be important prerequisites for Quang Ninh Tourism to increase its attractiveness and create breakthroughs.

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Singapore Investment Imprint in Vietnam Industrial Real Estate

With the impact of free trade agreements and capital inflows into Vietnam, Vietnam industrial real estate and logistics are the segments that have grown most rapidly recently.

As a multidisciplinary investment group of Singapore, Sembcorp Development entered Vietnam very early. In 1996, Sembcorp shook hands with Becamex IDC Vietnam Company to establish a joint venture: Vietnam – Singapore Industrial Park (VSIP).

Up to now, VSIP has developed a total of 9 VSIP projects across the country, with a total land fund of more than 8,600 ha, providing production infrastructure for nearly 900 enterprises with a total investment of more than 15 billion USD.

In addition to industrial parks, VSIP is also a pioneer in the construction of urban services and commercial areas, which are planned synchronously along the industrial zones. Currently, VSIP has been developing dozens of such projects to serve the community of experts, employees and local workers as well as industrial zones developed by VSIP.

Also coming from Singapore, Ascendas joint venture with Protrade Company to develop and manage the 500-hectare Protrade International Industrial Park in Binh Duong province and Saigon OneHub Project located in Ho Chi Minh City High-Tech Park (SHTP).

The Protrade International Industrial Park project is built according to international quality standards with a centralized wastewater treatment plant, full facilities, complete infrastructure, providing ready-built and custom-built factories.

Meanwhile, OneHub Saigon is a commercial office complex with an area of 12 hectares, located at the gateway of SHTP.

Designed to meet international green standards, the complex is an ideal choice for companies in information technology, high technology and supporting industries…

Many foreign investors are actively looking for investment opportunities in Vietnam’s industrial real estate market. In particular, many investors chose Binh Duong and Dong Nai to establish manufacturing companies, thanks to the availability of a foundation for production development.

Boustead Projects Limited launched its first ready-built factory project in Nhon Trach 2 Industrial Park in 2018. The factory at phase 1 covers an area of 6 hectares, has been designed and built under the supervision of the team of experts. Currently, this investor is implementing phase 2, with many sustainable and environmentally friendly solutions. This phase is expected to complete and welcome tenants in the third quarter of 2021.

In addition, Mapletree Group, another Singaporean investor, owns and manages total assets of more than 1 billion SGD (719.2 million USD) worth of assets in Vietnam, with a section stretches from Hanoi, Ho Chi Minh City, Binh Duong and Bac Ninh, with 8 real estate and logistics projects.

The wave of shifting and expanding production of foreign investors, including Singaporean investors, is opening great opportunities for Vietnam’s industrial real estate.

In particular, the Covid-19 outbreak caused supply chain disruptions and made international investors more interested in expanding plans, setting up company, branches or production facilities in Southeast Asian countries, in which Vietnam is a reasonable investment destination.

According to Senior Director of Savills Vietnam, Vietnam is always an attractive destination for foreign businesses with a young, more mobile workforce than some other countries in the region, reasonable labor costs.

In addition, there are advantages such as infrastructure, seaports, upgraded transportation system, political stability…

According to the latest report of JLL Real Estate Consulting Company (Vietnam), the total leased land area of ​​the southern provinces is at 25,045 ha in the second quarter of 2020. Supply is filling up rapidly due to soaring demand. Land rent in industrial zones averaged 106 USD / m2 / rental cycle, up 9.7% over the same period last year. The rental price of the ready-built factory is stable at 3.5 – 5 USD / m2 / month.

While the pandemic remains a threat, rental negotiations and new requirements are expected to continue to stall until the end of 2020. However, experts say, the market will quickly recover. right after the situation is under control. A strong industrial development base coupled with an ongoing diversified sourcing trend promises to help bring Vietnam to a new level in the industrial property development market.

According to the latest report of JLL Real Estate Consulting Company (Vietnam), the total leased land area of ​​the southern provinces is 25,045 ha in the second quarter of 2020. Supply is filling up rapidly due to soaring demand. Land rent in industrial zones averaged 106 USD/m2/rental cycle, up 9.7% over the same period last year. The rental price of the ready-built factory is stable at 3.5 – 5 USD/m2/month.

While the pandemic remains a threat, rental negotiations and new requirements are expected to continue to stall until the end of 2020. However, according to experts, the market will quickly recover right after the situation is under control. A strong industrial development base coupled with an ongoing diversified sourcing trend promises to help bring Vietnam to a new level in the industrial property development market.

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Binh Dinh: German Investors Want to Build A Wind Farm, Korean Businesses Interested in Assembling Cars

In the last days of August and early September 2020, many potential investors from Korea and Germany have come to study opportunities to set up company and invest in Vietnam and specifically Binh Dinh province to explore investment opportunities, with billion USD projects.

At the meeting of the departments of Binh Dinh province with leaders of Hyundai Aluminum Vina Company and Cammsys Company of Korea coming to explore investment opportunities in this province, according to representatives of Cammsys Company, the company wants to find a suitable partner to develop and assemble electric cars and ready to transfer production technology to develop electric car in Vietnam market.

Through a field survey in Binh Dinh, the Company highly appreciates the infrastructure, traffic connection of the province with the region and the world, and wishes to cooperate with the development of projects to supply electric cars for the regions, tourist resort and production association of this vehicle in the province.

Meanwhile, the representative of Hyundai Aluminum Vina Company with the cooperation in Vietnam has been 14 years now; Total investment capital of the Company’s projects in Vietnam is up to 5 billion USD in many different fields. On this occasion, when coming to Binh Dinh province, Hyundai Aluminum Vina Company hopes to find a clean space with an area of about 200 hectares to invest in the infrastructure of the high-tech industrial park. If found a suitable position and approved for investment, the company will call and attract about 60 Korean investors to come and do business.

Binh Dinh has Quy Nhon Port which is the most convenient international trade gateway of the Central Highlands region and the province of southern Laos, northeastern Cambodia to countries around the world. In addition, the province also has a complete transportation system and infrastructure connecting air, road and railway, with direct flights to Korea. In addition, Binh Dinh is always and ready to support and create favorable conditions for mechanisms and policies, reform of administrative procedures, and support for investors.

In terms of German investor, Director of the High-Level Offshore Wind Power Project – PNE Group proposed to develop an offshore wind power park in Binh Dinh province with a total investment of 1.5 billion USD. This is one of the investors with more than 20 years of experience developing onshore and offshore wind power projects in Germany. At the same time, learning about mechanisms and policies to encourage wind energy development in Binh Dinh and the process of developing and approving wind power projects in Vietnam.

The group’s leaders believe that the implementation of the wind power park project in Binh Dinh province will make Vietnam become a competitive wind power supplier in the region and globally, contributing to the completion of sustainable development goals and the goals set out in the Vietnam Renewable Energy Development Strategy to 2030, with a vision to 2050, approved by the Prime Minister.

Vice Chairman of Binh Dinh Provincial People’s Committee welcomed the PNE Group for their interest in researching and proposing project investment in the province; At the same time, commiting to create the most favorable conditions for investors during the project implementation.

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Da Nang to becomes the financial center of Central Vietnam

At the end of 2020, the representative of the Ministry of Planning and Investment proposed to build Da Nang city into a regional financial center with an investment of VND 47,000 billion according to Document 8919/BKHDT-KTĐPLT dated December 31st, 2020 by the Minister of Planning and Investment Nguyen Chi Dung.

Da Nang set the goal to “build a regional administrative center” in attracting and transmitting capital to the economy. In addition, Da Nang also proposes a number of fields that should have policies and incentives to attract set up business in Da Nang, Vietnam in the financial sector, creative startups, human resource training, and attract high-quality human resources.

The People’s Committee of Da Nang city also proposed to develop a project that includes many investment projects in many fields, focusing on the project of the complex of commercial financial centers with entertainment areas, casino and luxury apartment (under the list of key projects to attract investment in the period of 2021 – 2025) to be established and built on a total area of about 8.4 ha on Vo Van Kiet street with an investment of about VND 47,000 billion mobilized by investors.

Da Nang has the goal of building to become one of the major socio-economic centers of the country and Southeast Asia, as a center of entrepreneurship, innovation, tourism, commerce, finance, logistics, high-tech industry, IT, supporting industries to be established. Besides being located in central Vietnam and being a city directly under the Central Government for 24 years, Da Nang is the place that has high-quality human resources in the Central and Central Highlands.

In addition, the Ministry of Planning and Investment stated that “Vietnam has a different time zone from the 21 largest global financial centers. This is a unique and special advantage in attracting idle capital flows during the transaction break from these centers”.

In addition, Da Nang is the city with the largest economic scale in the Central Region, with the highest growth rate and GDP scale in the top of the country, ranking 8/63 provinces city in terms of economic density, ranking 9/63 in budget revenues.

Da Nang is oriented to develop into a modern, smart ecological city, a worthy city to live with the advantage of asynchronous infrastructure system of sea, road, and airway. There is a 3-hour flight distance with dynamic economies such as Bangkok, Malaysia, Singapore, Manila, Taiwan, Guangzhou, and Hong Kong.

Under normal conditions, Da Nang International Airport operates with nearly 500 international flights per week, operated with 25 airlines, connecting to 35 cities of 9 countries and territories; The number of international passengers passing through Da Nang International Airport increased at the fastest speed in the region. It is expected that by 2030, Da Nang international airport will be expanded with a capacity of about 30 million passengers/year.

With the above advantages, Da Nang hopes to soon become the financial center of Central, Vietnam, and Southeast Asia, expecting foreign investors to set up company and obtain investment certificate in Vietnam.

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Tetra Pak Construct 110 Million USD Packaging Factory in Binh Duong

Tetra Pak (Sweden) has started construction of a 110 million USD packaging factory on an area of 10,000 m2 and a total capacity of 20 billion packages per year at Vietnam – Singapore Industrial Park II – A (Binh Duong). This information has been announced since the end of 2016. The factory is expected to come into operation by the beginning of 2019.

According to the Deputy Minister of Planning and Investment, this is the factory with largest scale among 54 projects that Sweden investors have invested in Vietnam.

Moreover, he affirmed that the factory could become the leading bird, leading many Swedish businesses to come and set up business in Vietnam.

Sweden was the first country in the Western region that establish diplomatic relations with Vietnam. There will be many Swedish multinational corporations want to invest in Vietnam. Therefore, Vietnam in general and Binh Duong in particular need to prepare better investment environment to catch the wave of FDI, especially from Sweden.

According to representative of Tetra Pak, this is the company’s most green packaging factory in their system, as well as the 4th largest packaging factory in East Asia and Oceania in terms of scale.

The two popular types of packaging will be produced at the factory including Tetra Brik Aseptic and Tetra Fino Aseptic.

According to Tetra Pak, dairy and beverage products in South East Asia, Australia and New Zealand markets are expected to grow at a rate of 5.6 percent annually from now until 2019.

In Vietnam, milk production is still the largest sector in the country, which is expected to double consumption per capita to 28 liters per year by 2020. While the market for fresh fruit juice is expected to grow 17.5% in the next year. This is the basis for packaging factories – including Tetra Pak’s factory to expect fast growth in the near future.

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Joining CPTPP - Opportunity for Vietnam to Attract Quality Investors

The UK discussed for the first time with all CPTPP members, including Vietnam, to discuss joining this agreement.

Pursuing the goal of joining the CPTPP is one of the UK government’s priorities and is an important part of the free trade strategy.

Becoming a CPTPP member not only opens new opportunities for UK businesses, but also promotes investment and trade as well as develops sustainable economic cooperation between the UK and CPTPP members.

British companies have invested nearly 98 billion pounds (125.27 billion USD) in CPTPP members in 2018. By 2019, the value of trade transactions between the UK and CPTPP member countries is more than 110 billion pounds.

CPTPP will help complement bilateral trade agreements that the UK has entered or is negotiating with CPTPP members.

Currently, the UK and Vietnam are also working hard to translate the EU-Vietnam Free Trade Agreement (EVFTA) into the UK-Vietnam Bilateral Trade Agreement later this year. This will ensure continuity and bring commercial benefits to both British and Vietnamese businesses; at the same time, British businesses coming to Vietnam to set up company will also want to take advantage of attractive trade conditions.

The UK is the 15th largest investor in Vietnam in terms of investment accumulation and the 13th largest investment country in 2019. British investors who are present in Vietnam include HSBC financial services firms, Standard Chartered Bank, Prudential; Jardines in real estate; AstraZeneca and GSK in the pharmaceutical sector…

In 2019, bilateral trade in goods and services between Vietnam and the UK reached about 5.8 billion pounds (7.41 billion USD). The total trade turnover between the two countries grew at an average rate of 13% per year in the 2009-2019 period.

According to the World Economic Forum’s (WEF) Global Competitiveness Report, Vietnam’s global competitiveness 4.0 has significantly improved. Vietnam has also announced a national vision for the development of a digital economy with the goal that by 2030, a digital economy will reach 25% of GDP.

These are areas where the UK can help Vietnam such as smart city development, digitalization in construction and healthcare, fintech application to support inclusive business and financial growth.

The CPTPP will reduce tariffs between member countries by 95% and establish modern rules in areas that are increasingly important to UK businesses, including digital commerce, data, finance, and professional and business services. It is expected that areas like fintech, medtech and AI will grow rapidly.

Vietnam is the leading anti-Covid-19 country in the region. This is not only a testament to a strong public health, but also demonstrates Vietnam’s resilience. The International Monetary Fund (IFM) forecasts that Vietnam’s economic growth in 2020 will reach 2.7%. Vietnam has become the fastest growing economy in the region, outside Singapore; increasingly open to global trade…

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Establishing Distribution Company In Danang

Da Nang is a city in the Central of Vietnam, with the advantage of being a trading place of many countries in the world. Danang has a large seaport in the top 10 large seaports of Vietnam, facilitating trading activities with many countries around the world.

At the present, Da Nang is promoting foreign investment into Da Nang, and many investors have chosen Da Nang to do business in the distribution business line. For this business line, Vietnam has committed to open up to attract 100% foreign investment. As committed, foreign-invested companies in the distribution sector will be allowed to provide commission agents, wholesalers and retailers of all products manufactured in Vietnam and legally imported products into Vietnam. Therefore, the investors can import or produce goods, then they distribute the goods in accordance with regulations.

In addition, with the increasing in the number of tourists coming to Da Nang in recent years, the demand for consumer products, fashion and other items for tourists has increased. This triggers demand that many companies to provide essential goods for tourists, and this is a great investment opportunity for investors both domestically and abroad. The investors could explore this opportunity to set up company in Da Nang and fill the market’s demand.

In addition, with many policies to support enterprises in administrative procedures, as well as management, investors can easily carry out procedures as well as manage and control their business better. Enterprises investing in Da Nang are now very satisfied with the way public services are handled in the city’s administrative procedures, therefore more and more investors are choosing Da Nang as a destination for investment when targeting in Vietnam.

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RCEP Helps Vietnam Accelerate Investment Attraction

Together with ASEAN countries, Vietnam absolutely have the opportunity to become a hub to attract foreign investment in Vietnam, especially from countries participating in the Regional Comprehensive Economic Partnership (RCEP).

Finally, the RCEP was signed after 8 years of negotiations. Although it still has to wait a while for the 15 member countries, including 10 ASEAN member countries and 5 partners (including China, Japan, Korea, Australia and New Zealand) to approve, the assessment of the impact of the RCEP on the Vietnamese economy has been repeatedly confirmed.

The rules of origin procedures in RCEP bring significant advantages to Vietnam, whose economy is heavily dependent on imported materials. Vietnam is having a large trade deficit from Korea, China on raw materials for export production and it is always difficult for the origin of goods when exporting to many major markets around the world.

With RCEP, it is reported that Vietnamese enterprises can more easily access raw materials from member countries to produce export goods. For example, it is possible to import electronic chips from Japan and Korea; imported raw materials for textile and leather from China, then produced domestically and exported to other countries, at the same time satisfying the rules of origin within the bloc to take advantage of tariff preferences.

Not only with Vietnam, experts also agreed that RCEP is a favorable opportunity for all countries to participate in restructuring, repositioning supply chains and participating in global value chains. With RCEP, ASEAN is hoping to become the center of the global production chain. If we can do that, the chances for Vietnam are not small.

Vietnam has the opportunity to reshape and better exploit new positions, thereby building up a position in the global supply chain map. Of course, there will be an opportunity to attract investment. RCEP can help Vietnamese companies expand their markets, join regional supply chains and attract foreign investment.

Among the remaining 14 RCEP member countries, most are major investment partners of Vietnam. Even in the list of 10 countries and territories with large investment in Vietnam, there are 6 partners from RCEP. In which, the largest is Korea (70.38 billion USD), followed by Japan (59.89 billion USD), Singapore (55.7 billion USD), China (18 billion USD), Malaysia (12.8 billion USD), Thailand (12.5 billion USD).

Even without RCEP, foreign investment capital from these countries is still pouring into Vietnam, especially when Vietnam is the focus of attention of international investors, when investment flows are changing during Covid-19 period.

Currently, China, Japan, Korea and even Singapore, Thailand, Malaysia are speeding up investment abroad to expand production and supply chains. Vietnam is a safe and attractive destination. The opportunity to speed up investment attraction from RCEP member countries will be greater for Vietnam, especially when Vietnam is building many outstanding mechanisms and policies to catch the shifting investment inflows.

But with RCEP, the story is not just the investments between RCEP members. The prosperity, large market size of the RCEP bloc will also make it become the focus of global investors.

When proposing to negotiate RCEP, ASEAN countries also want to create a favorable environment to connect economies, creating opportunities for enhancing production capacity towards the goal of building ASEAN into a dynamic and unique economic region in terms of production and market.

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Set up branch office in Vietnam

Foreign entity is allowed to set up branch office in Vietnam to conduct business activities according to the law.

The branch of a foreign business entity in Vietnam (referred as “The Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.

The Branch is permitted to conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

It should be noted that the liability of the Branch is the liability of the foreign entity. The business activity of the Branch has to be consistent with the business activity of the foreign entity. The Branch has to has office address.

Therefore the investor should consider its investment strategy when setting up Branch office in Vietnam.

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M&A Due Diligence in Vietnam

Merger and Acquisition (M&A) activities in Vietnam have been rapidly increasing over the the years in value and number of transactions when Vietnam’s opening policies to attract foreign investments loosen up. The M&A due diligence and execution are therefore important steps to ensure a successful transaction.

For foreign investors wishing to take advantage with a certain level of risks in Vietnam where the cost of labour are cheap, mid-income populations are growing, and the need of capital are high, it is important to find the right target companies to invest. Challenges might arise when approaching the right local companies, locating the right decision makers within the local companies, encountering differences in languages and cultures.

It is important that the local consultants with the understanding of the business and legal environment in Vietnam where the local companies are incorporated could be involved at an initial stage to monitor and minimize the risks, improve the effectiveness of the M&A process in Vietnam.

The Vietnam consulting company could also provide corporate intelligence and insights of the Vietnam targeted companies to have an overall evaluation of the compliance of the Vietnam companies, possible risks involved and growth potential. Financial forensic services might also be needed before other further steps. Then, the following will need to be considered when undertaking the M&A in Vietnam.

Due diligence

M&A due diligence in Vietnam is a vital step because it determines whether the M&A will succeed or not. There are some aspects that must be carefully considered:

-Financial reports

Review all the financial reports of the Vietnam targeted companies within 3 to 5 years to assess the current and future financial situation. These data needs to be audited by a reputable independent auditing company. Evaluating financial situation targets on many aspects such as the reasonable connection between the financial statements, operating and sales margin of the business in relation to the average in that industry. These data allow valuation real value of the target business.

-The cash flow

Checking the dates on invoices showing that whether targeted businesses have paid promptly or not. Term of payment may vary from industry to industry, but generally 30 to 60 days. If the money order is paid after the billing date period of 90 days or more, it means that the business owner may be struggling with cash flow. Finding out that if the clients’ inability to pay bills or not is very important.

-The staff

Determining the importance of staff for the success of the business considering work habits of employees, working time of key employees; ability to remain working after a change of the owner occurs; the incentives necessary to keep key employees; ability to easily replace key employees; the relationship of key employees with the company’s customers.

-The customers

This is the most important assets of the Vietnam targeted company. Make sure that clients are as the other tangible assets of the business. Evaluating customers on some primary aspects: the relationship with the current owner of the business, customer history with business relations and the contribution of each customer to the profits of the company; assessing that customer will leave or stay when the business having new owners; customer services and dispute of the company, the relationship of the former owner of the business with the community or the industry.

-Business location

This is especially important if the targeted company is a retail company. Does the importance of business location play a crucial role for the success of the company? How is the location of the company you plan to acquire? Is there sufficient parking lot for customers? How does the company depend on sales in the region? How is the prospects of the business in this area? Does this place have been in the process of rapid change from new residential district office building or not? Has business location become more or less desirable because of contemplated changes in surrounding area or not?

-Competitors

Considering this aspect in order to define the capacity of the targeted business in the industry, the following questions would help: who are its competitor and what are their strategies? Does the price war happen frequently? How has the competitive environment changed?

-Business registration, permits and zoning

It’s necessary to make sure that business registration certificate and other legal documents can be easily given to the buyer. It would be better to acknowledge the procedures to transfer these documents and its fee with the help of local management consulting company in Vietnam. If the targeted company is a joint-stocks company, what is the procedure for the business registration? Can foreigners own the company 100% according to Vietnam laws? Conditional investments in Vietnam need to be considered carefully by lawyers in Vietnam to avoid mishaps.

-The company image

Company image can be a significant asset and that cannot be assessed in the financial report. There are many intangible factors to consider when evaluating a company: how to serve customers, how employees answer the phone and the level of support the community or the industry.

Negotiate the price

It is important to understand the purpose and motivation of both parties. The sellers’ motivation are formed and affected by value drivers. There are two main value drivers which are approach value and avoidance value. Approach value is our purpose such as prosperity and avoidance value is the negative effect that we need to eliminate. Normally, the buyers try to find out what are the reasons why the owner wish to sell the companies. This will help the buyers plan a reasonable strategy beforehand.

A research analyzes the general aspects that the buyers seeking for via conducting surveys companies’ owner who have sold or transformed their enterprises. The research results are focus on profit maximization (79%), minimization of tax payable (73%), protection of viability of the company (71%)…(Source: Acquisition Marketplace Review, 2007).

The motivation of the buyer in most cases is similar to the motivation of the seller, which is to maximize profits, expand markets, increase revenue, operating areas, areas of activity, minimize taxes…

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FM Logistic Builds 30 Million USD Distribution Center in Bac Ninh

On April 10th, FM Logistics – French logistics and transportation company officially started construction of a 30 million USD distribution center in VSIP Bac Ninh Industrial Park, laying the foundation for the company to explore the developing logistics market of Vietnam.

Once completed, this center will use about 300 employees, providing an area of 52,000 m2 for a maximum of 70,000 inventory boards. Phase I with an area of 21,000 m2 will be completed in the first quarter of 2020.

Logistics demand is growing strongly in Vietnam, one of the fastest growing economies in the world with GDP growth of about 7% in 2018. The growth of domestic production, wages and consumption, the young population and the explosion of e-commerce are also factors that promote the development of Vietnam’s logistics market. This is an opportunity for international 3PL companies to provide added value of logistics and door-to-door delivery services.

The distribution center and warehouse in Bac Ninh will support the development of food, retail, fast-moving consumer goods, industrial goods and cosmetics in the booming Vietnamese market. The center also supports increasing storage space of FM Logistic in Vietnam by nearly 10 times, at the time of increasing demand for Grade A storage. This proves FM Logistics commitment to invest in Vietnam.

The entire facility of this distribution center is designed by FM Logistic member company – NG Concept, including a wide range of utilities to accommodate temperature sensitive products, fast-moving consumer goods, electronic equipment, spare parts and even hazardous products.

Services that will be provided by the center include storage (with different temperature ranges), reception, packaging (or value-added services) and distribution. Optimize internal and external flow of facilities to match the increasing needs of modern retail operations.

From May 2019, FM Logistic will also start operating a rental warehouse with an area of 6,500 m2 in An Phu, Binh Duong province, 30km away from Ho Chi Minh City. The company officially operated in Vietnam in August 2017. In 2018, the company began providing nationwide shipping services, using its partner network.

Founded in France in 1967, FM Logistic is an independent logistics company with family scale, with a revenue of 1.2 billion EUR in fiscal year 2018, two thirds of which come from the international market. The company operates in 14 countries across Europe, Asia and Latin America (Brazil) and has about 26,000 employees.

FM Logistic invests in innovation to bring logistics, shipping and classifying solutions to meet the changing needs of consumers, the development of e-commerce and the distribution of multichannel sales. FM Logistic has served many international and domestic companies in the field of fast-moving consumption, retail, perfume, cosmetics, industrial production and health care.

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Many Large Businesses in Norway Want to Invest in Hanoi

7 leading corporations and enterprises from Norway include ITS Noway, Pixii AS, Ruter, Avfall Norge, Cambi, Host, Tomra want to set up business in Hanoi, at the same time cooperate, invest and transfer the most advanced technology in Hanoi city.

Chairman of the Hanoi City People’s Committee has just had a meeting with Innovation Norway and 7 leading Norwegian corporations and enterprises operating in the fields of: Developing smart traffic system, energy and energy storage, management and development of public transport systems, providing solutions for waste and waste sludge management, recovery and recycling of plastic and waste materials.

At the meeting, leaders of corporations exchanged views with the Chairman of Hanoi People’s Committee on Norway’s strengths, experiences and the most advanced technology such as waste and sludge treatment technology and recycling into fertilizer preparations for agriculture; technology to use clean energy in waste treatment; technology to collect, process and recycle hazardous plastic wastes; payment technology and smart transportation applications that encouraging people to use the City’s public transport system; experiences and management mechanisms that encourage corporate cooperation in waste and wastewater treatment and development of public transport.

At the same time, the leading corporations in Norway also expressed their desire to cooperate, invest and transfer advanced technology into Hanoi.

On the side of Hanoi, the Chairman of the city thanked the leaders of the corporations for exchanging and introducing valuable experiences in management as well as advanced technologies in areas that Hanoi is very in need of, serving for the construction and development of Hanoi towards smart, sustainable and effective urban.

At the same time, the city leaders also expressed that Hanoi is willing to create the most favorable conditions for Norwegian corporations and businesses to research, survey and seek investment and business cooperation opportunities in Hanoi.

Notably, representatives of the Innovation Norway, corporations and companies committed to organize Norwegian business delegations to Hanoi as soon as possible to implement the discussed plans.

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Kien Giang Continues to Welcome Investment Waves

With outstanding potentials and advantages, together with many large projects which have been invested in the area, especially efforts to strongly improve the business and investment environment, Kien Giang province expects to continue to welcome the wave of investment in the future.

Phu Quoc has been recognized as urban type 2 since 2014. Currently, Kien Giang province is waiting for the Government to approve the scheme on the establishment of Phu Quoc coastal city under Kien Giang province. From this policy, Phu Quoc has been focusing on investing heavily in developing essential infrastructure by domestic and non-budgetary sources…

Many key projects have been deployed and put into use, such as Phu Quoc International Airport, An Thoi International Seaport, Duong Dong Passenger Seaport, Ha Tien – Phu Quoc underground electric cable line, the road around the island, South – North main road, An Thoi cable car…

According to the Head of Phu Quoc Economic Zone Management Board, with many incentives, open mechanisms and interest of leaders, Phu Quoc is expected to grow strongly in a short time. Currently, according to the operation regulations of Phu Quoc island and Nam An Thoi island cluster, projects of organizations and individuals inside and outside the country investing in Phu Quoc shall enjoy the 10% enterprise income tax rate applicable during the project implementation period; Vietnamese and foreign people are entitled to a 50% reduction of income tax on high income.

Phu Quoc International Airport can welcome large aircraft with a flow of 2.6 million passengers per year. Besides, dozens of high-quality high-speed trains run Ha Tien – Phu Quoc and Rach Gia – Phu Quoc routes, bringing over 2,000 visitors to and from the island every day.

The synchronous investment has been effective. In 2018, tourists to Phu Quoc doubled compared to before the new airport opened. It is forecasted that in 2019, Phu Quoc will welcome several million visitors, of which about 30% are international visitors.

In addition to the highest investment incentive policies in the country, at the present, Phu Quoc investors are interested in a number of interesting issues such as: regulations allowing economic organizations, Vietnamese residing abroad, foreigners permanently residing in Vietnam, foreign-invested enterprises, foreign organizations and individuals may invest in the construction of houses for sale or lease, sub-lease or transfer of land use rights which has built infrastructure in accordance with relevant provisions of the law on land; overseas Vietnamese can buy houses…

Investors coming to Phu Quoc will receive maximum support from Kien Giang provincial government and Phu Quoc island district. If outside the jurisdiction, the locality is responsible for coordinating closely with ministries and agencies to promptly remove and create the best conditions for investors.

Up to now, in Phu Quoc district, there have been 265 detailed construction planning projects and master plan of 1/500 scale which have been approved with a total approved area of 7,384.98 ha. The number of accommodation rooms approved in the tourist areas is adjusted according to the general planning of about 80,141 rooms.

In recent years, Phu Quoc has changed clearly and comprehensively in all aspects, the economy has grown at an average rate of 27.52%/year; budget revenue reached over 1,000 billion VND per year; GDP per capita increased nearly 4 times compared to 2010; average tourism revenue increased by 43%/year.

It can be said, the results that Phu Quoc achieved have contributed significantly to the general development of Kien Giang province and created the strongest growth momentum in the Mekong Delta region.

Accumulated until July 15th 2019, Phu Quoc has 299 valid investment projects in planning areas with an area of 10,585 ha.

In which, there are 36 projects in operation with an area of 1,182 ha, total investment capital of about 14,758 billion VND; 35 projects are under construction (6 projects have been partially operated) with an area of 3,203 hectares and a total investment of about 95,731 billion VND; the remaining projects are completing investment procedures.

Regarding foreign direct investment (FDI), up to now, Phu Quoc district has 31 FDI projects with a total capital of 293 million USD.

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Sharp Plans to Build A New Factory in Vietnam, Operating in 2020

China will not be Sharp’s place of manufacturing LCD screens for cars sold in the US, this stage will be transferred to Vietnam. Sharp is going to set up factory in Vietnam.

According to Sharp, they will build a new factory in Vietnam to avoid the new tax imposed in the long-running US – China trade war.

The factory in Vietnam will assemble LCD screens for cars sold in the US. At the same time, about 10% of Dynabook’s production of personal computers can also be transferred from China to the new facility.

Sharp has not disclosed the investment amount to build a new factory but said it will operate in 2020 near Ho Chi Minh City. At the same time, Sharp will establish a subsidiary company with a capital of 25 million USD to operate the plant. In addition to LCD screens, this factory will also produce air conditioners and other electronic devices for sale in Vietnam.

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Da Nang- Tangier (Morocco) cooperates in economic field

On April 14th, 2021, representatives of Da Nang city had an online meeting with representatives of Tangier city (Morocco) on the 60th anniversary of the establishment of diplomatic relations between the two countries (1961-2021).

At the meeting, representatives of Da Nang city shared the characteristics, potentials and similarities in the field in the development orientation of two cities, by this meeting, the two cities will continue to promote cooperation in a number of areas such as tourism, transportation, and trade. In addition, Da Nang is implementing the goal of both coping with epidemics, socio-economic development, promoting the image of the city as a safe destination for investors and tourists.

Specifically, in the field of tourism, is is encouraged cooperation between tourism and travel business. At the same time, parties are suggested to coordinate to organize tourism product survey teams, to connect tourism of the two cities; promote, advertise and introduce the image of Da Nang to Moroccan citizens.

In the transport sector, Da Nang side hopes that Tangier will support Da Nang in calling for businesses and investors of Tangier to invest in a PPP component (public-private partnership) of Lien Chieu port project to cooperate. Besides, invest in logistics centers according to the approved planning and support investment in marinas, inland water ports.

In the field of trade, the side of Da Nang city proposed the two parties to exchange and provide information on trade fair and prestigious events of the city; information on import and export enterprises; trade policy mechanism, etc. for imported goods to support trade connection, promote goods export – import.

Besides, two cities will support enterprises to research, learn and access each other’s goods market; connect businesses in the raw material supply chain to boost exports of potentially complementary products, coordinate in organizing or assisting enterprises to survey the market, creating conditions for all parties to arrange stalls or send goods for introduction at their local product introduction centers.

Bases on the proposals of Da Nang, the representative of Tangier city shared, Tangier is a locality with infrastructure for tourism and transportation. Tangier wants the two cities to concretize ideas of cooperation to connect tourism. At the same time, to create favorable conditions and optimize strengths to develop fields that both cities are interested in. In addition, the representative of Tangier city hopes that apart from the aforementioned fields, the two cities will be able to cooperate in the fields of technology, environment and sustainable development.

By the meeting, the two parties also expected that in the coming time, with the efforts of cooperation and economic development, investors from Tangier will make investment in Da Nang, to apply for investment certificate, to set up company, in order to make the most of the incentives investment in Da Nang, in order to reap its economic benefits.

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Highlights in Real Estate Investment in Vietnam

Vietnam is attracting interest of investors in both domestic and foreign market. Overall, investor confidence was returning to the Vietnam real estate market. Both buyers and sellers have enhanced activity in recent months.

The real estate market of Vietnam has overcome the recession period within 4 or 5 years ago but in the last 12 months, the market has recovered and noted positive signs as well as confidence in the market in general.

Law on housing and real estate business Law takes effect in July 2015 and has acted quickly and positively on the real estate market in Vietnam. The changes in the Law on housing have significantly eased the regulations on home ownership for foreigners, although there are still some limitations.

“Hot spots” of FDI inflows

According to a recent report of Jones Lang LaSalle Vietnam (JLL), a series of free trade agreements such as TPP, EU and ASEAN will further promote the medium and long term development. Interest rates and inflation rate have declined significantly and became more stable in the past two years, helping the investment activity to occur more positive in both Ho Chi Minh City and Hanoi. With some domestic and foreign investors such as CapitaLand and Keppel Land, they have spurred the construction activities thanks to the growing revenue in the last 12 months.

Accordingly, the amount of disbursed FDI in the period from January to September of 2015 rose by 8.4% compared to the same period last year, reaching 9.7 billion USD. This is the strongest growth since the late 1980s, contrary to the slowdown of the Chinese economy. The amount of registered capital of new investors also rose even more sharply with 11 billion USD, focused primarily on the manufacturing industry, in which the energy and electronics industries are the sectors with the highest registered capital investment in the year, followed by the real estate sector.

According to the Ministry of Planning and Investment, FDI investment in the industrial park in Vietnam accounted for 67% of total FDI in Vietnam with 11 billion USD and accounting for 59% of the total 1,400 projects in the first 9 months of 2015. A notable transaction is the event that Amata Corporation acquired the land worth 279 million USD in Long Thanh (Dong Nai) for the purpose of building residential and industrial areas valued of 500 million USD.

According to JLL, the residential real estate prices in Vietnam maintained an average rate with 2 bedroom apartments, 70 m2, 10 – 15 minutes to reach the central area of Ho Chi Minh City, which are sold at the price of 1,600 – 2,000 USD/m2, equivalent to 112,000 – 140,000 USD/apartment. When compared with the big cities in the region, the price is believed to increase significantly.

Who dominated the real estate market of Vietnam?

JLL’s report showed that domestic investors are boosting investment activity in the real estate market of Vietnam. The largest real estate investors in Vietnam are Vingroup and Novaland Group.

Vingroup is Vietnam’s largest real estate development and management with market capitalization of about 3.4 billion USD. Vingroup’s investment portfolio includes 45 real estate projects spread across many sectors of the real estate market, including Vinhomes luxury apartments and villas; Vincom Center and Vincom Mega Mall; Vincom Office; 5 star Vinpearl resort; Vinpearl Luxury resort….

Novaland Group has participated in the real estate market in 2007 with the first project is Sunrise City with investment capital of 500 million USD located on Nguyen Huu Tho road, district 7. The real estate business of Novaland focused on the apartment complex segment from mid to high classes and the segment of house land with 25 projects that are being implemented throughout the downtown districts.

Vietnam is becoming an attractive place for foreign investment in the medium term than many other countries in Southeast Asia. Data from Real Capital Analytics (RCA) recorded that there are more attention from a number of private investment funds that are allocated foreign capital into Vietnam in an attempt to increase their market presence in Vietnam.

In the 2nd quarter of 2015, a joint venture of Warburg Pincus – a US investment fund, has invested 100 million USD into Vincom Retail, the Vietnam’s largest trade center ownership and management in Vietnam. Also in this quarter, Gaw Capital Partners has received the transfer of 4 real estate projects under various segments from Indochina Land with a total value of 106 million USD. Gamuda Land has also receive the transfer of 40% shares (equivalent to 64.1 million USD) in the Celadon City project, a modern urban area with initial investment by a joint venture between Sacomreal, Thanh Thanh Cong (TTC) and An Phu Gia.

The current real estate profit margin is high

JLL’s analysis shows that investors are now enjoying 6 – 7% profitability rate for residential real estate and 9 – 11% for commercial real estate, depending on location, completion time, quality of the project and the signing time of the tenants.

According to General Director of JLL Vietnam, real estate investment in emerging markets has always been seen as risky investments but with higher potential profits. Investors are willing to engage in joint venture projects in these markets, where they will combine with local investors who wish to have capital supporting – in order to have a foothold in the market before and also experience the exponential growth in the future when the economy of these market growing fast.

Moreover, the emerging markets such as Vietnam will have the potential growth factors, including population growth and high urbanization rate. Investors and project developers can take advantage of these factors.

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Da Nang – Singapore To Cooperate for Development

On May 12th, 2021, the representative of Da Nang city had a webinar with representatives of Ho Chi Minh City and Singapore on economic development, which the seminar was attended by nearly 200 companies from different industry whom are potential investors from Singapore, interested in setting up company in Vietnam.

During the seminar, the representative of Da Nang city introduced the investment and business environment, and preferential policies and investment opportunities of Da Nang city in the fields of high technology, information technology, high-quality services (health, education, logistics). The seminar received the sharing of experience when investing in Da Nang as well as the support of the city government from one of the largest Singaporean investors in Da Nang, and financial solutions when investing in Vietnam from some Singapore experts.

The representative from Singapore Business Federation highly appreciated the potential of the city’s business investment environment and proposed Da Nang city to establish the Da Nang Information Center (Da Nang Desk) located at the Vietnam Connection Center at the Singapore Manufacturing Federation (SMF) to connect Da Nang with Singapore companies.

Da Nang City is inviting Singaporean investors and businesses with financial and technological capabilities to learn about the business investment environment and cooperation opportunities in the city. The representative of Da Nang City highly appreciated the proposal to set up Da Nang Information Center in Singapore and assigned the Investment Promotion and Support Committee to propose a model, serving as a bridge to support the environment and business investment opportunities of Da Nang to Singaporean enterprises in particular and international in general; thereby further promoting the investment cooperation relationship between Da Nang and Singapore in the coming time.

Singapore is one of Vietnam’s most important trade and investment partners. In 2020, despite being affected by Covid-19, Singapore invested in 248 projects in Vietnam with a total capital of nearly 9 billion USD, making it the leading country in foreign investment in Vietnam. Accumulated to the end of 2020, Singapore is the 3rd largest foreign direct investor in Vietnam after Korea and Japan with a total of 2,629 projects and a total registered capital of more than 56.5 billion USD. In 2020, the total two-way turnover between Vietnam and Singapore reach over 6.7 billion USD, of which the export value of Vietnam’s goods will reach 3 billion USD and the import value will reach USD 3.7 billion.

Singapore is one of the key markets for investment attraction of Da Nang, currently the city has 28 Singapore FDI projects with a total registered capital of more than 838.4 million USD, ranking 2nd in the list of more than 50 countries and regions, territory, accounting for about 22% of total registered investment capital.

Da Nang City hopes that many investors from Singapore will invest in Da Nang to help the city achieve its goal of becoming the largest financial center in Vietnam. And the Singaporean investors can enjoy the best incentives from the city to get the best return on their investment from establishing company through foreign direct investment or making investment through M&A with local company. However, it is always important to undertake background check, search the reputation of the local company, local director and have full assessment on the business and financial risks in cooperating with local partners.

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Update: What Are Rights and Obligations of Foreigners Owning Properties in Vietnam?

According to the current Vietnamese law, the ownership of houses in Vietnam by foreigners has changed significantly towards more openness. However, home ownership of foreigners and Vietnamese citizens are still different.

Foreign house ownership is allowed in commercial housing construction projects only (i.e., only in newly formed residential areas), not an area of national defense and security purpose. In case of house donation or inheritance of house not subject to this regulation, the foreigner only receives the value of that house.

The foreigners combined may not buy, rent and purchase, receive, inherit and own more than 30% of apartments in an apartment building; or not more than 250 houses of separate houses including villas, row houses in an area whose population is equivalent to a ward-administrative division

In an area whose population is equivalent to that of a ward, if there is a commercial housing construction project for sale or lease-purchase, the quantity of detached houses that may be owned by foreigner is specified below: where the quantity of detached houses of an project is fewer than 2,500, foreigner may own up to 10% of the houses of such project; where there is only one project whose quantity of detached houses is equivalent to 2,500 houses, foreigners may own up to 250 houses of them; where there are two or more projects where the total quantity of detached houses does not exceed 2,500 houses, foreigners may own up to 10% of the houses of each project. In case a house is donated or inherited in excess of the number of houses under this regulation, only the value of that house is entitled.

The foreigners are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not more than 50 years from the date of issuance of the Certificate and have can be extended further according to the Government’s regulations if the need arises; house ownership period must be specified in the Certificate.

In case a foreign individual marries a Vietnamese citizen or an overseas Vietnamese, he/she can own a stable, long-term house and has the same rights as a Vietnamese citizen.

The foreign organization are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not longer than duration stated in their Certificate of investment, including extension duration, the duration of the homeownership shall be determined from the day on which the organization is granted the Certificate and stated in such Certificate.

In addition, foreign organizations and foreign individuals permitted to enter Vietnam have the same obligations as Vietnamese citizens but must comply with the following provisions:

If the homeowner is a foreign individual, he/she is entitled to lease house for lawful purposes provided that he/she notifies the agency of district in charge of housing where the house is located of housing lease as prescribed in regulations of the Minister of Construction and pays taxes on housing lease as prescribed before leasing houses. If a foreign individual gets married to a Vietnamese citizen or an oversea Vietnamese, he/she qualifies for stable and long-term homeownership and has all rights of homeowner similarly to Vietnamese citizens.

If the homeowner is a foreign organization, its house is/are only provided for their employees but it is not allowed to use their house for lease, offices, or other purposes.

The above are provisions on rights and obligations of foreign organizations and individuals when owning properties in Vietnam. For specific matters, please consult with property, real estate lawyers for legal advice for the property transaction from deposit agreement, house sales and purchase agreement, and registration of ownership with authorities for certificate of land use right, or house ownership certificate of to avoid property disputes in Vietnam, where the house ownership, land use rights are restricted for foreigners.

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