On September 26^th, 2018, Resolution no 579/2018/UBTVQH14 on the Environmental Protection Tariff has been promulgated by the Standing Committee of the National Assembly. Accordingly, from January 1^st, 2019, the environmental protection tax rate for a number of products such as: gasoline, oil, lubricants and coal as well as other non-environment-friendly products such as: plastic bags subject to taxation,…

No.	Product	Unit	Tax rate (VND/ product unit)	Tax rate (VND/ product unit)	Tax rate (VND/ product unit)	Growth rate (VND/ product unit)
			Resolution no 1269/2011/UBTVQH12 taken effect on January 1st, 2012	Resolution no 888a/2015/UBTVQH13 taken effect on May 1st, 2015	Resolution no 579/2018/UBTVQH14 taken effect on January 1st, 2019
I	Gas, oil, lubricants
1	Gas, except for ethanol	liter	1,000	3,000	4,000	+ 1,000
2	Aviation fuel	liter	1.000	3,000	3,000	0
3	Diesel oil	liter	500	1,500	2,000	+ 500
4	Petroleum	liter	300		1,000	+700
5	Mazut oil	liter	300	900	2,000	+ 1,100
6	Lubricant oil	liter	300	900	2,000	+ 1,100
7	Lubricant grease	kg	300	900	2,000	+ 1,100
II	Coal
1	Brown coal	ton	10,000		15,000	+ 5,000
2	Anthracite coal	ton	20,000		30,000	+10,000
3	Fat coal	ton	10,000		15,000	+ 5,000
4	Other coal	ton	10,000		15,000	+ 5,000
III	Dung dịch Hydro-chloro-fluoro-carbon (HCFC), including HCFC solution in a mixture containing HCFC	kg	4,000		5,000	+ 1,000
IV	Plastic bags subject to taxation	kg	40,000		50,000	+10,000
V	Restricted use herbicides	kg	500		500	0
VI	Restricted use termiticides	kg	1,000		1,000	0
VII	Restricted use forest product preservatives	kg	1,000		1,000	0
VIII	Restricted use warehouse disinfectants	kg	1,000		1,000	0

Regarding the necessity of the enactment of this resolution, the Ministry of Finance emphasized that it would encourage every individual and organization to reduce using products that are harmful to environment and to use environment-friendly products in exchange. The Finance and Budget Committee of the National Assembly said that if the environmental protection tax rate was adjusted as above, more than VND 15,000 billion would be expected to be earned a year to help investing in dealing with environmental issues.

 

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From 2019, base salary and minimum salary will be remarkably raised. Accordingly, millions of people will benefit from these crucial payroll amendments.

The Government just promulgated Decree no 157/2018/ND-CP regulating minimum salary for contractual employees.

Regulated subjects are as follow:

          - Contractual employees as prescribed in Labor Code.

          - Enterprises established, organized and operated as prescribed in Law on Enterprises.

      - Cooperatives, cooperative alliances, cooperative groups, farms, households, individuals and other Vietnamese organizations hiring contractual employees.

       - Foreign agencies, organzations, international organizations and foreign individuals in Vietnam hiring contractual employees ( except for the international treaties of which the Socialist Republic of Vietnam is member having different regulations from this Decree).

New regulations on minimum salary applied to employees working in enterprises are as follows:

          - VND 4,180,000/month, applied to enterprises operating in area I;

          - VND 3,710,000/month, applied to enterprises operating in area II;

          - VND 3,250,000/month, applied to enterprises operating in area III;

          - VND 2,920,000/month, applied to enterprises operating in area IV.

The applicable minimum salary areas are prescribed according to the administrative units.

Thus, the new minimum salary is higher than the current one by about VND 160,000-200,000/month.

Also in Resolution 70/2018/QH14 on the State budget estimate for 2019, the National Assembly assigned the Government to adjust the base salary (from VND 1.39 million/month to VND 1.49 million/month), and to raise pensions, social insurance benefits, monthly benefits according to the regulations (subjects guaranteed by the state budget) and preferential subsidies for people with meritorious services to the revolution equal to the rise of the base salary, time of effect from July 1^st, 2019.

This base salary will be used as a basis for calculating salary in payroll, allowance level and other regimes as prescribed in law.

Technical and professional payrolls for officials in State agencies from July 1^st, 2019 are also compatible with the new regulations. According to statistics, the base salary increase will have the salary of officials of all levels and groups raised by VND 200,000-800,000 depending on the coefficient.

 

 

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On October 24^th, 2018, the Government promulgated Decree no 148/2018/ND-CP amending and supplementing some articles of Decree no 05/2015/ND-CP defining and providing guidance on the implementation of a number of contents of the labor code. Accordingly, this Decree amends and supplements some articles related to labor contract and labor discipline.

Firstly, the decree amends the regulation on the subjects concluding labor contracts. According to the new regulation, instead of prescribing only family householders by default as before, the persons lagally authorized as the legal representatives by members of households, cooperative groups or other organizations not having legal status shall be a subject concluding labor contracts on the employer side. Additionally, the persons legally authorized in writing to conclude labor contracts by the legal representative specified in the regulations of the enterprises or cooperatives or by the head of the agencies, units or organizations, which have legal status as prescribed in law shall also be considered as a subject concluding labor contracts on the employer side. Thus, the subjects concluding labor contracts are expanded.

Secondly, The Decree amends and supplements some regulations on labor contracts contents with a view to decreasing contracts drafting process and hastening agreement process. Accordingly, such contents as: promotion and salary raise regulations, work time, rest time, personal protection equipments provided for employees, social insurance, medical insurance, unemployment insurance can now be agreed to proceed according to the regulations of the employer, labor regulations, collective labor agreements and regulations of the specialized law, without specifically being stipulated in contracts.

Thirdly, the Decree amends the regulation on labor contracts with elderly employees. Accordingly, when the employers has no need or the elderly employees are not healthy enough, both parties shall "agree to terminate” the labor contracts instead “terminate” the labor contracts as prescribed before.

Fourthly, the Decree amends the regulation on procedures for handling violations against the labor discipline. Specifically, the current procedures is divided into 2 cases:

- Case 1: Detecting the violations right at the time of the acts: The employers shall make minutes of the violations, notify the representative organizations of the labor collective at the grassroots level; parents, or the legal representatives in case of the employees under 18 years of age to conduct the meetings about handling violations against the labor discipline, then conduct the meetings. Currently, the employers only need to make sure that the written invitation notices are sent to the participants before conducting the meetings, without having to send the notices at least 5 working days prior to the meetings as before.

- Case 2: Detecting the violations after the time of the acts: When there are sufficient grounds to prove the employees' faults and within the statute of limitations, the employers notify about the handling violations against the labor discipline meetings to participants prescribed at Points b, c, Clause 1, Article 123, Labor Code including: The representative organizations of the labor collective; employees, parents, or the legal representatives in case of the employees under 18 years of age. Within 03 days from the date of receiving the notices, participants must confirm participation in the meetings, notify if not participating, if they do not confirm, or state improper reasons, or confirm participation without attending, the employers still conduct the meetings, without waiting until the written notices has been given at least 03 times as before.

The persons concluding labor contracts on the employer side shall be the persons entitled to make decisions on handling violations against labor discipline imposed on employees. The regulations on the persons concluding labor contracts have been amended as stated above.

Decree 148/2018/ND-CP comes into force on December 15^th , 2018.

 

 

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Cooperation mechanism is a mechanism for cooperation between Investment registration authorities and Business registration authorities in processing applications for investment registration and enterprise registration in Vietnam submitted by foreign investors. This mechanism, regulated in detail in the Circular No.02/2017/TT-BKHDT, make it easier for foreign investors and economic organizations to invest in Vietnam in form of capital contribution, share or stake transference, etc. 

 

This mechanism will be a clear basis for investment and business registration agencies to jointly handle the procedures for registration of investment and establishment of enterprises of foreign investors, including the Department of Planning and Investment, management boards of industrial zones, export processing zones, high-tech zones, economic zones, and provincial business registration offices. The cooperation mechanism has the following advantages:

- Elimination of the duplicate documents between two procedures submitted such as a copy of personal identification paper or organization establishment certificate, etc.

- Short time for carrying out administrative procedures;

- Minimization of travel due to the implementation of administrative procedures in different agencies, compared to the old procedures;

The cooperation mechanism can be applied to 3 cases including:

• Foreign investors and foreign-owned economic organizations invest in the establishment of economic organizations as stipulated in Article 22 of the Investment Law;
• Foreign investors and economic organizations with foreign owned capital investing in the form of capital contribution, share or stake purchase as regulated in Clause 1, Article 26 of the Investment Law;
• Foreign investors and economic organizations shall simultaneously adjust contents of enterprise registration and investment registration.

The order of implementation of the cooperation mechanism in case of establishment of an economic organization shall be performed in the following 5 steps: 

            Step 1: The investor shall submit the application to the Application-receiving division.

            Step 2: The Application-receiving division and Business registration authority shall consider the validity of the application.

            Step 3:  Issuance of the Investment Registration Certificate

            Step 4: Issuance of the Enterprise Registration Certificate

            Step 5: Delivery of the result to the investor

With regard to the case of investing in the form of capital contribution, share or stake purchase and adjusting the contents of enterprise registration and investment registration, the order and procedures are provided in Article 7 and 8 of Circular No. 02/2017/TT-BKHDT. 

In addition, Article 9 of the Circular regulated that the implementation of the cooperation mechanism under standby procedure will be applied in case the development or upgrade of the Common information processing system is in progress; or the Common information processing system has technical problems, or other force majeure events.

The cooperation mechanism facilitates the foreign investors and the foreign-owned organizations in the process of establishing the new economic organization, contributing capital, purchasing share or stake, or simultaneously adjusting the contents of investment registration and enterprise registration. The time will shorten because the two procedures are implemented with the information exchange mechanism between two agencies.

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On 23rd August 2018, the Government issued Decree no 108/2018/ND-CP amending, supplementing some articles of Decree no 78/2018/ND-CP on enterprise registration. These changes are expected to create new progress in the number of a start-up company in 2019, contribute to enhancing the development and competition in the economic system. Moreover, the alteration in the new Decree will help minimize the administrative procedures, improve the business environment and attract the investment from foreign individuals and organizations.

There are 9 notable new points as follow:

1. The dossiers submitted to the Business Registration Office shall not need to be sealed.  

This regulation simplified the procedure on the stamp of the Company, help reduce the expenses and the time for Enterprise.

Also stipulated by this new Decree, the Power of Attorney authorizing a person to execute the procedures related to the enterprise registration is not compulsory to notarize. According to the Civil Code and Law on Enterprise 2014 and the guidance documents, the Power of Attorney is not required to notarize, however, because some cases are made difficult by the competent authorities, Decree No. 108/2018/ND-CP clarified this point.

2. Simplification the application for one member limited liability Company.

With the regard to one-member limited liability Company that the owner is an organization, the application for enterprise registration will no longer need the copy of Article of Association of that organization as regulated by the previous Decree. 

3. The Enterprise can execute many procedures at the same time.

The Decree No.108/2018/ND-CP has one new regulation compared to Decree No.78/2015/ND-CP on the conversion of the Enterprise. Namely, the enterprise may register conversion of an enterprise and register changes of enterprise registration information or notification of other enterprise registration information, except registration of change of the legal representative.

4. Provision in detail the enterprise registration dossier of an enterprise converted from a business household.

Article 25a is supplemented in the Decree providing in detail and guiding the dossier and procedures to establish an enterprise on basis of conversion from the business household. This new point satisfied the provisions of Law on Assistance for small and medium-sized enterprises. Accordingly, the registration dossier comprises the original of certificate of business household registration; legitimate copy of the tax registration certificate and other documents required, appropriate with the type of Enterprise.

5. Registration Dossier can be submitted by post. 

According to the previous regulations, the Enterprise must submit the dossier directly at the Business Registration Office. However, Decree No.108/2018/ND-CP amend the Article 29, allowing the Enterprise to submit the dossier and receive the Enterprise Registration Certificate by post. The new way of application and receiving the result facilitate the Enterprise, help them save time and reduce travel expenses.

6. The enterprise are allowed to establish the business location in the central-affiliated provinces, cities outside the place of registered headquarter or branches.

According to Decree No 78/2015/ND-CP, Enterprise must establish the business location in the same central-affiliated provinces, cities which headquarter or branch of the Company is located.  This regulation limited the right to operate freely and proactively of the Enterprise, costed a large amount of money of Enterprise to establish the branch to manage the business location. Decree no 108/2018/ND-CP repealed this regulation, help increase the flexibility and the right to operate and expand actively of Company to many other regions without the establishment of a branch.

7. Improvement of the online application for the enterprise registration procedure 

In practice, Decree No. 78/2015 / ND-CP has not yet created a favorable mechanism for enterprises to register their enterprises online, therefore, Decree 108 has improved the business registration process in favor of people and enterprises. Previously, the person allowed to sign the online enterprise registration dossier is limited to the legal representative of the company, but with the new regulations, the authorized person shall sign the application for registration themselves or authorize other individuals to carry out procedures related to enterprise registration via electronic networks.

8. Reduction of procedures for notification of changes in information of founding shareholders of joint-stock companies

Previously, a joint-stock company must notify the business registration office of any changes in the registered founding shareholders information, which in turn impose an undue burden and expense on the Enterprise. Conceived this issue, the new regulation has reduced the number of cases where it is necessary to announce the change of information of founding shareholders and only one change has to be notified from now on is the founding shareholder who has not yet paid or only paid part of the registered shares.

9. The charter capital reduction file no longer require the latest financial statement with the time of capital reduction decision.

In case of reduction of charter capital, according to old regulations in Decree 78/2015/ND-CP, enterprises must commit to ensure full payment of debts and other property obligations after the reduction of capital. Along with the dossier, the company's financial statement at the latest period must be attached. However, according to the new regulations, capital reduction dossiers do not need to have the company's financial statements anymore.

Decree 108/2018/ND-CP comes into force on 10/10/2018, promising to create breakthrough in business registration, reduce administrative procedures, expand and attract sources of investment from domestic and foreign organizations.

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On 23rd August 2018, the Government issued Decree no 108/2018/ND-CP amending, supplementing some articles of Decree no 78/2018/ND-CP on enterprise registration. These changes are expected to create new progress in the number of a start-up company in 2019, contribute to enhancing the development and competition in the economic system. Moreover, the alteration in the new Decree will help minimize the administrative procedures, improve the business environment and attract the investment from foreign individuals and organizations.

In Aug 2017, The Ministry of Finance and The General Department of Taxation posted the draft Decree on goods sales and services provisions invoice to replace the Decree no 51/2010/NĐ-CP mentioning the subject who shall use electronic invoice having an identification code of tax authority. After more than 1 year of consulting and submitting to the Government, on Sep 12^th, 2018 Decree no 119/2018/NĐ-CP of the Government on electronic invoice when performing sale of goods and provision of services was officially issued.

Using electronic invoice will bring many benefits for the enterprises. With e-invoice, the enterprise can save the cost, the time to carry out administrative procedures and to transport the invoice to the customers. In addition, the enterprises can also enhance the company’s reliability through e-invoice with an identification code of tax authority. Not only the enterprises but also the state is beneficial from the electronic invoice. The control and grant identification code for electronic invoice for each invoice help prevent the use of fake invoice or expired invoice or false invoice, repeated use of invoices when transporting goods for sale to deduct taxes. The regulations of officially apply the electronic invoice is one progressive innovation, catching up with the new trend of Industrial Revolution 4.0.

Below are some notable contents in the new Decree on electronic invoice when performing sale of goods and provision of services that the Enterprises should consider:

Firstly, what is the electronic invoice?

Electronic invoice (e-invoice) means an invoice which is represented in the electronic data form, is created by an organization or individual selling goods or providing services, shows information about these goods or services, digital signatures and electronic signatures as per the law by using electronic instruments, even including those invoices created by POS cash registers with network connections for transmission of electronic data to tax authorities.

E-invoice includes:

- Value-added invoice (apply to organizations and individuals performing sales of goods and provision of services that declare value-added tax by the credit method)

- Sale invoice (apply to organizations and individuals performing sale of goods and provision of services that declare value-added tax by the direct method)

- Other types of invoice including: e-stamps, e-tickets, e-cards, e-receipts, electronic ex-warehousing cum transport bill or e-documents which have other names but the same content of e-invoice.

Secondly, subject applying electronic invoice

Enterprises, economic organizations, other organizations shall use the e-invoice with an identification code of tax authority when performing sale of goods and provision of services regardless of the value of each sale of goods or provision of services.

Nevertheless, there still have some enterprises can issue e-invoice without an identification code of tax authority when performing sale of goods and provision of services regardless of the value of each sale of goods or provision of services. In detailed, they are the enterprises operating in the sector of: electricity, petroleum, post and telecommunication, air transport, road transport, rail transport, sea transport, inland water transport, clean water, finance and credit, insurance, healthcare, electronic commerce, supermarket business, commerce. In addition, enterprises or economic organizations, which have already transacted or will transact with tax authorities via electronic means, develop information technology infrastructure and use accounting software and e-invoicing software systems that meet the needs of e-invoicing and access to e-invoices, store e-invoice data in accordance with regulations and ensure the electronic data transfer to buyers and tax authorities can also use e-invoice without the tax authority’s identification code. Although, if the enterprises operate in the above sectors but pose high risks related to taxes shall be required to use e-invoices with the tax authority’s identification code for their provision of goods or services, regardless of value of each provision of goods or services. (The tax authority’s identification code inscribed in the e-invoice is composed of a transactional number which is a sole numerical series and a chain of characters which is invented by the tax authority based on the information provided by the seller on the e-invoice).

Specially, the business household or individuals keeping accounting records, regularly hiring at least 10 employees and earning the preceding year’s revenue which equals at least 03 (three) billion dong in the agriculture, forestry, aquaculture, industry or construction sector, shall be obliged to use e-invoice with the tax authority’s identification code for their provision of goods and services, irrespective of the value of each provision of goods or services.

The using of identification code will help increase the accuracy of the information and the level of credibility of the enterprises.

Thirdly, conversion of e-invoice into paper vouchers

The legal e-invoice may be converted to paper voucher but must ensure the correspondence between e-invoice and paper voucher after converting. Nonetheless, the paper voucher shall only be retained for book and monitoring purposes only in accordance with the law on accounting and the law on electronic transactions, and shall not be valid for use in transactions or payments, except for cases where invoices are created form POS cash register with network connections for electronic data transfer to tax authorities.

Fourthly, registration for use of electronic invoice

Enterprises, economic organizations, other organizations, business house hold, individuals shall register for the access to e-invoices with/without tax authorities’ identification codes at the Web Portal of the General Department of Taxation. From the date on which e-invoice with/without the tax authority’s identification code are used, enterprises, economic or other organizations, business households or individuals shall be bound to destroy paper invoices which remain unused (if any) in accordance with the regulations.

Fifthly, free provision of services related to e-invoices with tax authorities’ identification code

To encourage and support the entities using e-invoice, The General Department of Taxation shall not charge the following enterprises, economic organizations, business households or individuals when providing e-invoice services with tax authorities’ identification code:

1. Small- and medium-sized enterprises, cooperatives, business households and individuals that operate at areas facing socio-economic difficulties or extreme socio-economic difficulties;
2. Small- and medium-sized creative startups prescribed by soft laws and business households or individuals that are transformed into enterprises (except those stated in point a of this clause) within a period of 12 months after their establishment;
3. Business households or individuals. In case the business households, individuals are subject to the use of invoice with the tax authorities’ identification code shall not be charged within a period of 12 months from the month of use of e-invoices with tax authorities’ identification codes;
4. Other small- and medium-sized enterprises which are defined according to the requests of the People’s Committees of centrally-affiliated cities and provinces, and the regulations of the Ministry of Finance, except enterprises operating at economic zones, industrial parks or hi-tech zones;
5. Those falling into other cases in which they are entitled to incentive policies under the decision issued by the Ministry of Finance.

Therefore, from the date of November 1^st 2018 that the Decree no 119/2018/NĐ-CP comes into force, the business entities mentioned above shall execute the e-invoice as provided by the law. Even though in order to let the business entities have time to build the information technology infrastructure, also get familiar with the e-invoice, the Decree regulated that the enterprises, economic or other organizations, business households, and individuals shall be complete the using of e-invoice by November 1^st, 2020.

In case enterprises, economic organizations have informed the issue of e-invoices without tax authorities' identification codes or have registered the use of e-invoices with tax authorities' identification codes before the entry into force of this Decree, they shall be allowed to continue to use existing e-invoices from its effective date. Besides, in order not to waste the paper bill printed and also in order to enable the entities to adapt to the new regulations and prepare for the information technology infrastructure, if enterprises, economic organizations, business households or individuals that have informed the issue of externally printed or internally printed invoices or have purchased invoices issued by the tax authority for use before the entry into force of this Decree shall be entitled to continue to use these invoices until end of October 31, 2020 and send the database of invoice to the tax authority.

With respect to businesses newly established during the period from November 1, 2018 to October 31^th, 2020, if they haven’t meet the information technology infrastructure requirements, they shall use the externally printed or internally printed invoices or have purchased invoices issued by the tax authority until October 31^th, 2020 to build the information technology infrastructure.

 

 

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Viet Nam is the member of a number of FTAs having a remarkable effect

In the context of international trade as current, Viet Nam has been trying to access, negotiate and sign Free Trade Agreements with the states all over the world.

Vietnam’s effort must be mentioned from 1992 when Viet Nam joined in Treaty of Amity and Cooperation in Southeast Asia (TAC) and became Observer. After that, Viet Nam attended to annual ASEAN Foreign Minister’s Meeting. And in 1995, Viet Nam officially acceded to ASEAN and became the 7^th member of the organization.

Continue with the objective to strengthen the cooperation with other countries, in 1995, Viet Nam applied to join World Trade Organization (WTO). After 11 years of conducting the bilateral, multilateral negotiations and consultations, in 2006, WTO officially admitted Viet Nam to the organization. In 2007, National Assembly of Social Republic of Viet Nam ratified the participation of Viet Nam to WTO. Viet Nam became an official member of WTO from January 1^st 2007 and started to embark on the intensification, further promoting of international economic integration.

Beside Regional Trade Agreements, Free trade agreements (FTAs) are also becoming the trend  in globle in the future.Throughout the world, many governments have signed, are negotiating, or contemplating new bilateral, multilateral free trade agreements and investment agreements. And Viet Nam is not the exception of this trend. As of 2018, Vietnam has signed, implemented, and is negotiating total of 16 Free Trade Agreements (FTAs) both as ASEAN member and as independent party. 

Up to now, Viet Nam signed and implemented 10 FTAs, signed and now is waiting for ratification of 2 FTA, has just finished negotiating 1 FTA and is negotiating 3 other FTAs.

- Of the 10 FTAs that have been signed and implemented, 6 FTAs have been signed as ASEAN members (including AFTA, 5 FTAs between ASEAN and its partners China, South Korea, India, Japan, Australia and New Zealand), 4 FTAs signed as an independent party (Chile, Japan, Korea, Eurasia Economic Coalition).

- The two FTAs that have finished the negotiations are the FTA ASEAN with Hong Kong, and theComprehensive and progressive agreement for Trans- Pacific Partnership(CPTPP).

- Three FTAs being negotiated include the Comprehensive Economic Partnership Agreement (RCEP), the FTA with Israel and the FTA with the European Free Trade Association (EFTA including 4 states: Iceland, Liechtenstein, Norway and Switzerland).

- With respect to EU-Vietnam Free trade agreement (EVFTA), on December 1^st, 2015, the negotiation of the agreement has been concluded. On February, 1^st, 2016 the Parties released a written agreement. A new move of EVFTA has been unanimous. Accordingly EVFTA is separated into two agreements, one on trade and the other on investment. In the same day, the two Parties announced that the legal review of Trade Agreement finished. Although, with the Investment Protection agreement, both parties have just concluded the initial discussion.  

The most notable among FTAs in Viet Nam has to be mentioned are the Comprehensive and progressive agreement for Trans- Pacific Partnership(CPTPP) and EU-Vietnam Free trade agreement (EVFTA) because of the wide scope of commitment and the high preferential treatment. These two Agreements taking effect in the coming time are forecasted to strongly promote the economic development of Viet Nam especially in the field of import and export of goods and trade with foreign countries.

• Comprehensive and progressive agreement for Trans-Pacific Partnership (CPTPP)

CPTPP was officially signed in March, 2018 by 11 states including: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Viet Nam.

The CPTPP is seen as a strong message against the current protectionist trend in the world. This agreement will create one of the world’s largest free trade association with a market of 499 million people and the gross domestic product (GDP) of $ 10,100 billion, accounting for 13.5% of world’s GDP.

Under the CPTPP, Viet Nam committed to eliminate almost 100% of tariff lines, accordingly:

- 65.8% of tariff lines will have the tax rate of 0% right after the agreement comes into force.

- 86.5% of tariff lines will have the tax rate of 0% in the fourth year from the year that the agreement comes into force.

- 97.8% of tariff lines will have the tax rate of 0% in the eleventh year from the year that the agreement comes into force.

- The remained goods were committed to eliminating import duties with the schedule of maximum elimination of tariff duties in the sixteenth year or following the tariff rate quotas.

The CPTPP will come into force if at least 6 member states or half of CPTPP’s members have approved the Agreement. As of August 2018, 3 member states have approved CPTPP being Japan, Mexico and Singapore. Viet Nam is scheduled to approve CPTPP in October 2018.

• EU-Viet Nam Free Trade Agreement

The main field of commitment under EVFTA includes: Trade of goods, Rules of Origin, Customs administration and trade facilitation; Sanitary and phytosanitary measures (SPS); Technical barriers to trade (TBT); Trade remedies (TR); Cross-border trade in services; Investment; Competition; State-owned enterprises; Government procurement; Intellectual Property; Sustainable development (comprising environment and labor); Legal issues; Cooperation and capacity building.

Under EU-Viet Nam Free Trade agreement, EU committed to giving preferential treatment on the tariff for goods from Viet Nam following the schedule as below:

- Eliminate the tariff right after the Agreement comes into force with 85.6% of tariff lines equivalent to about 70.3% of Vietnam’s current export turnover to EU;

- After 07 year, EU will eliminate tariff with total 99.2% of the tariff lines, equivalent to 99.7% Vietnam’s current export turnover to EU;

- For about 0.8% remained tariff lines, EU will give Viet Nam with the import duties in tariff rate quotas of 0%

Recently, Prime Minister Nguyen Xuan Phuc has had a meeting with Bernd Lange, Chairman of Committee of International Trade of European Parliament (INTA) visiting Viet Nam. The two Parties said the documents of the Trade agreement are being completed by the authorities of Vietnam and the EU in order to soon sign the agreement by the end of this year.

The impact of Free Trade Agreements to Viet Nam

The Free Trade Agreements that Viet Nam has joined and implemented helped raise import, export turn over, attracting more foreign direct investment (FDI). Lots of foreign investors have had the plan to invest in Vietnam’s market with the total value of registered FDI capital is $307.86 billion with 23,737 projects (Statistical data as of July - 2017 published by the Ministry of Planning and Investment).

By the end of 2017, the implemented capital of foreign direct investment is estimated $17.5 billion, increasing by 10% over the same period of 2016 and hitting the record in the past 10 years. In 2017, there had 05 projects granted for investment certificate with the worth of billion dollars.

After joining ASEAN and WTO and after signing and implementing the FTAs with other countries, Vietnam's export and import activities have seen a lot of changes in the structure of commodities and in particular the trade balance has shifted from a heavy deficit to a relatively small deficit and surplus in recent years. The economic growth of Viet Nam in 2017 is remarkable with the total turnover of export and import goods exceeded 400 billion USD.

Chart: Exports, imports, trade balance of goods in Vietnam period 2005-2017

Source: General Department of Customs

Foreign transactions of Viet Nam are also recognized through the ranking of trade in goods of Viet Nam over the year. If export and import of goods of Viet Nam respectively ranked 50^th and 44^th in 2006 all over the world, in 2015, export increased by 23 levels, ranking at 27^th while import also increased by 16 levels in the total number of countries and territories around the world.

Moreover, with the great growth of Viet Nam’s economy in 2017, World Trade Forum ranked competing capability of Viet Nam at 55/137 increasing by 5 levels; World Bank ranked the business environment of Viet Nam at 68/190 countries and territories, increasing by 14 levels. 

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The information about FTAs that Viet Nam signed and has come into force, signed but hasn’t come into force and the unsignedare presented in the following boards.

1. FTAs were signed and came into effect

No	Agreement	Date of signing	Place of signing	Country members	Effective date
1	ASEAN Free Trade Area (AFTA)	January 28th, 1992	Singapore	10 members of ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Singapore, Thailand, Vietnam.	January 1, 1993
2	ASEAN- China Free Trade Area (ACFTA)	Framework agreement on comprehensive economic co-operation was signed on November 4th, 2002	Phnom Penh, Cambodia	ACFTA includes 11 members: 10 members of ASEAN and China	January 1st, 2010
		Agreement on Trade in goods (29/11/2004)	Laos		July, 2005
		Agreement on Trade in services (12/01/2007)	Cebu, The Philippines		July 1st, 2007
		Agreement on Investment (15/08/2009)	Bangkok, Thailand		February, 2010
3	ASEAN - India Free Trade Area	Framework agreement was signed on October 8th, 2003	Bali, Indonesia	11 members: 10 members of ASEAN and India	January 1st, 2010
		Agreement on Trade in goods ( 13/08/2009 and 24/10/2009)	Bangkok, Thailand and Hanoi, Viet Nam		January 1st, 2010
		Agreement on Investment  (12/11/2014)	Nay Pyi Taw, Myanmar		July 1st. 2015
		Agreement on service (13/11/2014)	Nay Pyi Taw, Myanmar		July 1st. 2015
4	ASEAN- Japan Comprehensive Economic Partnership (AJCEP)	April, 2008	At all member states	AJCEP includes 11 members: 10 members of ASEAN and Japan	December 1st, 2008, particularly Malaysia on February 1st, 2009
5	ASEAN- Korea Free Trade Area (AKFTA)	Framework agreement on comprehensive economic co-operation was signed on December 13th, 2005	Kuala Lumpur, Malaysia	AKFTA includes 11 members: 10 members of ASEAN and Korea	July 1st 2006
		Agreement on Trade in goods between ASEAN and Korea (24/08/2006)	Kuala Lumpur, Malaysia		July 1st 2006
		Agreement on Trade in services between ASEAN and Korea (21/11/2007)	Singapore
		Agreement on Investment between ASEAN and Korea (02/06/2009)	Jeju island, Korea
6	Vietnam- Japan Economic Partnership Agreement (VJEPA)	December 25th, 2008		Vietnam, Japan	October 1st, 2009
7	ASEAN- Australia/ New Zealand Free Trade Area (AANZFTA)	February 27th, 2009	Thailand	AANZFTA includes 12 members: 10 members of ASEAN , Australia and  New Zealand	January 1st, 2010
8	Vietnam- Chile Free Trade Agreement	November 11th, 2011	Honolulu, Hawaii, The United States	Vietnam, Chile	January  01st, 2014
9	Vietnam- Korea Free Trade Area (VKFTA)	May 5th, 2015	Ha Noi, Viet Nam	Vietnam, Korea	December 20th, 2015
10	Vietnam- Eurasian Ecconomic Union	May 29th, 2015	Kazakhstan	6 members: Vietnam, Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan	October 5th, 2016

2. FTAs were signed but have not come into effect yet

No	Agreement	Date of signing		Place of signing	Country members	Status
11	Comprehensive and progressive agreement for Trans- Pacific Partnership (CPTPP)	March 8th, 2018		Santiago Chile	CPTPP includes11 members: Canada, Mexico, Peru, Chile, New Zealand, Australia, Japan, Singapore, Brunei, Malaysia and Vietnam	Each Party is following its appropriate domestic procedures to ratify the Agreement
12	ASEAN- Hong Kong  Free Trade Agreement (AHKIA)		November 12th, 2017	Manila Philippines	AHKIA includes 11 members: 10 members of ASEAN and Hong Kong	Expected to take effect from January 01st 2019

3. FTAs not signed:

No	Agreement	Date of signing	Place of signing	Country members	Status
13	- Vietnam- EU Free Trade Agreement (EVFTA) - Invesment Protection agreement	The negotiations  was finished on December 2nd, 2015	Brussels, Belgium	Vietnam and the EU	This FTA has concluded the negotiation but not signed.
14	Vietnam- EFTA Free Trade Agreement	The negotiations were launched from May 2012		5 members includes Vietnam, Switzerland, Norway, Iceland and Liechtenstein	still under negotiation
15	Regional Comprehensive Economic Partnership (RCEP)	The negotiations were launched from May 9th, 2013		RCEP includes 16 members: 10 members of  ASEAN  and China, Korean, Japan, India, Australia, New Zealand	still under negotiation
16	Vietnam- Israel Free Trade Agreement	The negotiations were launched from December 2nd, 2015		Vietnam , Israel	still under negotiation

 

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Asia Business Consulting is a boutique consulting firm specializing in corporate establishment, legal and business advisory, tax and payroll compliance, HR administration, market research to multinationals investing in Vietnam. For further information or to contact the firm, please email This email address is being protected from spambots. You need JavaScript enabled to view it. or download the company brochure. You can stay up to date with the latest business and investment news in Vietnam by subscribing for our newsletters.

 

According to the Viet Nam Clean Energy Association, Viet Nam is one of the countries with the greatest amount of sun in the world's solar radiation map. On average, total solar radiation in our country ranges from 4.3-5.7 million kWh/m2. In the Central Highland and Southern Central, the number of sunshine hours is quite high, reaching 2,000-2,600 hours per year. Average solar radiation of 150 kcal/m2 lasts about 2,000-5,000 hours per year, with estimated theoretical potential of about 43.9 billion TOE.

Apart from natural conditions, enterprises also enjoy other benefits from the Government's approved policy. According to deision No. 11/2017/QD-TTg on incentives for the development of solar power projects in Viet Nam, effective from June 1, 2017 to June 30, this is as follows:

Incentives on investment capital and taxes

Mobilization of investment capital: Organizations and individuals participating in the development of solar electricity projects are entitled to mobilize legal capital from domestic and foreign organizations and individuals for investment in the implementation of solar power projects under the current law.

Import tax: Solar power projects are exempted from import duties on goods imported to create fixed assets for the project; complying with the current provisions of law on import tax and export tax on goods for production of projects being raw materials, supplies and semi-finished products which can not be produced at home.

Enterprise income tax: The exemption and reduction of enterprise income tax for solar power projects shall be the same as for projects in the field of investment incentives under the current tax law.

Land incentives

Firstly, solar power projects, transmission lines and transformer stations for connection to power grids shall be exempted from or be entilted for reduction in land use levies, land rents and water surface rents in accordance with the current law for projects in the field of investment incentives.

Secondly, based on the planning approved by the competent authorities, provincial people's committees shall create conditions for arranging land funds for investors to carry out solar power projects. Compensation and support for ground clearance shall comply with the current land law.

 Electricity selling price

According to decision No. 11/2017/QD-TTg, EVN is required to purchase all electricity from grid connected solar projects, the price of solar electricity for EVN will be 9.35 Uscent / KWh, significanty higher than the average retail price of $USD7.3 per kWh. Electricity prices are adjusted by the exchange rate of USD / VND (this price applies only to grid connected projects with the efficiency of solar cell, which is greater than 16% or module is greater than 15% .)

After the Government promulgated preferential policy for solar power, solar power has become a “fever”in Viet Nam. Investment in a few provinces extremely bustling. Especially in the South of Central Coast region which has great sunshine potential. Hundreds of projects of domestic and foreign investors are registered, the energy investment market is “hotter” than ever. Below are tables describing the status of solar power development in each province and an detailed list of current solar power projects: 

Table . Status of solar power development of each province in Viet Nam

	province	Number of investor	Number of project	Installed capacity(MW)	Status
					In operation	Under construction	Investment project	Under consideration
1	An Giang	1	1	210			1
2	Ba Ria – Vung Tau	1	1	100			1
3	Bac Lieu	1	1	300			1
4	Binh Duong	1	1	0.5	1
5	Binh Dinh	1	7	621.63		1		6
6	Binh Phuoc	1	1	200			1
7	Binh Thuan	15	15	888.72			15
8	Dak Lak	1	5	3467			1	4
9	Dak Nong	1	5	324.4			1	4
10	Dong Nai	1	1	126			1
11	Gia Lai	2	2	98			2
12	Ha Tinh	2	2	80			2
13	Hau Giang	2	2	71			2
14	Hue	1	1	35		1
15	Kon Tum	1	1	49			1
16	Khanh Hoa	10	12	712.765			12
17	Long An	1	1	100			1
18	Ninh Thuan	15	16	1063		5	11
19	Phu Yen	4	5	449.104			5
20	Quang Binh	1	1	49.5			1
21	Quang Ngai	3	3	218.808		1	1	1
22	Quang Tri	2	2	79.5			2
23	Son La	1	1	30			1
24	Tay Ninh	5	9	774			9
25	Thanh Hoa	1	1	160			1
26	Vinh Long	1	1	49			1
	Total	76	98	8,937.57	1	8	74	15

Customers can contact us via company email for:

 Full report on solar power projects in Vietnam;

 Purchasing solar power projects in Vietnam;

 Investment on solar power projects in Vietnam

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Asia Business Consulting is a boutique consulting firm specializing in corporate establishment, legal and business advisory, tax and payroll compliance, HR administration, market research to multinationals investing in Vietnam. For further information or to contact the firm, please email This email address is being protected from spambots. You need JavaScript enabled to view it. or download the company brochure. You can stay up to date with the latest business and investment news in Vietnam by subscribing for our newsletters.

 

After 12 years of implementation, Competition Law 2004 reveals many limitations, no longer appropriate with the practical development of socioeconomic of the country. As the result, on June 12^th 2018, Competition Law 2018 was issued replacing Competition Law 2004.

Featured content of Competition Law 2018 is the separation of economic concentration from Anti-competitive practices. And the government now try to control the economic concentration. Economic concentration includes the following categories:

- Merger of enterprises;

- Consolidation of enterprises;

- Acquisition of enterprises;

- Joint venture between/among enterprises;

- Other categories of economic concentration as per the law.

Besides, if Competition Law 2004 just based on one and only factor being market share to determine prohibited economic concentration, the new Law regulates that the determination of economic concentration must base on the nature of the behavior which is substantial anti-competitive effects caused or probably caused by economic concentration. Assessment Factors includes: market share; competitive advantage brought about by economic concentration in the relevant market; the ability of enterprises after the economic concentration for removing or preventing other enterprises from market entry or expansion; etc

In addition, Competition Law 2018 regulates that the maximum fine for violation of economic concentration regulations shall be 05% of the total turnover of violating enterprises on the relevant market in the fiscal year preceding the year of violation. Reduce 5% compared to the last regulation.

For unfair competition practices (defined as practices of enterprises’ competition acts performed by enterprises against the principles of good faith, honesty, business norms and standards, which cause or may cause damage to the legitimate rights and interests of other enterprises), new Law provides that the maximum fine for the violation of regulations on unfair competition shall be 2.000.000.000 (2 billion VNĐ). Unlike before, Competition Law 2004 stipulated generally that unfair competition practices shall be handled in accordance with the law on handling administrative violation.  

For other violations, the maximum fine shall be 200.000.000 VNĐ (2 hundred million VNĐ). Competition law 2018 will take effect on July 1^st 2019, contribute to ensuring the freedom of doing business, fair competition of entities on the market and enhance the national competitiveness. 

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Asia Business Consulting is a boutique consulting firm specializing in corporate establishment, legal and business advisory, tax and payroll compliance, HR administration, market research to multinationals investing in Vietnam. For further information or to contact the firm, please email This email address is being protected from spambots. You need JavaScript enabled to view it. or download the company brochure. You can stay up to date with the latest business and investment news in Vietnam by subscribing for our newsletters.

 

Technology transfer refers to the transfer of the ownership or the right to use a given technology from the party that has the right to transfer such technology to the transferee. As such, transferee will have the right to use all the skills, pieces of knowledge, technologies, production methods and product samples ... of the transferor.

Technology transfer shall be executed through Technology transfer Agreement, and this agreement must be concluded in writing or in any other forms of equivalent value. The agreement must be signed and sealed (if any) by the parties; all pages of the agreement or its appendixes must be initialed and sealed (if any).

Article 31, Law on Technology transfer, issued on June 9^th, 2017 and taking effects on July 1^st ,2018 provided that there have 3 cases of technology transfer that must be registered with competent authority on science and technology, including:

“(a) Transfer of technology from a foreign country to Vietnam;

(b) Transfer of technology from Vietnam to a foreign country;

(c) Domestic technology transfer with use of state funding or state budget, excluding cases where Certificate of registration of science and technology task outcomes is available”.

In order to apply the regulations in practice, recently, Decree no 76/2018/NĐ-CP of the Government has been issued, detailing and guiding the implementation of a number of articles of Law on technology transfer. This Decree took effects on the same day as the Law on Technology transfer. Specifically, The Decree regulated the responsibility of registration of technology transfer belongs to transferee in the case of transfer of technology from a foreign country to Vietnam and Domestic technology transfer. In the event of transfer of technology from Vietnam to a foreign country, the transferor shall on behalf of the parties, submit the dossier for registration of technology transfer to the agency competent to grant the Certificate of registration of technology transfer.

Besides, Decree no 76/2018/NĐ-CP also provides guidance for payment method and for transferor and transferee to determine the price for technology transfer. Accordingly, parties of technology transfer transaction can choose 1 in 5 payment methods, such as:

- Payment based on net turnover (determined as the total turnover from the sale of product or service generated by transferred technology minus deduction from turnover, including discounts on trade, selling price discounts and goods returned); or

- Payment based on profit before tax (determined as the total turnover minus total reasonable cost to produce the product, service on sale in which technology transfer is applied. Parties can agree to use the method of payment based on profit after tax);

...

Moreover, Law on Technology transfer 2017 is more open than the Law on Technology transfer 2006, accordingly, the old one regulated that in case the technology transfer transaction is executed in Viet Nam, the parties must make a contract in Vietnamese. But now, the language used in the agreement shall be agreed upon by the parties according to Law on Technology 2017 and the Law don’t require agreement in Vietnamese anymore. 

 

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