Capital from China’s ‘Ring Road and Route’ Is Coming to Vietnam

China's belt road project is coming to Vietnam

 In response to the China Government’s initiative to build the 21stCentury Silk Road running across the Eurasian, the Chinese’s construction enterprises are actively coming to Vietnam.

Chairman of the Hong Kong Trade Development Council (HKTDC) Vincent HS Lo has just led a delegation of 40 investors and experts to visit Hanoi and Ho Chi Minh City. The delegation includes large domestic firms (including Hong Kong) in the fields of finance, consulting, architecture, energy, water and waste treatment, engineering and construction, law and accounting, transportation…

According to Mr Vincent HS Lo, the delegations have goal to invest in areas that specially focusing on the implementation of the “Ring Road and Route”, which is implemented by the Chinese government to develop the infrastructure of the area. Vietnam is determined locating in a critical position to invest in infrastructure, so that is the key to promote trade and commerce among nations.

The delegation also has meeting with Prime Minister Nguyen Xuan Phuc, Minister of Planning and Investment Nguyen Chi Dung, Deputy Minister of Transport Nguyen Hong Truong and leaders of Hanoi and Ho Chi Minh City. Along with that, they also have meetings with many Vietnamese businesses, including big names such as Van Thinh Phat Investment Group or Sunny World Real Estate Development Company.

According to Mr Johnson Choi – CEO of Sunwah Group, with a very flexible policy of the Government of Vietnam, he believes that investment in infrastructure in Vietnam is quite feasible in comparison with other countries in Asia. Together with many businesses introduced by the HKTDC, Sunwah will work with other partners to express special interest in the 1,000 km North-South Expressway project.

Also according to Mr Choi, the Vietnamese Government is showing their support to businesses as committed. Compared with other countries in the region, the liquidity of the Vietnamese currency is at a better level. Over the past twenty years, Chinese investors have moved overseas remittances to Hong Kong quite easily.

Chairman of HKTDC Mr Vincent HS Lo believes that businesses in Hong Kong and China will have strength on infrastructure investment and set-up company in Vietnam thanks to the abundant capital and good experience. Hong Kong is the financial center of the world, so it’s easy for them to raise funds from everywhere to invest. At the same time, they have experience in most services, from consulting to construction and operation.

According to Mr Vincent HS Lo, businesses in Hong Kong and China are open to the investment and cooperation models with Vietnamese enterprises. However, the Chinese are particularly interested in the form of PPP. At the same time, the joint venture model is also considered more than the 100% capital investment to take advantage of local market knowledge of Vietnamese enterprises.

On May 14th, Chinese President Xi Jinping hosted the “Ring Road and Route” forum, with nearly 30 leaders in the world. This is an action to promote the “Ring Road and Route” initiative, in order to revive the “Silk Road” connecting Asia and Europe. Accordingly, Credit Suisse Group forecasts that China could pour more than 500 billion USD into 62 countries over the next five years to implement plans to promote its soft power.

How ANT Consult Could Help Your Business?

Please click here to learn more about ANT Consult Civil Matters Practice or contact our lawyers in Vietnam for advice via email  ant@antconsult.vn or call our office at +848 35202779

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Assistance in Setting-up Business Venture

To help Clients start business in Vietnam, ANT Consulting introduces the service to assist in setting up business venture in Vietnam.

Foreign investors could make direct investment in Vietnam through setting up one hundred per cent (100%) capital of foreign investors, or establishing joint venture between domestic and foreign investors, or  investing in the contractual forms of: BCC, BO, BTO, and BT

Types of enterprise for foreign investors to invest in Vietnam are as following:

a)     Limited Liability Company 

A limited-liability company may not issue securities to mobilize capital.

b)     Joint Stock Company

The main difference between Joint Stock Company and Limited Liability Company is the Joint Stock Company can raise funds by offering shares or securities.  In addition, an enterprise tends to join the Stock exchanges or public company must be a Joint Stock Company.  Management system of Joint Stock Company is more complicated than Liability Company.

c)     Partnership

Unlimited liability partners must be individuals who shall be liable for the obligations of the company to the extent of all of their assets.  Limited liability partners shall only be liable for the debts of the company to the extent of the amount of capital they have contributed to the company.

d)     Representative Office of foreign trader

Representative Office is not allowed to directly conduct profit making activities in Vietnam (i.e: the execution of contracts, direct payment or receipt of funds, sale or purchase of goods, or provision of services)

e)     Branch of foreign trader

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.

f)      The investing measures by signing contracts

Business co-operation contract (BCC) means the investment form signed between investors in order to co-operate in business and to share profits or products without creating a legal entity.

Build-operate-transfer contract (BOT) means the investment form signed by a competent State body and an investor in order to construct and operate commercially an infrastructure facility for a fixed duration; and, upon expiry of the duration, the investor shall, without compensation, transfer such facility to the State of Vietnam.

Build-transfer-operate contract (BTO) means the investment form signed by a competent State body and an investor in order to construct an infrastructure facility; and, upon completion of construction, the investor shall transfer the facility to the State of Vietnam and the Government shall grant the investor the right to operate commercially such facility for a fixed duration in order to recover the invested capital and gain profits.

Build-transfer contract (BT) means the investment form signed by a competent State body and an investor in order to construct an infrastructure facility; and, upon completion of construction, the investor shall transfer the facility to the State of Vietnam and the Government shall create conditions for the investor to implement another project in order to recover the invested capital and gain profits or to make a payment to the investor in accordance with an agreement in the BT contract.

Foreign investors may sign BOT, BT and BTO contracts with a competent State body to implement infrastructure construction projects in Vietnam. Typically, the contracts are for projects in the fields of transportation, electricity production, water supply, drainage and waste treatment.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +8428 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Benefits of Setting Up Company in Ho Chi Minh City

Ho Chi Minh City is considered as Vietnam’s economic hub. During the long history of foundation and development, the city’s economy is growing constantly and motivating the development of the country.

The city is therefore considered as a potential investment environment for domestic investors as well as foreign investors. The investment through establishing companies and conducting business activities in Ho Chi Minh city certainly promises to achieve multiple benefits. These benefits come from the following reasons.

First, Ho Chi Minh City has strategic location advantage in Vietnam. Southeast Asia Region, Ho Chi Minh City is 1,700 km south of Hanoi, 297 km east of Phnom Penh, Cambodia, 881 km east of Bangkok, Thailand.

Food, glass, textiles, paper products, plastics, chemicals, building materials and machinery are produced here. Ho Chi Minh City accounts for 20% of total gross domestic product (GDP), 30% of industrial production and 40% of export products of Vietnam. The city also accounts for 33% of the national budget and 60% of foreign investment flows into the region. In the past few years, the economy have been grown at a rate greater than 10% (6% to 8% nationally).

Second, Ho Chi Minh City is home of  well – qualified, abundant and young human resources.

With a population of more than 8 million, accounting for more than 10% of the total Vietnamese population, Ho Chi Minh City itself has potential employment market to make any business investment. The work force in Ho Chi Minh City was estimated to reach 4.7 million people in 2012, making up more than 50% of the total population of the city. The percentage of trained labor increased from 40% in 2005 to 55% in 2010 and was forecast to reach 70% in 2015. The percentage of labor source holding postgraduate degree is also increasing year by year and most of them tend to stay in the city after holding degrees. Ho Chi Minh City is also home to more than 80 universities and colleges, vocational schools with over 400,000 students providing an abundant trained work force.

With the above – mentioned abundant labor force, any companies set up in Ho Chi Minh City can easily recruit suitable employees in a short time..

Third, the city has modern and high infrastructure system. Namely, when setting up company in Ho Chi Minh City, the owners will benefit from the modern and comprehensive infrastructure system.

Tan Son Nhat Airport is the largest airport in the country with the capacity to accommodate 20 million people a year. From Tan Son Nhat Airport, there are 50 routes to other countries all over the world such as China, Japan, Korea, Singapore, European countries, etc.

Saigon Port serves as a gateway to the Mekong River Delta, the South China Sea (83 km away from the sea) and the Asia continent. The port has a total area of 500,000 m2 with 5 terminals meeting the international standards, and it handles about 8.3 million tons of cargo annually. Throughout the history of foundation and development of Saigon, Saigon Port plays an important role in making Ho Chi Minh City a flourishing trading center. It accounts for a fifth of the nation’s Gross Domestic Product and almost a third of its industrial production.

Ho Chi Minh City is also home to industrial zones. According to the statistics of Cushman & Wakefield, the city has 18 industrial parks that are operating with a total area of 3635 ha. When investing in such industrial zones in Vietnam, enterprises can benefit from various incentive policies such as low rate tax or other incentive policies.

Telecommunication and information technology in the city is modern. The system of post and telecommunication in Ho Chi Minh meets international standard, providing fast, reliable and high quality services such as ADSL, rapid data transfer, wide broadband MAN. The Internet service in Ho Chi Minh city is also among the cheapest in the world.

Besides, the city is also considered the best working conditions. Enterprise will not be fear that it is not enough place for working. The city with the system of offices provide ideal working environment for all investors.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Advisory
• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +8428 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Set-up Limited Liability Company in Vietnam

Limited Liability Company is a form of enterprise which is established by contributing of members.  A member shall be liable for the debts and other property obligations of the enterprise within the amount of capital that he/she has undertaken to contribute to the company.

Limited liability companies are regulated by two types:

• One member Limited Liability Company is an enterprise owned by one organization or individual;
• Limited Liability Company with two or more members is an enterprise owned by organizations or individuals, in which the number of members shall not less than two members and not exceed fifty.

Organizational and management structure of Limited Liability Company normally comprise of a Member’s Council, General Director or Director.

A limited-liability company established by foreign investors may take the form of either:

• 100% foreign-owned enterprise (where all members are foreign investors); or;

• foreign-invested joint-venture enterprise between foreign investors and at least one domestic investor.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Advisory
• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +8428 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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From 3/9, import duties of 10% for cash transport vehicles.

Ministry of Finance has just issued Circular No. 119/2012/TT-BTC amending and supplementing Circular No. 157/2011/TT-BTC issued the export tariff, import tariff preferences under the list of goods subject to tax.

Accordingly, from September 3rd 2012, imported cash transport vehicles enjoy the preferential import tax of 10%.

Under Circular 119, the Ministry of Finance add group of cash transport vehicle (Group 98.23) in the Preferential Import Tariff according to the list of taxable goods, issued together with Circular No. 157. Tax rates for this group is 10%.

Conditions for this category to enjoy preferential import tariffs is: a written confirmation of the State Bank of Vietnam on ensuring standards for cash transport vehicles regulated by the State Bank of Vietnam. Using cash transport vehicles are the State Bank of Vietnam and its subordinate units, the credit institutions, State Treasury and the Vietnam Development Bank.

Enterprises that import cash transport vehicle when importing, in addition to the general rule documents for import goods, shall present to the customs authorities the certificate of the State Bank of Vietnam on the vehicles meet the standards os cash transport vehicle in accordance with the State Bank of Vietnam.

For lots of cash transport vehicle imports from August 1st 2012 onwards if they meet the conditions of the object and have certification by the State Bank of Vietnam on the sufficient conditions for cash transport vehicles shall be classified and taxed imported under the provisions of Circular 119.

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