Improved Legal Environment Will Boost Vietnam Despite Possible Failure of TPP
After Donald Trump, the US president-elect issued a note of intent to withdraw from Trans-Pacific Partnership (TPP) trade deal, there is a question raised on the attraction of FDI into Vietnam: would foreign investors continue to flood to Vietnam to set-up company?
Vietnam as well as other countries has delayed TPP ratification awaiting for the approval of the US because it has been assured that TPP would be meaningful if only the US is a member and if TPP is ratified, Vietnam will attract large volumes of FDI capital.
Nevertheless, there are opinions that Vietnam will continue to grow and attract FDI remarkably regardless of TPP approval from the US.
Vietnam has recently signed a number of trade agreements with other nations and territories which could attract foreign investments into Vietnam in the coming years. For the US, there is a potential that instead of TPP, the US would negotiate and conclude other bilateral trade agreements with Vietnam.
Vietnam might attract foreign investment capital through TPP and this statement could not be denied. Therefore, in the process of speedy preparation to welcome TPP, Vietnam has changed the legal policies and regulations to adapt to TPP Agreement. A number of newly passed laws have been considered that improve the rights and benefits of private enterprises in Vietnam such as Civil Code, Law on Investment, Law on Public Investment, Law on Environmental Protection, Labour Code… The new legal framework will create more opportunities in the process of international economic integration for Vietnam, encouraging foreigners to invest and set-up business in Vietnam.
In conclusion, TPP, despite the potential for not being approved by the US would not significantly negatively impact Vietnam. Besides the continuously improved legal environment, Vietnam still has its own value in competitive labour, growing number of mid income earners, and stable government to attract investment.
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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 may not issue securities to mobilize capital.
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.
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.
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