Distinguish Assignment of Industrial Property Rights And the Licensing of Industrial Property Rights

According to Law on Intellectual Property in Vietnam, industrial property rights means rights of an organization or individual to inventions, industrial designs, designs of semi-conducting closed circuits, trademarks, trade names and geographical indications, trade secrets which such organization or individual created or owns, and the right to prevent unfair competition.

Accordingly, these rights may be transferred to other organizations and individuals that are not creators or owners of those objects. Transfer of industrial property rights includes two types of “assignment of industrial property rights” and “licensing of industrial property rights”.

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The assignment of industrial property rights means the transfer of ownership right by the owner of such industrial property right to another organization or individual. It means assignor shall have to transfer all the rights of the industrial property object to assignee and after the two parties complete the transfer procedure, assignee shall be fully entitled to make decisions upon that industrial property object. However, when transferring, the parties should pay attention to the following matters: (i) Industrial property right owners may only assign their rights within the scope of protection; (ii) Rights to geographical indications shall not be assignable because this object is physical and cannot be moved; (iii) Rights to trade names may only be assigned together with the transfer of the entire business establishment and business activities under such trade name for instance under merger and acquisitions; (iv) The assignment of the rights to marks must not cause confusion as to properties or origins of goods or services bearing such marks (v) Rights to marks may only be assigned to organizations or individuals who satisfy conditions for persons having the right to register such marks.

Licensing of industrial property objects means permission by the owner of such industrial property object for another organization or individual to use the industrial property object within the scope of the owner’s right. Unlike assignment, licensing of rights is when the owner of industrial property object temporarily grant rights to other organizations and individuals to use their industrial property objects for a definite period of time. Licensing of industrial property rights also has certain restrictions such as (i) The right to use geographical indications or trade names shall not be licensable; (ii) The right to use collective marks must not be licensed to organizations or individuals who are not members of the owners of such collective marks; (iii) The licensee must not enter into a sub-license contract with a third party unless allowed by the owner; (iv) Mark licensees shall be obliged to indicate on goods and goods packages that such goods have been manufactured under mark license contracts; (v) Invention licensees under exclusive contracts shall be obliged to use such inventions in the same manner as the invention owners.

Accordingly, the parties need to understand the purpose, scope and object of transfer of industrial property rights, and thereafter sign corresponding agreements being being assignment of industrial property rights or licensing of industrial property rights. Copyright, trademark, patent lawyers could be of help to provide consultancy and legal advice to ensure the rights and obligations are clearly spelled out to avoid potential dispute in Vietnam during the transfer of industrial property rights.

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Regulations on Pay to Employees Working During Lunar New Year Holiday

Under the provisions of Article 106.1 of the Labor Code 2012, overtime is a period of work outside normal working hours prescribed by law or according to a labor agreement or regulation. Depending on the needs and agreement of the two parties, the enterprise may request employees to work overtime during lunar new year (Tet) holiday, but must not exceed 12 hours in a day and must pay overtime as prescribed by law.

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According to Article 25 of Decree No. 05/2015 / ND-CP, the salary for overtime work on lunar new year holiday for employees is prescribed as follows:

An employee who works overtime in the daytime of the lunar new year holiday is entitled to at least 300% of the normal day salary, excluding the salary on that new year holiday if the employee receives wages.

Employees who work overtime at night during lunar new year holiday, apart from enjoying 300% of the normal daily salary, excluding the salary, if the employee receives a daily salary, the employee is also paid at least 30% extra of the average daily wage, and 20% extra of the of the lunar new year holiday pay rate.

In particular, night working hours are calculated from 10:00 p.m to 6:00 a.m of the following day.

For employees who work overtime on the same day as lunar new year holiday, they shall receive overtime pay according to lunar new year holiday; if the lunar new year holiday is the same as a weekly holiday, pay overtime is same as pay for work in weekend.

In addition, when making overtime workers, the enterprise must pay attention to the maximum number of overtime hours a day and must organize compensatory leave for employees as prescribed in Article 106 of the Labor Code and Article 4. Decree 45/2013/ND-CP.

Our lawyers with specialization in labour matters always monitor the changes in law to provide regular update to client.

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Vietnam and Japan Signed 12 Cooperation Agreements

The Secretary General of Liberal Democratic Party of Japan, the President of Japan – Vietnam Friendship Parliamentary Union- Nikai Toshihiro, on January 12th, 2020 met with the Vietnam’s Prime Minister- Mr. Nguyen Xuan Phuc in Hoi An to discuss economic, cultural and tourist exchange topics.

At the meeting, the representative of Vietnam welcomed the Japanese delegation to come and exchange of economic, cultural and tourism exchanges of the two countries. The representative of Vietnam affirmed that Vietnam appreciate the cooperation with Japan, especially in economic matters. At the moment, Japan is the top country with FDI in Danang in particular and Vietnam in general. The Japanese investors set up company, obtain investment registation certificate and invest in various business lines including IT, trading, real estate, design consultancy, engineering. Based on the cooperation between the countries, Vietnam and Japan have achieved many positive effects on the economy, education, culture, social security.

The representative of Vietnam confirmed that the relationship between the countries developed into many fields as “extensive strategic partnership for peace and prosperity in Asia” established in 2014, in which, Japan always is the trustful, important partner of Vietnam.

The representative of Japan expressed his pleasure to visit Vietnam in the beginning of 2020. He said that the organization of the delegation has the largest scale ever with more than 1,000 delegates, and diverse members from National Assembly deputies, representatives of ministries, branches, local leaders, businesses and people of Japan showed high interest and consensus within Japan from the National Assembly, the Government, localities, business community and people towards strengthening and deepening friendly and cooperative relations with Vietnam in the coming time.

By this meeting, the representatives of the two countries witnessed the signing and exchange of 12 cooperation documents, memorandums of understanding between ministries, branches, localities and businesses of the two countries. By these cooperation documents, the two countries hope that in the future, they will cooperate more together in all aspects of culture, education, economy and society to realize their construction goals and develop the countries.

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Hanoi Topped the Country in Attracting FDI after 7 Months

The Foreign Investment Agency (Ministry of Planning and Investment) has recently released the data on foreign direct investment (FDI) activities in Vietnam in the first 7 months of 2018, in which Hanoi is the province that attract the most FDI with the total registered capital of 6.17 billion USD, accounting for 26.9% of total investment. It shows that Hanoi is an attractive destination for foreign investors

With a total registered capital of 6.17 billion USD, accounting for 26.9% of total investment capital in 7 months, Hanoi surpassed the second place with 4.12 billion USD registered capital of Ho Chi Minh City (accounting for 17.9% of the total investment capital), Ba Ria – Vung Tau with the total registered capital of 2.15 billion USD, accounting for 9.4% of the total investment capital.

To achieve these results, in the past 7 months there have been many large-scale projects registered to invest in Hanoi. Among them is the “smart city” project in Hai Boi commune, Vinh Ngoc district, Dong Anh district, Hanoi with a total investment of 4,138 billion USD invested by Sumitomo Corporation (Japan); The Lotte Mall Hanoi project, with a registered capital of 600 million USD, which is invested by a Korean investor in Hanoi with the goal of building a high-end international standard complex comprising of shopping centers, hotels, offices, apartments for short-term business travelers.

At the conference “Hanoi 2018 – Investment and Development Cooperation”, Hanoi also handed over the decision approving the investment policy and investment registration certificates for 71 projects, with total investment capital of more than 400,000 billion VND (nearly 20 billion USD). Of which, there are 11 FDI projects with a total capital of more than 130 trillion VND (5.428 billion USD). This is a very impressive achievement, the result of the best foreign investment attraction so far and the hallmark of Hanoi in the work of attracting FDI.

According to the Hanoi Statistics Office, in the first 7 months of 2018, the production and business situation of foreign-invested enterprises still maintained a growth rate of 14,791 billion VND, equivalent to 48.3% of the plan, increase by 3.6% over the same period in 2017. This also shows that the prospect of attracting investment in Hanoi in the coming time will continue to flourish.

According to the Foreign Investment Department, across the country, in the first 7 months of 2018, foreign investors have invested in 17 industries, of which the processing and manufacturing sector attracts the most attention of foreign investors with a total of 9.63 billion USD, accounting for 41.95% of the total registered capital. The real estate business ranks second with total investment capital of 5.6 billion USD, accounting for 24.4% of total registered capital. The third is wholesale and retail sector with a total registered capital of 1.69 billion USD, accounting for 7.4% of total registered capital.

In addition, in 7 months, 96 countries and territories have invested in Vietnam. Japan ranked first with total investment of 6.88 billion USD, accounting for nearly 30% of total investment; Korea ranked second with total registered capital of 5.46 billion USD, accounting for 23.8% of total investment in Vietnam; Singapore ranked third with total registered capital of USD 2.73 billion, accounting for 11.9% of total investment capital…

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Anti-dumping Law: The Basic Concepts

1. What is dumping?

In international trade, dumping is a phenomenon occurs when a commodity is exported at a price lower than the selling price of that item in the domestic market of the exporting country. Therefore, it is simple to understand that if the export price of a commodity is lower than its domestic prices, the product may be considered to be dumped.

2. Why is dumping?

There are many causes of dumping in international trade. In fact, there are many cases that seller deliberately dumping in order to achieve certain benefits such as: Dumping to eliminate competitors in the import market to become monopoly and gain market share; Selling at low price to acquire foreign currency… Sometimes, the dumping is reluctant because the manufacturer and exporter cannot sell product, the production is stalled then the long-term storage products could be corrupted… Hence, they have to sell off to recover capital.

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In international trade, the anti-dumping tax may be imposed without regarding to the reason why the manufacturers dumping. Dumped into foreign markets is often perceived as a negative phenomenon because it reduces the competitiveness of prices and the market share of domestic products of importing countries.

However, dumping can have positive impacts on the economy: consumers benefit from low price goods; if dumped goods are inputs of other manufacturing sector then the low raw material prices can make certain growth of that industry… Therefore, not all acts of dumping will be applying the anti-dumping measures.

As regulated by the World Trade Organization (WTO), the anti-dumping measures can only be applied in certain circumstances and must meet certain conditions. Specifically, the anti-dumping measures are applied only when the following three conditions are met: The imported goods are dumped; the manufacturing sector of similar products of the importing countries is significantly affected; there is a causal relationship between the dumping of imports goods and losses mentioned above

3. The anti-dumping tax?

The anti-dumping tax is the additional taxes besides the normal import tax, which is imposed on foreign products that are dumped into the importing country. This type of tax is to prevent dumping and eliminate the damages caused by the dumping of imported goods. In fact, the anti-dumping tax is used in many countries as a form of “legal protection” for its domestic production. In order to prevent the abuse of this measure, the WTO member countries have together agreed on the provisions required to comply regarding the investigation and imposition of anti-dumping tax, concentrated in an Agreement of the WTO on anti-dumping, which is the ADA Agreement.

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Mavin Pledged to Invest 80 Million USD in Nghe An

Mavin Group (Australia) has operated in Vietnam for a long time and now they do not hide their ambition to expand investment and set up business in Vietnam.

In February 2017, Mavin Group inaugurated an animal feed production factory in Nghe An. This plant has a total investment of 15 million USD, which is built on an area of 3.6 ha and has a capacity of 300,000 tons per year.

Mavin Group has invested in Vietnam for more than 12 years and now has production facilities in 7 provinces and branches, warehouses in 19 different provinces in the country. However, up to date, Nghe An is the only province that Mavin plans to invest in 4 separate projects with a total investment of 80 million USD.

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In addition to the inaugural animal feed factory, Mavin Group plans to deploy 3 more projects in Nghe An.

In April 2017, Mavin Group was granted a license to invest in a 18 million USD hi-tech pig farm, built on an area of ​​100 hectares. Subsequently, the Mavin Group plans to invest in a Veterinary Research Center. At the same time, conducting a feasibility study to invest in a food processing plant that may be launched by 2018. The project has a total investment of 25 million USD, built on an area of ​​5 hectares, capacity of 200,000 tons/year. This factory will produce products made from meat, sausage, ham and other traditional meats… serving the domestic market and exporting to Laos and Cambodia.

According to the Chairman of the group, Mavin Group before making investment decision always consider 6 issues that are: human resources; market; geographic factors; political issues (attention, government support, security…); incentive policy and transparency.

In addition, representatives of the Mavin Group expressed their satisfaction when investing in Nghe An. Moreover, they also suggested that investors should choose to invest in Nghe An not only because of favorable geographic location, synchronous facilities, great source of human resources but also highly supported from province leaders with great investment incentives.

According to the representative of Vietnam – Singapore Industrial Park (VSIP) in the Central and South regions, recently many local and foreign investors have come to Nghe An seeking investment opportunities.

Previously, in September 2015, VSIP Nghe An was officially started construction with a total area of 750 hectares. After more than a year of land handover, up to now, VSIP Nghe An has now leveled and built complete infrastructure for about 100 hectares of industrial land area in phase 1A. The wastewater treatment system, clean water supply, power supply, fire prevention and protection have been completed and ready to serve investors in production.

More than 90 companies from many countries and territories have come to find out information and investment opportunities at VSIP Nghe An and 10 companies have signed investment commitments with total investment capital of over 400 billion VND. By the beginning of September 2017, some companies have received land handover and started plant construction. In which, the first factory was officially put into operation. It is expected that by the fourth quarter of 2017, two more companies will come into operation, attracting about 1,000 workers.

It is known that VSIP Nghe An is the 7th project that VSIP deployed in Vietnam. Previously, in addition to 2 VSIP projects in Binh Duong, there are projects in Bac Ninh, Hai Phong, Quang Ngai and Hai Duong. Currently, VSIP’s projects attract a total of 720 investors from 30 countries and territories with total domestic and foreign investment of 9.2 billion USD, creating jobs for about 180,000 workers.

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Intellectual Property and Trademark Registration in Vietnam

Trademark is a sign for consumers to identify the goods or services of each company from those of others.

In Vietnam, many businesses today have not paid sufficient attention to trademark protection. Only when their trademarks would be infringed by other companies or competitors, they really concern to protect their trademarks and business through trademark registration, trademark opposition or take further actions. Such situation will negatively impact the business financially.

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Trademark rights will be protected within the national territory, therefore when a trademark has been registered in Vietnam, it will be protected in Vietnam. If one company wishes their trademarks to be protected in other countries, it could:

-Directly register in each country or

-Register via the Madrid International registration by filing a single application which indicates the registrations at respective countries.

If registered under the Madrid International, firstly, trademarks must have been submitted trademark applications or have registered in Vietnam, depending on whether the country for protection is under the Madrid Protocol or the Madrid Agreement.

Law on Intellectual Property and its related documents could also be referred to for further information.

ANT Lawyers’ services in the field of trademark registration advice covers:

-Look-up, assess and consult possibilities to register trademark in Vietnam and abroad;

-Represent clients in applying for certificates of trademark registration, record modification, extend degree of trademark protection in Vietnam and abroad;

-Evaluate the effectiveness of the certificate of trademark registration and the possibility of trademark rights violation;

-Implement of the protected trademark rights: investigate, monitor, negotiate, seek arbitration or initiate a lawsuit or request other competent agencies for handling of infringement in Vietnam and abroad;

-Negotiate, draft, evaluate and register the of changing trademark ownership in Vietnam and abroad;

-Advise on building strategies, brand development;

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How to Protect Business Secrets through Non-Disclosure Agreement (NDA)

In business or production process, individual or organization being may have to share its business secrets with others. Legal solution for this situation is to enter into a Non-Disclosure Agreement agreement (NDA).

Non-Disclosure Agreement (NDA) are often used by inventors or companies when sharing business ideas, sample products which have just been created, patent and many other business secrets. This disclosure’s purpose is to explore the possibilities to cooperate, manufacture; to commercialize a particular product in relation to another company when seeking licensing contracts, financial source to develop a product; to deploy a business secret, to enter into a Merger and Acquisition transactions, or to create binding obligations on employees if they know or are known secrets of the company they are working for.

What does the content of the Non-Disclosure Agreement (NDA) include?

NDA should begin with a clear statement of who the owner’s non-disclosed information is (owner); party who receives non-disclosed information (recipient); identify non-disclosed information and the reason for disclosing such information to the recipient. The most important thing of NDA is to identify the scope of non-disclosed information or confidential information to avoid the parties in dispute if one party discloses certain information. Another thing to keep in mind is that the NDA can achieve the purpose of the parties when stipulating clearly how the recipient has to protect that information and what is allowed or not allowed to do with that information. In particular, it is necessary to detail that the recipient has to take responsibilities if they violate the information security obligations specified in the NDA.

Besides, the parties may agree to a reciprocal NDA. Sometimes, the source of information is two-ways, both parties will then disclose confidential information to each other, for example when the two parties form a joint venture, or have intention of acquiring the target company through M&A. Accordingly, NDA will refer to the agreement of formation a joint venture, M&A which clearly states that which confidential information two parties will share, what are the rights and obligations of the two parties.

Of course, the best way to keep a secret is to not tell anyone. However, this is not always possible in the collaboration world when shared economy is thriving in Vietnam. If the owner needs to share business secrets, they could sign with the recipient an non-disclosure agreement or contract to avoid unfortunate circumstances.

Lawyers at ANT Lawyers could help clients to create NDA in various business transactions in M&A, joint venture, IP commercialization, labour to address the needs of business requirements in Vietnam.

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Danang city Meeting the First Korean Consul General in Central Region

On December 16th, 2019, Danang City held a meeting with the new Korean Consul General Mr. Ahn Min Sik, the first Korean consul general in Central Region of Vietnam.

Currently, Danang is a city that attracts a large number of Korean people to travel, live and invest to set up company. Therefore, the establishment of the Korean General Consulate in Danang is an opportunity to further expand the friendly relationship between the two countries.

In addition, the representative of Danang city also expressed his desire to attract more Korean investors in such fields as tourism, high technology, information technology and other industries. And the city has also leveraged the strengths and advantages in socio-economic development of the city in recent years. The city also hopes that the establishment of a Korean General Consulate in Danang will contribute to boosting many investors from Korea into Danang and contribute to increasing the number of Korean tourists to the city.

Mr. Ahn Min – Sik’s important tasks during his mission was to promote the attraction of Korean investment into Central of Vietnam including Danang. At the same time, further promote cooperation on the field of tourism between the two countries. According to ambassador Mr. Ahn Min – Sik, nowadays, many Korean people have come to Vietnam to travel, and his task is to make efforts for Korean tourists to return to Vietnam for the second and third time and many more after that.

Mr. Ahn Min – Sik affirmed that he would always accompany the city, making efforts for the development of Danang and South Korean localities, as well as for the good friendship between the two countries. The parties hope to have more opportunities to cooperate with each other, in all fields such as tourism, investment, culture, education, … to confirm the friendly relationship between Vietnam and South Korea in the near future.

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US Businesses Intend to Move to Vietnam

Is Vietnam ready for relocation investment?

Answering this question, the flow of foreign investment, particularly the United States to Vietnam will have great changes.

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Is Vietnam ready?

This question is again raised, this time from Mrs Marie Diron, Managing Director of the National Credit Risk Group for Asia and the Pacific (Moody’s).

Mrs Marie Diron posed this issue at the Seminar on The Indian Ocean – Pacific Strategy and its Economic Impact on Vietnam, seeking solutions to promote sustainable development in Vietnam and other countries in the area (in the framework of the Asian Economic Forum held by the Vietnam Chamber of Commerce and Industry (VCCI) and the American Chamber of Commerce in Vietnam (Amcham) last week in Ho Chi Minh City).

The relationship between the US and China remains complicated, yet it cannot be correctly identified. Foreign manufacturers in China tend to move their investments to Vietnam, but the institutions, human resources, infrastructure, or hardware and software of Vietnam are generally ready to welcome this shift?

Just a few days ago, at the Vietnam Business Forum (VBF) 2018, Mr Michael Kelly, Chairman of the American Chamber of Commerce in Vietnam (AmCham) has mentioned the results of AmCham’s recent survey to the US businesses in China, whereby one-third have relocated or are considering relocating some of their manufacturing facilities to overseas. A separate survey of foreign companies from other countries shows that half are considering relocation and Southeast Asia is their top choice.

China will remain an important member of the global supply chain. But with the shift in investment, Vietnam is gaining benefits. The question is how can Vietnam take full advantage of this opportunity to keep up the pace of rapid economic growth?

On the US investors side, according to Chairman of AmCham, they know what they need. Vietnamese businesses and foreign invested enterprises need an equal and supportive environment for development. That means the relationship between investors and the administration needs to be mutual and transparent.

In particular, Chairman of AmCham said that there should be improvements in important areas that have great significance to Vietnam’s competitiveness, they are energy (to strengthen Vietnam’s future); facilitate trade and flow of goods; creating a more attractive, transparent and stable business environment; fully exploiting the potential of the digital economy in Vietnam; and modernize education, ensuring reasonable labor costs.

AmCham believes that the business environment can be improved by increasing productivity and reducing costs as well as business risks in Vietnam. More importantly, reducing costs and business risks will benefit Vietnamese businesses – many of which are small and medium enterprises – and will also promote entrepreneurship and start-up spirit, ensuring competitiveness and growth in the future of Vietnam.

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KMH Group – Korea Proposed to Invest in Developing High-Tech Industrial Cluster in Thua Thien Hue

Chairman of Thua Thien Hue Provincial People’s Committee has just had a meeting with Chairman of the Board of Directors of KMH Group – Korea, seeking opportunities to invest in Vietnam and exchanging information to expand investment projects in tourism, relaxation and high-tech industry in Thua Thien Hue.

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At the meeting, according to Chairman of the Board of Directors of KMH, the implementation of investment projects of resorts and golf courses associated with entertainment services in Chan May – Lang Co Economic Zone with the total investment capital of 100 million USD of the Group is on schedule. KMH Group is looking forward to expanding investment cooperation in this area in some coastal areas of the province, at the same time linking with major Korean corporations to invest in developing high-tech industrial clusters in Thua Thien Hue province.

Also at the meeting, representative of KMH proposed: “The KMH wants the provincial leaders to pay attention and create conditions for the Group to study and implement some investment projects in the province in the shortest time”.

In response to the investor’s proposal, Chairman of the Provincial People’s Committee welcomed KMH Group to invest in Thua Thien Hue, especially in the potential areas of the provinces with policies to attract investment such as tourism, trade, high-tech industry.

Chairman of the Provincial People’s Committee also affirmed: “Thua Thien Hue province is ready to support KMH Group to research and expand investment, especially to create conditions for KMH Group to cooperate with its partners in establishing Korean high technology parks in Hue”.

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Banking Sector in Vietnam

1. Overview

Vietnam’s banking sector has shown significant improvement which results from stable inflation and interested rate, favorable environment for foreign direct investment and a shift from deficit to surplus of the country’s current account. This sector plays a crucial role in Vietnam’s economic development in recent years.

2.Banking system

There are two tiers in banking sector in Vietnam. The first one is State Bank of Vietnam (SBV) which is responsible for monetary policy and supervision/regulation of the banking system in Vietnam. The second one consists of commercial banks, financial companies, credit co-operatives, people’s credit funds, and insurance companies. The main activity driving banking system is commercial bank which includes 5 state-owned commercial banks, 33 joint stock commercial banks, 5 joint venture commercial banks and 5 wholly-owned foreign owned bank.

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State owned commercial banks (SOCB) account for more than 40% of market share. The largest bank in terms of total assets, network and still 100% state owned share is Agribank. And four other SOCB areVietcom bank, Viettin Bank, BIDV and MHB.

Joint stock commercial banks (JSCB) have small capital/deposit base and more diversified shareholding structured compared to state owned commercial banks. There are currently 33 JSCB, which the leading ones are SaiGon Joint Stock Commercial Bank (SCB), Military Joint Stock Commercial Bank (MBB), Vietnam Export Import Commercial Joint Stock Bank (EIB), Asia Commercial Bank (ACB) and SaiGonThuong Tin Commercial Joint Stock Bank (STB)

Also SBV had granted 5 licences to permit HSBC, Standard Charter Bank, ANZ Bank, Shinhan Bank and Hong Leong Bank to establish as wholly-owned foreign banks

3.Potential opportunities for foreign investment

There are solid evidences to prove that Vietnam’s banking sector has such a huge potential for foreign investment

-Government effort of reforming banking system

SBV suggested that merge and acquisition of loss making and incompetent bank would be necessary to improve efficiency within the industry. For example, in 2015, SBV forced merge of loss making Vietnam Construction Bank to Vietcom bank with purchasing share price for 0 VND. By forcing merge and acquisition of incompetent banks, SBV has increased exploitation of economies of scale and the reduced burden on regulators

-Trade agreements facilitate foreign ownership and investment

Have taken part in variety of trade agreement such as Trans Pacific Strategic Economic Partnership (TTP), Association of Southeast Asian Nations (ASEAN) and Free Trade Agreement with different countries, Vietnam has made restructuring move to standardize banking system which will be compatible and accessible to other countries. Vietnam is required to have bilateral arrangement which eliminate the challenges of foreign establishment of banking services.

The government also encourages foreign investors to hold shares for five year period and partnering with the local bank to enhance management, capacity or new development. With the 30% limit of oversea ownership to domestic banks, the strategic foreign investors are allowed to acquire up to 15% of share in a bank, and up to 20% with Prime Ministerial approval. HSBC has also invested in a leading local bank, possessing a 20% stake in the Vietnam Technological and Commercial Joint Stock Bank—Techcombank. It is also the sole foreign strategic partner of the BaoViet Finance-Insurance Group, Vietnam’s largest insurance company. In a vote of confidence in the insurer, HSBC increased its stake to 18% in October 2009.

-Vietnam- a destination of foreign investment in South East Asian market

There is a huge untapped market in Vietnam. According to SBV, only 20% of more than 90 million citizens in Vietnam hold bank accounts and 3% of the population have credit cards. With 87% of the population under the age of 54, there is a great opportunity for retail banking activity development in Vietnam.

Also it is agreed that SME and rural areas have had challenges to access bank investment and loan. The data of Asian Development Bank shows that “lack the capacity to assess the risk of investment into SMEs and find bankable projects” and lack of knowledge about loan and lending systems for rural citizens are the main reasons leading to currentunder-banked circumstances.

The stable economic with GDP growth of around 6% to 7%; low wage costs; a large population with a high savings rate and lack of innovative approach to the market are advantages for foreign investors to accelerate financial and industrial development in Vietnam market.

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Danang city Builds the Business Relationship with Tochigi Province of Japan

On December 19th, 2019, the representative of Danang city met the president of Tochigi province, lead by Mr. Fukuda Tomikazu paying a working visit in Danang. At the moment, Japan is the top of country which invest in Danang.

Danang is receiving more than 130 investment projects and the total of investment capital is 800 million USD from Japan. The Japanese investors set up company, obtained investment registration certificate the area such as: hi-tech, supporting services, education, medical. Besides, Danang signed the official memorandum of understanding on business cooperation with some cities of Japan such as: Kawasaki, Kansai, Yokohama, Kirsarazu,… Danang show wishes to cooperate with Japan in many fields such as: economy, cultural, education,..

At the meeting, the representative of Danang city introduced the economy-social of the city and in the recent years, the cooperation relationship of Danang and Japan has been developing in many fields.

Besides, the representative of ANT Lawyers met the representative lawyers from Utsunomiya law firm of Tochigi province at ANT Lawyers Danang office. At the meeting, the parties discussed about the cooperation of helping Japanese investors to enter Vietnam market with legal services. ANT Lawyers is the law firm in Vietnam, which has the offices in Hanoi, Danang and Ho Chi Minh City.

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Pharmacy and Healthcare in Vietnam

1.Overview

There has been an optimistic trend in pharmacy and healthcare industry in Vietnam. This industry is irreplaceable as the education level and life expectancy of Vietnamese have been significantly improved. However, due to some challenges, pharmacy and health care industry desires for a change in legal framework, thus creating favourable conditions for development in the futures.

2.Vietnam – next growing pharmacy and healthcare market

-Overview of market potential

With the population of around 94 million, 44% monthly increasing income, 30% urbanisation rate with 3.4% growth rate per year, 6% GDP growth per year, the demand for better development of pharmacy and healthcare industry has been significantly increased.

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Business Monitor International (BMI) in their report “Vietnam Pharmaceutical and Healthcare” revealed that annual total value of pharmacy market $3 billion with annual growth of 15.5% period 2014-2018. The same report also showed that the total healthcare spending reaches $13 billion in 2015 which account for 5.8% GDP- highest in ASEAN, is expected to grow to $24 billion in 2020s.

-Trade agreement influence Vietnam’s market

Vietnam has recently taken part in several trade agreement which allow foreign companies to easily enter Vietnam. Firstly, Vietnam has cut tariff on 47 tariff lines of pharmaceuticals. Also by encouraging foreign investment to enter Vietnam in various forms, among 171 pharmaceutical companies operating in Vietnam, 9% are foreign invested enterprise, 4% are joint ventures.

Secondly, in terms of healthcare sector, the data of Ministry of Health stated that there are 137 operational private hospitals, including six foreign invested hospitals, and about 30,000 consulting rooms. These six foreign invested hospitals have the initial investment capital of 94 million dollars. Vietnamese government had licensed to a lot of foreign invested projects in the healthcare sector which included a total investment capital of 1.16 billion dollars. In addition, the government has allowed the investors in healthcare sector to enjoy 10% corporate income tax for the whole life of the project, tax exemption for 4 years and lower land leasing fee for years.

-Pharmaceutical products heavily rely on import

Local pharmaceutical production was valued at nearly US$920 million which satisfy 48 % of the needs in Vietnam. Imported drugs account for the remaining 52 %. Vietnam imports pharmaceuticals mainly from France, India and Korea. The medicine lines from this countries is stable and price competitive. In terms of domestic companies, the three largest public pharmaceutical companies are DHG Pharmaceuticals JSC (DHG), Traphaco JSC (TRA) and Domesco Medical Import-Export JSC (DMC).

Around 90 of raw material input are imported from foreign countries, in which 57% are from China, 18% from India and other countries such as Austria, Spain, Germany, France, Italy, and Sweden …

-Vietnam’s consumer behaviour

Vietnamese consumer has a strong preference of foreign medicines. The statistics have revealed that in the doctor prescription, 18 -20% domestic medicines are used for the patients even though the imported medicines are more expensive than domestic ones. Vietnamese consumer has more confident in terms of quality of foreign products.

Only 20%-30% of Vietnamese consumers buy medicines with prescription. However, BMI expected that the usage percentage of medicine through prescription will increase to 74.6% in the next 5 years.

3.Challenges

-Poor regulation standards

Price management and intellectual property protection of the government have not been managed closely. Therefore, the price of products still increases every year and the counterfeit medicines is still floating in the market, around 0.1% in 2012 (Drug Administration of Vietnam)

Around 28% of pharmaceutical companies have the Global Manufacturing Practice (GMP) certification, which states the minimum requirements that a pharmaceutical manufacturer must meet in order to prove that their products are of high quality and do not pose any risk to consumers. Particularly, in 2013, there are 79 out of 105 foreign medicine manufacturing enterprises and 5 of 80 domestic manufacturing enterprises that qualify GMP due to the fact that most of the enterprise are small in terms of sizes and capital investment. This indicates that Ministry of Health needs to take more aggressive actions to encourage the companies to meet the standards.

-Specific patented medicines is weak

Even though there are plenty of investment projects in pharmaceutical and healthcare industry with support from government, producing patented medicines are still too expensive in terms of time and manpower. In fact, lack of medical qualification, infrastructure development and material sources are factors leading to underdeveloped circumstance in this sector.

-Lack of accessibility in healthcare industry

There has been 1090 public hospital and 175 private hospitals in Vietnam in 2014, is expected to increase to 1204 and 200 respectively. However, there are 25.1 hospital beds per 10,000 inhabitants and 7.9 doctors per 10,000 inhabitants, which are still a question mark that has not been handled.

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Investment in Wind Power Project in Vietnam

Wind power is one of priority sectors to develop in Vietnam. Vietnam Government has been given a lot of incentives as well as support for wind power development projects.

Wind power investment procedure in Vietnam

Step 1: Project location

Investment in wind power projects must be suitable with the development plans of wind power and electricity, which are approved by the competent authorities.

Investors are licensed the wind power investment and development permit for wind power projects that are on the list of approved national wind power and electricity development plans. Moreover, in terms of the projects which are not in the approved list, the investors are responsible to create its dossiers which will be added to the development plan and examined by Ministry of Industry and Trade and then by Prime Minister.

Step 2: Evaluate wind potential at selected location

It is necessary to install wind measurement masts (if they are not available on the project location) and implement the wind measurement at least one year.

Step 3: Pre-feasibility research and require adding the project to power development plan

If the project location has potential wind condition, the investors will make a report and submit to Ministry of Industry and Trade to add this project to the list of power development plan. The Ministry is responsible to consider the application and asks for Prime Minister’s approval (wind power is a new sector in Vietnam, so the procedure has not been issued yet. All wind power projects with large scale as more than 50 MW have to be approved by the Prime Minister). After the project has been approved, the application is submitted to Department of Planning and Investment where the project is located

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Step 4: Make investment report (feasibility study)

After being approved, the investment report will be submitted to Ministry of Industry and Trade to evaluate and approve

Step 5: Signing power purchase agreement with EVN

Under the provisions of Decision No. 37/2011/QD-TTg, EVN is obliged to buy the entire power output of the wind power project. Agreement and finalize the signing of the power purchase contracts, connection, design metering systems. Currently, the standard power purchase agreement is still in the process of waiting for approval from the Government.

Step 6: Implementation of the project

When the technical design is completed and the investment report is approved by the competent authorities such as Department of Industry and Trade, Department of Construction, Department of Natural Resource and Environment and other relating departments.

Step 7: Construction

According to Decision 37/2011/QD-TTg, the investors are allowed to start the construction only when its investment certificate is granted, have the signed power purchase agreement with the power buyer, have connecting agreement with the power distributor; wind condition report is continuously recorded in 12 months.

Policy framework relating to wind power supporting in Vietnam

Policies and incentive mechanisms of the Vietnamese Government for wind power sector are expressed through clearer legal policies clearer in recent times. Prime Minister issued Decision No. 1208/QD-TTg of July 21, 2011, approving the national plan for power development in the period 2011 – 2020 with consideration to 2030. In which expresses the goal of the Vietnam Government is to prioritize developing renewable sources for electricity production, increasing the proportion of electricity produced from 3.5% in 2010 to 4.5% of total power manufactured in 2020 and 6% in 2030.

The government’s commitment to renewable power sector in general and wind power sector in particular is clearly indicated after Decision No. 37/2011/QD-TTg was issued on 29 June 2011 (taken into effect on 20th August, 2011) stipulating the mechanism to support the development of wind projects in Vietnam. Accordingly, the wind power projects enjoy preferential of capital, tax and fee.

– Mobilizing investment capital: Investors are allowed to mobilize capital in the form of permission from the organizations and individuals at home and abroad, has preferential investment credit under the existing legal provisions on investment credit and export gorvernment’s.

– Preferential of tax:

+ Import tax: The project to develop and use of renewable energy sources are exempt from import duty for goods imported to form fixed assets for the project; imported goods are raw materials, supplies and semi-finished products cannot be produced domestically and imported for production of projects as stipulated by the current legislation on export tax and import tax.

+ Enterprise income tax: The exemption and reduction of enterprise income tax for projects to develop and use of renewable energy sources is made as to projects in the field of investment incentives as stipulated by the current legislation on taxes.

– Incentives on land: The project to develop and use of renewable energy sources be exempted or reduced of land use fees and land rent as stipulated by the current legislation applicable to projects in the field of incentives invest.

– Priority is given to research related to the development and use of renewable energy resources in the field of scientific development and technology and development of high-tech industry; allocate funds from the fund to support scientific studies and technology in the pilot project, the project of industrialization for development and use of renewable energy, promote technological improvements relating to the development and use of renewable energy, reduce production costs of renewable energy products and improve product quality.

According to Decision No. 37/2011 / QD-TTg on the mechanisms to support wind power. In which, the buyer (EVN) is responsible for purchasing all electricity output from wind power project at the price of 1,614 VND / kWh (excluding VAT value added taxequivalent to 7.8 US cents / kWh) at the point of delivery of electricity. Electricity purchase prices are adjusted according to fluctuations in the exchange rate between VND and USD. In particular, the State shall support for the buyer the price of electricity at the price of 207 VND / kWh (equivalent to 1.0 US cents / kWh) for the entire output of electricity purchased from wind power plants through Protection Fund Vietnam environment. This means, the buyer or EVN only pay 6.8 US cents / kWh.

According to Decision No. 37/2011/QD-TTg on the mechanisms to support wind power. In which, the buyer (EVN) is responsible for purchasing all electricity output from wind power project at the price of 1,614 VND / kWh (excluding VAT, equivalent to 7.8 US cents / kWh) at the point of electricity delivery. Electricity purchase price will be adjusted according to the fluctuations in the exchange rate between VND and USD. In particular, the State shall support for the buyer at the price of 207 VND / kWh (equivalent to 1.0 US cents / kWh) for the entire output of electricity purchased from wind power plants through Vietnam Environment Protection Fund. This means, the buyer or EVN has to pay only 6.8 US cents / kWh

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Korean Venture Capital Poured into Vietnam

According to Adjust’s Mobile Growth Map – a mobile market research company, Vietnam is the fastest growing application market that keeps Internet users.

In 2017, Korean President Moon Jae-in announced a new policy aimed at strengthening the relationship between Korea and ASEAN. These policies have boosted the dynamism of Korean companies to Southeast Asian business.

More and more companies in every field aim to Southeast Asia. Many of them, are venture capitalists.

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Over the past two years, Southeast Asian technology companies have signed numerous agreements involving Korean investors, such as the 50 million USD investment in Bukalapak e-commerce company of Mirae Asset-Naver Growth Fund, seed sponsorship deals for real estate startups from BonAngels Venture Partners and Kakao Ventures.

In addition to trade and real estate, Korean venture capital funds have poured money into almost every other important area of Southeast Asia including fintech (KIP’s investment in C88 in Singapore), car (SoftBank Ventures Korea in Singapore by Carro), travel (BonAngels and Nextrans in Vietnam) and logistics (Nextrans and FuturePlay into EcoTruck Vietnam).

In recent years, Korean venture capital companies have also established joint funds with partners in Southeast Asia to target startups in the region, including a cooperation fund worth 87 million USD of Korean Investment Partners with Golden Equator, the 100 million USD cooperation fund of Intervest and Kejora Ventures. The bigger ones are Hanwha Asset Management and Golden Gate Ventures with 200 million USD fund and most recently the investment fund of about 100 million USD of KB Investment and MDI Ventures.

In 2017, Southeast Asia’s private capital and venture capital surpassed Europe for the first time, with the amount of 23.5 billion USD invested in this area, nearly three times higher than in 2016, according to data from Singapore Venture Capital & Equity Association

(SVCA). Investments in startups doubles to 8 billion USD. In 2018, Alibaba invested an additional of 2 billion USD in Lazada while Indonesia’s Gojek closed the 1.5 billion USD funding round.

Korean investors pay special attention to Indonesia and Vietnam. According to the Vietnam Technology Investment Report of Cento Ventures and ESP Capital, 13 of 61 venture capital funds operating in Vietnam in the first half of 2019 are Korea.

According to Adjust’s Mobile Growth Map – a mobile market research company, Vietnam is the fastest growing application market that keeps Internet users.

One of the reasons is that Vietnam is the market with the largest potential for internet growth worldwide.

That’s why so many businesses come to this region, and so many acquirers are actively looking for Southeast Asian companies. Silicon Valley giants like Google and competitors are beginning to look more seriously at Southeast Asian companies as an investment and acquisition opportunity.

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Korean Investor Proposed to Invest in 200 MW Hydroelectric Power Plant at Chan May – Lang Co

Chairman of the People’s Committee of Thua Thien Hue province has just had a meeting and worked with the Director of the Busan Economic Promotion Agency (Korea) (BEPA) to learn about investment and development opportunities in Thua Thien Hue Province.

At the meeting, Director of BEPA has informed about investment orientation and investment promotion plan of Busan city abroad, including investment cooperation in Vietnam.

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Through understanding the potentials and policies to attract investment of Thua Thien Hue province, the Korean agency wants to cooperate with Thua Thien Hue province to develop some investment projects and bring large enterprises in Busan to investment in the province.

Accordingly, the Korean side proposed to invest in a number of projects in Chan May – Lang Co Economic Zone of Thua Thien Hue province, namely investment in hydroelectric power plant, capacity of 200 MW and investment in construction of ports serving for the transportation of raw materials for power plants, and import – export activities. In addition, the Korean side wishes to study investment in infrastructure and industrial development investment projects in accordance with the investment attraction policy of Thua Thien Hue province in Chan May – Lang Co Economic Zone.

Chairman of Thua Thien Hue Provincial People’s Committee welcomed and highly appreciated BEPA’s desire and ideas for investment and development proposals in Thua Thien Hue province; Provincial departments and agencies will coordinate and create the best conditions for BEPA as well as Korean investors to study investment projects in Chan May – Lang Co Economic Zone.

For the investment in Hydro gas power plant, Chairman of the province proposed that BEPA should complete the dossier soon to submit to the Ministry of Industry and Trade for consideration and incorporation into the development investment plan and at the same time soon negotiate with EVN on the electricity prices serve as a basis for the effective investment of power plant in Chan May – Lang Co Economic Zone.

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Danang city Expands the Cooperation with Italia

On December 17th, 2019, the representative of Danang city met Mr. Dante Brandi the General ambassador of Italia paying a working visit to Danang.

In 2019, the export turnover to Italy is estimated at US $ 4.6 million, import turnover from Italy is estimated at US $ 4.1 million. Main export products are textiles, aquatic products, fishing rods and handicrafts. The main import items are medicine, electrical equipment, spare parts, and garment materials. At present, there are about 15 enterprises having import and export trade relations with the Italian market, 6 Italian investment projects in manufacturing, processing and services with the total capital is USD 1,2 mil.

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The representative of Danang city suggest Mr. Dante Brandi support the city to contact the Italian investors and enterprises in the hi-tech, environment, hi-service which is the strength of Italia and Danang is needing in the coming time.

At the moment, Danang didn’t have the official cooperation relationship with any cities of Italia; therefore Danang hopes Mr. Dante Brandi could introduce some cities of Italia where have the same character and the way to develop, therefore Danang can establish the relationship in the way to transfer the staffs to develop the city and environment management system.

Mr. Danta Brandi supports the relationship between Danang and other cities of Italia, establish the straight flight from Danang to Italia,… to increase the cooperation, development in travel of the two countries, in the time that many Italian investors wish to set up company to invest in Vietnam. And also it is planned to increase the programs on teaching the Italian language in the Danang Foreign Language University, open the sport cars exhibitions, attract the Italian enterprises expand and operate their business in Danang,…

The representative of Danang wishes to attract more and more the Italian investors to develop the investment relationship between Danang and Italia in the future. Besides, the cooperation with Italia will help Danang to develop the targets of the city in travel, hi-tech, and environment direction.

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