Construction Operation License Instead of Contractor’s Permits for Foreign Contractor in Vietnam

The foreign contractors are only permitted to carry out construction activities in Vietnam so long as being granted construction operation license by Ministry of Construction as per the Construction Law.

EPC Contractors have increasingly been interested to learn the requirements of licenses and permits to operate in Vietnam.  It is advised that the construction law firm in Vietnam with lawyers specializing in construction area to assist the foreign contractors to understand the legal frameworks, and requirements of foreign contractors before and after taking on construction projects in Vietnam after bidding result.

The regulations and procedures are promulgated in Decree No. 59/2015/NĐ-CP on management of construction investment projects and Circular No.14/2016/TT-BXD guiding on licensing construction activities and management of foreign construction contractors in Vietnam.

Investment in construction activities has been growingly rapidly.  In order to meet the tender conditions and take part in construction activities in Vietnam, foreign contractors shall follow the regulations in Vietnam and obtain proper license during the preparation and the execution of the construction of the project.

Prior to construction operation license, foreign constructors have experienced another form of permit named contractor’s permits for foreign contractors in Vietnam.  These are two concepts however the process of registration and document requirements are not so different.

There has been an effort to harmonize and reduce differences and conflicts arisen in many fields of laws regulating the mentioned subject and the new provisions of the Law on Bidding, Construction Law and the Investment Law to be issued in 2014 which establish a stable legal framework for the implementation of foreign contractor’s bidding and construction activities in Vietnam.  This changes does not differentiate which position the foreign contractors are appointed from the lead contractor, the main contractor, contractor to subcontractor consortium. Unlike domestic contractors, foreign contractors must be granted construction operation license for each awarded contract.  The amendment from the contractor’s permits for foreign contractor contribute to the unity of the same concept in different legal instruments regulating the license procedure of foreign contractors operating within the territory of Vietnam, and limit the unnecessary overlaps, difficulties to law interpretation and application of legal entities.

We shouldn’t forget to mention that the amendment of the foreign contractor’s construction operation license is to increase the relevance between the name and nature of the licensed activities of foreign contractors in construction operation. One of the initial conditions to a foreign contractor to be licensed is when the contractor has won a bid or been selected to be sub-contractor of an investment project. Therefore, the terms construction operation license shall demonstrate the role of the contractor in the construction projects they have been participated in.

The new construction operation license for foreign contractor is expected to be easier to relate to when foreign contractor take part in construction project in Vietnam.  This would attract more foreign contractors to undertake construction projects in Vietnam to bring in the technology equipment, as well as the management skills to Vietnam.

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TPP withdrawal of The US – Vietnam investment impacts

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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For Vietnam legal matters or services, the clients could reach ANT Lawyers, the exclusive Vietnam law firm members via email at ant@antlawyers.vn or call the telephone at +848 35202779.

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Korea launches anti-dumping investigation into Vietnam’s alloy steel

HCMC – The Korea Trade Commission (KTC) has decided to launch an anti-dumping investigation into alloy steel imports from Vietnam, Ukraine, and India, according to the Vietnam Competition Authority at the Ministry of Industry and Trade.

The KTC decision comes after Korean firms, including Dongbu Metal, Simpac Metalloy, and Taekyung Industrial, which manufacture and sell alloy products, sent their petitions to KTC in September this year.

This is the second time Korea has opened anti-dumping and anti-subsidy investigations into Vietnamese products, according to the Vietnam Chamber of Commerce and Industry (VCCI).

The competition authority said KTC has named one Vietnamese firm on the list of enterprises to be inspected. However, other firms that want to voluntarily join the probe can send a request to the commission.

It is expected that KTC will make a preliminary investigation in three months, starting from December 7 to March 6, and announce its official results in June.

The current stringent economic climate, along with the removal of tariff barriers thanks to the Free Trade Agreements (FTAs), has prompted many countries to launch anti-dumping and anti-subsidy probes against imports as a way to prevent risks and injuries for their local industries.

ANT Lawyers is a Vietnam law firm with English speaking lawyers whom understand the laws of Vietnam within the business and the local culture context.

For Vietnam legal matters or services, the clients could reach ANT Lawyers, the exclusive Vietnam law firm members via email at ant@antlawyers.vn or call the telephone at +848 35202779.

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What lawyers should not promise

In Vietnam, the law has continuously played an important role in the life and contribute to protect and maintain the stability and development of society. In the trend of integration of the world economy, the role of the law has once again been confirmed with a new level in order to contribute to promoting the integration of Vietnam into world economy and opens a new opportunity for those who are practicing law in general and lawyers in particular in Vietnam.

In general, lawyer profession in Vietnam has been a noble profession for the purpose of contributing to the protection of justice, while contributing to the socio-economic development. In reflection, lawyers themselves take professionalism as the basic foundation of the profession, and should always have the responsibility to self-improve skills and widen knowledge in various areas to meet the growing demands as Vietnam develops i.e. corporate, commercial, investment, construction, environment, securities laws…etc.

Sometimes, when providing legal services to clients in handling disputes claim against damages for breach of contractual obligations, the customer has requested a lawyer to promise and guarantee the results of the dispute.

The lawyer, whom represents the client to protect the legitimate rights and interests of the client, has to follow the law, and the ethics. Responding to the request of the client to promise and guarantee the result, the lawyer shall refuse because the outcome of such will depend on the facts and legal grounds of the disputed matters in Vietnam.

The lawyer shall collect comprehensive information from the client then analyze possibilities of outcome. Lawyers should not promise the results or the percentage of success which could potentially lead to the wrong decision made by the client. If the results are not as customer’s expectation, it will be a great loss to the prestige, and the image of lawyers. A good lawyer will have the skills to analyze problems, look at the details, and propose solutions but cannot guarantee the outcome of a case. Each case is different and there are too many unknown factors, and the unanswered questions.

In a litigation case, the lawyers will tell the customers what they are facing, what the lawyers could do, the best situation and what is worst. Good lawyers will know how to analyze and clarify the issue. Both the client and the lawyer should have a positive attitude to solve the problems in regard to the disputing matters.

The only thing ANT Lawyers could promise in a dispute case is that we will follow the laws of Vietnam.

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HCMC more cautious about choosing FDI projects

HCMC has turned more careful in choosing foreign direct investment (FDI) projects so as to avoid those requiring much land and using outdated technologies which are detrimental to the environment, a city official told local media last week.

The city authorities even make more careful choices when it comes to projects registered in industrial parks (IP) and high-tech zones, said Su Ngoc Anh, director of the municipal Department of Planning and Investment.

“The city has recently faced a problem with a big FDI project whose investor requires nearly 200 hectares of land, which is a very large area,” he said.

Regarding the solution for attracting FDI projects in the future, Anh said IPs are preparing land lots to serve Japanese and South Korean investors who use advanced technologies but do not require large land lots. Such IPs are building multi-story facilities to cater to these investors.

The city is now home to 6,500 operational FDI projects with combined registered capital of nearly US$41 billion, many of which will expire in the next five to ten years. The city will screen all such projects, and allow them to expand their scales and extend their operational durations.

District-level authorities will also make lists of projects that they need to call for foreign investments.

Anh noted that foreign investors tend to change their business policies when investing in HCMC by switching from pouring investments in wholly-owned projects to establishing joint ventures, contributing capital or acquiring stakes in operational projects as the move allows them to save time and costs for clearing land and building workshops.

Total investment in the city in 2016 is estimated at VND310 trillion (US$13.68 billion), with 17% of it from foreign investors, 8% from the city’s budget, 11% from State-owned firms and the rest from local people, according to Anh’s department.

The data reflects the role of FDI in the city’s socio-economic development when its share in the total investment in the city’s economy has increased from 15% in 2010 to the current level.

This year, the city expects to attract 713 FDI projects worth a combined US$1.3 billion and sees 174 FDI projects raising their capital by US$465 million.

The city also has allowed 1,900 foreign investors to spend US$1.9 billion contributing capital and acquiring stakes in enterprises here.

In all, the city expects to lure an estimated US$3.7 billion of FDI capital this year.

Source: The Saigon Times

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Worries over housing tax

Suggestions let fly by the Ministry of Finance to collect the housing tax have stirred up objections from many experts who challenge the foundation for such a plan. They argue that the reasons behind the ministry’s intention are not convincible.

As covered in local media, the Taxation Policy Department under the ministry has been assigned to flesh out the plan to collect the housing tax, especially those people with two or more houses. Those people with only one house will likely be exempted from this tax, but the tax rate will increase progressively from the second home. Deputy Minister of Finance Huynh Quang Hai says in Tuoi Tre that “the housing tax will surely be collected, not only to increase revenues for the State budget but also because the housing tax has been collected in many countries for long.”

Such an approach immediately draws fire.

In many countries worldwide, as reasoned by experts, the housing tax is often meant by the State to regulate the market so as to curb excessive speculation, thus ensuring healthy development of the property sector, beside the goal of generating more income for the State budget.

In Vietnam, they say, the Ministry of Finance needs to spell out its key goal - whether it is to earn more revenue or to intervene in the market - and needs to take a prudent approach in both cases.

If the primary goal is to create a new source of income for the State budget, a rethink is needed, since the burden of taxes and fees in the country is deemed to be already rather heavy for businesses and the people. Creating a new tax will make life harder for many people.

Meanwhile, if the goal is to introduce State intervention to ensure justice among all market players, the goal can hardly be realized if the tax is simply based on the number of houses one owns, and speculators will still have ways to ensure their profit margin by factoring the tax sum into their prices. That is to say the rich can still defend their wealth, while poorer people will suffer if housing prices climb due to the new tax.

In addition, a certain homeowner can have two or three houses, but the total value of their properties is far lower than one with only a big house in a prime location. In major cities, a big house in a good commercial quarter may cost hundreds of billions of dong, while a house on the outskirts is priced at hundreds of millions or less, and if the tax is imposed on multiple-home owners, then justice cannot be ensured. That is not to mention the vast difference between a home in a major city and another in the countryside.

As such, the housing tax – if it is to come into life – must be conceived in another way, and should be based on the value of properties as the core rather than merely the number of properties, besides a set of criteria scientifically mapped out to ensure that State intervention in the market will work to make life easier for the general public. It should stabilize the market rather than stirring up public worries.

Source Saigon Times Daily

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Visa and Immigration Matters in Vietnam

Foreigners  entering  Vietnam  for  different  purposes  will  need proper  visas  issued,  failing  which  would lead  to  the  revocation,  invalidation  of  entry/exit/residence  permits issued  by  Vietnamese  competent authorities.  The  length  of stay  in  Vietnam for foreigners  depend  on the  visa type and the time  duration specified  on  the  visa  itself.    For  some  visas,  especially  work  related  visas,  the  foreigners  need  to  be sponsored by Vietnam enterprises  for working purpose.  The proper works  visa must be obtained before work permit in Vietnam would be issued and the foreigners could apply for temporary residence card to stay in Vietnam for a longer period.

Below lists down all visa symbol for references.

1. NG1 –  Issued  to  members  of  delegations  invited  by  the  Secretary  General  of  Vietnam’s  Communist Party of, the President of Vietnam, the President of the National Assembly, the Prime Minister.
2. NG2 –  issued  to  members  of  delegations  invited  by  standing  members  of  the  Secretariat  of  the Vietnam’s Communist Party, Deputy President of Vietnam, Deputy President of the National Assembly, Deputy  Prime  Minister,  President  of  Vietnamese  Fatherland  Front,  Executive  Judge  of  The  Supreme Court, Chief Procurator of the Supreme Procuracy, State Auditor General; members of delegations at the same  levels  of  Ministers,  Secretary  Generals  of  Provincial Communist  Authorities,  President  of  the People’s Committees of provinces.
3. NG3 –   Issued   to   members   of   diplomatic   missions,   consular   offices,   representative   offices   of international organizations affiliated to the UN, representative offices of intergovernmental organizations and their spouses, children under 18 years of age, and housemaids during their term of office.
4. NG4- Issued  to  people  who  come  to  work  with  diplomatic missions,  consular  offices,  representative offices  of  international  organizations  affiliated  to  the  UN,  representative  offices  of  intergovernmental organizations,  visitors  of  members  of  diplomatic  missions,  consular  offices,  representative  offices  of international   organizations   affiliated   to   the   UN,   and   representative   offices   of   intergovernmental organizations.
5. LV1 –  Issued  to  people  who  come  to  work  with  units  affiliated  to  Vietnam’s  Communist  Party;  the National  Assembly,  the  government,  Central  Committee  of  Vietnamese  Fatherland  Front,  the  People’s Supreme  Court,  the  People’s  Supreme  Procuracy,  State  Audit  Agency,  Ministries,  ministerial  agencies, Governmental agencies, the People’s Councils, the People’s Committees of provinces.
6. LV2 –  Issued  to  people  who  come  to  work  with  socio-political  organizations,  social  organizations, Vietnam Chamber of Commerce and Industry.
7. ĐT – Issued to foreign investors in Vietnam and foreign lawyers practicing in Vietnam.
8. DN – Issued to people who come to work with companies in Vietnam.
9. NN1 –  Issued  to  Managers  of  representative  offices  or  projects  of  international  organizations  and foreign non-governmental organizations in Vietnam.
10. NN2 – Issued to heads of representative offices, branches of foreign traders, representative offices  of other foreign economic, cultural, professional organizations in Vietnam.
11. NN3 –   Issued   to   people   who   come   to   work   with   foreign   non-governmental   organizations, representative  offices,  branches  of  foreign  traders,  representative  offices  of  other  foreign  economic, cultural, professional organizations in Vietnam.
12. DH – Issued to people who come to study or serve internship.
13. HN – Issued to people who come to attend conventions or conferences.
14. PV1 – Issued to journalists who have permanent residences in Vietnam.
15. PV2 – Issued to journalists who come to work for a short period of time in Vietnam.
16. LĐ – Issued to people who come to work.
17. DL – Issued to tourists.
18. TT –  Issued  to  foreigners  that  are  parents,  spouse,  children under  18  years  of  age  of  the  foreigners issued  with  LV1,  LV2, ĐT,  NN1,  NN2,  UNIVERSITY,  PV1,  LĐ  visas,  or  foreigners  that  are  parents, spouse, children of Vietnamese citizens.
19. VR – Issued to people who come to visit their relatives or for have other purposes.
20. SQ – Issued to people at an overseas visa-issuing authority of Vietnam

It is  important that the immigration lawyers  in Vietnam to be retained for advice in regard to visa, work permit, temporary residence card or other immigration matters.

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