North-south expy incentives meant to lure foreign investors

HANOI – The Ministry of Finance has approved strong financial incentives proposed by the Transport Ministry for the North-South Expressway project in a move to attract capable investors, especially those from abroad. Such incentives are aimed to minimize risks for investors wanting to get involved in this big-ticket project.

The Government has offered multiple financial incentives in preparation for inviting tenders for 20 component projects, with 17 of them under the build-operate-transfer (BOT) investment format, in the first phase of the project.

In particular, the Transport Ministry is allowed to raise toll fees in the project’s feasibility study and contract. Especially, fee adjustments can be more flexible and will not have to follow the Finance Ministry’s prevailing regulations.

Inflation of around 4% a year can be factored into toll fees. Besides, the return on equity is allowed at 14% a year, or 2-3 percentage points higher than those applied to other BOT projects.

The disbursement of investors’ capital and bank loans will follow the rates specified in their contracts in line with the progress of their projects. In other words, investors will not have to contribute their capital once upon issuance of investment certificates as regulated for other projects.

These financial mechanisms are mainly designed to attract international investors, as previous regulations have kept potential investors at arm’s length due to high risks of slow capital recovery.

The suggested return on equity ratio is about 2.15 times higher than deposit rates at commercial banks, also with the aim of luring foreign investments.

As covered in the Daily on Tuesday, the Ministry of Transport has proposed a slew of policy incentives for the North-South Expressway project.

These include the State Bank of Vietnam’s commitment to allow investors to access bank loans, while the transport ministry can apply various types of investment formats and contracts in the project that is divided into multiple components.

The ministry also asked for the Government’s permission to appoint consultants responsible for drawing up the project’s feasibility study and technical design, as well as consultants offering appraisal services for the project in phase one.

The project with four to six traffic lanes and allowing for speeds of 80-100 kilometers per hour will require an estimated VND312.4 trillion (US$13.7 billion).

The main section from Hanoi City to HCMC has 1,622 kilometers in length, of which 123 kilometers has been opened to traffic, including the Phap Van-Cau Gie, Cau Gie-Ninh Binh, and HCMC-Long Thanh-Dau Giay sections. Besides, work on the 127-kilometer Danang-Quang Ngai section is underway.

In phase one, work on some 713 kilometers is divided into 11 sub-projects, with eight public-private partnership (PPP) and BOT ones, and three others under the public investment format in 2017-2020. Besides, around 659 kilometers is developed under nine BOT sub-projects from 2011 to 2025.

The second phase from 2025 onwards is intended to extend the North-South Expressway in accordance with the project’s approved master plan.

Source: The Saigon Times

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How Foreign Investors Comply with Reports Submissions in Vietnam

Foreign investors setting up business in Vietnam have to comply with statistics report submissions according to Vietnam laws.  To ensure compliance, corporate lawyers should be consulted to ensure compliance with reports applicable to foreign owned enterprises in Vietnam.

As the current regulation, foreign owned enterprises are obliged to submit monthly, quarterly, six month and annual reports to the Vietnam Department of Statistics or State agency for foreign direct investment of respective province or city.

Monthly reports are applicable to businesses and projects operating in the industry: mining, processing industry, electricity, gas, water supply, waste disposal, water treatment, information and communications, real estate, transport, warehousing, trade and services.

Quarterly reports are applicable to businesses and projects operating in agriculture, forestry and fisheries, construction;

All foreign owned enterprises have to report every 6 months on employment and income of the employee;

On annual basis, all foreign owned enterprises have to submit reports on the identification information of the business; financial indicators reflecting business results including revenue by business lines, taxes, fees, expenses, and profit; and capital investments made during the year by investment sources and investment category.

We at foreign investment practice of ANT Lawyers, a law firm in Vietnam with offices in Hanoi and Ho Chi Minh City would be able to assist clients in regulatory and licensing matters relating to the investment and the operation of the foreign investor enterprises in Vietnam.  We could be reached at email:ant@antlawyers.vn or office tel: +848 35202779.

Source: antlawyers.vn

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Do You Need a Lawyer to Write a Demand Letter for Payment?

Not in every case the Buyer admits to being wrong or responsible for payment as agreed in contract. They may plead substantially contractual breach of the Seller or insist on the null and void of contract for their non-performance of payment. For strengthening arguments, the Seller have to base on legal grounds and evidences to request for payment under contracts. Even if the Buyer is not in good faith, the Seller has right to claim an interest on delayed payment. In a easy case and having a small total amount of payment, you can write a demand letter by yourself. Contrarily, if your case is complicated with a lager damage, an attorney’s advice is probably necessary.

Legal grounds for request the Buyer/ Debtor conforms to the payment obligation as follows:

(i) Contract, purchase order (signed by legal representative of authorized representative);

(ii Applicant laws which is referred in the contract;

(iii) International commercial customs which is referred in the contract: Incoterm, UCP, ISBP (International Standard Banking Practice), etc.

It should be emphasized that the right to claim for payment of the Seller must accompany by their obligations as per contract. If the Seller fails to conform with obligations such as: quality of goods, quantity of goods, time of delivery, manner of delivery, etc that cause miss-achievement of contract purpose for the Buyer, the Seller might disable to claim for payment by laws.

Generally, the Buyer shall make payment punctually with method agreed by parties. Accepting request for postponement of payment performance from the Buyer without any conditions shall be deemed that the payment performance is timely made. As a result, the Buyer shall not be fined for breach. It should be advised that all notifications and responses to acceptance or reject the request for postponement of payment performance must be made in written form as fax, email, mal or instead of oral forms. The more carefully retain evidences, the more effective your demand letter becomes. Then, you can attach them to your demand letters for threatening the Buyer/ Debtor.

In many case, dispute settlement provision provides that “Should there be any dispute as for contract is concerned and this cannot be resolved amicably, by negotiations between parties or through mediation of professionals, the Court of Vietnam shall have exclusive jurisdiction”. In that case, the Seller shall notice the Buyer by a demand letter after the payment term is overdue. A demand letter should be clearly expressed your intention of legal actions.

There are some suggestions that you can follow related to writing a demand letter on the first or second times. If your demand letters do not effectively work, you should request supports from lawyers as soon as possible. They have enough experience in both legal knowledge and technical language skills to press the Buyer/Debtor for payment. Moreover, ANT Lawyers has many experienced professional experts to collect information about finance, legal status… prior to give legal advice. Besides representing our Clients to follow up and negotiate with the Debtor on their action plan to pay the Debt, we can support them to file lawsuits, request the Court of Vietnam to enforce judgments, or submit written requests for initiation of bankruptcy process.

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Forms of Disputes and Approaches to Settlement

Dispute in Vietnam could be between parties in business transaction, foreign investors and Vietnam government, or between countries in implementing international treaties.

The formation of market economy in Vietnam took place in the context of the development in the width and depth of the economic ties at a significant fast pace that make Vietnam an important part of the world supply chain.  Vietnam suppliers could sell the goods and services to the world and the foreign supplier could also export their goods and services to Vietnam market.  Further, as the Vietnam market opens up, foreign investors could invest through various forms of investments in Vietnam i.e. acquire equities in Vietnam companies, establish business in Vietnam.  During this process, disputes are an inevitable result which has been growing in scale and complexity.

Most should agree that disputes shall be construed as the dissent, inconsistencies or conflicts of interests, rights and obligations between the parties in the economic relations at different levels. Accordingly, economic disputes can have the following basic forms:

1. Disputes in business are between the participants in a business transaction including investments, production to consumption of products or performance of services on the market for profit purposes i.e. professional and product liability, debt disputes over a business transaction, franchise disputes, intellectual property disputes, and disputes over contract for supply of goods or services…
2. Disputes between foreign investors with Vietnam government agencies, arising in the implementation of the BTO, BT, BOT, and the implementation of international agreements on promotion and protection bilateral and multilateral investment i.e. government policy and policy measures, concession to water and sewerage, power or energy supply, project or contract payment…
3. Disputes between countries in the implementation of the international bilateral and multilateral agreements.

In Vietnam, as the disputes arise, parties involved could consider resolving the matters through negotiation, mediation, arbitration, or taking court actions after taking consideration of various factors including cost, time, and the complexity of the disputes.  Litigation law firm in Vietnam with skillful dispute lawyers should be consulted to provide the suitable advice for dispute resolution.

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