Japanese firm hopes sun will shine on new solar power plant in Vietnam

The 50-megawatt plant will cost nearly $50 million in Vietnam’s Gia Lai Province.

A Vietnamese electricity company has signed a deal with Japanese engineering company JGC to design and build a 50-megawatt solar power plant.

The deal, signed by Gia Lai Electricity, is estimated to be worth over 5 billion yen ($47.4 million), with the facility to be set up in Gia Lai Province by November, according to the Nikkei Asian Review.

It's the second deal to be signed with Vietnam since the government introduced a feed-in tariff program in March 2017.

Vietnam is accelerating the construction of solar power plants to make up for an anticipated power shortfall due to the recent cancellation of several nuclear power projects.

The government is trying to nurture solar energy as the country's main source of electrical output. Solar power currently accounts for 0.01 percent of the country's total power output, but the government plans to increase the ratio to 3.3 percent by 2030 and 20 percent by 2050.

The cost of solar panels is falling, and the government is expected to introduce a system of buying excess solar power.

The Vietnamese government had planned to build two nuclear power plants with Russia and Japan, but the plan was cancelled in November 2016 due to the hefty up-front costs of several billion dollars for each reactor.

Investing in renewable energy is an emerging trend in Vietnam, and projects worth billions of dollars have been registered across the country.

An increasing demand for energy and limited reserves of fossil fuels are the first reasons for this new investment trend in Vietnam, said Nguyen Anh Tuan, a senior energy official at the industry and trade ministry.

With the development of new technologies, the cost of producing clean energy has dropped from VND3,500 to VND2,200-2,500 per kilowatt-hour (kWh), Tuan said.

He added that government incentives for solar power projects are another reason for this trend. The government has raised its buying price from 7.8 to 9.35 U.S. cents/kWh, while offering investors tax breaks and cutting land use fees.

Vietnam currently relies mainly on coal and hydroelectric power generation. The country is aiming to produce 10.7 percent of its total electricity through renewable energy by 2030, mainly through solar and wind energy, up from the 6 percent as previously planned.

Source: evnexpress

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Intellectual Property remains a big challenge for Vietnam under CPTPP

At an informal meeting of representatives from 11 countries (without US) taking place on the Asia-Pacific Economic Cooperation (APEC) dated on November 10th, 2017, the parties agreed to change from Trans-Pacific Partnership Agreement (TPP) to the Comprehensive and Progressive Partnership for Trans-Pacific Partnership (CPTPP).

Accordingly, the CPTPP contains 8,000 pages of documents, but only 20 articles of the TPP agreement, including 10 articles related to intellectual property (IP) and 4 points are reserved for the parties to negotiate in next time. Each member will list its delimited list of restrictions of their country.

According to the Vietnam Minister of Industry and Trade, CPTPP still guarantees a quality agreement like TPP-12, while ensuring new equilibria for member countries. The content of the CPTPP is not only about trade, investment, but also on intellectual property (albeit temporarily postponed) and other broad areas.

With CPTPP, Vietnam may not be the most beneficiary country like the proposed TPP, but it is still very important, because it brings together many of the criteria associated with reform, particularly institutional reform, improving the investment climate, business.

Vietnam law on Intellectual Properties will need to be amended because the legal system of Vietnam’s IP is not consistent with the legal system of developed countries. The Law on Intellectual Property of Vietnam, after many proposals, has not yet been approved by the National Assembly. Meanwhile, the amended Law on Technology Transfer, though approved in June 2017, still lacks specific guidelines on technology transfer.

Intellectual property rights in the TPP not only contain general provisions and requirements relating to areas of cooperation, patents, test data, designs, trademarks, geographical indications or copyright but also focuses on the legal enforcement of this right by nations.

The CPTPP is based on agreed commitments at the TPP, which are particularly important in paving the way for Vietnamese goods to penetrate into the members’ markets.

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Foreign investors register to invest 1.25 billion USD in January

Foreign investors registered to invest nearly 1.25 billion USD in Vietnam in January, which will include funding for new projects, in addition to existing projects and buying stakes in projects, which will equal 75.9 percent, compared to the same period last year.

In January, the disbursement of foreign direct investment (FDI) saw a positive increase of 10.5 percent to 1.05 billion USD year on year, according to statistics from the Ministry of Planning and Investment’s Foreign Investment Agency.

A number of large projects were granted licences during the month, including Kefico Vietnam Company Ltd, which was allowed to add 120 million USD in investment capital; Vina Cell Technology Company Ltd, which added 100 million USD; the Nam Dinh Ramatex Textile and Garment Factory project with total capital of 80 million USD in Nam Dinh province, funded by a Singapore investor; and Jotun Paint Company Ltd in HCM City, invested by a Norwegian investor with funds of 70 million USD.

Out of 125 countries and territories with FDI projects in Vietnam, the Republic of Korea was the most significant investor with 58.1 billion USD, accounting for 18.1 percent of total capital. Japan was in second place with 49.46 billion USD at 15.4 percent, followed by Singapore, Taiwan, Britishvirgin Island and Hong Kong.

In terms of investment in foreign countries, Vietnam granted licences for investments in foreign countries for six projects in January, with a total investment capital of 6.46 million USD.

Three of these projects were in retail and wholesale areas, while the remainders were in the fields of processing and manufacturing, residential services and science and technology.

The projects are being conducted in Canada, Campuchia, New Zealand, Germany, Belize and Myanmar.

- dtinews -

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Penalties on Working Without Work Permit in Vietnam

Vietnam has become an attractive destination for foreigner investors due to the impressive development of socio – economic in recent years. This is such a good opportunity for Vietnamese enterprises to get cooperation in business with foreign partners.

To take advantage of the opportunities to be the pioneer and market share, many of them have demand in employees with good skills and qualifications. To meet these requirements, more and more companies hire foreign workers for specific positions which might lack of human resources within Vietnam territory.

According to Labor Code 2012, the employer wishing to recruit the foreign workers has to explain their labor demand to the People’s Committee of provinces and obtain written approval from this agency. Pursuant to this written approval, the employer shall submit the application for the work permit to the Department of Labor, War Invalids and Social Affairs of the province where the planned working place of such foreign workers is located.

Work permit in Vietnam

A foreign citizen wishing to work in Vietnam must fully meet the following conditions:

Possessing full civil act capacity;

Possessing technical and professional qualifications and skills and health appropriate to the work requirement;

Not being a criminal or subject to penal liability examination according to Vietnamese and foreign laws;

Possessing a work permit granted by a competent Vietnamese state agency, except the cases specified in Labor Code.

Therefore, based on regulations of the Labor Code of Vietnam, except for the foreign citizens exempted from work permit i.e. investor of company established in Vietnam, all of cases the foreign citizens wishing to work in Vietnam shall be subject to work permit application. A foreign employee shall produce his/her work permit when carrying out immigration procedures or upon request of a competent state agency.

In case foreign citizens who do not belong to work permit exemption being found working in Vietnam without work permit, that person shall be considered violation of the law of Vietnam. In addition, the employer that uses the violated employee without work permit shall be punished accordingly.

According to Decree No. 95/2013/ND-CP amendments to the government’s Decree No. 95/2013/ND-CP dated August 22, 2013 on Penalties for administrative violations against regulations on employment, social insurance, social insurance, and Vietnamese guest workers:

i) Foreign citizen that working without work permits, except for the cases in which the work permit is exempt shall be expelled.

ii) Employers who employ foreign workers in Vietnam without work permits or certificates of exemption from work permits, or employ foreign workers using expired work permits shall be implied:

a. A fine from VND 30,000,000 to VND 45,000,000 if the violation involves 01 – 10 workers;

b. A fine From VND 45,000,000 to VND 60,000,000 if the violation involves 11 – 20 workers;

c. A fine From VND 60,000,000 to VND 75,000,000 if the violation involves more than 20 workers;

Additional penalty: The employer who commits the violation mentioned herein shall have its operation suspended for 1 – 3 months.

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From January 1, 2018, the license for import business is legally required for automobiles vehicle import

This is one of the provisions laid down in the Decree No. 116/2017/ND-CP prescribing statutory conditions for manufacture, assembly, import of automobiles vehicles and trade in automobiles vehicle maintenance and repair services.

Pursuant to this Decree, from January 1, 2018, enterprises will be allowed to import automobiles vehicles only if they satisfy statutory conditions and have already obtained the license for automobiles vehicle import business in accordance with applicable regulations. 

In order to obtain this license, enterprises are required to:

- Legally own, contractually lease or authorize automobiles vehicle servicing premises that conform to prescribed requirements.

- Have a confirmation or document evidencing that they are entrusted to act on behalf of foreign automotive manufacturing and assembling enterprises to recall automobiles vehicles imported in Vietnam.

Application documentation for the license is discussed in detail in the Decree No. 116/2017/ND-CP set to commence on October 1, 2017.

Source: Thuvienphapluat .vn

See more: Process Setting-up Foreign Owned Import Export Business in Vietnam

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Regulations on items not subject to VAT amended

This is one of the highlights of the Decree No. 146/2017/ND-CP amending the Decree No. 100/2016/ND-CP and the Decree No. 12/2015/ND-CP on Value-Added Tax (VAT) and Corporate Income Tax (CIT).

- They are mineral resources which have yet to be processed or transformed into other products;

- They are goods which are made directly from main materials that are mineral resources, and which have the aggregation of value of such mineral resources plus the energy cost that accounts for at least 51% of their production cost, except to the extent that:     

+ Such exported products are finished products produced from other intermediate products which are made from mineral resources.

These mineral resources may be directly extracted and processed into, or purchased for further production of, or processed by hiring other toll manufacturers into, exported products, by business establishments.    

+ Such exported products are final products made from main materials which are other than mineral resources (these mineral resources have been processed into other products).

The Decree No. 146/2017/ND-CP is set to commence on February 1, 2018.

Source: Thuvienphapluat .vn

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04 important things that enterprises must take into consideration in 2018

The policies and guidelines in effect from 2018 which may have significant influence on enterprises, including:

1. Simplification of documentation required for application for enterprise registration:

This is a guideline set out in the Resolution No. 136/NQ-CP dated December 27, 2017 on the plan to simplify administrative procedures and citizen's papers related to management of residents under the jurisdiction of the Ministry of Planning and Investment.

Accordingly, documentation requirements and contents of application and declaration forms necessary to apply for registration of establishment of enterprises will be subject to changes in the coming time, specifically including:

- Repealing the documentation requirement such as “Citizen Identification card, ID card, passport or other legally-required documents" for application of registration of enterprises.

- Replacing certain personal identification information by “personal identity numbers" existing in sample forms and declarations required by enterprise registration formalities.

Additionally, the Resolution provides a guideline to cancellation of the requirement for submission of personal identification documents in several formalities for outward and inward investment in Vietnam.

2. Support policies for Small and Medium-sized Enterprises

From January 1, 2018 the 2017 Law on Support for Small and Medium-sized Enterprises enters into force and provides a number of support policies for these enterprises, specifically including:

- Credit access support: Establishing the Credit Guarantee Fund to grant guarantee for corporate credit;

- Tax and accounting support: Allowing enterprises to apply the CIT rate in the definite term which is less than the one normally applied to other enterprises.

- Production premise support: Allocating unoccupied land for development and construction of industrial clusters, agricultural, forestry and aquacultural product processing zones; granting subsidies for the price of land lease for industrial parks, hi-tech parks and industrial clusters operating in local jurisdictions.

- Technological support; support for incubation centers, technical centers and shared working places: Supporting technological innovation and development; granting exemption from and reduction in land rental, non-agricultural land use and corporate income tax.

- Market expansion support: Establishing product distribution chains.

- Information, consultancy and legal support: Permitting enterprises to have access to information through the national portal for corporate support; granting exemption from and reduction in consultancy costs charged for use of consultants’ services.

- Personnel development support: Granting relief from costs of participation in business and business management training courses.

Especially, the Law prescribes particular policies intended for enterprises transformed from business households and small or medium-sized startups.

3. Elimination of a great number of business requirements

The Decree No. 08/2018/ND-CP provides for removal and reduction of a lot of business requirements in such sectors as oil and gasoline, cigarettes, electricity, commercial franchising, electronic commerce, chemical, industrial explosive and food. Below are typical examples:

- Elimination of certain requirements concerning oil and gasoline manufacturing and business;

- Elimination of requirements concerning the franchisee party involved in commercial franchising activities;

- Repeal of the requirement saying, "it is mandatory that websites must have legitimate domain names and conform to regulations on management of information available on the Internet”, which is one of the requirements for establishment of e-commerce websites for sale of commodities and provision of services.

The Decree No. 08/2018/ND-CP will enter into force from January 15, 2018.

4. Requirements for granting business licenses to foreign investors

The Decree No. 09/2018/ND-CP entering into force from January 15, 2018 has laid down provisions on innovation of requirements for granting the license to purchase and sell goods to foreign investors, specifically including:

- Covering more persons eligible for being granted the business license, including foreign investors who do not belong to member countries or territories of international treaties of which Vietnam is a member (in contrast to the previous regulation under which only foreign investors belonging to member countries of international treaties of which Vietnam is a member are eligible for such business license).

- Covering more goods and services which are eligible for the business license, including those which are not endorsed in international treaties of which Vietnam is a member (in contrast to the previous regulation under which only goods or services in which Vietnam is committed to open the market are eligible for such business license).

In each of the aforesaid cases, foreign investors are bound to meet certain requirements and criteria.

Source: Thuvienphapluat .vn

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