Malaysia Business Chamber Vietnam

Block G, Unit 0215, The Manor 2, 91 Nguyen Huu canh, Binh Thanh District, HCMC  Tel:(84-28) 6258 6316
Vietnam News



Vietnam - Solar Power Taking Off -  PPA Breaking News - The text of the PPA is issued - How to work with it:



Exchange rate risk at year’s end needs to be aware of

PM urges lower interest rates, taxes stable



Hourly minimum wage more conducive to labour productivity?

Enterprises ask ministry not to make haste on e-invoice



DEEP C leads port JV for Quang Ninh

Samsung explores new horizons in Vietnam



European developer announces 1st housing project in VN

Savills: HCMC's residential index up as Hanoi's eases



World Bank and Vietnam to pilot solar power auctions

Philippines' AC Energy keen on renewables in Vietnam



Numerous banks allowed to provide foreign exchange services

Public property might be used to pay for BT projects



Dr. Oliver Massmann

International Attorney at Law
Certified Financial Accountant and Auditor
General Director of Duane Morris LLC
Partner of Duane Morris LLP
Member to the Supervisory Board of PetroVietnam Insurance Holdings Joint Stock Company




By Oliver Massmann – Duane Morris Vietnam LLC 

Following the issuance of Decision No. 11/2017/QD-TTg of the Prime Minister on mechanism for encouragement of development of solar power in Vietnam (Decision 11), on 12 September 2017, the Ministry of Industry and Trade officially released Circular No. 16/2017/TT-BCT guiding Decision 11 (Circular 16). Circular 16 is aimed at providing regulations on formulation, approval and amendment of the national as well as provincial power master plan. In addition, the solar Power Purchase Agreement (Solar PPA), which is of great interest for many foreign investors, is also provided in Circular 16 as a mandatory template for future on-grid and rooftop solar power projects with only minor changes expected to be permitted during the contract negotiations.

In essence, the Solar PPA is almost the same as current applicable PPAs for renewable projects. This creates bankable issues for solar projects and a hindrance to foreign investors planning an investment in the sector.

Feed-in-Tariff (FiT)

Circular 16 repeats the solar FiT for power output from on-grid projects and excessive power output generated from rooftop projects specified in Decision 11 to be VND2,086/kWh or US 9.35 cents/kWh. This FiT only applies to on-grid projects and rooftop projects coming into commercial operation before 30 June 2019 and will remain within 20 years from the commercial operation date. We note that while the FiT for power output from on-grid projects is adjusted according to the fluctuation in the VND/USD exchange rate, meaning at any time during the year, it is not the same for rooftop projects. Instead, the mentioned FiT for excessive power output generated from rooftop projects remains the same throughout the first year of operation, and the new FiT for the next year will be adjusted based on the announced VND/ USD exchange rate of the last working day of the previous year.

EVN’s rights and obligations as the sole off-taker

EVN is delegated to purchase all power output generated from solar power projects pursuant to terms and conditions of the Solar PPA within 20 years.

It is noteworthy that the Circular 16 and the Solar PPA list out certain circumstances where EVN is not obliged to purchase power as negotiated with the seller, for example:

  1. when EVN is in the process of installing equipment, or making repairs, replacement, inspection or examination of the grid connection of the seller's power plant;
  2. when the transmission grid or the distribution grid connected to EVN’s grid has a problem or grid equipment directly connected to EVN's transmission grid or the distribution grid has a problem; and
  3. when EVN’s grid needs support to recover after the incident in accordance with the provisions of operation of the national power system and the standards, technical regulations of the electric industry.


Unfortunately, the current Solar PPA does not include provisions protecting the interests of the seller in the abovementioned circumstances. It is quite risky for the producer if the output is ready to be fed to the grid but the connection is not available to do so. Absent a clear indication of whether the Solar PPA is a ‘take or pay” agreement, investors will find it difficult to secure and ensure the profits and revenue of their projects.

Dispute resolution

The Solar PPA allows either party to the agreement to bring the dispute to local courts for litigation and other energy-related state bodies of Vietnam (General Directorate of Energy and the Electricity Regulatory Authority of Vietnam) for mediation and resolution.

The Solar PPA does not provide for international arbitration to be an option to resolve the dispute. This could be a great concern for foreign investors, especially those of large utility scale projects.

Other key issues of concern

  • No Government guarantee to enhance the credit of EVN as the sole off-taker;
  • No provision addressing the risks of changes in applicable laws; and
  • The Solar PPA is required to follow a specific template, which is not bankable.



Although these abovementioned bankability issues remain in the Solar PPA as the same for other renewable energy PPAs, we have assisted our clients on different large scale power projects, also in the Renewable Energy sector and managed to win bankable PPAs with EVN. We strongly believe that our track record experience will help investors and the same will be done for the Solar PPA.


Please do not hesitate to contact Dr. Oliver Massmann under  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.


Back to Top



 Exchange rate risk at year’s end needs to be aware of

Tri Thuc Tre 

The foreign exchange market is still in stable trend thanks to abundant foreign currency supply, non-fluctuating interest rates as well as large amount of foreign currency accumulated by banks. However, there have had some signs of change, therefore, it is impossible to be subjective.

*Foreign exchange market to maintain the stability

Le Quang Trung, VIB’s general director said there are three worth noticing points when looking at the current domestic foreign exchange market.

First, FDI investment in Vietnam is very large and increases very rapidly, which means that a large amount of foreign currency has flown into and increased fast. Accordingly, investors have to convert foreign currency into dong to do business, so the supply of foreign currency is good.

Second, foreign currency reserves increases, supporting dong.

Third, the balance of imports and exports slightly improved at the beginning of the year but has recently been restrained at less than $2 billion, which means the balance deficit trend is well controlled and in the downward trend from now till the end of the year.

For foreign factor, Trung said previously, the market expects that the U.S Federal Reserve (Fed) will strongly increase the interest rates of the US dollar, helping the value of this currency to rise in the market. However, in reality, the US Dollar Index fell to around 92 and the U.S dollar constantly lost value against many other currencies.

“In the first eight months of the year, the U.S dollar really depreciated. When valuing dong in the currency basket, most of currencies have appreciated compared to US dollar. So, in my opinion, external factors affecting dong are mostly positive. Dong has maintained stable trend in the last months of the year”, said Trung.

BIDV’s capital business research group said the foreign exchange market in August 2017 was stable. The fact that the supply of foreign currency was stable, the interest rate market did not have much fluctuation, and banks accumulated a large amount of foreign currency were the reasons leading to the stability in the month.

Exchange rate in this month was mostly traded within a narrow band of 22,725-22,735 dong/US dollar though some sessions increased to 22,740 dong/US dollar due to the demand of FDI customers.

Also in August, as per the research group, the State Bank was estimated to purchase about $300-350 million. The central rate in August continued to increase in the middle of the month compared to the end of July, and then slightly decreasingly to 22,438 dong/US dollar at the end of the month.

As such, during the entire August, the central rate increased about 11 points, lower than the growth of the previous months when this index improved 284 points since the beginning of this year.

Despite the narrowed difference in interest rate between dong and US dollar in the market, it is still strongly supported by the supplydemand balance and fluctuation of the US dollar in the international market.

Specifically, the research group said in August 2017, the foreign currency supply continued to be plentiful. The estimated trade balance was about $300-400 million.

Besides, the FDI disbursement continues to grow since the beginning of the year, reaching about $1.25 billion.

In addition, foreign indirect investment also took place vibrantly in both stock and bond markets. The DXY index in the international market continued to trend down about 0.8-0.9 percent in August to 92.25 percent amidst the U.S political turmoil and the US dollar’s pressure suffering from other strong foreign currencies, especially the euro.

Another point that supports the stability of the foreign currency market is that the foreign currency credit in September is expected to grow positively again in line with the credit growth trend of dong due to high capital demand of businesses, continued stability of exchange rate and attractive interest rate difference.

At the same time, foreign currency mobilisation is expected to decrease slightly again after rising sharply in August. Accordingly, the difference in US dollar mobilisation and lending is expected to shrink in this September.

“The increase pressure from external factor also tends to decrease as the LIBOR rates are expected to continue moving sideways when Fed’s ability to increase interest rate in Q3 fell to a low level of just 30 percent after the meeting last July”, said the research group.

*But it is impossible to be subjective

The remarkable point in the economic report in August and the first eight months of 2018 by the National Financial Supervisory Commission (NFSC) said the import and export turnover reached the highest growth rate since 2012.

In the first eight months of 2017, the import and export turnover respectively swelled 17.9 percent and 22.3 percent from the same period of 2016 (exports increased 5.5 percent and imports decreased 0.3%).

As such, at the end of August, the trade deficit reached $2.1 billion, equal to 1.6 percent of the total import-export turnover. Of which, the state economic sector had a trade deficit of $16.4 billion and the foreign invested sector had a trade surplus of $14.3 billion.

“This means exchange rate suffers from pressure of trade deficit in the last months of the year”, said a leader of the National Financial Supervisory Commission.

BIDV’s capital business research group forecasts that though exchange rate remains stable in September 2017, ranging around 22,725-22,750 dong/US dollar due to abundant reserve, some important events in September may influence, causing exchange rate to fluctuate in the short term.

Specifically, the cash flow from FDI disbursement is likely to continue growing positively in 2017 as Vietnam continues to vigorously reform and the government makes commitments to develop healthy business environment, the disbursed FDI in September is expected to be equal to August, at about $1.25-1.3 billion; the trade balance that is improving and is likely to continue having a surplus in September, estimated at $200-400 million, which will also add to the supply.

However, the DXY index is expected to continue going sideways as the US economy has not had sudden changes.

At the same time, the U.S government continues having to struggle to regain the confidence of investors and the market as policy reforms made in the Presidential election campaign of the U.S President Donald Trump has continuously failed at the Senate and the House of Representative. In addition, in January-September, there will have Fed’s regular meeting.

It is expected that in this meeting, Fed will launch the plan to reduce the holding of government bond in the asset balance sheet. That may affect the domestic market psychology and the US dollar/dong exchange rate may fluctuate slightly this time.

“Due to the above mentioned factors, we continue to maintain the forecast that this year’s exchange rate will be 22,950 dong/US dollar”, said the research group.

Pham Hong Hai, CEO of HSBC Vietnam also said the US dollar/dong exchange rate tends to increase in the last months of the year but will not be large.



Back to Top

PM urges lower interest rates, taxes stable


The government has instructed corresponding administrative authorities to aim for a 0.5 per cent decrease in lending interest rates from now until the end of 2017, while keeping taxes, fees and other charges unchanged, in order to propel the current disbursement rate in public spending and boost businesses’ productivity.

Under Resolution 84/NQ-CP issued last week, prime minister Nguye~n Xuan Phuc signed the request for the State Bank of Vietnam (SBV) to take the initiative in monitoring the money supply and general monetary policy to suit the actuality of the country’s macroeconomic flows based on inflation rates and the money market.

At present, the PM has asked the SBV to strive for both a 0.5 per cent interest rate reduction and a 21 to 22 per cent annual credit growth rate for 2017.

Simultaneously, the Ministry of Planning and Investment (MPI), Ministry of Finance (MoF), and other central and local departments or agencies will shift their focus to accelerating the disbursement rates for public investment, as stated in Resolution 70/NQ-CP.

If these changes can be implemented, the country should be looking at a much better fourth quarter result for 2017, including the annual goal of 6.7 per cent GDP growth.

Additionally, all taxes, fees and charges should remain unchanged in 2017 to encourage exports and production, in the hope of achieving economic growth consistent with the domestic market.

In the last four months of 2017, increases in the disbursement of public spending on projects, including from official development assistance and the State budget, should play a significant role in helping economic sectors reach their year-on-year growth goals of 3.05 per cent for the agriculture sector, 7.91 for industrial production, and 7.19 per cent for tourism and services.

In the first eight months of 2017, the MoF has reported a total of VND137 trillion (US$6.1 billion) in State budget disbursement for public projects, amounting to 38.4 per cent of the yearly plan for public investment as approved by the National Assembly, in comparison with 2016′s 39 per cent over the same period.

On the other hand, the money and credit market has been stable, with credit rates marking a year-on-year increase of 10.06 per cent as of the end of August.

As the SBV is in charge of keeping lending rates low to encourage borrowing from businesses and other economic sectors, the MoF must take the lead in implementing support policies to monitor the State budget, guarding against misspending, promoting saving across all sectors and strictly following the government’s regulations on financial and budget management.

The MoF has in turn asked local authorities to help reduce business related costs, and analyse the impact of an increase in value added tax on the general economy.

The government also requested the MPI and the MoF to work with the Ministry of Transport on mobilising investment towards strategic public traffic infrastructure projects, helping speed up disbursement on the North to South Vietnam highway project, as well as the national railway construction project and the Long Thanh airport project in HCM City.

Phuc also required the SBV to increase monitoring, inspection and dealing with any breaches in the credit sector, especially when it comes to the financial branch’s system security.


Back to Top




Hourly minimum wage more conducive to labour productivity?


Vietnam needs to convert the monthly minimum wage to hourly minimum wage to increase labour productivity.

This was one of the proposals of the Vietnam Institute for Economic and Policy Research (VEPR) at the workshop themed “Labour Productivity and Wage Growth in Vietnam” organised by VEPR and the Japan International Cooperation Agency (Jica) today in Hanoi.

Vietnam is one of the countries having the lowest labour productivity in Southeast Asia. Average productivity per worker in Vietnam has improved significantly since 2010, by 23.6 per cent, according to figures from the general Statistical Office (GSO), but the gap between Vietnam and the region remains. Especially, Vietnam’s productivity was put at 15 times less than in Singapore, eleven times less than in Japan, and ten times less than in South Korea.

Bui Sy Loi, deputy chair of the National Assembly’s Social Affairs Committee, said that introducing the hourly minimum wage will increase labour productivity and will reflect the essence of the market economy. The hourly minimum wage will also create harmony in terms of benefits between enterprises and employees.

Nguyen Thi Lan Huong, former director of the Institute of Labour Science and Social Affairs, agreed with the hourly minimum wage due to its flexibility and convenience for both enterprises and employees.

Huong said that numerous countries in the world have applied the hourly minimum wage and they are listed in the top ten countries having the highest minimum wages. The ranks of these countries include Australia, Belgium, the Netherlands, New Zealand, and Germany.

“In order to increase labour productivity, the government should move the minimum wage policy and permits enterprises and employees to negotiate employees’ income among themselves. Enterprises have differences in terms of scale and recruitment policy and paying the salary based on labour productivity will stimulate the employees to work hard,” said La Van Thanh, representative of Foster Electric Co., Ltd

These proposals were built to respond to concerns that labour productivity increases at a much slower pace than the minimum wage, badly affecting Vietnam’s competitiveness against regional competitors.

Vietnam has witnessed rapid increases in the minimum wage over the past years, which grew at double-digit annual rates during the 2007-2015 period, far exceeding per-capita GDP and CPI.

During the same period, the growth rate of the minimum wage was also higher than that of labour productivity. Specifically, the ratio of minimum wage to labour productivity saw rapid increase, from 25 to 50 per cent.

This pattern cannot be observed in other countries in the region such as China, Indonesia, and Thailand. The gap between the growth rates of minimum wage and labour productivity in Vietnam has widened faster than in other countries considered.


Back to Top

Enterprises ask ministry not to make haste on e-invoice

The Saigon Times

While admitting huge benefits of electronic invoices, many enterprises find it hard to issue e-invoices from next year as required, while others want to decide which form of invoice is best for them, instead of being forced to use e-invoices.

At a seminar held last week to collect comments on a draft decree on invoices held by the HCM City branch of the Vietnam Chamber of Commerce and Industry (VCCI), many businesses expressed concerns over the new regulation that forces enterprises to use e-invoices from early next year.

Meanwhile, Nguyen Ngoc Tuan, vice chair of the Dong Nai Association of Accountants, said the use of e-invoices from early 2018 to report sales data to tax offices may cause wastefulness. He proposed a longer time to prepare for the e-invoice application and no punishment for the use of paper-based invoices.

A representative of Nestle Vietnam agreed that the time left to prepare for implementing the new regulation is too short, while Liksin Corporation proposed that the Ministry of Finance allow businesses to decide which is good for them.

Phan Thi Linh Thai from Ajinomoto Vietnam said the company has yet to issue e-invoices due to numerous obstacles such as differences in technological platforms of its customers.

Nguyen Thi Thuy Minh, an accountant at Orient Commercial Bank (OCB) which has issued e-invoices since last year, said the benefits of e-invoices to banks are considerable. However, she proposed cutting a fee of VND300 for an e-invoice which is not in line with the target of reducing business costs and said she expected that enterprises could be given leeway.

Nguyen Thi Thu Ha from the general Department of Taxation said e-invoicing is becoming a global trend and the tax agency wants more agencies and firms to use e-invoices.

Online tax declaration and digital signature services as well as software are available and it is necessary to have a standard invoice to ensure connections and transmissions among relevant agencies nationwide, said Ha.

The tax offices will support enterprises to save costs and make the most of available resources, she added.

A representative of the Department of Information Technology of the general Department of Taxation said competent authorities have confidence in the transition. However, many enterprises may have difficulty issuing e-invoices.

The draft jointly prepared by the general Department of Taxation and the Ministry of Finance is aimed at replacing paper invoices with electronic ones to cut procedures and create a more transparent business environment.

The tax agency proposed that the current number of 830 enterprises using e-invoices in the country should maintain the current procedures, but tax data and declarations must be periodically sent to the tax authorities from January 1, 2018.

Risky enterprises which purchase paper invoices from tax offices must use e-invoices with verification codes issued by tax authorities from January 1 next year while other enterprises using paper invoices printed by themselves will carry out the regulation from July 1, 2018.

The tax offices allow firms to continue using paper invoices that are already printed within 2018.

Back to Top



Russia’s private leader in port development and operation, The Seaport of Azov, and the DEEP C consortium headed by leading Belgian port, industrial zone, and green energy group Rent-A-Port have agreed to develop a state-of-the-art ecological industrial zone and port complex in the northern province of Quang Ninh.

The establishment of a Vietnamese-Russian industrial manufacturing hub in northern Vietnam is expected to speed along a new wave of Russian investments in Vietnam as a result of recent high-level governmental commitments to boost the two countries’ investment and trade in the near future.

September 8 marked a milestone for co-operation ties between Quang Ninh authorities, Tien Phong Industrial Zone JSC – in which DEEP C consortium is a major shareholder – and The Seaport of Azov. The parties agreed to seek the central government’s approval to transform an area of 100 hectares in Quang Ninh’s South Tien Phong region into a hub for industrial manufacturing and port operations along the Chanh River.

The signing of the memorandum of understanding (MoU) was made on the sidelines of the 20th Session of the Vietnam-Russia Intergovernmental Commission on

Trading-Commerce and Science-Technology Cooperation in Ho Chi Minh City, which saw the participation of approximately 150 Vietnamese and Russian businesses.

According to the MoU, the development of the Vietnam-Russia Industrial Complex within the $128 million Tien Phong Industrial Zone is expected to kick off swiftly if Vietnamese authorities give their go-ahead to the project soon.

The Seaport of Azov started investment in Quang Ninh in 2016. The intention of the partners is to equip the Vietnam-Russia Industrial Complex with a liquid jetty and a general cargo port, as a continuation of their year-plus of co-operation.

The complex will be developed in a location between the international deepwater seaport of Lach Huyen in the northern port city of Haiphong and the shallow Chanh River in Quang Ninh. This would enable all manufacturers based in the complex to transport their products via an inland waterway in order for them to be able to reduce the number of trucks on the road.

“This is a great opportunity to present The Seaport of Azov’s commitment to invest in Vietnam. Our ultimate aim for this strategic co-operation framework is to attract Russian companies to invest and expand their business in Vietnam in general and in northern regions like Quang Ninh in particular,” said Andrian Sinebok, chairman of the Board of The Seaport of Azov, at the signing ceremony.

DEEP C and The Seaport of Azov’s pipelined industrial zone and port complex coincides with investment from Russia to Vietnam hitting a downturn. Statistics show that in the first eight months of this year, Russian businesses registered to invest roughly $1.026 billion in 114 valid projects in Vietnam.

The deal is also a positive result of the partnership agreement between Vietnam and Russia signed at the end of June. Vietnamese President Tran Dai Quang and Russian President Vladimir Putin agreed on investing more than $10 billion in both countries in the coming years.

According to Marc Stordiau, Rent-A-Port’s CEO, the signing of the MoU represents the strong business relationship of Rent-A-Port and The Seaport of Azov and a 20-year friendship between the global businesses.

For Vietnam, this is the logical continuation of the previous co-operation between DEEP C consortium and The Seaport of Azov in Euro Jetty JSC. The first investment of Euro Jetty JSC was the existing liquid jetty - one of the biggest of its kind in northern Vietnam - in Haiphong’s Dinh Vu/DEEP C Industrial Zone, which has attracted more than 70 projects invested by multinational companies from Japan, Germany, the US, Vietnam, Singapore, and South Korea, with a total investment amount of more than $3 billion.

Stordiau told VIR that The Seaport of Azov is operating a port in Russia in a location similar to Tien Phong, and thus this latest business venture of the Russian partner with its port experience and the DEEP C consortium will likely be successful. “We will continue working together with the Vietnamese authorities so as to realise a strategic plan to develop the maritime access to Tien Phong Port of Quang Ninh,” Stordiau said.

The Seaport of Azov is located on an intermodal corridor intended for movement of cargo from north to south, and also handles freight from and to the Balkan-Danube and Mediterranean regions. It is the main gate connecting the Mediterranean Sea with the internal waterway system of Russia and the Caspian Sea. It allows the delivery of cargo to the centre of Russia, to the Ural Mountains, and Central Asia.

Rent-A-Port is the port-related investment and management arm of the Belgian holding company Ackermans & van Haaren, which was founded in 1885 and is one of the largest listed holding companies in Belgium, with assets worth €2.7 billion ($3.2 billion).

Rent-A-Port operates as an engineering and investment company that analyses, designs, constructs, develops, and manages port, logistic, and marine infrastructure, as well as industrial zones worldwide. Some examples are the port of Antwerp (Belgium), the second-busiest port in Europe; the port of Kampen (Netherlands); the port of Duqm (Oman); and the port of Messaieed (Qatar).

In Vietnam, Rent-A-Port’s investments are in Dinh Vu Industrial Zone JSC with three DEEP C Industrial Zones covering 3,000ha in Haiphong, in Tien Phong Industrial Zone JSC with two DEEP C Industrial Zones in Quang Ninh, in green energy and water treatment projects in Haiphong and Halong Bay, and in co-operation with the Vietnamese government in wind- and solar-driven micro-desalination for agricultural production in the Mekong Delta region.

“Rent-A-Port has already invested an amount in excess of $200 million and has now also committed to invest an additional $250 million in various industrial zone and port complexes in Vietnam in the next 10 years,” Stordiau told VIR. 


 Back to Top


Along with investing $17 billion in high-tech complexes in Thai Nguyen and Bac Ninh provinces, Samsung plans to encroach on other sectors in Vietnam.

Along with the launching of Galaxy Note 8, the newest Samsung smartphone model, on September 13 in Ho Chi Minh City, the Korean giant will also launch Samsung Pay, its mobile payment service, soon.

This is not the first time that Samsung mentions launching Samsung Pay. Last year, when the company launched the Galaxy S7 and S7 Edge in Vietnam, Kim Kyung-dong, director of Samsung Pay, said that Vietnam was considered a potential market for Samsung Pay and expected to convert the country’s majority of consumers to electronic payments.

At the time, Samsung Pay was expected to launch in Vietnam in 2016, however, to date, the company completed the entire procedures for launching Samsung Pay in Vietnam.

According to unofficial information, numerous domestic banks, including Vietcombank, VietinBank and BIDV, and even foreign banks like Shinhanbank and Citi Bank will support Samsung Pay to extend its network in Vietnam.

Several days ago, according to newswire Business Korea, Samsung Securities announced a cooperation deal with Caldera Pacific, a Hong Kong-based private equity fund, to buy a 40 per cent stake in Dragon Capital and become its second-largest shareholder.

According to the deal, Samsung Securities will hold 10 per cent and Caldera Pacific 30 per cent.

The deal aims to accelerate Samsung’s inroads into the Vietnamese stock market to keep up with competing compatriots who are already present in Vietnam’s numerous sectors. 

Market experts forecast that acquiring a stake in Dragon Capital is the beginning of Samsung Securities’ strategy to enter the Vietnamese stock market and the company may additionally acquire stakes in other companies.

In March 2016, Samsung was granted the investment certificate for a large-scale research and development centre in Hanoi’s Hoang Mai district.

This $300-million project, which would be Vietnam’s largest research and development (R&D) centre to date, also marks the first time a global tech giant has chosen Vietnam as an R&D hub.

Samsung planned to build a 21-storey building on a three-hectare land plot and employ 2,000 labourers in 2016 and eventually 4,000 in the upcoming years. The total capital volume of $300 million would be disbursed within four years, including $50 million in the 2016-2017 period, $150 million in 2018, and the remaining $100 million in 2019.

However, to date, there has been no move to implement the project.


Back to Top


uropean developer announces 1st housing project in VN


EZ Land, backed by the KEY SICAV SIF fund from Luxembourg, has announced plans to build 1,000-1,500 apartments a year for the next five to eight years.

Speaking at the company’s launching ceremony in HCM City on Tuesday, Oliver Brazier, managing partner of EZ Land Vietnam, said the company would focus on mid-priced apartments for which demand is high now and expected to remain so in future.

Its first project is HausNeo in District 9, where 568 apartments will be built at a cost of VND500 billion (US$22.02 million).

EZ Land’s apartments would be inspired by the Bauhaus style – which shuns ostentation -- he said.

The company has “a goal of putting the first bricks for the sustainable development of the real estate market in Viet Nam,” he added.

The prices would be announced in October, but a typical two-bedroom apartment would cost VND1.4-1.5 billion, the company said.

With the Government’s policy of supporting the property market, growing GDP and incomes and high demand for a first home among millennials, Viet Nam, especially HCM City, is an attractive destination for developers, the company said.


Back to Top


Savills Vietnam releases Property Price Index for August and second quarter.


With substantial supply in the mid and high-end segments, the residential index for Ho Chi Minh City in August increased significantly against August 2016, according to the Savills Property Price Index (SPPI) report.

The index reached 93 points in the second quarter, an increase of 1 point quarter-on-quarter and unchanged year-on-year. Sales of approximately 11,700 units were up 36 per cent quarter-on-quarter and 68 per cent year-on-year, for a five-year high.

Grade C continued to perform well, with 62 per cent of total transactions. Grade B sales were over 4,200, a significant 35 per cent quarter-on-quarter and 24 per cent year-on-year increase.

The office index in the second quarter was 89 points, up 2 points quarter-on-quarter and 7 points year-on-year. Improvements were a result of 4 per cent quarter-on-quarter and 5 per cent year-on-year rent increases.

Total office take-up was 25,500 sq m, up 477 per cent quarter-on-quarter and 79 per cent year-on-year. Grade A had the highest quarterly take up for two years, of over 19,000 sq m.

Meanwhile, in Hanoi, the residential index was 106.1 points in the second quarter, down 1 point quarter-on-quarter and 2 points year-on-year. The average selling price was $1,209 per sq m. Increasing secondary supply is causing segment prices to ease a little. Grade A primary prices also decreased with new projects offering under-average prices.

In the second half of this year, approximately 23,500 units from 45 projects will come online. Affordable residential projects with well-rounded facilities are forecast to attract the most buyer interest.

The office index moved up to 65.2 points, gaining 2.2 points against the first quarter and 5.8 points year-on-year, mainly due to 3.7-point quarter-on-quarter and 7.4-point year-on-year occupancy increases.

In particular, the non-CBD index steady upward trend continued, rising 2.2 points quarter-on-quarter and 7.6 points year-on-year as occupancy increased 3.7 points quarter-on-quarter and 8.6 points year-on-year.

No new CDB supply over the next two years will likely ease pressure and see average rents increase. The surge of new supply in non-CBD areas is providing occupiers with more choice and pressuring developers to adjust asking rents to more competitive levels.

Back to Top




In preparation for the coming open energy market in Vietnam, the World Bank and the Ministry of Industry and Trade (MoIT) will implement the pilot programme to auction solar power with the floor price of 9.35 US cent per kWh. The programme is aimed at accelerating the development of registered projects, while simultaneously luring in more new investment capital.

This was announced by Tran Hong Ky, energy expert of the World Bank, at the inception workshop themed “National Assessment of the Development Potential of Grid-Connected Solar Photovoltaic Projects in Vietnam until 2020 with a Vision to 2030,” organised this morning in Hanoi.

The workshop was organised within the framework of the Renewable Energy and Energy Efficiency (4E) project, which is jointly implemented by Power and Renewable Energy Agency under the Ministry of Industry and Trade (MoIT), and Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Accordingly, the Vietnamese government will issue set capacities (e.g. generating 500MW by 2020) and companies will be able to bid with complete project plans and feed-in-tariffs. The winner, generally the investor offering the best prices, will be awarded the project and the power purchase agreement to then arrange capital, land, and complete the advertisement procedures to implement the project.

“World Bank and MoIT are discussing plans to implement the programme and the method to collect the $2-million capital for implementation. We expect to implement the programme before the decision on polices for encouraging solar power development in Vietnam expires in June 2019 so that we can compare the effectiveness of the existing selling price policies to the auction programme,” Ky added.

“The pilot auction programme was proposed based on investors’ concerns about the selling price of solar power. Thus, we expect that the programme will help Vietnam to exploit the maximum potential of solar power,” Ky stated.

The selling price is one of the primary concerns of investors looking to develop solar projects in Vietnam, thus, on April 11, the government issued Decision No.11/2017/QD-TTg on an incentive mechanism for developing solar power projects.

Accordingly, the buyer will be obliged to buy the whole generated output from on-grid solar power projects with the feed-in tariff at the point of delivery of VND2,086 per kWh (not including value added tax), equivalent to 9.35 US cent per kWh. This feed-in tariff will be adjusted according to VND/USD exchange rate fluctuations. The decision is valid from June 1, 2017 until June 30, 2019.

Responding to the decision, Nguyen Sy Chi, deputy director of Ocean Renewable Energy JSC, said that the above selling price is quite attractive and investors in general and Ocean Renewable Energy in particular can see profit in investing in this sector. However, the effective duration is quite short, while solar projects operate for 20-30 years, thus it is difficult to forecast policy changes after the existing decision expires and firms cannot build long-term plans.

Regarding the proposal of the pilot auction programme, Chi said that the investor will face numerous risks because, in general, before deciding to develop a project, investors will calculate the chances of whipping up the necessary investment capital and the project company’s equity.

This process includes the calculation of bank loans to be taken up for financing the project. However, a precedent condition set by banks to provide loans is the submission of a power purchase agreement. Thus, in case of a selling price auction, investors will find absolutely no certainty as to the funds available for them, making the whole process no more than mere guesswork, a risk very few would be willing to take on.

Vietnam’s fast-growing economy has placed tremendous pressure on the country’s fossil fuel-dependent electricity production over the past few decades. Meanwhile, the county has expansive solar resources.

The solar irradiation levels are comparable to most countries in the region, including developed solar markets, such as China, Thailand or the Philippines, as well as to mature international solar markets, such as Spain and Italy. Thus, solar energy can strongly contribute to meeting the raising energy demand in Vietnam.

Solar photovoltaic (PV) is expected to be the main renewable energy source with the installed capacity to be increased from around 6-7MW by the end of 2015 to 850MW by 2020 (1.6 per cent of the country’s power generation) and 12,000 GW by 2030 (equivalent to 3.3 per cent).

Potential solar projects under construction

On August 29, 2015 Thien Tan Investment and Construction Joint Stock Company organised the ground-breaking ceremony of the 19.2MW Thien Tan solar power project located in the central province of Quang Nam’s Mo Duc district.

The plant was expected to add about 28 million kWh of electricity to the national grid per annum.

The VND900-billion construction was scheduled for completion in July 2016. However, to date, the construction has yet to finish.

Along with Thien Tan’s existing project in Quang Ngai, the company planned to develop the $2-billion Thien Tan Solar Energy Project in Bac Ai district in Ninh Thuan province. The project, which covers an area of 1,400 hectares, is divided into different phases with five power plants in total, of which the first 50MW plant will commence construction in 2017. The plant is expected to be put into operation in 2018.

To date, the group has completed several preparatory activities, including proof of financial capacity, investigation and development of the topographical map, as well as submitting the environmental impact assessment report.

BCG Bang Duong Energy Joint Stock Company under Bamboo Capital JSC and South Korean Hanwha Group will cooperate in implementing a solar power project in the Mekong Delta’s Long An province with a total investment of $100 million.

The 125-hectare project’s capacity will be 100MW and will begin construction in 2018 to be completed by 2019.

BCG Bang Duong will arrange domestic capital sources, conduct administrative procedures, research and implement the project, as well as negotiate the signing of electricity purchase contracts with Electricity of Vietnam (EVN). Hanwha will provide technology, engineering, and installation, and arrange international funding.

The first project to be connected to the national grid is An Hoi solar farm in Con Dao of Ba Ria-Vung Tau province. The project’s construction was kicked off in March 2014 and started transmitting electricity to the Con Dao grid in early December 2014 with a capacity of 36 kWh.



Back to Top


Company announces plans to build renewable energy plants in Vietnam over next two or three years.

AC Energy Holdings Inc., the power generation unit of conglomerate Ayala Corp., has unveiled a plan to build renewable energy plants with a combined capacity of several hundred megawatts in Vietnam over the next two to three years.

AC Energy’s President Mr. John Eric Francia said the company was in talks with several potential partners in Vietnam to implement the strategy. The move to look for potential renewable projects in Vietnam is part of its thrust to reach 2,000 MW of attributable capacity by 2020, with half coming from renewable energy projects.

Mr. Francia said that while the company was open to all types of technologies, it was keenly interested in renewable energy. “The market in Vietnam is growing in the double digits and my view is that there is a need for greater supply,” he said. “They have no reserve margin with double digit growth, so are in need of additional investment.”

Affirming that Vietnam was offering positive investment opportunities, he said he was hoping that a deal would be finalized soon. “We are trying our best,” he said.

Currently with 1,300 MW of capacity, including 300 MW of renewable energy, AC Energy recently acquired Bronzeoak Clean Energy, one of the leading renewable energy developers, having built over 250 MW of solar and biomass projects, as well as San Carlos Clean Energy.

Ayala Corp., the Philippines’ oldest conglomerate, entered Vietnam in 2008 through its subsidiary Manila Water’s $44-million water loss reduction project in Ho Chi Minh City.

It became a strategic investor in the Ho Chi Minh City Infrastructure Investment Joint Stock Co. (CII), the leading infrastructure developer in the southern city, in 2012, and now holds an 8.8 per cent stake in CII via its unit VIP Infrastructure Holdings Pte. Ltd. Through Manila Water, Ayala now owns a 38 per cent stake in Saigon Water Infrastructure JSC (SII).

Vietnam is trying to generate enough energy to sustain the country’s growth and to connect the millions of people who still do not have access to power, while gradually shifting towards clean and low-carbon energy. Last year, the government revised down its output target for coal-fired power plants to 53.2 per cent of the country’s total power generation by 2030 from the previous 56.4 per cent.

The country is aiming to produce 10.7 per cent of its total electricity through renewable energy by 2030, mainly through solar and wind energy, up from 6 per cent previously. In May this year, the government issued long-anticipated regulations on solar energy projects.

A raft of incentives to support renewable energy will be in place to June 2019 and have been dubbed a “landmark” in the country’s solar energy outlook. Other than exemptions on import duties and incentives including breaks in taxes and land use fees for solar power projects, raising the bid price to purchase solar energy to 9.35 US cents per kWh is a key measure.

Most recently, the Ministry of Industry and Trade has asked the government to raise the buying price for wind power in an effort to help investors cover high input costs, suggesting that the price should be lifted to 8.7 US cents per kWh for wind energy projects on land and 9.95 US cents per kWh for offshore plants.

Since 2011, the buying price for wind energy has stood at 7.8 US cents for all land-based projects in Vietnam, with 6.8 US cents paid by State-run power monopoly Electricity of Vietnam (EVN), and the remainder coming from the country’s Environment Protection Fund. For the country’s only offshore plant, in the Mekong Delta province of Bac Lieu, the current price is 9.8 US cents per kWh.

Back to Top


Numerous banks allowed to provide foreign exchange services


In early September 2017, the State Bank of Vietnam (SBV) issued a Decision amending the licenses, in which supplemented the function of “doing business and providing foreign exchange services in the domestic and international markets in the area regulated by SBV” for many banks.

Specifically, the Vietnam Technological and Commercial Joint Stock Bank (Techcombank) and Asia Commercial Joint Stock Bank (ACB) are approved by SBV’s Governor to supplement Clause 8 of the operating license with “doing business and providing foreign exchange services in the domestic and international markets within the area regulated by SBV”.

At the same time, the head of SBV also approved the amendment of Section II, Article III of the license of operation of foreign bank branches for three foreign bank branches to “doing business and providing foreign exchange services in the domestic and international markets within the area regulated by SBV”. These three foreign bank branches including The Bank of Tokyo Mitsubishi UFJ, Ltd,Hochiminh city branch (MUFG); Far East National Bank Hochiminh city branch (now renamed as SinoPac Bank Hochiminh city branch); and Mizuho Corporate Bank, Ltd,Hochiminh city branch (now renamed as Mizuho Bank, Ltd,Hochiminh City branch).

The foreign banks and foreign bank branches are responsible to (1) carry out the activities specified in this Decision to ensure compliance with the law on foreign exchange and other relevant regulations; (2) carry out the procedures stipulated in Clause 3, Article 18b of Circular 40/2011/TT-NHNN dated December 15th 2011 of SBV which regulates the licensing, organisation and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organisations engaging in banking activities in Vietnam (as amended by Circular 08/2015/TT-NHNN dated June 30th 2015 of SBV) for the above mentioned activities.

Back to Top


The Ministry of Finance recently revealed a draft decree allowing the use of public property to make payment to investors that implement construction investment projects in the form of build-transfer (BT projects).

According to the drafter, the draft is designed to implement the Law on Management and Use of Public Property, which will take effect in early 2018.

Under the draft, public property includes land, infrastructure facilities and property used for the management and provision of public services and assurance of national defense and security by state agencies, organizations and units.

The use of public property to make payment to investors would be required to adhere to the principle of parity and difference offsetting between the value of BT projects and value of the property used to make payment to BT project investors that would be selected in accordance with the bidding law.

The value of public property used to make payment to BT project investors would be determined based on market prices at the time of making payment and included in the state budget estimates under the state budget law, the draft says.

Meanwhile, the value of a BT project covers expenses for ground clearance (if any); construction costs; equipment, project management and construction investment expenses; loan interests; and other related expenses.

The determination of these expenses must comply with the construction investment law and the value of a BT project would not be changed after being approved by competent state agencies, except where there is a written permission for adjustment of the scale, technical design and loan interests of such project.

According to Nguyen Van Duc, General Director of the Dat Lanh Real Estate Company, the current mechanism of appointment of investors in BT projects is to blame for the loss of public property. He suggests solving the problem of “group interests” before implementing BT investment projects nationwide.

Sharing the view, Bui Quang Tin, CEO of BizLight business school, said unclear mechanisms of determination of public property value and bidding may lead to the development of “group interests”. If selected investors are financially incapable, the implementation of BT projects will be at high risk of emerging bad debts, he said.


Back to Top



Page 13 of 26

Upcoming Events

No events





Weekly Bulletin

Block G, Unit 0215, The Manor 2, 91 Nguyen Huu canh, Binh Thanh District, HCM City
Tel: (84-28) 6258 6316 - Fax: (84-28) 6258 6316 - Email: info@

Facebook: https://www.facebook.com/mbc.hcm
Copyright 2008 Malaysia Business Chamber Vietnam
Designed & Powered by SMNET