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



Lawyer in Vietnam Dr. Oliver Massmann PUBLIC MERGERS AND ACQUISITIONS

Lawyer in Vietnam Oliver Massmann Public mergers and acquisitions: market analysis overview


Will deposit rates soon rise again?

Reference exchange rate stays flat


Vietnam spends nearly 1.7 billion USD on corn import every year

Finance Ministry proposes new tax on pickups


$4-billion South Hoi An casino officially starts construction

Vietnam after 30 years of FDI attraction


Central coast in spotlight

Real estate enterprises face difficulties in starting up new projects


ExxonMobil to kick off multi-billion dollar gas-to-power complex in October

Indian group proposes to build solar power in Binh Phuoc


Twenty categories of goods, services placed under state monopoly

Government okays amendments to tax laws


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


Lawyer in Vietnam Dr. Oliver Massmann PUBLIC MERGERS AND ACQUISITIONS

By Dr. Oliver Massmann, Duane Morris Vietnam LLC

FDI capital has been rising in the past few years. In the first 6 months of 2017, the total FDI capital to Vietnam is USD19.2 billion, an increase of 54.8% compared to the same period last year. Vietnam’s M&A market continues to be active in 2017 after reaching a record-breaking deal value of USD5.8 billion in 2016. The number of M&A deals amounts to 2,062 deals worth USD1.8 billion from January – May 2017, up 116.2% compared with the statistics last year.

Real estate continues to be the most attractive sector, with hundreds of millions of USD waiting to be poured into the market via M&A, especially in residential, offices, retail, hotel and industrial park segments. Main investors still come from Japan, Korea, Singapore, and particularly a rising number of investors from China recently. The retail, consumer goods, and industrial goods are also very active, with M&A deals accounting for 53% of total deals in 2016. This is partly due to an attractive market of about 93 million people with high purchasing power.

Notable deals in 2016 and first half of 2017 include the following:

  • Central Group (Thai Group) bought BigC Vietnam at USD1.1 billion
  • TTC Holdings (Thailand) bought Metro Vietnam at USD710 million
  • In March 2017, Siam City Centre bought 65% of Holcim Vietnam from LafargeHolcim at USD524 million
  • In April 2016, Mirae Asset (a Korean securities company) together with AON BGN Investment Company (an UK company) bought Keangnam Hanoi Landmark Tower at USD350 million
  • In December 2016, Fraser & Neave ( a Singaporean beverage company) bought 5.4% of Vinamilk’s shares at USD500 million

Note: Owner of Fraser & Neave is also owner of TTC Holdings

  • In January 2016, Mobifone bought 95% of AVG’s shares at USD400 million

Leading companies in the sectors are main target of foreign investors. They have the advantage of holding strong brands, strong market share or controlling significant natural resources.

We hope that the M&A will continue its trend when the Government speeds up the equitization of many state-owned enterprises, especially in power, infrastructure and telecommunication sectors. Experts forecast the total value of M&A deals in 2017 will reach up to USD6.2 -6.5 billion.

How to obtain control of a public company

The most common means of obtaining control over a public company are as follows:

  • The acquisition of shares/charter capital through:
  • buying shares/charter capital from the existing shareholders of the company;
  • buying shares/charter capital of a listed company on the stock exchange; and
  • public share purchase offer.
  • Through a merger. The 2014 Law on Enterprises sets out the procedures for company mergers by way of a transfer of all lawful assets, rights, obligations and interests to the merged company, and for the simultaneous termination of the merging companies.
  • Through the acquisition of assets.

There are restrictions on the purchase of shares/charter capital of local companies by foreign investors in certain sensitive sectors. In addition, the law is silent on merger or assets acquisition (e.g., business spin-off) transactions where a foreign investor is a party. Regarding other assets acquisition transactions, if the asset is a real property, foreign ownership right will be restricted according to real estate laws.

Securities of public companies must be registered and deposited at the Vietnam Securities Depository Centre before being traded.

Depending on the numbers of shares purchased, an investor can become a controlling shareholder. Under the Vietnam Law on Securities, a shareholder that directly or indirectly owns 5% or more of the voting shares of an issuing organization is a major shareholder. Any transactions that result in more than 10% ownership of the paid-up charter capital of the securities company must seek approval of the State Securities Commission (SSC).

What a bidder generally questions before making a bid

Before officially contacting the potential target, the bidder conducts a preliminary assessment based on publicly available information. The bidder then contacts the target, expresses its intention of buying shares/subscribing for its shares and the parties sign a confidentiality agreement before the due diligence process. The confidentiality agreement basically includes confidentiality obligations in performing the transaction. The enforcement of confidentiality agreements by courts in Vietnam remains untested.

A bidder's legal due diligence usually covers the following matters:

  • Corporate details of the target and its subsidiaries, affiliates and other companies that form part of the target.
  • Contingent liabilities (from past or pending litigation).
  • Employment matters.
  • Contractual agreements of the target.
  • Statutory approvals and permits regarding the business activities of the target.
  • Insurance, tax, intellectual property, debts, and land-related issues.
  • Anti-trust, corruption and other regulatory issues.

Restrictions on shares transfer of key shareholders

Founding shareholders can only transfer their shares to other founding shareholders of the company within three years from the issuance of the Enterprise Registration Certificate. After then, the shares can be transferred freely. An internal approval of the general meeting of shareholders is always required if:

  • The company increases its capital by issuing new shares.
  • There is any share transfer of the founding shareholders within the above three-year period.

If the sale and purchase is a direct agreement between the company and the seller in relation to an issuance of shares, the selling price must be lower than the market price at the time of selling, or in the absence of a market price, the book value of the shares at the time of the approval plan to sell the shares. In addition, the selling price to foreign and domestic buyers must be the same.

When a tender offer is required

A tender offer is required in the following cases:

  • Purchase of a company's circulating shares that results in a purchaser, with no shareholding or less than a 25% shareholding, acquiring a 25% shareholding or more.
  • Purchase of a company's circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
  • Purchase of a company's circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of a previous offer.

There is no guidance on building a stake by using derivatives. In addition, the bidder cannot purchase shares or share purchase rights outside the offer process during the tender offer period.

The bidder must publicly announce the tender offer in three consecutive editions of one electronic newspaper or one written newspaper and (for a listed company only) on the relevant stock exchange within seven days from the receipt of the State Securities Commission's (SSC's) opinion regarding the registration of the tender offer. The tender offer can only be implemented after the SSC has provided its opinion, and following the public announcement by the bidder.

Making the bid public

The offer timetable is as follows:

  • The bidder prepares registration documents for its public bid to purchase shares.
  • The bidder sends the bid registration documents to the SSC for approval and, at the same time, sends the registration documents to the target.
  • The SSC reviews the tender documents within seven days.
  • The board of the target must send its opinions regarding the offer to the SSC and the shareholders of the target within 14 days from receipt of the tender documents.
  • The bid is announced in the mass media (although this is not a legal requirement).
  • The length of the offer period is between 30 and 60 days.
  • The bidder reports the results of the tender to the SSC within 10 days of completion.

Companies operating in specific sectors (such as banking, insurance, and so on) can be subject to a different timetable.

Offer conditions

A takeover offer usually contains the following conditions:

  • The terms and conditions of the offer apply equally to all shareholders of the target.
  • The relevant parties are allowed full access to the tender information.
  • The shareholders have full rights to sell the shares.
  • Applicable laws are fully respected.

An offer can also be subject to conditions precedent. Conditions precedent are set out in the share sale and purchase agreement or the capital contribution transfer agreement. There is no specific restriction on conditions precedent other than the requirement that they cannot be contrary to law and conflict with social ethics (although the legal definition of social ethics is unclear). The most common conditions precedent are:

  • Amendments to the charter/relevant licence of the target.
  • Obtaining necessary approvals to conduct the transaction.
  • Changes to the target's management body.


Payment of the contract price will only be made after the conditions precedent are met.

Employee consultation

There is no requirement under Vietnamese law that the employees must be consulted about the offer. However, if a layoff is to be conducted, the employer must:

  • Prepare a labour usage plan.
  • Consult with the employee representative.
  • Notify the competent labour authority on the implementation of the labour usage plan.

When a tender offer is required?

A tender offer is required in the following cases:

  • Purchase of a company's circulating shares that results in a purchaser, with no shareholding, or less than a 25% shareholding, acquiring a 25% shareholding.
  • Purchase of a company's circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
  • Purchase of a company's circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of the previous offer.

Form of consideration and minimum level of consideration

Under Vietnamese law, shares can be purchased by offering cash, gold, land use rights, intellectual property rights, technology, technical know-how or other assets. In practice, acquisitions are most commonly made for cash consideration.

In cases of full acquisition of state-owned enterprises, the first payment for the share purchase must not be less than 70% of the value of such shares, with the remaining amount being paid within 12 months.

In transactions involving auctions of shares by state-owned enterprises, the purchaser must make a deposit of 10% of the value of the shares registered for subscription based on the reserve price at least five working days before the auction date included in the target company's rule. Additionally, the purchaser must transfer the entire consideration for the shares into the bank account of the body conducting the auction within ten working days of the announcement of the auction results.

In the case of a public tender offer, the payment and transfer of shares via a securities agent company appointed to act as an agent for the public tender offer must comply with Decree 58/2012/ND-CP.

Delisting a company

If a company seeks voluntarily de-listing, it must submit an application for de-listing that includes the following documents:

  • A request for de-listing.
  • For a joint stock company:
    • the shareholders' general meeting approval of de-listing of the stock;
    • the board of directors' approval of de-listing of bonds; and
    • the shareholders' general meeting approval of de-listing of convertible bonds.
  • The members' council (for a multi-member limited liability company) or the company's owner (for a single member limited liability company) approval of de-listing of bonds.
  • For a securities investment fund, the investors' congress approval of de-listing of the fund's certificate.
  • For a public securities investment company, the shareholders' general meeting approval of stock de-listing.

A listed company can only de-list its securities if de-listing is approved by a decision of the general meeting of shareholders passed by more than 50% of the voting shareholders who are not major shareholders.

If a company voluntarily de-lists from the Hanoi Stock Exchange or Ho Chi Minh Stock Exchange, the application for de-listing must also include a plan to deal with the interests of shareholders and investors. The Hanoi Stock Exchange or Ho Chi Minh Stock Exchange must consider the request for de-listing within ten and 15 days from the receipt of a valid application, respectively.

Transfer duties payable on the sale of shares in a company

Depending on whether the seller is an individual or a corporate entity, the following taxes will apply:

  • Capital gains tax. Capital gains tax is a form of income tax that is payable on any premium on the original investor's actual contribution to capital or its costs to purchase such capital. Foreign companies and local corporate entities are subject to a corporate income tax of 20%. However, if the assets transferred are securities, a foreign corporate seller is subject to corporate income tax of 0.1% on the gross transfer price.
  • Personal income tax. If the seller is an individual resident, personal income tax will be imposed at the rate of 20% of the gains made, and 0.1% on the sales price if the transferred assets are securities. An individual tax resident is defined as a person who:
    • stays in Vietnam for 183 days or longer within a calendar year;
    • stays in Vietnam for a period of 12 consecutive months from his arrival in Vietnam;
    • has a registered permanent residence in Vietnam; or
    • rents a house in Vietnam under a lease contract of a term of at least 90 days in a tax year.

If the seller is an individual non-resident, he is subject to personal income tax at 0.1% on the gross transfer price, regardless of whether there is any capital gain.

Payment of the above transfer taxes is mandatory in Vietnam.

Regulatory approvals

The investor will need to register the capital contribution and purchase of shares if either:

  • The target is operating in one of the 267 conditional sectors referred to in the 2015 Investment Law.
  • The capital contribution and purchase of shares results in foreign investors owning 51% or more of the target's charter capital (in particular, from below 51% to more than 51% and from 51% to above 51%).

The local Department of Planning and Investment where the target is located must issue its final approval within 15 days from the receipt of a valid registration application. However, in practice, this procedure can take several months due to the workload of certain central authorities and the lack of clear guidance documents. Therefore, the registration requirement can cause substantial delays to the whole M&A process.

In other cases, the target company only needs to register change of membership / shareholders at the Business Registration Division.

Restrictions on repatriation of profits and/ or foreign exchange rules for foreign companies

If the target company in Vietnam already has an investment registration certificate, it must open a direct investment capital account at a licensed bank in Vietnam. Payment for a share purchase by a foreign investor must be conducted through this account. The account can be denominated in Vietnamese dong or a foreign currency. In addition, if the foreign investor is an offshore investor, it will also need to open a capital account at a commercial bank operating in Vietnam to carry out the payment on the seller's account and receive profits.

If the target company in Vietnam does not have an investment registration certificate, the foreign investor will need to open an indirect investment capital account for payment to the seller and remittance of profits.


Please do contact the author 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 on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.



Back to Top



Lawyer in Vietnam Oliver Massmann Public mergers and acquisitions: market analysis overview

By Dr. Oliver Massmann, Duane Morris Vietnam LLC


Largest / most noteworthy public M&A transactions in the past 12 months

Oil gas & Chemicals

In May 2017, Earth Chemical bought 100% stake in A My Gia Joint Stock Company at about USD79.2 million.


In July 2017, Vietnam International Joint Stock Commercial Bank bought 100% business of Commonwealth Bank of Australia (Ho Chi Minh Branch).



  • Thai group Singha bought 25% and 33% stake in Masan Consumer Holdings and Masan Brewery respectively at a total of USD1.1 billion.
  • VinGroup bought Maximark at an undisclosed value.
  • In April 2017, Shinhan Vietnam Bank bought the retail business of ANZ at an undisclosed value.
  • In May 2017, Bien Hoa Sugar Company and Thanh Thanh Cong Tay Ninh Sugar Company bought 100% charter capital of HAGL Sugar at about USD58.52 million.


  • In December 2016, Fraser & Neave (a Singaporean beverage company) bought 5.4% of Vinamilk’s shares at USD500 million.
  • In late 2016, Deasang Corp bought 99.99% stake in Duc Viet Food Joint Stock Company.
  • In November 2016, Kido Corporation bought 65% stake in Tuong An Vegetable Oil Company at about USD44.52.
  • In late March 2017, CJ Cheiljedang Corporation bought 20% stake in Saigon Trading Corporation at USD8.2 million, bringing its total ownership in Cau Tre Export Products Processing Joint Stock Company to 71.6%.
  • In May 2017, Kido Corporation bought 27% stake in Vietnam Vegetable Oil Industry Corporation, bringing its total ownership in the company to 51%.

Real estate

  • In June 2016, Mapletree Investments acquired Kumho Asiana Plaza project through the joint venture between Kumho Industrial and Asiana Airlines at USD215 million.
  • In July 2016, Mitsubishi bought the Manor Central Park project from Bitexco Group at an undisclosed deal value.
  • Also in July 2016, VinaCapital bought International Centre Building from Keppel Land Ltd. At USD13.8 million.
  • In September 2016, CapitalLand Vietnam bought Ho Chi Minh Cau Kho Land Plot project from River View Company Limited at USD51.9 million.
  • In the first quarter of 2017, Sulyna Hospitality bought 70% stake in a 4-start resort in Phu Quoc from Berjaya Land at USD14.65 million.
  • In the first quarter of 2017, An Gia Investment Corporation and its partner Creed Group bought 5 apartment blocks of La Casa Project of Van Phat Hung Corporation at about USD40 million.
  • In the same period, CapitaLand announced the purchase of 90% stake in CapitaLand Thanh Nien.


  • In June 2016, FWD insurance company, a branch of Pacific Century, started the process of acquiring Great Eastern Vietnam after receiving the licence for this acquisition.
  • In June 2016, New Life RE bought Duxton Hotel from Low Keng Huat at USD49.2 million.
  • In April 2017, Aviva Insurance Corporation bought 50% stake of VietinBank Aviva Joint Venture Company from Vietnam Joint Stock Commercial Bank for Industry and Trade.

The major trends in the structuring of public M&A transactions

In Vietnam, M&A transactions usually take the form of either share or asset acquisitions, with share acquisition transactions outnumbering asset acquisition transactions.

Share acquisitions by foreign purchasers are commonly structured as offshore direct investments. The new investor can:

  • Acquire shares or capital contributions from an existing shareholder in the target (for example, a joint stock company, limited liability company, and so on).
  • Subscribe for newly issued shares of the target (for a joint stock company).
  • Make further capital contributions to the target (for a limited liability company).

In the case of an asset deal, a foreign purchaser must generally establish a new subsidiary in Vietnam.

In addition, M&A transactions can also take the form of a merger. One or more companies of the same type can be merged into another company by transferring all assets, rights, obligations and interests to the merged company, terminating the existence of the merging company.

The 2014 Enterprise Law sets out the types of business structuring that can be used by investors as a result of M&A transactions. In addition, the 2014 Investment Law is the first law that regulates M&A transactions and clearly provides that such transactions do not require an investment registration certificate. Now, the foreign investors must seek approval from the local Department of Planning and Investment of the transaction if the:

Target company operates in conditional business sectors applicable for foreign investors.

Investment leading to foreign ownership of the target company is 51% or more (in particular, from below 51% to more than 51% and from 51% to above 51%).

In other cases, the target company only needs to register a change of membership/shareholding at the Business Registration Division. This change has ended years of uncertainty and frustration faced by foreign investors seeking entry into the Vietnam market or expansion through M&A transactions.

The level/extent of private equity-backed bids in the past 12 months

Investment in the form of M&A transactions is still the most popular form compared with private equity investment. In recent months, private equity funds have been following the securities market in Vietnam, especially companies carrying out value chain operations. Consumer goods and infrastructure are the sectors that attract the most attention. However, due to limited publicly available information, it is not possible to fully assess the level of private equity-backed bids.

The approach of the competition regulator(s) in the past 12 months

The Vietnam Competition Authority under the Ministry of Industry and Trade (VCA) must be notified of the transaction if participating companies have a combined market share in the relevant market of 30% up to 50%. The VCA will then examine whether the calculation of the combined market share is correct and whether the transaction is prohibited (that is, whether the combined market share exceeds 50%, except in certain cases). The transaction can be conducted when the VCA issues a written confirmation that the transaction is not prohibited under competition law.

For more information on the VCA, see www.vca.gov.vn/Default.aspx?lg=2.

Main factors affecting the public M&A market over the next 12 months

The country's deeper and wider integration into the world's economy is offering new opportunities for M&A activities.

Another factor includes the high pressure faced by the government to privatise state-owned enterprises to meet requirements under signed trade pacts, especially the EU – Vietnam Free Trade Agreement, which is expected to come into force in 2019.

Encouraging signs for foreign investment include:

  • Reformed policies to allow wider access to foreign investors.
  • Formation of the ASEAN Economic Community at the end of 2015.
  • The conclusion of free trade agreements (FTAs).
  • Vietnam’s super rich population is growing faster than anywhere else and is on track to continue leading the growth in the next decade.
  • Equitization of state-owned enterprises will speed up.

The introduction of the new Investment Law, Enterprise Law and other laws and policies are creating an improved legal environment for investment and trade in general, and the M&A market in particular. However, the following factors also affect M&A transactions:

  • Divergent interpretations and implementations by local licensing authorities of international treaties such as Vietnam's WTO Commitments.
  • Different licensing procedures applied to different types of transactions (for example, for foreign invested companies and domestic companies, public companies and private companies, and for buying state-owned shares or private shares).

Although legal and governance barriers, along with macro instability and the lack of market transparency are still the greatest concerns for investors, M&A deals in Vietnam are still expected to be one of the key, effective channels for market entry.

The major expected trends in the Vietnam M&A market include:

  • Bank restructurings.
  • Acquisitions and anti-acquisitions, particularly in the real estate sector.
  • Growing Japanese and Thai investment in Vietnam through M&A transactions.
  • Reform of SoEs.


Please do contact the author 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 on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam.

Back to Top


Will deposit rates soon rise again?


In early 2017, as banks accelerated mobilisation to ensure compliance with Circular 06, the mobilisation internet rate level sharply rose by an average of 0.1-0.5 percent per annum compared to late 2016. Some joint stock banks even boosted mobilisation of valuable papers, pushing up the long-term mobilisation rate to up to 9.2 percent per annum.

However, mobilisation rates have started to decline since the second quarter (Q2) of the year as the market expected an extension of the roadmap to apply Circular 06 and the liquidity of the system cooled down thanks to the large volume of deposits of the State Treasury at commercial banks. Meanwhile, the lending rate level was fairly stable, except some slight adjustments to the rates for priority areas after the move to cut operating rates of the State Bank of Vietnam (SBV) since July 10th 2017.

The credit growth in the first half of the year (H1) reached 8.16 percent, while it was 7.86 percent in the same period of 2016. Since the 2016 credit growth was 18.71 percent and lending often grows better towards the end of the year, the 18 percent credit growth target in 2017 is completely feasible.

In late Q1 2017, some banks have used up 70 percent of their credit growth limit assigned by SBV and proposed for an expansion. In the case that SBV loosens the credit growth room for these banks, the annual credit growth is likely be higher. In the opposite case, these banks will have the motivation to restructure their loans, select better customers and enhance their asset quality.

The pressure to increase mobilisation rates slightly reduced in Q2 2017. However, according to a recently announced report, experts of Vietcombank Securities Company (VCBS) said that if SBV does not offer support as expected, this pressure will soon increase, along with the situation when credit will be boosted in H2 2017.

“If this happens, it will be a risk for banks when lending rates are unlikely to increase, particularly after the operating rate cut of SBV, negatively affecting banks’ Net Interest Margin (NIM). Meanwhile, the liquidity of the interbank market may reverse and cause negative impacts on the long-term bond investments which were prosperous in H1 2017″, the report stated.

VCBS also mentioned that SBV still has room to support low interest rates, and the agency can consider the measures such as loosening the regulations of Circular 06 or promoting foreign currency purchase. With the capital adequacy ratio (CAR) approaching the minimum requirement of SBV, state-owned banks are having smaller room to develop lending. Accordingly, VCBS predicted that these banks will make more drastic measures to increase mobilisation in H2 2017 and early 2018. The measures to be considered may include limiting cash dividend, mobilising tier-2 capital via bond issuance, and promoting private placement. The second measure is expected to be more likely to be carried out as both conducting private placement and temporarily stopping dividend payment may be limited at management levels. Thus, the pressure from the expected bond issuance continues to negatively influence the cost of capital for banks.

The bad debt issue of the banking sector has existed for many years and not yet been thoroughly settled. By the end of June 2017, the on-balance sheet bad debts and bad debts sold to VAMC but remain unsettled accounted for 5.8 percent of the total outstanding loans. This ratio would be 10.08 percent if including the potential bad debts.

However, since 2017, many positive signals in terms of policy have been issued such as the Resolution 42/2017/QH14 approved on June 21st 2017 by the National Assembly on piloting the bad debt settlement of credit institutions; Decree 61/2017/ND-CP issued on May 16th 2017 on the appraisal of the starting price of bad debts and assets secured for the bad debts, and the establishment of the Council for auction of bad debts and the assets secured for high-value bad debts; and the acceleration of SBV to handle zero-dong banks via Mergers and Acquisitions (M&A). Meanwhile, banks themselves are also showing strong view when they plan to soon settle the special bonds of VAMC in 2017 and 2018.

The above information has created a very positive expectation on the process to deal with bad debts and restructure the banking system. Accordingly, if these policies are implemented effectively, the bad debt settlement of banks will be speeded up, capital flows will be unfrozen, and banks may record extraordinary profits in the next few years.

According to VCBS, the bad debt handling process will be boosted in H2 2017 when the National Assembly approves the support policies. “New policies can have positive effects in numerous ways such as improving debt collection via secured assets, promoting the participation of VAMC, stimulating new cash flows and market liquidity thanks to the involvement of new investors”, stated VCBS’s report.

If the above policies are carried out effectively, the bad debt trading market will perhaps soon be put into operation, speeding up bad debt settlement and unfreezing the capital flows for the economy. Certainly, this should go hand in hand with active coordination and support from both policies and relevant management authorities.


Back to Top

Reference exchange rate stays flat


The State Bank of Vietnam kept the daily reference VND/USD exchange rate on August 17 unchanged from the day before at 22,450 VND.

With the current trading band of +/- 3 percent, the ceiling rate applied to commercial banks during the day is 23,123 VND and the floor rate 21,777 VND per USD.

The opening hour rates at major commercial banks also stayed stable, with Vietcombank and Techcombank maintaining the same rates as on August 16.

Vietcombank is buying the greenback at 22,690 VND and selling at 22,760 VND.

Techcombank listed the buying rate at 22,670 VND and the selling rate at 22,770 VND per USD.

Meanwhile, BIDV raised both rates by 5 VND, to 22,695 VND (buying) and 22,765 VND (selling) per USD

Back to Top


Vietnam spends nearly 1.7 billion USD on corn import every year


Vietnam has so far this year imported 4.13 million tonnes of corn worth 825 million USD, according to the Ministry of Agriculture and Rural Development.

The figures represented increases of 9 percent in volume and 11 percent in value compared to the same period last year.

Vietnam spends up to 1.7 billion USD a year on average to buy corn from Argentina, Brazil and Thailand.

Corn import is on the rise due to the country’s limited plantation, which covers just over 1 million hectares, and difficult cultivation conditions that have led to low productivity, at 4.6 tonnes per hectare on average. Increasing demand for animal feed also contributes to the cause.

The agricultural body plans to shift between 700,000 and 800,000 hectares of low-productivity rice paddies to the cultivation of other plants, with corn making up the lion’s share.


Back to Top

Finance Ministry proposes new tax on pickups


The Ministry of Finance has proposed that the government apply a special consumption tax on pickups to be set at 60 percent of the tax on cars with nine seats or less with similar engine displacement, a move that would sharply increase their costs.

Speaking at a press conference in Hanoi on August 15, Pham Dinh Thi, head of the finance ministry’s Tax Policy Department, said pickups mainly have engine displacement of between 2,000 and 3,000cc, so if the tax on the car with nine seats and less is currently 55 percent of the car value, the tax on the pickups should be 33 percent.

The proposal was made after the prime minister required the ministry to study and check the tax on pickups in the region. The ministry found that regional countries usually levy special consumption tax on pickups lower than that of autos with nine seats or less.

According to the Law on Special Consumption Tax regulations, a special consumption tax of 15 percent is levied on pickup trucks with engine displacement of 2,500cc or less, 20 percent for those with over 2,500cc-3,000cc and 25 percent for those with over 3,000cc.

In recent years, the number of pickups has sharply increased in Vietnam, the majority imported. In 2012, 3,291 units were sold, of which 3,252 were imported and 39 units were locally-assembled. In 2016, sales soared to 28,233 units, of which 27,265 units were imported and 968 units were locally-assembled.

Thi said the five-seat pickups had for many years enjoyed special consumption tax lower than that of vehicles with the same number of seats (lower than SUV models, with engine displacement from over 2,500cc to 3,000cc, taxed 55 percent). Therefore, the number of consumers moving to buy pickups instead of SUVs has been seen increasing rapidly.

On April 14, the government Office announced that deputy prime minister Trinh Dinh Dung had assigned the finance ministry to study and reevaluate the current special consumption tax and registration fees for pickups, which then would be proposed and reported to the government and the National Assembly to supplement and revise law if needed.

On April 28, the Ministry of Industry and Trade sent a document to the prime minister on its evaluation on auto production and assembling in Vietnam and measures to develop the auto industry, in which it proposed the government impose a special consumption tax on five-seats pickups with haul of less 1,500kg at the level of vehicles with nine seats or less.

If the finance ministry’s proposal is approved by the government and the National Assembly, the average special consumption tax on pickups will increase by 50 to 100 percent.


Back to Top



$4-billion South Hoi An casino officially starts construction


Contractor Coteccons today began the construction of the first phase of the $4-billion South Hoi An integrated casino resort, now named Hoiana, located in the central province of Quang Nam.

The project is invested by a joint venture of Vietnam-focused asset management firm VinaCapital, Macau-based SunCity Group, and Hong Kong-based Chow Tai Fook Enterprises Ltd.

According to the newest plan, the first phase, which covers an area of 163 hectares with a total investment capital sum of $500 million, will include an 18-hole golf course meeting international standard, resorts, a shopping centre, and other infrastructure facilities. The construction is expected to be completed within 19 months.

Previously, in late April 2016, the investor held the ground-breaking ceremony. The plan for the first phase was to start operations in early 2019 and for the whole complex to be completed in 2035. Once the resort comes into operation, it will be the second largest casino in Vietnam, after The Grand Ho Tram Strip resort and casino complex located in the southern province of Ba Ria-Vung Tau.

In December 2016, VinaCapital announced that the property would be called Hoiana.

Licensed in 2010, the project was initially developed by VinaCapital and Genting Malaysia Berhad, and comprised of five-star hotels, villas, and a casino targeting foreign tourists.

However, in September 2012, Genting suddenly announced its withdrawal in the midst of site clearance, forcing VinaCapital to find other partners to jointly develop the project.

After over two years of searching, VinaCapital has finally found prestigious partners in SunCity Group and Chow Tai Fook Enterprises Ltd. to replace Genting Group for their proposed $4-billion integrated casino resort.

On March 23, 2015, the Quang Nam People’s Committee officially granted an amended investment certificate for the project, officially recognising SunCity Group and Chow Tai Fook Enterprises as stakeholders working in conjunction with VinaCapital.

Accordingly, Chow Tai Fook and VinaCapital are strategic investors and SunCity, which is 70 per cent owned by Chow Tai Fook, will cooperate with its mother company to manage and run the resort.

Chow Tai Fook is engaged in property development, hotels, casinos, transportation, and jewellery. Meanwhile, SunCity is a casino operator at the world’s largest casino hub, Macau.

Regarding Coteccons, the company was the contractor of numerous large-scale projects, including Masteri Thao Dien, Vinhomes Thang Long, Vinhomes Metropolis, Vinhomes Golden River, Landmark 81, and The Grand Ho Tram Strip resort and casino complex, among others.


Back to Top

Vietnam after 30 years of FDI attraction

Bao Dau Tu

So far, the preparation for the 30th anniversary of Foreign Direct Investment (FDI) in Vietnam has only started. The summarising report is being drawn, partly based on the reports from localities. However, information showed that this report will inherit the research results from the 25-year report on FDI attraction, in addition to the survey and assessment of actual FDI situation in the past five years (2012-2017). It will consist of in-depth assessments on the prominent issues of FDI over the time, such as the development of supporting industry; the linkage between domestic and FDI firms, technology transfer, and certainly the assessments on the environmental assurance of FDI firms, as well as the attraction of FDI in high-tech and high-tech agriculture, in line with the new direction on FDI attraction set by the government after summarising the 25 years of FDI attraction.

While the in-depth analysis cannot be announced yet, the most visible number, according to the Ministry of Planning and Investment, is the current 23,737 active FDI projects in the country with total registered capital of 307.86 billion USD a very remarkable figure.

Another noteworthy point is that the FDI sector in the past year has made significant contribution to the socio-economic development of Vietnam. This sector contributed 70 percent of export turnover, 50 percent of industrial production value, 22-25 percent of total social investment capital, 15-19 percent of the state budget, etc. FDI sector has really been considered a driving force for growth of Vietnam in the past 30 years of reform.

By looking at the numbers, another reality can be seen. In the last 30 years, Vietnam has attracted over 300 billion USD of FDI but that is only the registered number. The actual disbursement, according to the Department of Foreign Investment (under the Ministry of Planning and Investment) is estimated at only 163.9 billion USD, equivalent to 53.2 percent of the total valid registered capital.

The question is that where has that amount of over 140 billion undisbursed FDI been allocated, and what are the real and virtual numbers? The 30-year FDI attraction review must clearly examine and assess this number, in order to get a real picture of FDI attraction over the past three decades.

Through several talks with reporters of Bao Dau Tu, Prof Dr Nguyen Mai stressed that many of the statistics on FDI attraction in Vietnam are virtual numbers, but they were still included in the annual statistical yearbooks and annual economic reports with no practical value.

More than once, Prof Dr Mai recommended the MPI to direct localities to thoroughly review the situation of unimplemented projects to classify into two types including projects that can be implemented and projects that cannot be implemented, so as to resolutely remove the statistics of the type-2 projects, at the same time urge and track type-1 projects to soon be carried out. The 30-year FDI attraction review is a great opportunity to eliminate virtual numbers in the statistics on accumulative registered capital, because it is not suitable for practical situation.

In fact, without the needs for specific reports, numerous virtual projects can still be named, which are the large-scale FDI projects that have not yet been implemented, such as the Nhon Trach Berjaya New City project in Dong Nai with an investment capital of two billion USD; the international university urban zone invested by Berjaya with an investment of 3.5 billion USD, and the Vietnam Financial centre project (930 million USD) in Hochiminh city, and Kobelco Steel project in Nghe An with investment of one billion USD; etc.

To remove virtual numbers and to conduct the 30-year FDI attraction review, the MPI is now asking localities to report about their FDI attraction situation in the past 30 years, as well as report on the implementation of large-scale projects using large-size land, etc. unfortunately, not many localities have done this report.

In order to prepare for the 30-year FDI attraction review and to promote FDI disbursement, thereby promoting the economic growth, the MPI has proposed the government a number of important solutions. One of them is to regularly monitor and urge FDI firms to make disbursements as committed, review the projects which have received investment licences across the country to have a solution for each type of projects, particularly the large-scale projects, projects using large-size land, including the revoke of licenses if necessary.

According to information, based on reports of localities, the MPI will organise three working teams to accelerate the disbursement of some large delayed FDI projects in the North, the Central and the South in late 2017. This is an important and essential move to speed up FDI disbursement to serve the growth target, and also to have more practical documentation to summarise 30 years of FDI attraction of Vietnam.


Back to Top



Central coast in spotlight


Investors are seeking alternative opportunities in central coastal cities like Danang and Nha Trang, given the high property prices in Hanoi and Ho Chi Minh City. In anticipation of the trend, foreign developers with strong financial capacity have ramped up acquisitions or have been partnering with local developers to scale up projects there.

Central Vietnam features a coastline of scenic beaches which have attracted a growing number of domestic and international tourists in recent years. Consequently, the coastal cities of Danang, Nha Trang, and Hoi An have become popular second-home markets, with completed infrastructure as well as a plethora of living and entertainment services.

Many tourists, investors, as well as locals desire to own beachfront apartments or villas in the area to enjoy their weekend holidays. On top of this, coastal properties would make good potential investments in the future. In fact, many investors who invested in Danang’s land plots have made a fortune when land prices have risen by 300-400 per cent after 5-7 years of investment.

As market sentiment is improving, individual investors are cashing in on non-Central Business Districts (non-CBD), like the central province of Quang Nam near Danang or the suburban areas of Nha Trang.

In June, Dat Quang JSC and CEN Group unveiled Ngoc Duong Riverside–The Gardens in Quang Nam in the south of Danang. At the launch, hundreds of customers and investors made deposits to snap up land plots, half of whom came from Hanoi and Ho Chi Minh City.

According to Giap Van Kiem, director of STDA Real Estate Project Supermarket System in the central region (the sales agency of the project), a land plot at Ngoc Duong Riverside is priced at VND683 million ($30,052), which is a reasonable price for investors. In addition, improvements to infrastructure and the transport system make Quang Nam’s real estate market more appealing to investors.

“It is hard to find development sites in Danang’s CBD, while the neighbouring areas have large land reserves and reasonable prices for private investors. As a result, Ngoc Duong Riverside continues to receive solid interest from investors, prodding CEN Group to pay more attention to this project,” he added.

According to statistics by the Nha Trang-Khanh Hoa Real Estate Association, property giants have secured a firmer foothold in the central province of Khanh Hoa and Nha Trang City in particular during the past three years. Consequently, the real estate market there has been transformed, thanks to an impressive line-up of old and new projects.

Nguyen Xuan Thuy, chairman of the association, noted that, “By the end of 2016, around 39 resorts were being constructed across Khanh Hoa, with a combined investment capital amount of VND6 trillion ($264 million). Along with newcomers like Vingroup, other professional developers are also flocking to the market, like Hung Thinh Corporation from Ho Chi Minh City, Duyen Ha JSC, Eurowindow Holding, and MBLand from Hanoi, as well as real estate agencies like Dat Xanh Mien Bac and STDA.”

The infrastructure improvements in Nguyen Tat Thanh Street, the main arterial road of the northern Cam Ranh Peninsula strectching along Bai Dai Beach, and the system of fish-bone roads leading to the sea were highlighted. A slew of projects developed by famous brands, like Movenpick Cam Ranh Resort, Fusion Resort Nha Trang, and The Anam Resort, are currently under construction.

According to Pham Thi Khanh Ngoc, sales manager of Nha Trang Real Trade and Investment Co., Ltd., the 30-kilometre road running along Bai Dai Beach connecting Cam Ranh International Airport with Nha Trang is packed with 37 resorts under construction. The resorts are set to open in the next few years, creating a new tourism complex along the road.

The land plot segment is gaining traction alongside a growing hospitality market. Dat Xanh Mien Bac has taken over South Cai River township from Minh Phat Co., Ltd., while its branch company Dat Xanh Nha Trang is responsible for developing the project freshly renamed to Nha Trang Pearl. Strategically located in the gateway between Nha Trang and Da Lat, Nha Trang Pearl boasts a panoramic view of the Cai River. After the acquisition, the project has made a big splash in the market.

Tran Quoc Trung, general director of Dat Xanh Nha Trang, said that the 50-hectare project is developed with ample social infrastructure and modern technical infrastructure. Nha Trang Pearl includes land plots for 288 villas, 644 garden houses, 346 townhouses, and five condominiums. The first phase of the project recorded a complete take-up of all products. In the secondary market, prices have been increased by several dozen percent, depending on each plot.

“Most of our clients are from the northern region. In particular, one investor from Hanoi has acquired five plots at the same time. Each plot is priced from VND4.5 million per square metre. All units were usually sold out at the launching events,” he said.

It is notable that the Vietnam Real Estate Association has organised an event for real estate brokers in Nha Trang, which highlights the attractiveness of the market. In fact, most brokers at the event highly appreciated the potential in the city’s real estate sector.

Similar to Nha Trang, Hoi An’s bustling real estate market has been underpinned by a growing tourism sector and billion-dollar investments on international-standard resorts.

Hoiana is the largest casino and resort complex in Central Vietnam, covering an area of 985ha. The $4-billion project held the groundbreaking ceremony in late April 2016. It includes resorts, luxury entertainment areas of five-star standard, cultural centres, commercial centres, shopping centres, villas, and marinas.

The project is invested by a joint venture between Vietnam-focused asset management company VinaCapital and foreign partners. In the future, Hoiana Integrated Casino Resort is expected to turn the economically disadvantaged area to a popular leisure, tourism, and entertainment destination in the region.

In the north of Hoi An, another billion-dollar project known as New Hoi An City is completing the final works to commence the first phase of operation. HB Group has injected $1.5 billion to develop premium coastal properties on an area of 400ha.

Vietnam’s leading property developer Vingroup also held the groundbreaking ceremony for Vinpearl Hoi An Resort & Villas, representing a total investment capital amount of VND5 trillion ($220 million). The 200-ha project features Vinpearl hotel and villas, Vinpearl Golf Club, Vinpearl Land entertainment area, and a hi-tech agricultural park combined with VinEco tourism.

Meanwhile, Dat Xanh Group will implement the Opal Ocean View Resort project on a 185-ha site near South Hoi An. With an investment capital sum of VND4.6 trillion ($202.4 million), the project includes villas, a beach resort, and a hotel, with synchronised technical infrastructure.

Many coastal property developments are underway in Hoi An, including Tam Ky-Nui Thanh coastal tourism complex (2,000ha), Tam Ky urban area (2,000ha), and Tam Hoa-Tam Anh urban area (2,240ha).

New opportunities for those with vision

According to Do Thu Hang, associate director of Research at Savills Hanoi, foreign investors show more interest in projects with clean land reserves due to limited opportunities in CBD. They are looking to acquire projects from other developers or set up joint ventures with companies holding land reserves.

“There is a new wave of M&A among foreign investors to take over projects in non-CBD to create new markets. The infrastructure in the areas is nearing completion, such as the development of the metro system and the expansion of belt roads. If investors can establish a new market in non-CBD, they will earn a fortune in the future as pioneers,” Hang said.

“Opportunities to acquire land plots are limited in CBD of gateway cities like Hanoi and Ho Chi Minh City and coastal cities like Danang and Nha Trang. Investors now seek alternative investment in non-CBD for more land plots with reasonable prices. The move shows a vision for the future among institutional and individual investors. However, it is crucial for them to acquire projects with full legal status and improved infrastructure to give relief to potential homebuyers,” she added.


Back to Top


Real estate enterprises face difficulties in starting up new projects


The number of property projects this year is much smaller than in 2016 due to numerous difficulties in starting up new projects, especially time-consuming administrative procedures and high land use charges, said Ngo Quang Phuc, vice chairman of the HCMC Real Estate Association (HoREA).

At a seminar “Solutions to promote the growth of the real estate market in the rest of 2017” in HCMC on August 16, Phuc, who is also deputy general director of Him Lam Land, said the real estate market has slowed down this year compared to two previous years.

The tightening of real estate credit has caused difficulties for investors. Besides, complicated administrative procedures are attributed to the slower growth of the sector.

This year, Him Lam Land will launch only one instead of three new projects as planned due to obstacles to procedures, Phuc added.

Nguyen Minh Khang, general director of LDG Investment Corporation, said it often takes 15 to 18 months to complete administrative procedures for a project excluding the time required for compensation and site clearance.

In addition, land use charge is another obstacle to developing a property project as it is unpredictable. LDG acquired a land lot for VND120 billion (US$5.27 million), but the land use charge paid to the State alone amounted to VND115 billion. It means that real estate enterprises have to pay a large amount of money to the State, thus causing prices of houses to skyrocket, said Khang.

Economic expert Dinh The Hien said the scarcity of land, site clearance difficulties and high land use charge in the city have caused the suspension of many projects.

Data of the HoREA shows that houses offered for sale in the first half of this year decreased compared to the year-ago period. The number of low-cost and high-end houses rose 1.9 and 1.8 times respectively while the number of houses in the mid-end segment went down by 42.1%. Some large investors in this segment had no houses to sell.

A decrease in speculation was also mentioned as a reason of the stagnant market. Enterprises investing in the low-cost segment are expected to gain sustainable development in the future.

Bui Quang Tin, another economic expert, said interest rates may go down in the five remaining months of this year as well as in the upcoming years, making life easier for those realty developers with access to credit.

At the seminar, Vu Van Phan, deputy head of the Housing and Real Estate Market Management Department under the Ministry of Construction, said the Standing Committee of the National Assembly has approved VND840 billion to build houses for policy people and VND1,160-billion loans to build social houses as stipulated in Decree 100.

The Vietnam Bank for Social Policies has also mobilized some VND1 trillion to develop social housing projects. A total of VND2 trillion will be disbursed this year to support enterprises and home buyers.



Back to Top




ExxonMobil to kick off multi-billion dollar gas-to-power complex in October


ExxonMobil Corporation from the US is completing the geological survey and build the design of the pipeline installation, aiming to conduct the construction of the onshore infrastructure of the Blue Whale (Ca Voi Xanh) gas-to-power complex located in the central provinces of Quang Nam and Quang Ngai.

At a working session with leaders of the Management Board of Dung Quat Economic Zone, the representative of ExxonMobil confirmed that the corporation is preparing the necessary conditions to implement the construction. At present, the corporation has carried out the land survey and took soil samples to conduct the environmental impact report.

The investor urged relevant authorities to complete other procedures so that it can implement the project soon.

The exact amount of investment capital has not been released, but initial information suggested that the gas-to-power complex could carry a price tag of $20 billion. However, Vietnam's state-run oil and gas group PetroVietnam, the co-investors of the project, referred to $10 billion.

ExxonMobil and PetroVietnam signed a memorandum of understanding for the project in 2013. The project is believed to have high feasibility thanks to the good reputation of the investor and the readiness of the local authorities.

According to the plan, the construction will be implemented in the two provinces of Quang Nam and Quang Ngai. Notably, the landfall location of the gas pipeline stemming from Blue Whale gas field and the gas processing plant will be located at Chu Lai Open Economic Zone (EZ) in Quang Nam. Besides, four more gas-to-power plants to be fuelled from the same field, with a total generation capacity of 3,000 megawatts, will be divided equally between Quang Nam’s Nui Thanh district and Quang Ngai’s Dung Quat EZ.

ExxonMobil expects to exploit 8-9 billion cubic metres of gas per year, 1-3 billion cubic metres of which will go to Dung Quat refinery for processing.

Once the complex comes into operation, it will create opportunities for economic development of Vietnam in general and Quang Nam and Quang Ngai provinces in particular, as well as investment opportunities aiming to benefit from the Blue Whale project.

Notably, according to the plan, PetroVietnam will invest a gas processing plant in Chu Lai Open Economic Zone, while the other gas fired power plants will be simultaneously invested in both Quang Nam and Quang Ngai. No specific information about these projects has been released yet, however, it is sure that when the gas-to-power complex comes into operation, these projects will also be implemented.

Singapore-based Sembcorp had planned to develop a coal-fired power plant with a total investment capital sum of $2.5 billion in Quang Ngai. According to the initial plan, the construction will be kicked-off in 2017 so that the first generator can come into operation in September 2020, and the second unit in March 2021.

However, when the investor found out about the Blue Whale project, it abruptly asked to change the project’s implementation technology from thermal power to gas-fired power and delay the construction time at least until 2023 or 2024. This means that the pace of the project will be largely dependent on the progress of the Blue Whale gas project.


Back to Top


Indian group proposes to build solar power in Binh Phuoc


India’s Hero Future Energies Asia Pte.Ltd on Wednesday proposed developing a solar power project in the southern province of Binh Phuoc.

During a working session with the provincial People’s Committee, the company pledged to implement the project within three months after receiving an investment licence.

The committee vice chairman Huynh Thi Hang said provincial authorities would facilitate the plant’s development. However, she noted that solar power projects with capacity of under 50 MW are approved by the Ministry of Industry and Trade while those with capacity of more than 50 MW need the Prime Minister’s approval.

Director of the provincial Department of Industry and Trade Nguyen Anh Hoang highlighted the province’s high heat radiation and long sunshine hours, good conditions for solar power.

Back to Top



Twenty categories of goods, services placed under state monopoly


The State will hold monopoly over 20 categories of goods and services such as gold bar production, lottery ticket and postage stamp issuance.

Such is provided in Government Decree 94 dated August 10 which specifies goods, services and fields subject to state monopoly.

Gold bar production is one of 20 categories of goods and services subject to state monopoly under Decree 94__Photo: Internet

The Decree, which will come into force on October 1, underlines that state monopoly will only be established over essential goods and services for national defense and security or national interests to which the State would have exclusive rights as well as goods and services which other economic sectors do not wish and cannot deal in.

The list of 20 goods and services subject to state monopoly include goods and services reserved for national defense and security such as military equipment and other products used for enlisted personnel.

The list also covers multipurpose hydropower and nuclear power projects of particular importance, industrial explosives, and fireworks. Other economic activities that fall under the state monopoly are import of tobacco, cigars and cigatettes; production of gold bars and import and export of gold materials for production of gold bars; banknote printing and coin minting; issuance of lottery tickets and postage stamps; and publishing, excluding printing and distribution.

The scope of monopolized services also extends to transmission and regulation of the national power system; operation of navigation light systems and public navigable channels; management, operation and exploitation of the coastal information station system; air traffic, aeronautical information and aviation search and rescue services; and  management and operation of national and urban railway infrastructure.


Back to Top


Government okays amendments to tax laws


The Ministry of Finance on Tuesday announced a scheme for amending tax laws, including the laws on value added tax, personal income tax, natural resource tax and special consumption tax.

The Government has agreed with most of the adjustments proposed by the Finance Ministry, and asked the ministry to ensure transparency, said Deputy Prime Minister Vuong Dinh Hue at an earlier meeting with related ministries and departments.

The Deputy Prime Minister agreed with the Ministry of Finance’s suggestion to raise value added tax for some certain commodities from 10% to 12%. However, he asked the ministries to carefully review commodities that should be imposed 11-12% VAT.

The Government agreed to increase special consumption tax imposed on tobacco and certain autos. However, tax imposed on autos having less than nine seats should be reviewed by the Ministry of Industry and Trade.

The Deputy Prime Minister agreed with the suggestion to reduce income tax rates imposed on high-income earners, adjust natural resource tax imposed on water use and reduce corporate income tax rates for small and medium enterprises (SMEs).

The Ministry of Finance was asked to review some current regulations such as the newly issued law on support for SMEs and regulations on real estate transfers when making amendments to the tax laws.

The Ministry of Finance will pass the scheme around for public comment and send it to the Ministry of Justice for assessment in the next several days. The scheme will be submitted to the Government in September for approval.

The law amendment is aimed at reducing administrative procedures for tax payment, facilitate trade and manufacturing, and boost economic development.

Second home tax still undecided

The property tax levied on the ownership of the second home has not been decided although the tax was earlier proposed in a tax reform plan for the five-year period to 2020, said Pham Dinh Thi, director of the Tax Policy Department under the Ministry of Finance.

At a press conference on amendments and supplements to tax laws on Tuesday, Thi said that the ministry and the National Assembly have issued resolutions on domestic revenues, including the property tax.

In a report on collection of the land use and property tax and policies relating to the property tax, the ministry also proposed taxing land and landed assets. However, no regulations on tax collection methods, the base tax rate and asset evaluation methods have been issued.

Previously, the Ministry of Finance has proposed three tax options for housing. In option 1, the owner of a home measuring over 200 square meters is subject to a tax of VND1,000-4,000 per square meter per year depending on the type of house. In option 2, the tax would be collected based on the value of the house but if the value is more than VND1 billion, the tax sum would be equivalent to 0.03% of that value.

For option 3, the property tax would be levied from the second and subsequent houses with an annual rate of VND1,000-4,000 per square meter per year. But those homes with two floors or fewer would be spared.

Vietnam has no property tax as in other countries. The property-related tax policy has yet to create a stable source of revenue for the State budget since current land use tax revenue accounts for 0.03% of GDP and 0.15% of the nation’s total budget revenues. Meanwhile, the property tax is a main source of budget revenue in some other countries in the world.

Back to Top


Page 5 of 14
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