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 Energy – Action plan for getting deals done with the new Power Purchase Agreement


Is bitcoin trading prohibited in Vietnam?

Dong-US dollar swap point returns to positive


Vietnam urges ratification of EVFTA

Vietnam’s GDP growth cannot keep pace with an increase in public debt


Efforts needed to improve FDI quality

The billion-USD Van Don investment case


Real estate inventories taper off over 16%

Property market stays strong


Binh Phuoc approves Indian-invested solar power project

HCMC: Enterprises keen on waste-to-energy projects


New Law on Fisheries strengthens quality management

More incentives needed to develop special economic zones


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




Vietnam - Solar Energy – Action plan for getting deals done with the new Power Purchase Agreement

Interview with Dr. Oliver Massmann, Duane Morris Vietnam LLC


  1. Which significant changes does the new PPA contain for the solar energy sector?

Decision 11 introduces the Feed-in-Tariff (FiT) rate of UScents 9.35 per kWh. The FiT rate is only applicable for on-grid solar power project with efficiency of solar cells greater than 16% or with efficiency of the modules greater than 15%. The FiT rate depends on the currency exchange rate of the Vietnamese Dong and the US-Dollar. The rate remains the same throughout the whole year. It is adjusted by the Vietnamese State Bank on the last working day of the year for being used in the following year.

As a result, the financial planning is easier and it grants certain security for investors such as protection against currency fluctuation.


  1. Which aspects in the new PPA have changed compared with the draft PPA from April 2017?

Compared with the draft PPA, the FiT rate is now indicated in the final version and there is reference to the adjustment of the FiT in case of USD/VND exchange rate fluctuation.

The MoIT made no big changes regarding the shortcomings of the draft of the PPA from April 2017.

The investor still has to bear the biggest risk.


  1. Is the PPA bankable?

No, in general the PPA is not bankable in its final version.


  1. Is there a way to make it bankable?

Yes, it is possible to make the PPA bankable. We have 20 years of experience making PPAs bankable for gas and coal fired power plants and wind energy plants in Vietnam. The investor should use all business channels and experienced negotiators to make the PPA bankable.

It is a matter of negotiation and experience. Decision 11 is granting investors the possibility to negotiate the conditions with EVN. The price remains fixed.

Agreements such as the EU – Vietnam Free Trade Agreement (“EVFTA”) or the Trans-Pacific Partnership (“TPP”), which is now called the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (“CPTPP”), lay a big milestone for making the PPA bankable.

The EVFTA was signed in 2015 and is expected to be ratified by all member countries by 2018. It is probably going to take effect in 2019. It is estimated to generate an increasing GDP and to liberalize the economy of Vietnam. Another aspect is the elimination of almost all custom duties (over 99% of all tariff lines). As a result, there will be a huge impact on trade development and the interest of investors.

Another important agreement is the CPTPP. On 4th February 2016 the TPP was signed between 12 countries. The signing nations made up 28% of the global trade and 40% of the global GDP. However, at the beginning of 2017, the US President Trump decided to withdraw from the TPP. The remaining 11 member states discussed the future of the TPP in APEC event in Da Nang, Vietnam and agreed to push ahead with the TPP but now under the name of CPTPP. Furthermore, the states agreed to work out a new framework agreement, which includes changes to the previous TPP agreement. The largest amendment was made in the field of intellectual property, for example, easing the protection of copyright or the special protection of biologics and pharmaceuticals.

However, the level of market access is still the same as in the first TPP. For some countries, further negotiations have to take place and they need time to adapt their laws to the CPTPP rules. The negotiators have set the goal of signing the revised TPP by the first quarter of 2018. After 6 countries have ratified the partnership, it will come into effect.

With the CPTPP, market access to more sectors will be opened than the WTO such as telecommunication, distribution of goods, manufacturing and fabrication. However, there will remain a few restrictions in the power/energy sector as discussed below.

As a result of the EVFTA and the TPP, Vietnam will get access to a huge part of international markets. This gives Vietnam the possibility to increase the amount of imports and exports (estimated up to 37% higher until 2025) and to improve foreign investments.

Another essential instrument is the Investor-State Dispute Settlement (ISDS) which is going to be applied under the EVFTA and the TPP. Under that provision, for investment related disputes, the investors have the right to bring claims to the host country by means of international arbitration. The arbitration proceedings shall be made public as a matter of transparency in conflict cases. In relation to the TPP, the scope of the ISDS was reduced by removing references to “investment agreements” and “investment authorization” as result of the discussion about the TPP’s future on the APEC meetings on 10th and 11th November 2017.

As a conclusion, the bankability of the PPA will get enhanced as a consequence of the EVFTA and TPP in the next few years if the legislative framework is being reformed in the right direction. The economy will become more dynamic because of access to other markets and further foreign investments. With the implementation of the ISDS in the TPP, investors will be more secured in relation to dispute resolution and protection against the risks of international trading. As a result, banks will be more willing to finance PPAs.

Our recommendations: For now, the bankability of the PPA is not as it is expected. But you should be aware of the upcoming agreements which will lead to a big impact on the economy growth and the economy itself. If everything is improving in the right direction as it is now, the PPAs will be more bankable in the future and there will be better investment opportunities.


  1. How was the bankability issue handled in the past years?

The TPP and the EVFTA are not the only agreements regarding the bankability of the PPA.

Vietnam and the USA signed the Bilateral Trade Agreement (BTA) in 1999 which was implemented in 2001. It was a huge success and very important agreement for the economy of Vietnam. It was the first opening of the Vietnamese market and important for the creation of more business opportunities and new standards for financing projects.

Another important fact was Vietnam’s accession to the WTO in 2007. This has improved trade relations between Vietnam and other countries by removing trade barriers and the commitment to non-discrimination. It was also a political sign to show Vietnam’s will to get integrated in the international trade by accepting international trading rules.

To be able to fulfill the commitments, it is necessary to make legislative adjustments and adopt laws that ensure the viability and efficiency of the projects. In the last years, many important laws have been introduced. They have helped to enhance the bankability of the PPA, for example, the 2014 Investment Law, 2014 Enterprise Law, 2012 Labor Law, etc.

In addition, in 2011, the legal framework for wind power projects was introduced.


Our recommendation: You should use existing international agreements and local laws as the bases for negotiation. Remember to rely on existing precedents and keep in mind that there are some difficulties for project development. But with a well-structured project development, it is still possible to getting a bankable PPA done.


  1. What are the main risks of the PPA for investors?

With many solar projects currently focused on a few central locations, the capacity of existing facilities to absorb power must be a cause of some concerns given the PPA’s transfer of such risk to power producers.

EVN holds a monopoly of distribution, repair, maintenance, inspection and examination of the grid.

There is a big risk because of the lack of the government’s guarantee for EVN’s payment obligation in cases energy is provided from the producer but cannot be transmitted due to interruption of EVN’s grid connection. One solution for bridging that guarantee gap can be the use of the MIGA backup from the Worldbank (Multilateral Investment Guarantee Agency) or backup from the Asean Development Bank.

Reasons for the interruption can be, for example: force majeure or termination of contracts. EVN can refuse transmitting the energy in cases of maintenance or repairing.

Circular 16 does not contain any guarantee or compensation for investors in these cases.

Our recommendations for avoiding potential risks: Be aware of veto rights of EVN and Vietnamese authorities. You have to be patient because the decision making process in Vietnam goes through many levels and takes time.


  1. There will be conflicts between the investors and EVN because of the shift of risks to the investors. Which means of conflict resolution does the PPA grant to investors?

In general, the PPA is governed by the Vietnamese law.

The PPA does not provide for international arbitration as a means of dispute resolution.

Conflicts can be submitted to the Department of Electricity and Renewable Energy. If this option fails, investors can seek help at the Electricity Regulatory Authority of Vietnam (ERAV) or with application to a Vietnamese court.

The PPA implicitly allows the involvement of domestic and offshore arbitration. However, whether it can be a prior agreement with EVN in the PPA or only until there is an arising dispute simply lies in the hands of EVN.

Our recommendations for successful negotiations with EVN: You have to understand how EVN is working and what their targets are. Be aware of their monopoly position in the energy sector in Vietnam. Don’t try “to reinvent the wheel”!

Do not overexert them with too ambitious intentions related to the development proposal. They might be afraid of so many new things. Rely on workable precedent strategies and make reference to successful projects.


  1. Which view does the MoIT hold regarding the shortcomings of the PPA?

The MoIT knows about the shortcomings of the PPA and is aware about the fact that the PPA will not attract investors to meet the power demand or to solve problems regarding the development of renewable energy.

The MoIT also knows that the solar energy sector in Vietnam has a lot of potentials.

Finally, the MoIT expects to attract smaller investment projects where bankability is not really an issue for the investors.


  1. Is the view of the MoIT realistic?

In our opinion, the MoIT’s view is not realistic. It may lead to unfeasible projects because of the existing risks of the final version of PPA and without assurance for supportive services from a bank. Furthermore the success of projects depends on the result of the negotiation with EVN.


  1. Which advice can you give to future investors regarding their project development?

Be aware! You have to take care of your project on a step-by-step-base and get well prepared for the negotiations with EVN when you decide to invest in an on-grid power project.


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.


Thank you!



Back to Top




Is bitcoin trading prohibited in Vietnam?



State management agencies still have not agreed on a way to manage bitcoin and other kinds of digital currencies.

Phan Vu Hoang from Deloitte Vietnam said at a workshop on blockchain and electronic taxation that state agencies do not understand bitcoin transactions.

He cited a lawsuit filed by the Ben Tre City Taxation Agency against Nguyen Viet Cuong to prove that taxation bodies, people’s courts and the police act differently in the same case.

In the period between 2008 and September 2013, Nguyen Viet Cuong exchanged bitcoins via the internet. Cuong was summoned by the Ben Tre provincial police many times to ask about his exchange transactions.

The agency concluded that Cuong’s business activities were not an offense, but decided to impose administrative punishment.

In May 2016, the Ben Tre City Taxation Sub-department released Decision No 714 which said Cuong had to pay VND981 million in VAT and VND1.6 billion in personal income tax, or VND2.6 billion in total. Cuong lodged complaints two times about the decision, but the complaint was rejected.

Meanwhile, he said that he did not violate the laws because electronic currency was not recognised as a kind of commodity for trade.

In late September, the Ben Tre provincial People’s Court released the decision requesting to abrogate the decision on collecting tax arrears from Cuong. The court stated that current laws don’t recognise bitcoin as a kind of commodity.

The taxation body released a decision on collecting tax arrears in this case. It was understood that the agency recognises bitcoin as a kind of commodity.

Meanwhile, the legal framework on managing the digital currency is still being drafted.

An analyst commented the move by the taxation agency may cause serious consequences, lending a hand to illegal remittances and payments for illegal transactions.

The State Bank of Vietnam (SBV) late last month once again affirmed that bitcoin and other digital currencies are not legal payment instruments in Vietnam. The agency stated that the issuance, supply and use of bitcoin and other digital currencies as payment instruments are prohibited.

It warned that the behavior will bear administrative fines of VND150-200 million, and that from January 1, 2018, issuing, supplying and using illegal payment instruments (including bitcoin and digital currencies) may be subject to criminal prosecution in accordance with the 2015 Criminal Code.

Le Cong Nhuong, a NA deputy from Binh Dinh, raised a question about bitcoin to SBV Governor Le Minh Hung at the ongoing NA session.

FPT University wants to collect tuition from foreign students in bitcoin and Coc Coc Software wants to attract investment from Germany in the currency.


Back to Top


Dong-US dollar swap point returns to positive



At the end of last week, for the first time in three months, the swap point between dong and US dollar on the interbank market started to return to positive, continuing till the beginning of this week.

In the past week, the interest rate in dong on the interbank market has been increasing steadily over sessions. This was also the strongest weekly increase since the long-standing decline since mid-July 2017.

Specifically, at the end of last week, the interest rate in dong on the interbank market increased rather strongly, from 0.27 percentage points to 0.36 percentage points in all terms compared to the session at the end of the previous week. The average interest rate in the session at the end of the week ranged around 1.37 percent/annum for overnight term, 1.55 percent/annum for 1-week term, 1.7 percent/annum for 2-week term and 2.02 percent/annum for 1-month term.

Meanwhile, the interbank interest rate for US dollar was rather stable last week, only decreasing 0.01-0.03 percentage points for overnight and one-month terms. The overnight interest rate was 1.33 percent/annum, compared to 1.44 percent/annum for 1-week term, 1.54 percent/annum for 2-week term and 1.74 percent/annum for 1-month term.

The aforementioned status continued to be shown in the session at the beginning of this week, November 20, in which the average interbank interest rate in dong continued rising slightly by 0.02-0.05 percentage points in all terms, to 1.42 percent/annum for overnight term; 1.6 percent/annum for 1-week term; 1.74 percent/annum for 2-week term; and 2.04 percent/annum for 1-month term. Meanwhile, the average interest rate of US dollar was 1.35 percent/annum for overnight term, 1.47 percent/annum for 1-week term, 1.57 percent for 2-week term and 1.73 percent/annum for 1-month term.

As such, one of the factors that can be detrimental to the stabilisation of US dollar/dong is the balance in interest rate between dong and US dollar in the interbank market over the last period has started to change.

Normally, when this swap point is negative, or interest rate of US dollar is higher than dong in the interbank market, market members will be stimulated to hold US dollar because it is more beneficial, especially in the last period when the interest rate in dong in the interbank market fell to less than one percent per annum while the interest rate in US dollar was popularly more than 1.3 percent/annum. If the amount of holding is large and the situation prolongs, it will lead to speculation and put pressure on exchange rate.

However, on October 10, due to large foreign currency supply, the State Bank started to have new exchange rate regulation cycle (reducing the purchase price of foreign currency, and purchasing forward foreign currency), and the system no longer exists the hoarding phenomenon. Even, since October till last week, the State Bank still continued buying foreign currency to increase the forex reserves.

As for the system, the capital demand in dong has increased in about two recent weeks, reflecting in the amount of the State Bank’s matured T-bills along with some capital injection sessions through the Open Market Operation (OMO).

And this is also the time when credit enters the most strongly growing season in a year, as usual.


Back to Top



Vietnam urges ratification of EVFTA



Deputy Prime Minister Vuong Dinh Hue has suggested that Vietnam and the European Union should accelerate preparations for ratifying the EU-Vietnam Free Trade Agreement (EVFTA), the Government news website reports.

Speaking at a meeting on November 21 with Ambassador Bruno Angelet, head of the EU delegation to Vietnam, Deputy PM Hue affirmed EVFTA’s importance to both Vietnam and the EU, and proposed speeding up preparations for ratifying the free trade agreement, probably in mid-2018. Hue said EVFTA should bring equal benefits for both sides.

Angelet highly appreciated Vietnam’s preparations for the implementation of commitments in EVFTA. The EU has sent a report on the roadmap and common orientations for the implementation of EVFTA to Vietnam’s Ministry of Industry and Trade to ensure close cooperation between the two sides.

He said the signing of the EU-Vietnam Partnership and Cooperation Agreement (PCA) will play an important role in accelerating the ratification of EVFTA and promoting sustainable development.

In the context of the PCA, the two sides will organize a human rights dialogue next week to enhance a common understanding in the field and reinforce bilateral relations.

Hue said the amendment of economic cooperation agreements should not be tied with the issue of human rights. He stressed Vietnam always attaches special importance to international cooperation in human rights protection on the basis of respecting historical and cultural differences.

“I hope the Vietnam-EU human rights dialogue will be successful,” Hue said.

At the meeting, the Deputy PM also expressed his concern over the European Commission’s (EC) decision to issue a “yellow card” against Vietnam for illegal fishing activities of Vietnamese vessels in waters of neighboring countries and poor system to control landings of fish that is processed locally before being exported to the EU.

Vietnam highly appraised the EU’s recommendations and supports in addressing illegal, unreported and unregulated (IUU) fishing.

Hue said Vietnam has taken adequate action to prevent IUU fishing and hoped the EU will soon take back the “yellow card”.


Back to Top


Vietnam’s GDP growth cannot keep pace with an increase in public debt



Vietnam is still under big pressure to call for capital for domestic debt swap, with 50 percent of domestic debts expected to reach maturity in the next three years, according to the World Bank.

The report on public debt implemented by the government of Vietnam in cooperation with WB showed that the ratio of public debt on GDP is rising, and that Vietnam is one of the countries with the fastest growing ratio, which has increased by 10 percent in the last five years.

Dinh Trong Thinh, a renowned economist, said if the Vietnam economy grows well, it will be able to pay debts. However, there are problems in current economic growth. Vietnam is trying to increase investments to obtain growth. With the current growth model, the economy cannot develop in a sustainable way.

He went on to say that Vietnam’s public debt and foreign debt are beyond the safety line. If the situation cannot be improved, it will be a problem for the national economy and Vietnam will have to pay a heavy price.

“Loosening expenditures, in the long term, is the cause of the budget deficit. If so, the government has to to borrow money for spending which will lead to an increase in public debt in general and foreign debt in particular, and insolvency,” he warned.

Thinh has suggested five solutions to improve the debt payment capability.

First, Vietnam needs to change the investment and production development model and apply the model which utilises science and technology to create high productivity. Second, the country needs to carry out administration reform, and cut out waste in the state apparatus.

Third, Vietnam needs to be more selective in attracting FDI, so that the foreign invested economic sector has good effects on other economic sectors and the economy. Fourth, it is necessary to heighten the operational efficiency of SOEs. Reforming the management mechanism at SOEs (state-owned enterprises) is a difficult task, but it is a must.

Fifth, Vietnam will consider borrowing money to pay debts, but it needs to be cautious to be sure that the debt structure is within the safety line.

Pham Quy Tho from the Institute for Policy and Development commented that the public debt growth rate in the last three to four years is 3-4 times higher than the GDP growth rate.

He stressed that the settlement of debt must be must be clarified in law to heighten enforcement.

Some analysts have suggested raising the public debt ceiling to be able to call for capital for investment and development. However, deputy PM Vuong Dinh Hue said the government has said ‘no’ to the ceiling lifting.



Back to Top





Efforts needed to improve FDI quality



Vietnam attracted 24,397 foreign direct investment (FDI) projects worth 312.9 billion USD from 128 countries and territories in the first 10 months of this year. However, experts said that the projects’ influence on the economy is still modest, necessitating a change in mindset to lure investment.

FDI has been poured into 18 out of 21 sectors and all 63 localities nationwide.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, the FDI sector’s contributions to GDP rose rapidly to 19 percent in 2016 from only 2 percent in 1992.

Exports from the sector accounted for 71.5 percent of the country’s total in 2016, up from 64 percent in 2012. Its contributions to State budget collection also rose from 1.8 billion USD in the 1994-2000 to 14.2 billion USD in 2011-2010. In 2016, the sector paid about 7.1 billion USD to the State budget, accounting for 20 percent of domestic collection and 15 percent of the country’s total income.

However, along with positive contributions, the FDI sector has also faced many problems, as attracting high technology has been difficult.

Wim Douw, a senior expert for trade and competitiveness policy at the World Bank, said that Vietnam’s FDI attraction over past years has depended largely on low-cost labour resources and investment incentives, while the quality of the investment has stayed low.

But the country’s advantages are fading, while the fourth industrial revolution is changing the world rapidly, he said, stressing that Vietnam should change mindset in calling for investment.

Le Duy Thanh, vice Chair of the People’s Committee of Vinh Phuc province stressed that Vietnam should prioritise environmentally friendly projects with modern technology and a strong effect on domestic growth.

Currently, the Ministry of Planning and Investment is building a draft strategy on FDI attraction for 2018-2022, which is expected to tackle problems in the field, driving investment quality upwards.


Back to Top



The billion-USD Van Don investment case

Nhip Cau Dau Tu


One of the phenomenal investment this year is Van Don (Quang Ninh). Similar to Phu Quoc, the 551-square kilometre archipelago is changing rapidly after being selected as one of three candidates to pilot the “special economic zone” model for the first time in Vietnam. Will the new coat help Van Don go further on the journey to become the pearl of the Northeast key economic region?

Billions of USD have been poured into Van Don. As of October 2017, about 2.5 billion USD were invested in the infrastructure of the island district, most in Public-Private Partnership form. Most notably, the Van Don International Airport project is being urgently completed. Once completed, the airport will help connect the island to main cities of China such as Shenzhen, Shanghai, Hong Kong, or Macau in just one to two-hour flight. Within about five hours of flying, Van Don has access to a number of large markets, including a series of major economic centers with a population of more than three billion people and total GDP of more than 22 billion USD.

Another project that is expected to make a push to Van Don is the highway linking Van Don with Mong Cai border gate. The project has investment capital of 16 trillion dong and is expected to be started by the end of the year in the form of build-operate-transfer (BOT). Together with the Van Don Ha Long expressway and Ha Long Hai Phong which are completing the final stages, Van Don Mong Cai expressway will help the transport system connecting Hanoi Hai Phong Van Don Ha Long Mong Cai be completed with high quality, contributing to stimulate investment inflows and facilitate the flows of goods and international tourists.

A number of large-scale projects worth trillion dong have presented in Van Don, such as SonaSea Dragon Bay (five trillion dong), Cai Bau Port and Urban area (25.2 trillion dong), Van Don Mong Cai expressway (16.014 trillion dong), and many other trillion-dong resort projects, etc., making the area to become a “huge construction site” waiting for the special economic zone.

What investors most expect is the “special economic zone” coat that Van Don is about to wear, along with Bac Van Phong (Khanh Hoa) and Phu Quoc (Kien Giang). Van Don is the second location in Vietnam after Phu Quoc licensed to pilot a casino project that allows Vietnamese people to gamble. Along with the advantages in terms of ecosystem and natural landscape, Van Don has the potential to break through strongly in the coming years to become a leading economic and tourism urban zone for the Northeast region, connecting with Ha Long bay a natural heritage of the world as well as creating an effective trading network with major cities in China, Japan, South Korea and Taiwan (China).

The draft scheme on Van Don Special Economic Zone Project identifies the key sectors in terms of fields (tourism-services, industry, and agriculture) and is divided according to each phase of development. Specifically, in the first phase (2018 -2022), the project will focus on developing entertainment tourism with casino services, seaport services, and aviation; trade and international trade centers; and innovative technology and start-up centre. The organisation of local government will follow the model of having a Head of the special zone instead of having a People’s Council.

Despite having potential, Van Don has a lot to do to become a dragon. According to the scheme to develop Van Don as a special economic zone built by Quang Ninh province, the capital demand to make Van Don to become a modern urban zone reaches about 12 billion USD in 2014-2030 period. Since the total investment is too large while the state budget is limited, Van Don will have to seek other options to mobilise capital, especially from private sector. Nevertheless, this matter depends on the openness of the mechanism.

The policies for special economic zones currently remain problematic and controversial. Some people concerned that it will be difficult to well control these zones as they are too large. Dr Vo Tri Thanh, former head of the Central Institute for Economic Management said that “we seem to have not yet defined whether special economic zone is the area to make earnings or to test institutions”.

Being a follower, Vietnam has conditions to learn the models of other countries. According to Dr Thanh, some special economic zones in the region, such as Shanghai and Shenzhen of China have successfully fulfilled their historic mission in testing institutions. Currently, China continues to allow the formation of sub-zones in these special economic zones to pilot new financial and banking and monetary mechanisms, and new technologies. Certainly, the opportunities will pass if there is delay.

In fact, the infrastructure for tourism in Van Don remains fairly limited. The island district currently has just 14 one to two-star hotels in operation. To attract millions of tourists each year, especially international tourists, Van Don will need to add thousands of hotel rooms, particularly in luxury segment and numerous modern entertainment services. This can only be achieved when investors have the absolute confidence in the potential of the island, along with the openness of policies and mechanisms.


Back to Top





Real estate inventories taper off over 16%



Real estate inventories nationwide saw a reduction of over 16 per cent as of November 20, from the same time last year.

This has dropped to an estimated value of over VND26 trillion (US$1.14 billion).The highest inventories were recorded in residential land. They were estimated at more than 3.1 million square metres and valued at VNĐ12.4 trillion.

This was followed by town houses, with 3,129 units worth over VND7 trillion. Unsold apartments stood at 2,924 units, equivalent to some VND4.2 trillion, while commercial land was at 604,151 square metres, valued at nearly VND2.4 trillion.

Unsold properties in HCM City were at VND4.78 trillion, while Hà Nội saw a total inventory value of VND5.3 trillion.

The Ministry of Construction forecast that housing prices will remain stable in the short term and that the tourism property market will experience robust development in the time to come.

Apartment prices in Ha Noi declined 0.5 per cent from the previous quarter and individual housing segments increased 0.13 per cent.

In stark contrast, apartment prices in the southern hub went up 0.8 per cent; however, luxury units dropped 0.5 per cent in price. Individual housing segments escalated 1.65 per cent from the third quarter.


Back to Top


Property market stays strong



Strong economic growth since 2015 has created a thriving domestic property market that is likely to continue next year, said Construction Minister Pham Hong Ha.

The Minister told the first annual Vietnam Real Estate Forum in Hanoi this week that the market’s growth had made significant contributions to the country’s socio-economic development.

“Upbeat signs have been seen in the market index. Property inventories have fallen sharply due to growing housing demand, while the flow of direct and indirect foreign investment into the sector has soared,” he said.

The property market’s recovery has also bolstered the financial-securities market and other related industrial sectors, such as construction and building materials, the Minister said, predicting that resort properties would also continue to develop.

However, he said the market had displayed a lack of transparency. Further, parts of the real estate market had been manipulated by those with vested interests.

Most investment in property projects had come from credit institutions, banks and by mobilising home buyers.

“The structure of property products has not been suitable or closely managed. The supply of high-end estate segments has been higher than demand, while there has been a lack of commercial and social housing projects,” the minister added.

In addition, he said, State management agencies had not developed policies to respond to changes in the market. Also, he claimed the Government had not had adequate policies regarding taxes, credits and land, to regulate resources for market development, and had not encouraged social housing projects.

Nguyen Tran Nam, chairman of the Vietnam Real Estate Association (VNREA), agreed, saying that the estate market would be more stable next year.

Statistics indicate that Hanoi has some 20,000 apartments for sale. In total, the capital and HCM City have 45,000 to 50,000 apartments that are offered for sale in the market, while consumption results in only 30,000 sales per year.

“Therefore, the market has enough apartments to meet current demand,” Nam said, adding that there is no speculation in the market.

Nguyen Trong Ninh, director of the ministry’s Department of Housing Management and Real Estate Market, said the property market continued to see stable growth, including in resort properties at Da Nang, Nha Trang – Khanh Hoa  and Phu Quoc – Kien Giang, which were attracting investments from local and foreign investors.

Credit in estate under control

Outstanding loans in the property sector are in line with the Government’s orientation and the market’s real demand. By the end of July, outstanding loans in the sector rose 4% from last year. Property loans account for 9% of the country’s total outstanding loans.

“The portion has been stable since 2013. The loans in the estate sector have focused on apartment projects, which are suitable for people’s demand,” said Nguyen Quoc Hung, director of the Credit Department under the State Bank of Vietnam (SBV).

In addition, the central bank has asked credit institutions to actively resolve bad debts, especially in the property sector. The bad debt rate in the sector was sharply reduced from 7.05% in 2013 to 4.06% in 2017.

Hung said the SBV would continue to stabilise the monetary market, while closely supervising credit in the estate sector to ensure effective and sustainable credit growth.

He proposed to continue renewing and improving planning, while shortening the time for approving social and commercial housing projects. Meanwhile, policies for these new types of properties, such as condotels and officetels, should be completed.

He said the Government was also on guard against speculation-driven growth in the market. Further, banks will not issue loans worth more than 70% of a project to property developers, and investors must use the loans to invest only in the project for which they received the loan.

Economist Le Xuan Nghia said he believed that financing for social housing projects has been challenging, as it mainly comes from bank loans instead of non-profit or Governmental resources.

“Bank loans should not be a long-term solution, as they cause pressure on the banking sector. I think the Ministry of Construction should study experiences from other countries in mobilising resources. This could include the establishment of a fund for social and inexpensive housing projects,” he added.

VNREA’s vice chairman Nguyen Manh Ha said social housing projects have been mostly located in big cities, such as Hanoi and Ho Chi Minh City.

The projects should be set in locations that are not too far from the city centres, and receive support through tax breaks.

Ha said establishing the fund could be difficult, as low and middle-income residents would likely be unable to contribute to the fund. Deep-pocketed donors would need to step up.

“The issue is that each locality should have their own solution to resolve the problem,” he said.

The forum, organised by VNREA in co-operation with the financial-economic channel VITV, is a large event that will assess the real estate market in a comprehensive manner, from commodities and segments to housing-related issues, such as land, finance, credit and tax.



Back to Top




Binh Phuoc approves Indian-invested solar power project



The southern province of Binh Phuoc announced on November 17 it has approved an investment plan for a US$54 million solar power plant project funded by Indian Tata Power Company.

The 49-megawatt plant will span 55ha in Loc Tan Commune, Loc Ninh District. Shenbagam Manthiram, chief representative officer of Tata Power Company in Viet Nam, said that the locality has good conditions for the company to carry out the project, including a significant period of daylight, convenient transport links and national grid connections.

Tata Power is asking the province to facilitate the project so that it can complete it before June 2019, he added.

Lauding the project, Chairman of the provincial People’s Committee Nguyen Van Tram said he has asked the local Department of Industry and Trade and relevant agencies to support the company with legal assistance so that all necessary procedures can be finalised at the earliest.

He noted that the province will convert more than 20,000ha of forest land and rubber cultivation areas with low economic efficiency in Loc Ninh District into land for solar power development.

This will be made in tandem with branching out land funds to attract hi-tech agriculture development, Tram stressed, adding that the province is prioritising investment in renewable power and clean power.


Back to Top



HCMC: Enterprises keen on waste-to-energy projects


As many as 34 local and foreign enterprises have expressed keen interest in developing waste-to-energy projects in HCMC given the high potential in the sector.

Among potential investors are big names such as Trisun Green Energy Corporation and Hitachi Zosen of Japan, a consortium of Keppel Land of Singapore and Tien Phuoc Real Estate JSC, Naavovo Energy Inc of Canada, and South Korea’s Sudokwon SLC.

HCMC discharges 8,000 to 8,500 tons of garbage a day which is now processed by Vietstar Environmental JSC, Tam Sinh Nghia Investment-Development JSC, Vietnam Waste Solutions and HCMC Urban Environment Co Ltd.

The city government plans to organize a seminar this weekend to call for investment in waste-to-energy projects using advanced technology with the participation of representatives of 18 southern cities and provinces, investors and experts in the sector.

Dong Minh Toan, chairman and general director of Binh Phuoc General Import-Export JSC, said besides household waste, HCMC discharges 1,500 tons of industrial waste and 400 tons of medical waste a day that can also be potential sources for waste-to-power projects. Therefore, the company has invested VND30 billion (US$1.32 million) in a waste-to-energy plant at Go Cat dumpsite in Binh Tan District which is being piloted by Hydraulic-Machine Co Ltd.

The company expects to recoup investment with the price of VND2,200 per kWh of electricity and fees collected from enterprises sending garbage to the plant. The company plans to pour an additional US$40 million into the project to generate 20MW of power from 1,000 tons of garbage a day, Toan said.

According to Decision 31/2014/QD-TTg of the Prime Minister on policies for power generation projects using solid waste, power companies have to buy electricity of waste-to-power projects in 20 years at a price of 10.05 U.S. cents per kWh. Investors of these projects can enjoy tax incentives for equipment import and land rent reductions.


Back to Top




New Law on Fisheries strengthens quality management



The Law on Fisheries, approved by the National Assembly on November 21, sets out a host of regulations on fishery quality management in an apparent move to ensure safety for fishery products for domestic and foreign markets.

According to the law, prohibited acts in fishery activities include injecting impurities into seafood, illegal fishing, illegal transport, storage and processing of seafood, and using banned antibiotics, medicines and plant protection products.

Seafood processing and trading facilities have to observe the regulations on food safety and environmental protection. Seafood is required to have clear origin to ensure food safety and hygiene, according to the new law that will take effect on January 1, 2019.

Banned or expired substances of unclear origin shall not be used for preservation and processing purposes. Overuse of chemicals that are allowed for or restricted from use in aquaculture is also banned.

Organizations and individuals importing seafood are required to have sufficient documents about the products’ origin and quality to ensure food safety and hygiene. Seafood not allowed for trade in Vietnam can still be imported for research or exhibition purposes following approval from the Ministry of Agriculture and Rural Development.

Apart from regulations governing fishery quality, the law also specifies numerous articles designed to protect the fishery resources.

Specifically, the law disallows the use of banned substances, explosives, poisons, electric and other destructive fishing methods.

Besides, the use of fishing gear that obstructs, interferes with or causes damage to other fishing organizations and individuals, fishing in banned areas, and encroachment on protected marine areas are also banned.

Provincial authorities and the Ministry of Agriculture and Rural Development take responsibility for granting licenses to Vietnamese organizations and individuals wanting to develop fish farming at sea, while foreign firms wanting to invest in similar projects will have to ask for the Government’s permission.

Individuals and organizations fishing by vessels of six meters or longer are required to have a fishing license.
The Law on Fisheries has nine chapters and 105 articles on fisheries resources protection and development, aquaculture, fishing activities, management of fishing vessels, fishing ports, shelters for vessels, processing, trading in, export and import of aquatic products, and governmental management of fisheries.

The new law when taking effect on January 1, 2019 will replace the Fisheries Law No. 17/2003/QH11. The law will apply to Vietnamese and foreign organizations and individuals  conducting fishing activities in mainland, archipelagoes, internal waters, territorial seas, exclusive economic zones and the continental shelf of Vietnam.


Back to Top


More incentives needed to develop special economic zones



The aim of the draft Law on Special Administrative, Economic Units is to create a legal foundation for the formation, management, and operation of 3 special administrative-economic zones, namely Van Don in Quang Ninh, Phu Quoc in Kien Giang, and Bac Van Phong in Khanh Hoa province.

The bill is expected to create breakthroughs in mechanisms and preferential incentives to boost economic development in these zones.

The draft Law on Special Administrative, Economic Units made breakthrough in streamlining the administrative apparatus under which the special economic zones’ authorities will apply a one-stop shop mechanism to settle administrative procedures with investors.

The bill also proposes a series of unprecedented land and tax incentives to attract more investment. These include cutting conditional business lines from 243 to 108 and creating more favourable conditions for domestic and foreign investors to mortgage their land or directly receive land use rights.

Foreign investors’ projects will be exempted from import taxes for 7 years after they begin their operation, pay corporate income tax of 10 percent during the project implementation, enjoy tax exemption for 4 years and 50 percent reduction of taxable income for 9 additional years.

Deputy minister of Planning and Investment Nguyen Van Trung said, “The draft law aims to develop an administration model in which upholds individual responsibility, increases oversight by state agencies, the community, the people, and enterprises.

It proposes 10 major policies that are fundamental to ensuring competitiveness and more outstanding than Vietnam’s current regulations and that of other countries. The proposed policies must be transparent and everyone must have the right to exercise oversight.”

Once the special mechanism takes effect, it is hoped that Van Don, Bac Van Phong, and Phu Quoc will see a strong investment flow. Van Dong, for example, can generate about $4 billion from taxation, fees, and land-based income.

Similarly, Bac Van Phong will contribute about $2.2 billion a year to the state budget and billions of dollars a year to local GDP growth.

The potential of Phu Quoc special economic zone is expected to attract more than $3 billion to the state budget, while enterprises will create added values worth $19 billion from now until 2030. More jobs will be generated and per capita income will increase.

But economist Nguyen Minh Phong says preferential taxes and land lease prices aren’t enough to attract investors. The key will be a strong mechanism.

“A special economic zone is not just an industrial zone. It is a miniature nation with special administrative institutions, where all forms of business activities are allowed to develop to serve local residents. To ensure its success, it must maintain its policies, trust, and consistency, especially for long-term investment projects. In the initial period, it’s necessary to outline extremely specialised incentives to attract key investors in infrastructure with which to lure other investors,” Phong said. The construction of special economic zones will create new breakthroughs in economic growth for the localities that deploy the model and for the entire nation.


Back to Top


Page 5 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