Updated new policies on foreigners in VN
10:14 | 03/09/2014

VGP – A string of fresh policies on foreign-related elements were introduced in the first eight months including foreign strategic investors, sub-lease of job, preferential corporate tax, international goods trading activities with foreigners, temporary import for re-export, and indirect investment capital account.

Illustration photo

Foreign strategic investors

A foreign strategic investor may hold 20% of the charter capital of a Vietnamese credit institution, according to Government’s Decree 01/2014/ND-CP, dated January 3, 2014. The decree took effect from February 20, 2014.

Decree 01 adds financial joint stock companies and financial leasing companies to the list of organizations eligible to sell shares to foreign investors. This helps increase opportunities for foreign investors in Viet Nam.

Decree 01 maintains provisions on share ownership percentage of foreign investors as individuals and organizations. However, a foreign investors’ share ownership percentage can be raised to under 15% of the charter capital of the Vietnamese credit institution.

The total share ownership level of foreign investors cannot exceed 30% of the charter capital of a Vietnamese commercial bank.

Guidelines for sub-lease of job

Circular 01/2014/TT-BLDTBXH dated January 8, 2014 (Circular 01) took effect from March 1, 2014 providing further details on the implementation of paragraph 3 of Article 54 of the Labor Code of the licensing the activity of labor sub-lease, the deposit and list of works permitted to be done in sub-lease of labor.

As a rule, foreign enterprises may enter into joint ventures with Vietnamese enterprises to trade in the sub-lease of labor. In addition to the meeting of capital requirements, foreign enterprises have to prove that their main business line is the sub-lease of labor.

Foreign enterprises should provide contracts to which they have conducted the business activity of sub-lease of labor, in which the operating time of labor sub-lease has been granted in accordance with local regulations is represented and related to documents (if any).

Preferential corporate tax

The Government’s Decree 154/2013/ND-CP, dated November 8, 201 guides the management of concentrated information technology parks.

Accordingly, enterprises will enjoy corporate tax rate of 10% for 15 years (up to 30 years in special cases) and exempt from tax in 04 years and get 50% tax cut in the next five years.  

In addition, they will be exempted from import tariff for goods imported to create fixed assets and serve for production of information technology products and services of enterprises.

Under Decree 154, concentrated information technology parks must employ at least 2,000 laborers doing specialized jobs in information technology, occupying at least 60% of total laborers working in the IT Park.

The Decree took effect since January 1, 2014.

Int’l goods trading activities with foreigners 

The Ministry of Finance on January 27, 2014 issued Circular No. 04/2014/TT-BTC (Circular 04) guiding some regulations on international goods trading activities and agent activities of buying, selling, processing and conducting goods transit with foreigners.

Circular 04 stipulates four types of imported goods under tariff quotas including salt, tobacco, poultry eggs, refined sugar and raw sugar.

Used automobiles of all kinds shall satisfy condition that the vehicles were used less than 5 years old from the production year to the import year.

Temporary import for re-export

The Ministry of Industry and Trade on January 27, 2014 issued Circular No. 05/2014/TT-BCT (Circular 05) providing for the temporary import, re-export, re-import and transit of goods.

Circular 05 takes effect from February 20, 2014 and replaces Circular No. 05/2013/TT-BCT, dated February 18, 2013.

From February 20, 2014, enterprises trading in temporary import for re-export of used goods and goods subject to special consumption tax must have the security deposit of VND 7 billion. The security deposit must be paid to the State Treasury at provincial level or bank branches in the province or city where the enterprise is issued Certificate of business registration or Certificate of enterprise registration.

The deposit amount of enterprises trading in temporary import for re-export of frozen foods is VND 10 billion.

Regulations on indirect investment capital account

Circular 05/2014/TT-NHNN (Circular 05) of the State Bank of Viet Nam guides the opening and use of a capital account to carry out foreign indirect investment activities in Viet Nam.

Circular 05 only applies to investors who as non-residents, perform indirect investment activities in Viet Nam, as well as the organizations and individuals involved in the indirect foreign investment in Viet Nam.

According to this Circular, all foreign indirect investment activities in Viet Nam by foreign investors must be done through one indirect investment account opened at one licensed bank and all indirect investment activities shall be made in VND.

The Circular took effect from April 28, 2014.

Management of foreign learners

The regulations of the Ministry of Education and Training on management of foreign students in Viet Nam will take effect on April 11, 2014.

Foreign students are required to register and update their personal information in a database athttp://lhsnn.vied.vn within 30 days after their registration in the country.

Foreign students, including those studying at all educational institutions, are required to update their information annually or when there are any changes.

List of 127 national projects calling for foreign investment

Under Decision 631/QD-TTg, dated May 5, 2014 regarding the promulgation of the List of National Projects calling for foreign investment by 2020.

The projects are categorized into five: technical infrastructure, social infrastructure, agriculture, processing and preserving and production-service sectors.

Enforcement of Land Law 2013

The revised Land Law was adopted by the 13th National Assembly at its 6th session on November 29, 2013, featurring a number of important new points that draw great public concern.

Under the revised Land Law, foreign-invested enterprises are eligible to receive transfer of the investment capital, as the value of land use right applies to state-allocated land subject to collection of land use fees, the lease land is paid once for the entire rental period where the value of land use rights has been capitalized into the enterprise equity, except for transfer of the investment capital as the value of land use rights for agricultural production or forestry.

The transfer of the land use right associated with the residential housing investment project only applies to the land area having already completed construction of residential housings as per the approved projects.

Enterprise investor investing in the construction and business of industrial park infrastructure shall obtain permission from the competent authority to appropriately adjust the land use term; as long as the overall land use term shall not exceed 70 years and the project investor shall pay land use fees or land rent for the extended term area.

The Decree took effect from July 1, 2014.

By Huong Giang

  Reader opinion
 
Turn off Vietnamese typing Automatic typing Telex VNI VIQR  
Fullname Email address  
  Title
 
  Content