Nov. 28 – The government last week passed a new decree that will increase minimum wages throughout Vietnam as of December 31, 2013, which will be effective for enterprises, co-operatives, household businesses, foreign companies and international organizations operating in the country.
Replacing Decree 103/2012/ND-CP, the new Decree 182 will implement increases of up to VND2.7 million (US$130) in Vietnam’s four different geographic regions categorized on the basis of living standards. Region I, for instance, includes the urban and some suburban districts of Ho Chi Minh City (HCMC), Hanoi, and Hai Phong, as well as the cities of Bien Hoa, Binh Duong, and Vung Tau. Region II covers rural Ha Noi and HCMC plus urban Can Tho and Da Nang. Region III covers provincial cities and the districts of Bac Ninh, Bac Giang, Hai Duong, and Vinh Phuc. Region IV covers the remaining localities. Continue reading
Nov. 12 – When looking to expand your manufacturing business into Vietnam, there are a variety of key issues for which extra attention needs to be paid. You need to be aware of not just your potential location, but also what establishing a presence in that location means – specifically with regard to different zone types and any relevant tax or administrative issues. Continue reading
Nov. 5 – Vietnam has recently released a circular on anti-treaty shopping rules. This new circular amends the existing circular 133/2004, which was on the matter of double taxation agreements (DTA) with other countries, and seeks to prevent companies from using DTAs as a way to circumvent taxation.
The latest circular goes into depth on a number of new general anti-avoidance rules (GAAR) that are directly related to the claiming of tax treaty benefits.
The GAAR follows the general trend of other countries in the Asia-Pacific that are also seeking to prevent treaty shopping and strengthen their DTAs. The new circular also follows the Organization of Economic Cooperation and Development’s (OECD) definitions for such terms as ‘beneficial ownership’ and ‘residency’. Continue reading
Oct. 16 – On September 10, 2013, the Vietnamese Ministry of Finance issued Circular 128/2013/TT-BTC (hereinafter referred to as “Circular 128”) which enacts a host of new regulations with regards to customs procedures, customs control and supervision, import and export duties and the administration of duties on import and export goods.
Circular 128 will take effect starting November 1, 2013, and will amend certain articles of Circular 196/2012/TTBTC, in addition to replacing other related legal documents. Detailed information can be found below.
Sept. 18 – On September 5, the Vietnamese Government issued Decree 102/2013/ND-CP (Decree 102) regarding the country’s labor laws in order to provide a set of clearer guidelines for foreigners currently working in Vietnam. Decree 102 – which will be effective starting November 1, 2013 – replaces both Decree 34/2008/ND-CP (dated March 25, 2008) and Decree 46/2011/ND-CP (dated June 17, 2011). Continue reading
Sept. 16 – The new issue of Asia Briefing Magazine, titled Work Visa and Permit Procedures Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of September and October.
Demand for skilled foreign nationals remains high across Asia, but when conducting business as a foreign national in a foreign country, it is important to be aware of the regulations governing foreign executives’ stay abroad. Employers with a physical presence in these markets must also understand the proper procedures for sponsoring a foreign worker.
The necessary documents required for a foreign national working in Asia vary country to country, but typically include a specific work visa, a work permit, and/or a residence permit. However, short-term visits for purposes of due diligence, quality control, or trade fairs, for example, may be covered through the issuance of business visas. Continue reading
Sept. 5 – Vietnam’s Ministry of Finance and General Department of Taxation (GDT) released a new draft circular this week aimed at simplifying its transfer pricing policy.
Specifically, the circular introduces the Advance Pricing Arrangement (APA) program, which will allow taxpayers to arrange in advance the tax treatment of transfer pricing transactions with affiliated companies.
Essentially, transfer pricing is used when two affiliated companies exchange goods instead of actually purchasing them on the open market. For tax purposes, companies are required to record the exchange of goods using the arms-length principal, which states that the prices charged by the affiliated companies should be equivalent to the prices that would have been charged by a third-party. Continue reading
Aug. 22 – Late last week, Vietnamese Prime Minister Nguyen Tan Dung asked the Communications Ministry to look into possible regulations restricting free call and messaging apps (chat apps) in an attempt to level the playing field for Vietnamese telecoms companies. Apps that may be affected include internationally popular Viber, Line and WhatsApp.
The Prime Minister’s actions are the result of calls from Vietnamese telecoms companies to place an outright ban on all chat apps. The telecoms companies claim that they are suffering massive losses due to the usage of these apps and the free international call services they offer, and that they are being forced to cover these losses by implementing large price increases – something most domestic Vietnamese consumers are likely to not be able to afford.
It is predicted that mobile operators will lose US$32 billion in traditional SMS revenue to chat apps in 2013, which is expected to increase to US$86 billion by 2020. Continue reading
Aug. 21 – The Vietnam Government has lent support to a proposal by the Ministry of Finance and State Securities Commission allowing foreign firms a greater stake holding in listed companies. The draft proposal would amend certain regulations to allow foreigner investors to hold up to 59 percent of the charter capital of domestic companies – an increase of 10 percent on the current cap.
While the additional shares would not grant the foreign owner greater voting rights, it will allow them to increase their financial returns, encouraging greater foreign investment in Vietnam’s domestic companies.
Furthermore, in another proposed change foreign investors may now have the opportunity to purchase between 49 and 100 percent of the charter capital of a securities company. At the moment if foreigners wish to invest in a securities company, they must purchase either 49 or 100 percent of the charter capital – nothing in between. Continue reading