Legal & Regulatory

Vietnam Moves Closer to Implementing Single Visa Policy with Southeast Asian Countries

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HCMC – At the most recent meeting of the Ayeyawadi – Chao Phraya – Mekong Economic Cooperation Strategy (ACMECS) organization, tourism officials from Vietnam, Laos, Cambodia, Thailand, and Myanmar agreed on the need to urge their respective governments to ease travel restrictions and push forward the implementation of a single visa policy for all of the countries.  The meeting was held at this year’s International Travel Expo in Ho Chi Minh City (HCMC).

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Vietnam Expands the Scope of the Foreign Contractor Tax

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HANOI – In a newly released circular, the Vietnamese government has expanded the reach of the Foreign Contractor Tax (FCT). The FCT Circular 103/2014/TT-BTC, issued by the Ministry of Finance, replaces the previous FCT Circular 60/2012. Circular 103 will become effective on October 1, 2014.

FCT is the main tax Vietnam levies on foreign companies carrying out activities, or deriving income, within the country.  The tax is withheld from the payments made by Vietnamese customers, or contracting parties, to a foreign company.

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New Circular Allows Foreign Investors to Open Direct Investment Capital Accounts in Vietnam

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HANOI – On August 11, the State Bank of Vietnam issued Circular 19/2014/TT-NHNN to provide detailed instructions on the management of foreign currency FDI operations in the country. This Circular serves as explanation to Decree 70/2014/ND-CP, which will go into effect from September 25th 2014.

According to the new regulations, foreign investors can open direct investment capital accounts in Vietnam Dong in addition to their foreign currencies accounts. Before, they were only allowed to open direct investment capital accounts in foreign currencies.

This change will provide huge support to foreign investors, especially those who want to reinvest in Vietnam using their own revenue in the country.

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Vietnam Issues Circular 78 on Corporate Income Tax Incentives and Deductions

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HANOI – On June 18, 2014, Vietnam’s Ministry of Finance published Circular 78, which provides additional guidance regarding Decree 218 on corporate income tax (CIT). The Circular will come into effect on August 2, 2014 and will be effective for the whole 2014 tax year.

In the new Circular, the Vietnamese government has reintroduced tax incentives for investments in certain industrial zones. Industrial zones that do not qualify for CIT incentives are those in the inner districts of Ho Chi Minh City, Hanoi, and Hai Phong as well as those located in type 1 provincial cities.

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Vietnam’s 12th Draft Law of Residential Housing Expected to be Favorable Towards Foreigners

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HCMC – As foreign investment in Vietnam has increased significantly over the past few years, demand for housing from foreigners is also accelerating.  At a National Congress meeting on June 18th, many Congressmen expressed their approval towards the 12th Draft Law of Residential Housing, which proposes more opportunities for foreign organizations and individuals who wish to purchase housing in Vietnam.

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Vietnam’s PM Urges Improvement of Customs Process

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HANOI — Vietnam’s Prime Minister, Nguyen Tan Dung, has called the country’s lengthy import-export procedures “unacceptable” and has proposed upgrading the process so that it is more in line with standards around the Asian region.

In particular, Vietnam needs to simplify the customs processes and procedures related to import and export activities in order to reduce the time involved. Additionally, improvements also need to be made in the government’s management capacity so that it can become more transparent and in line with international norms.

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Vietnam’s Land Law Goes Into Effect, More Room for FIEs

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HCMC – On July 1st, 2014, Vietnam’s 2013 Land Law (revised) officially came into effect, The new law has seven more chapters and 66 more articles than the original 2003 Land Law. The new law institutionalizes the points of view and orientations contained in Resolution 11-NQ/TW of the sixth Plenum of the Party Central Committee.

Although the new Land Law still does not allow foreign-invested enterprises to receive the transfer of land use rights or purchase land, it does not prohibit foreign investors from buying the capital associated with the land, for example, factories.

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Vietnam Tightens Regulations on Foreign Sourced Loans

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HANOI – On May 15, 2014, new legislation went into effect that tightened the Vietnamese government’s control of foreign sourced loans. This legislation is of particular importance since many Vietnamese businesses tend to opt for loans from overseas financial institutions and business partners.

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Vietnam Finance and Investment Regulatory Update

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Purchase of shares by foreign direct investors:

HANOI – On February 20th, 2014, Circular 01/2014/ND-CP went into effect, it covers the purchase of shares by foreign investors from Vietnamese credit institutions. This legislation replaced Circular 69/2007/NĐ-CP dated April 20th, 2007.

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Airfares for Overseas Employees Working in Vietnam Not Subject to Personal Income Tax

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HANOI – On May 15, Vietnam’s Ministry of Finance released Official Letter 6375/BTC-TCT which clarified that airfares and related expenses provided to overseas employees for travel between their foreign location and Vietnam are not subject to Personal Income tax (PIT). This ruling will also be applied retroactively to the period prior to the August 15, 2013 issuance of Circular 1 11/2013/TT-BTC.

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Asia Briefing Bookstore Catalogue 2013