Vietnam attracts FDI in 10 months of 2021

  In 2021, due to the spread of the Covid-19 epidemic in the world, the economic situation has been seriously affected. This greatly affects the investment performance of investors making investment in Vietnam. However, Vietnam government still implements many policies to attract forein investors to set up company, make investment, in order to realize the “dual goal” of fighting the epidemic and developing socio-economic and achieving economic growth to get the high results.

According to statistics of the Ministry of Planning and Investment, as of October 20th, 2021, the total newly registered capital, adjusted and contributed capital to buy shares, and buy capital contributions from foreign investors reached USD 23.74 billion, which is accounted for 1.1% more than the same period in 2020. Realized capital of foreign investment projects is estimated at USD 15.15 billion, accounted for 4.1% over the same period in 2020.

Accumulated to October 20th, 2021, the Vietnam has attracted 34,266 projects with a total registered capital of over USD 404 billion. The accumulated realized capital of foreign investment projects is estimated at over USD 247 billion, equal to 61.1% of the total valid registered investment capital.

Foreign investors have invested in 18 industries out of a total of 21 national economic sectors. In which, the processing and manufacturing industry leads the way with total investment capital of USD 12.74 billion, accounting for 53.7% of total registered investment capital. Next is the electricity production and distribution industry ranked second with a total investment of USD 5.54 billion, accounting for 23.3% of the total registered investment capital. Followed by real estate, wholesale and retail businesses with a total registered capital of USD 2.12 billion and over USD 803 million respectively.

In terms of the number of new projects, the processing and manufacturing industry, the wholesale and retail trade, and professional and scientific and technological activities are the industries that attract the most projects, accounting for 33.1% and 27.8% respectively, and 16% of total projects.

There are 97 countries and territories have the investors invested in Vietnam in the 10 months of 2021. In which, Singapore leads with a total investment of USD 6.77 billion, accounting for 28.5% of total investment capital in Vietnam. Korea ranks second with USD 4.15 billion, accounting for 17.5% of total investment capital. Japan comes third with a total registered investment capital of nearly USD 3.4 billion, accounting for 14.3% of total investment capital.  Investment amount is followed by China, Hong Kong, Taiwan,…

Foreign investors have invested in 58 provinces and cities in Vietnam in 10 months of 2021. Long An province leads the way with a total registered investment capital of USD 3.68 billion, accounting for 15.5% of total registered investment capital, including a large power project of up to USD 3.1 billion (accounting for 84.2% of total registered investment capital of Long An province). Ho Chi Minh City comes to second place with over USD 2.73 billion, accounting for 11.5% of total investment capital. Hai Phong city ranks third with a total registered capital of USD 2.72 billion, accounting for nearly 11.5% of total investment capital. Next are Binh Duong, Can Tho, Quang Ninh,…

In terms of the number of projects, foreign investors still focus a lot on investing in big cities with convenient infrastructure such as Ho Chi Minh City, Hanoi, Bac Ninh. In which, Ho Chi Minh City leads in number of new projects (34.1%), number of adjusted projects (17.7%) and capital contribution and purchase of contributed capital (59.4%).

In addition, Vietnam has implemented the selective investment attraction policies (reducing quantity, increasing quality) to eliminate small-scale projects with little added value. This also partly affects the number of projects of small investors planning to invest in Vietnam.

To ensure safety in the prevention and control of the Covid-19 epidemic, Vietnam has applied a policy of restricting entry and implementing long-term isolation, which affects the progress of surveys and implement the procedures of experts and project development groups.

Due to the impact of the epidemic, Vietnam has implemented a factory blockade and restricted the movement of workers in industrial zones, slowing production, reducing capacity and output, and disrupting the supply chain. This affects the psychology of new investors who are planning to invest in Vietnam.

In 2021, many factors affect the investment performance of international investors to Vietnam. However, with many policies to support and attract investment, Vietnam still becomes an investment destination for many big investors in the world. In late 2021 and early 2022, with many policies to attract FDI to revive the economy after the epidemic, Vietnam hopes that international investors can seize the opportunity to make investment, establish company, in order to bring the best economic benefits for their business.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Receipt of Application for Anti-dumping Measures on Welding Materials From China, Thailand and Malaysia

 

On January 21^th, 2021, Trade Remedies Authority of Vietnam (Investigating Authority) received Dossier from a company which is the representative of the domestic manufacturing (Requesting Party) requesting for the application of the anti-dumping measures on some types of welding materials originating from People's Republic of China, Kingdom of Thailand and Malaysia.

On February 01^st, 2021, Investigating Authority confirmed that Dossier was complete, valid according to regulations of law on trade remedies.

Within 45 days of the receipt of a complete, valid Dossier, the Investigating Authority shall examine the Dossier to submit to the Minister of Industry and Trade for consideration for conducting an investigation.

Contents of Dossier examination include: (i) Determine qualification of the legal representative of the domestic manufacturing of organization, individual that submitted the Dossier according to regulation of Law on Foreign Trade Management; (ii) Determine evidence on the dumping of imported goods that caused or threatened to cause significant injury to a domestic manufacturing or significantly prevent the formation of a domestic manufacturing.

Our international trade and competition lawyers at law company will always follow the development from authorities to provide update to our clients.

Whom is Exempted from Work Permit Since 2021?

  On December 30, 2020, the Government issued Decree No. 152/2020/ND-CP regulating foreign workers working in Vietnam and recruiting and managing Vietnamese employees to work for the foreign employers in Vietnam.

In which, foreign workers in Vietnam are not required to be granted work permits include:

The employee is the owner or capital contributor of a limited liability company with a capital contribution of at least 3 billion VND; Chairman of the Board of Directors or a member of the Board of Directors of a joint stock company with a capital contribution of at least 3 billion VND;

Intra-corporate transferees within 11 service sectors in Vietnam's service commitment schedule with the World Trade Organization, including: business services, communication services, construction services, distribution services, educational services, environmental services, financial services, health services, tourism services, recreational and cultural services, and transport services;

The person responsible for establishing a commercial presence;

The employee enters Vietnam to work as manager, executive, expert or technical worker for a working time of less than 30 days and not more than 3 times a year;

The employee who enters Vietnam for a period of less than 03 months to offer services;

The employee enters Vietnam for a period of less than 03 months to handle complicated incidents, technical or technological situations that affect or risk affecting production and business that Vietnamese experts and the foreign experts currently in Vietnam cannot handle it;

Foreign lawyer who has been granted a law practice license in Vietnam in accordance with the Law on Lawyers; The employee is licensed by the Ministry of Foreign Affairs to operate information and press in Vietnam in accordance with the law; The person certified by the Ministry of Education and Training to enter Vietnam for teaching and researching;

The employee enters Vietnam to provide professional and engineering consulting services or perform other tasks intended for research, formulation, appraisal, supervision, evaluation, management and execution of programs and projects using official development assistance (ODA) in accordance with regulations or agreement in international treaties on ODA signed between the competent authorities of Vietnam and foreign countries;

The employee is sent to Vietnam by competent foreign agency or organization to teach and research at international schools under the management of foreign diplomatic missions or the United Nations; establishment and organization established under the agreement which Vietnam has signed and acceded to;

The employee enters Vietnam to implement an international agreement to which a central or provincial authority is a signatory as per the law;

Person obtains an official passport to work for a regulatory agency, political organization, or socio-political organization;

Relatives of members of foreign representative missions in Vietnam;

In cases where the provisions of an international treaty to which the Socialist Republic of Vietnam is a signatory;

Head of representative office, project or is responsible for the activities of international organizations, foreign non-governmental organizations in Vietnam;

The employee is a volunteer;

The student studies at a foreign school or training institution which has a probation agreement with an agency, organization or enterprise in Vietnam; or a probationer or apprentice on a Vietnam sea-going ship;

The employee is a foreigner who marries a Vietnamese and lives in the territory of Vietnam.

This Decree takes effect from February 15, 2021.

How Pilot Program Using Mobile Money for Payment is Regulated?

  With the development of the information technology industry, there is a trend to simplify the process and procedures for making transactions making it becomes easier, faster and more convenient for users. Hence mobile money has become a new trend in transferring money, making payment in many countries.

To develop non-cash payments, increase access and use of financial services, especially in rural, mountainous, remote, border and island areas of Vietnam, as well as taking advantage of infrastructure, data, telecommunications networks, reducing social costs to develop, expanding non-cash payment channels on mobile devices, bringing convenience to users, on March 9, 2021, the Vietnam Prime Minister issued Decision No. 316/QD-TTg on approving the pilot implementation program of using telecommunications accounts to pay for goods and services with small value (Mobile - Money).

The pilot subjects are enterprises that have a license to provide electronic wallet payment intermediary services and a license to establish public mobile terrestrial telecommunications networks using radio frequency bands or the subsidiary is licensed by the parent company to establish a mobile public ground telecommunication network using radio frequency bands and allows the use of telecommunications infrastructure, networks and data.

Individual customers who register and use the Mobile-Money service must provide an Identification Card (ID)/ Citizen Identification/ Passport that coincides with the customer's mobile subscriber number registration information and Identification and authentication piloted by enterprises in accordance with the Government's regulations on mobile subscriber registration; and the number of mobile subscribers must have the period of activating and using continuously for at least three consecutive months up to the time of registering to open and use Mobile-Money service. Each customer is only allowed to open one Mobile-Money account at each pilot enterprise.

The pilot implementation is applied nationwide, in which the pilot enterprise must give priority to the pilot implementation of Mobile-Money service in rural, mountainous, remote areas, Vietnam's borders and islands.

The pilot enterprise is only allowed to provide Mobile-Money service to transfer money and pay for legal goods and services in Vietnam in accordance with the current law to serve the needs of daily life; the pilot implementation of Mobile-Money service only applies to legal domestic transactions in accordance with Vietnamese law provisions in VND, not to make payment/ remittance for goods and services provided across borders.

The pilot implementation period is set to be two years from the time the first enterprise conducting the pilot is approved for pilot implementation of Mobile-Money service. Transaction limit must not exceed 10 million VND/month/Mobile-Money account for total transactions: withdrawal, money transfer and payment.

Financial and banking lawyers at ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Ho Chi Minh City and Da Nang will always follow up with new developments in regulation and provide clients with update.

Anti-dumping Measures on Welding Materials from China, Thailand and Malaysia (AD15)

  On January 21^th, 2021, Trade Remedies Authority of Vietnam (Investigating Authority) received Dossier from a company which is the representative of the domestic manufacturing (Requesting Party) requesting for the application of the anti-dumping measures on some types of welding materials originating from People's Republic of China, Kingdom of Thailand and Malaysia.

On February 01^st, 2021, Investigating Authority confirmed that Dossier was complete, valid according to regulations of law on trade remedies. Within 45 days of the receipt of a complete, valid Dossier, the Investigating Authority shall examine the Dossier to submit to the Minister of Industry and Trade for consideration for conducting an investigation. Contents of Dossier examination include: (i) Determine qualification of the legal representative of the domestic manufacturing of organization, individual that submitted the Dossier according to regulation of Law on Foreign Trade Management; (ii) Determine evidence on the dumping of imported goods that caused or threatened to cause significant injury to a domestic manufacturing or significantly prevent the formation of a domestic manufacturing.

On March 18^th, 2021, Ministry of Industry and Trade issued Decision no. 947/QD-BCT on conducting an investigation to apply anti-dumping measure on some types of welding materials with HS code 7217.10.10; 7217.30.19; 7217.90.10; 7229.20.00; 7229.90.20; 7229.90.99; 8311.10.10; 8311.10.90; 8311.30.91; 8311.30.99; 8311.90.00 originating from People's Republic of China (China), Kingdom of Thailand (Thailand) and Malaysia (Goods under investigation) (code AD15).

According to Vietnam laws, after initiating an investigation, Ministry of Industry and Trade will send a Questionnaire to related parties to collect information for the purpose of analyzing, assessing the accusations, including: dumping activities of export enterprise of China, Thailand and Malaysia; (ii) damages of the industry whose Vietnam products; (iii) causation between dumping activities and damages of the industry whose domestic products.

If necessary, based on results of preliminary investigation, Ministry of Industry and Trade can apply temporary anti-dumping measure in order to prevent dumping activities which continue to cause material injury to domestic industry.

Ministry of Industry and Trade will conduct examining, verifying the information provided by related parties before finalizing official investigation conclusion of this case. At the same time, Ministry of Industry and Trade will also hold a public consultation in order for the related parties to directly communicate, provide information, give opinions about this case before making a final decision.

Ministry of Industry and Trade recommends that all organizations, individuals who are exporting, importing, distributing, conducting business, using goods under investigation should register as related parties and should provide Ministry of Industry and Trade the necessary information so that rights and interests are protected according to Vietnam laws.

Ministry of Industry and Trade can impose the retroactive of the anti-dumping duty on the imposed goods within 90 days before imposing temporary anti-dumping duty. Therefore, Ministry of Industry recommends that all organizations, individuals who are in the process of exporting, importing, distributing, conducting business, using goods under investigation should pay attention to the possibility of imposing temporary anti-dumping duty and the retroactive of the anti-dumping duty.

Our international trade and competition lawyers at Law company will always follow the development from authorities to provide update to our clients.

Can Foreign Invested Enterprises Distribute Pharmaceutical Products in Vietnam?

  Currently, with the complicated developments of the Covid-19 epidemic in the world in general and in Vietnam in particular, the research, production and import of Covid-19 vaccines are the matter that everyone is concerned about. On February 24th, 2021, the first batch of vaccine approved for import was transported to Vietnam by the Vietnam Vaccine Joint Stock Company.

Facing this situation, a number of foreign enterprises have expressed their opinions on the limitations imposed on foreign-invested enterprises in the field of distribution of pharmaceutical products in Vietnam. Vietnam has reserved no commitment to open the distribution of pharmaceutical products service market and has not committed to opening the distribution of pharmaceutical products service market under any trade agreement or international treaty up to the moment, because the pharmaceutical sector is sensitive, directly related to access to drugs and people's health.

According to the provisions of the law, “distribution of pharmaceutical products” means the division, movement and storage of pharmaceutical products from the warehouse of the manufacturer/importer of such products or from a distributor to the end user thereof or to a distribution point or between distribution points by means of various transport methods. For distribution services, in the WTO Commitments, it is clear that pharmaceutical distribution services are excluded from the scope of commitments for all modes of supply. In addition, Appendix 03 of Circular 24/2016/TT- publicizing roadmaps for goods trade and goods trading directly related activities of foreign-invested enterprises in Vietnam, it is also recognized that pharmaceutical products are on the list of goods not entitled to distribution.

Regarding this issue, the Drug Administration of Vietnam expressed the following viewpoint: “The suspension of allowing foreign-invested enterprises in Vietnam to provide drug storage and transportation services is to prevent the distribution of disguised drugs in Vietnam, contributing to health security and towards the professionalization of the medicine distribution system in Vietnam.”

Point c, Clause 10, Article 91 of Decree 54/2017/ND-CP, effective from May 8, 2017, provides for cases ineligible to distribute drugs as follows:

"10. The entities that are entitled to import but not entitled to distribute drugs and medicinal ingredients in Vietnam must do activities related to distribution of drugs and medicinal ingredients in Vietnam except for drugs and medicinal ingredients they manufacture in Vietnam, including:

c) Providing drug/medicinal ingredient transport or storage services."

According to this content, foreign-invested enterprises in Vietnam are not allowed to transport and preserve drugs, except for drugs and medicinal ingredients manufactured by that enterprise in Vietnam. It can be seen that the restriction on the right to distribute drugs to foreign-invested enterprises is aimed at ensuring health security, being proactive in drug supply and distribution, towards to professionalize the domestic drug distribution system as a foundation to support the development of the domestic pharmaceutical industry and contributing to better control of drug prices in the market.