Top 10 Challenges of Doing Business in Vietnam

Expanding gross domestic product (GDP), modern infrastructure and a dramatic increase in foreign direct investment (FDI) are signs that Vietnam has transformed into an attractive investment destination, but there are still barriers to doing business which are best navigated with local help on board.

Since 1988, there have been 13,544 foreign investment projects with a total registered capital of US$213 billion in Vietnam, building a large overseas investment sector which occupies about 17% of GDP and 43.4% of industrial product value. Overseas firms are attracted by Vietnam’s 87 million-strong population which supports a large and young workforce and that has also seen an increase in disposable income in recent years.

Strong economic growth rates have been a common feature of the Vietnamese economy since the 1990s, and even though the high levels slumped slightly during the global financial crisis, the country has rapidly returned to pre-crisis growth trends and is expected to continue on this path. Infrastructure, tourism development, and related real estate and retail sector development in urban areas are all attracting large amounts of FDI, and overseas firms are increasingly attracted by the country’s move from a centralized to a market-orientated economy.

However, The World Bank and International Finance Corporation (IFC) rank Vietnam in 99th place in the world for ease of doing business, which means it is essential to seek local help of law firms and lawyers in Vietnam when expanding into the country.

Starting a Business

There are 10 procedures to undertake when starting a business in Vietnam, making it among the most complex start-up environments in the world. What’s more, many tasks facing new corporate entities may be unfamiliar to overseas companies, making the task far more rigorous. Registration of the seal-sample at the State Agency, for example, or publicly announcing the formation in a local newspaper are procedures most companies generally don’t have to complete.

Dealing with Construction Permits

It takes 110 days and 11 procedures to get permits for construction in Vietnam, once again requiring interaction with several official departments. Inspections must be carried out by the Department of Construction and the municipality, and certificates should be obtained from the Firefighters Prevention Department, the Department of Construction and the Department of Natural Resources and Environment.

Getting Electricity

Getting electrical connection is among the most rigorous tasks facing startups in Vietnam, taking 115 days to complete and costing a significant percentage of income per capita. Inspections by the local power corporation are required before completing processes with the Traffic and Transport Department and the Firefighters Prevention Department.

Registering Property

Registering property inVietnam takes 57 days to complete, which is far higher than the OECD norm but around average for East Asia and Pacific. Contracts between the transferor and the transferee are signed before taxation is paid and registration for the right to use land is complete.

Getting Credit

Vietnam is home to quite a stable credit environment, and obtaining capital is a relatively smooth process for businesses. However, the lack of a private credit bureau can make the process a little trickier for overseas firms.

Protecting Investors

Investor protection is an area in which Vietnam needs to improve. It is ranked in 169th place by the World Bank and IFC, with a weak director liability index and shareholder suits index.

Paying Taxes

There are massive 32 corporate tax payments to be made each year which takes an average of 872 company hours to complete. Compared to the OECD norm of 176 and the East Asia and Pacific average of 209, taxation is one of the most burdensome processes of doing business in Vietnam.

Trading Across Borders

Given its strong manufacturing base and reliance on interconnectivity, trading across borders is a cheap endeavour. However, that isn’t to say the process is not complicated, and the stream of documentation required for both importing and exporting highlights that cross-border trade can be difficult at the best of times.

Enforcing Contracts and Resolving Insolvency

Enforcing contracts takes 400 days to complete and 34 procedures. Resolving insolvency is a far more laborious process, taking five years on average to complete and with a low recovery rate.

Culture

The Vietnamese believe in the teachings of the early Chinese philosopher Confucius which emphasize the importance of relationships, responsibility and obligation. Vietnam is also a collectivist country and community concerns will almost always come before business or individual needs.

ANT Lawyers

We have the local knowledge to help you navigate these minefields. Whether you want to set up in Vietnam or just want to streamline your Vietnamese operations, we could assist.

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Vietnam busts largest-ever drug cartel

Police raided 13 drug-producing labs across Vietnam, seizing over $8.8 million worth of narcotics.

Ho Chi Minh City police have arrested more than 20 people believed to be members of what they call the country's largest drug ring operating across the country.

The ring, headed by Van Kinh Duong, 36, has allegedly produced nearly 300 kilograms (660 pounds) of ecstasy pills and other synthetic drugs.

Duong was sentenced to six years in prison for illegal possession of drugs in 2008, according to Ho Chi Minh City's Cong An newspaper. However, he managed to escape from prison and set up his own drug production ring using the fake name Tran Ngoc Hieu.

His network included many labs in Ho Chi Minh City, Hanoi, Nha Trang and some southern provinces, according to the police. The labs were often set up in deserted areas and they would be relocated after every batch of narcotics produced. To avoid police detection, Duong would manage and monitor these labs through a social network and a camera system instead of physically visiting them.

The dozens of people working in the labs are all Duong's relatives.

The pills would often be trafficked from Ho Chi Minh City to Hanoi in suitcases of 50 kilograms (around 250,000 pills) each, and sold for VND180,000-200,000 ($8-9) per pill.

Duong's network has churned out nearly 300 kilograms of synthetic drugs and sold about 200,000 ecstasy pills between early 2016 until it was busted.

Police arrested Duong just as he landed at Ho Chi Minh City's Tan Son Nhat airport on April 6. At the same time, more than 200 police officers raided 13 of his ring's establishments across the country and arrested many members of the ring.

More than 500,000 ecstasy pills and 120 kilograms of narcotic powders with an estimated value of VND200 billion ($8.8 million) were seized during the raids. Police also seized VND10 billion $(440,000), 7 cars including a VND25 billion supercar and some real estate related to the crime.

The drug seizure was the largest ever in Vietnam, Phan Anh Minh, deputy director of the Ho Chi Minh City police department, said.

Further investigations are underway.

Vietnam has some of the world’s toughest drug laws. Those convicted of possessing or smuggling more than 600 grams of heroin or more than 2.5 kilograms of methamphetamine face the death penalty.

The production or sale of 100 grams of heroin or 300 grams of other illegal narcotics is also punishable by death.

 Source: E.vnexpress

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Vietnam to sign deals for up to $17 bln in US goods, services: prime minister

Vietnam will increase the import of high technologies and services from the U.S.

Vietnamese Prime Minister Nguyen Xuan Phuc said on Tuesday he would sign deals for U.S. goods and services worth $15 billion to $17 billion during his visit to Washington, D.C., mainly for high technology products and for services.

“Vietnam will increase the import of high technologies and services from the United States, and on the occasion of this visit, many important deals will be made,” Phuc told a U.S. Chamber of Commerce dinner.

Phuc, who is due to meet with U.S. President Donald Trump on Wednesday at the end of a three-day visit to the United States, did not provide any further details of the transactions.

GE Power Chief Executive Officer Steve Bolze told the dinner that General Electric Co will sign new business worth about $6 billion with Vietnam, but also offered no details.

Phuc’s comments came after U.S. Trade Representative Robert Lighthizer expressed concern about the rapid growth of the U.S. trade deficit with Vietnam, saying this was a new challenge for the two countries and he was looking to Phuc to help address it.

“Over the last decade, our bilateral trade deficit has risen from about $7 billion to nearly $32 billion,” Lighthizer said. “This concerning growth in our trade deficit presents new challenges and shows us that there is considerable potential to improve further our important trade relationship.”

Lighthizer and other Trump administration trade officials have pledged to work to reduce U.S. bilateral trade deficits with major trading partners. The $32 billion deficit with Vietnam last year, the sixth largest U.S. trade deficit, reflects growing imports of Vietnamese semiconductors and other electronics products in addition to more traditional sectors such as footwear, apparel and furniture.

The trade issue has become a potential irritant in a relationship where Washington and Hanoi have stepped up security cooperation in recent years given shared concerns about China’s increasingly assertive behavior in East Asia.

Phuc’s meeting with Trump makes him the first Southeast Asian leader to visit the White House under the new administration.

Vietnam was disappointed when Trump ditched the 12-nation Trans-Pacific Partnership (TPP) trade pact, in which Hanoi was expected to be one of the main beneficiaries, and focused U.S. trade policy on reducing deficits.

Source: E.Vnexpress

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Trademark registration services in Vietnam

Trademarks are an important part of client company’s competitive edge. ANT Lawyers IP practice helps you protect these valuable intellectual assets, through trademark registration, oppositions, and other trademark protection resolutions in Vietnam.

In particular, ANT Lawyers IP practice offers client services as following:

• Trademark Availability Searches
• Trademark Watch Service
• Trademark Filings & Trademark Registrations
• Renewals
• Recordals of Amendments, Assignments, Merger Agreements, Licences
• Filing Opposition & Responses

Our trademark attorneys in Vietnam will process client’s trademark registration by carrying out the following steps:

• Providing our clients with cost estimates for searching and filing applications
• Conducting comprehensive clearance searches including analysis about registration of the required trademarks and providing advice on the most appropriate and cost-effective method to obtain a clearance
• Preparing and filing trademark applications, including obtaining appropriate legalization of documents and translations (if applicable)
• Responding to objections raised by Registrars and potential third party oppositions
• Negotiating settlement agreements when necessary to overcome prior marks
• Obtaining a Certificate of Trademark Registration once your trademark is approved
• Recording changes in name and address of proprietor, assignments, licenses and renewals of trademarks
• Providing solutions for trademark protection in Vietnam.

Learn more about our ANT Lawyers Intellectual Property practice, its experience, and team members here.

Please contact our trademark attorneys in Vietnam for advice via email ant@antlawyers.vn or call us at +844 32 23 27 71

Let ANT Lawyers help your business in Vietnam.

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Retro Nokia phone hits the right buttons on return to Vietnam

Nearly two decades after being crowned the king of Vietnam's cellphone market, Nokia’s classic 3310 has made a successful return to the mobile-crazy country, proving that its charms still work.

The classic talk and text phone, which was reintroduced in a brightly colored version at the Mobile World Congress in Barcelona last February, hit Vietnamese shops on Monday and has already become a phenomenon.

“It has triggered a hunt like when the iPhone first arrived in Vietnam,” said one customer who has been trawling the shops in vain for the revamped model.

Many mobile retailers in Hanoi and Ho Chi Minh City said they had received limited supplies that sold out in a day. An independent shop in Hanoi was sent 20 phones while a retail chain received 500 for its more than 400 outlets.

A source from the official distributor said that supplies will stabilize from next week. Many buyers have put deposits down for the phone, which costs VND1,059,000 ($46.67).

Retailers said customers are buying out of a sense of nostalgia.

The phone is a powerful reminder of Nokia’s popularity back at the start of the millenium, when the 3310 was one of the most popular models in many markets, including Vietnam.

The original 3310 sold 126 million phones, the 12th best-selling phone model in history. Nine of the top 12 selling models were produced by Nokia.

Many Vietnamese still consider the old model a benchmark for durability and battery life. The new model is designed for 22 hours of talk time and up to one month of standby time, which might heighten the phone’s appeal as a backup for smartphone users.

Analysts hailed the 3310 launch as a smart retro gambit, but one which could overshadow the Finnish company’s re-entry into the global smartphone market. Nokia has also launched four moderately priced smartphones ranging from 139 to 299 euros ($156-336).

Nokia sold its by-then ailing handset operations to Microsoft for $7 billion in 2014, leaving it with its network equipment business and a large patent portfolio.

But last year, it gave the Nokia brand a fresh start by licensing its devices brand to HMD Global, a new company led by ex-Nokia executives and backed by Chinese electronics giant Foxconn.

Industry analysts say the revived Nokia 3310 has the makings of one of the hit devices of 2017, appealing to older Nokia fans in developed markets looking for an antidote to smartphone overload, while also appealing to younger crowds in emerging markets.

Source: E.vnexpress

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Decree No. 30/2013/ND-CP on aviation business and operations

On Apr 8th, 2013, the Government issued Decree No. 30/2013/ND-CP on business air transport and general aviation operations to replace Decree 76/2007/ND-CP dated May 9th, 2007.

The new Decree regulates on conditions and procedures for granting business permits for air transport, general business aviation license for commercial purpose, registration certificate of general aviation operation for commercial purpose, the use of brand, franchise businesses in air transport business and air transport operation enterprises for commercial purposes.

According to this Decree, the age of the used aircraft imported into Vietnam is regulated as following:

a) For passenger aircraft: Not exceeding 10 years from the date of manufacture to the point of entry into Vietnam under the purchase contract, lease purchase contract; does not exceed 20 years from the date of manufacture to the expiry of the leasing contract; 25 years from the date of manufacture to the expiry of the lease contract for helicopters;

b) For cargo aircraft, postal parcels and business aviation for commercial purposes: Not exceeding 15 years from the date of manufacture to the point of entry into Vietnam under the purchase contract, lease purchase contract; not exceeding 25 years from the date of manufacture to the expiry of the lease contract;

c) The type of aircraft other than those specified above: Not exceeding 20 years from the date of manufacture to the point of entry into Vietnam under the purchase contract, lease purchase contract; does not exceed 30 years from the date of manufacture to the expiry of the lease contract.

In addition, the decree also provides for capital requirements:

1. Minimum capital requirement to establish and operate airline air transportation business:

a) Operation upto 10 aircrafts: 700 billion VND (or USD 25m) for airlines to do international air transport; 300 billion VND for airline operators in domestic air transportation;

b) Operation from 11 to 30 aircrafts: 1,000 billion VND for airlines to do international air transport; 600 billion VND for airline operators in domestic air transport ;

c) Operation from 30 aircrafts or more: 1,300 billion VND for airlines to do international air transport; 700 billion VND for airline operators in domestic air transport.

2. Minimum capital requirement for the establishment of the airline business for commercial purposes: 100 billion VND Vietnam.

This Decree shall be effective from the date of 06/01/2013.

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Nokia sues Apple for patent infringement

Apple was using Nokia's technology in its products without paying for it. 

Nokia announced Wednesday it is suing Apple in German and U.S. courts for patent infringement, claiming the U.S. tech giant was using Nokia technology in "many" products without paying for it.

Finnish Nokia, once the world's top mobile phone maker, said the two companies had signed a licensing agreement in 2011, and since then "Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple's products."

"After several years of negotiations trying to reach agreement to cover Apple's use of these patents, we are now taking action to defend our rights," Ilkka Rahnasto, head of Nokia's patent business, said in a statement.

The complaints, filed in three German cities and a district court in Texas, concern 32 patents for innovations related to displays, user interface, software, antennae, chipsets and video coding. Nokia said it was preparing further legal action elsewhere.

Nokia was the world's leading mobile phone maker from 1998 until 2011 when it bet on Microsoft's Windows mobile platform, which proved to be a flop. Analysts say the company failed to grasp the growing importance of smartphone apps compared to hardware.

It sold its unprofitable handset unit in 2014 for some $7.2 billion to Microsoft, which dropped the Nokia name from its Lumia smartphone handsets.

Meanwhile Nokia has concentrated on developing its mobile network equipment business by acquiring its French-American rival Alcatel-Lucent.

Including its 2013 full acquisition of joint venture Nokia Siemens Networks, Nokia said the three companies united represent more than 115 billion euros of R&D investment, with a massive portfolio of tens of thousands of patents.

The 2011 licensing deal followed years of clashes with Apple, which has also sparred with main rival Samsung over patent claims.

At the time, Apple cut the deal to settle 46 separate complaints Nokia had lodged against it for violation of intellectual property.

Source: E.vnexpress.net 2016

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