Deviations from EIARs - Change of scale, capacity and technology
Among potential deviations from an Approved EIA, changes in scale, capacity and technology could be an arguable issue in any investment project because of the following:
Confusion about tender offer definition under Vietnamese law
Under Vietnam securities regulations, the legal requirement on tender offer in acquisition of shares in a public joint stock company (the target company) will be triggered in one of the following circumstances:
a. Circumstance 1: An offer to purchase voting shares which results in the ownership of 25% or more of the outstanding voting shares of the target company;
b. Circumstance 2: Any organization or individual together with its related persons holding 25% or more of the voting shares in the target company purchasing further (mua tiếp) 10% or more of the outstanding voting shares of the target company;
c. Circumstance 3: Any organization or individual together with its related person holding 25% or more of the voting shares in the target company purchasing further 5% to less than 10% of the outstanding voting shares of the target company within 1 year from the completion of the previous tender offer; and
d. Circumstance 4: Any organization or individual having intention to conduct a tender offer.
Further development on Vietnamese tax applicable to offshore capital transfer
In April 2015, the General Department of Tax (GDT) instructs a provincial tax department to consider imposing corporate income tax (CIT) on an offshore capital transfer transaction (Offshore Transfer) between a French seller and a Vietnamese buyer (2015 Instruction). The 2015 Instruction has raised a Vietnamese tax concern over offshore capital transfer activities. In February 2016, the GDT issues additional guidelines (2016 Instruction) for the Offshore Transfer to clarify some unclear issues under the 2015 Instruction. In particular,
Acquisition Registration in Vietnam – Scope of Application
Under the Investment Law 2014 and Decree 118/2015, an Acquisition Registration will be required:
- if a foreign investor or a deemed foreign investor acquires any percentage of ownership interest in a target company, which involves in business subject to a FIE Condition; or
- if a foreign investor or a deemed foreign investor acquires ownership interest in a target company, which does not involve in any business subject to a FIE Condition but the proposed acquisition results in (1) the aggregate ownership interest held by foreign investors or Deemed Foreign Investors in the target company being equal to or exceeding 51%; or (2) the aggregate ownership interest held by foreign investors or deemed foreign investors in the target company, which already exceeds 51%, increasing.