Offshore indirect investment by Vietnamese companies

Under Decree 135/2015 effective from 15 February 2016, a local company can invest in shares, bonds and other securities issued offshore of Vietnam (Offshore Indirect Investment) via an entrustment agreement (hợp đồng ủy thác đầu tư) with a licensed fund management company, securities company or commercial bank (Local Managers) if:

  • the State Bank of Vietnam (SBV) designates investment in offshore securities investment funds includingOffshore Fund as a permitted type of offshore indirect investment;
  • the entrusted amount is within the annual limits for overall offshore indirect investment approved by the Prime Minister;
  • the local company satisfies certain conditions (see below); and
  • the Local Manager satisfies certain conditions (see below).
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Written by Nguyen Quang Vu On In , ,

Application of investment treaties for a Japanese investor in Vietnam

Under Decree 58/2012, if an international treaty has provisions regarding foreign ownership limit (FOL) in a public joint stock company then the provisions of the international treaty will apply. Under Decree 118/2015, if a foreign investor is subject to multiple international treaties on the same industry or business line then the foreign investor is entitled to select one of the applicable international treaty. And if the foreign investor has selected to follow one international treaty then the investor will need to comply the provisions of such international treaty as a whole.  

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Written by Nguyen Quang Vu On In ,

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,

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Written by Nguyen Quang Vu On In , ,

Waiver Of Refund Guarantees For House Purchase Contracts

Under the Law on Real Estate 2014, a real estate developer must provide a bank guarantee to any house buyer to secure for the developer’s obligations to refund all advance payment received from the buyer if the developer fails to deliver the house to such buyers on time. The refund guarantee is intended to provide additional protection to house buyers but it also adds additional costs to the transaction. There are several structures for a developer and a house buyer may employ to avoid the requirement for a refund guarantee. But each of the structures carry certain legal risks. In particular,

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Written by Nguyen Quang Vu On In