Decree 9/2018 on for sale of goods and “other related activities” by foreign invested enterprises (FIE) in Vietnam

On 15 January 2018, the Government issued Decree 9/2018 on sale and purchase of goods and other directly-related activities by FIEs. Decree 9/2018 took effect immediately and replaces the outdated Decree 23/2007. Several issues arise from this Decree 9/2018. Unfortunately, most of these issues will likely make the operation and investment by FIEs in the sectors covered by Decree 9/2018 more (sometimes much more) challenging. In particular,

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Written by Nguyen Quang Vu On In ,

New requirements on strategic investors investing during the equitisation of a State-owned enterprise

Decree 126/2017 replacing Decree 59/2011 on equitisation of State-owned enterprises  introduces various new requirements for a strategic investor who invests during the equitisation of a State-owned enterprise (equitised SOE). These new requirements (especially the pricing requirement) are more difficult for a strategic investor to satisfy. In particular,

  • The equitized SOE must decide to select the strategic investor and the strategic investor must commit to invest before publication of the public offering document for the public auction. Under Decree 59/2011, the strategic investor may decide to invest either before or after the public auction;
  • Despite being required to commit to invest before the public auction, in most cases, the strategic investor must pay a price not lower than the average bidding price at the public auction. Under Decree 59/2011, there is no such requirement and the minimum price is the lowest successful bidding price. This requirement under Decree 126/201 seems to repeat the mistake under Decree 109/2007. There is unlikely any sensible investor who will commit to invest without knowing the price that it has to pay first;
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Written by Nguyen Quang Vu On In ,

The Sabeco – ThaiBev transaction – "Official" confirmation of a common deal structure

The Sabeco – ThaiBev transaction announced on Monday is no doubt the biggest equity deal in Vietnam so far. The deal structure (see below) as reported by newspaper involves Vietnam Beverage acquiring 53.59% shares in Sabeco. Vietnam Beverage is wholly owned by Vietnam F&B Alliance Investment. Thai Bev, in turn, owns 49% of Vietnam F&B Alliance Investment. From the look of it, it appears that ThaiBev is investing in Sabeco by setting up a “non-foreign” investor through various corporate layering.

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Written by Nguyen Quang Vu On In ,

HOW CAN A FOREIGN INVESTOR ACQUIRE LAND USE RIGHTS IN VIETNAM?

In Vietnam, private ownership over land is not recognised under the Constitution and Land Law 2013.  Instead, one may acquire certain rights which are close to the ownership rights over the land (land use rights) in accordance with the land regulations. A foreign investor does not fall under the scope of subjects that are entitled to obtain land use rights in Vietnam, but a local company (Local Co) wholly or partly owned by such foreign investor may acquire land use rights to conduct its investment projects.

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Written by Nguyen Quang Vu On In ,