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Tuesday, June 23, 2020

How to invest in Vietnam – Taxation

The tax system in Vietnam includes the following main taxes:

Corporate Income Tax (CIT);
Import – Export Duties;
Value Added Tax (VAT);
Special Sales Tax (excise tax) or (SCT); and
Personal Income Tax (PIT).

Each of these taxes is administered by the General Department of Taxation (Ministry of Finance) minus import and export tax (General Department of Customs). In Ho Chi Minh City, the Tax Department is responsible for collecting taxes and settling taxes. Customs will be responsible for import and export taxes.

1. Corporate Income Tax

Enterprises that produce and trade in goods and services and earn income are subject to CIT. The standard CIT rate is 25%. 10% and 20% preferential corporate income tax rates for businesses investing in geographical areas with socio-economic difficulties, economic zones, or high-tech parks or in encouraging investment sectors. Encourage for a certain period of time. When the preferential interest rate term expires, the CIT rate usually returns to the standard tax rate.

We illustrate in the table below the preferential tax rates and CIT conditions.

The duration of application of tax rate incentives is counted from the first year an enterprise has turnover.

The tax exemption or reduction duration is counted from the first year an enterprise has taxable income; In case the enterprise has no taxable income in the first three years from the first year of turnover, the tax exemption or reduction period is calculated from the fourth year.

In addition, businesses will be exempt from corporate income tax in the following cases:

Production, construction or transport businesses employing a large number of female workers are entitled to a reduction of the corporate income tax at the additional cost for female workers.
Enterprises employing a large number of ethnic minority laborers are entitled to a reduction of corporate income tax at the additional expense for ethnic minority laborers.

2. Import and export duties

2.1. Export duties

Exports are encouraged and therefore, most exported goods and services are exempt. Export duties are only calculated on a few items, which are basically natural resources such as minerals, forest products and scrap metals. The ratio ranges from 0% – 45%.

The price for calculating the export tax is the Free-On-Board (FOB) price of the invoice.

2.2. Import duties

a. Goods subject to import duties

Typically, all goods that cross Vietnam’s border are subject to import duties. Especially:

Goods imported through Vietnam’s border gates by road, river, seaport, international railway, international post office and other places where customs procedures are carried out;
Goods transferred from the local market to non-tax areas or vice versa; and
Other goods allowed for trading or exchange.

The following goods are not subject to import duties:

Goods in transit and transport by mode of border gate transshipment via Vietnam’s border gates or borders;
Humanitarian aid goods, non-refundable aid goods;
Goods imported from abroad into non-tariff areas and only used therein;
Goods brought from another non-tariff area.

b. Import duties rates

Consumer goods, especially luxury goods, are subject to high import duties, while machinery, equipment, materials, and supplies necessary for production, especially those that are not domestically produced, enjoys lower import duties, or even a 0% tax rate. Tax rates on imported goods include (i) standard tax rates, (ii) preferential tax rates, and (iii) special preferential rates depending on the origin of goods.

The preferential duty (“MFN”) will be applied to imports originating from countries or groups of countries that have signed agreements with Vietnam to achieve the most preferred national position in trade relations. ;
Standard tax rates will be applied to imports originating from countries that have not signed an agreement with Vietnam to achieve the most preferred National position in trade relations. The standard-duty rate shall be applied at a uniform rate that is 150% of the preferential duty rate,
Special preferential tax rates apply to imports originating from countries or groups of countries that have signed agreements with Vietnam on special preferential import duties on the basis of free trade areas or customs union or facilitate trade exchange across borders. (e.g., the ASEAN Common Effective Preferential Tariff (“CEPT”) Scheme and the ASEAN-China Free Trade Area (“ACFTA”)).

c. Exemption from import duty

FIEs and foreign parties to BCC who invest in the List of encouraged investment or the List of specially encouraged investment are exempted from importing raw materials, raw materials and semi-finished products that have been produced domestically. manufacturing in preferential industry investment projects.

In addition, import duty exemption will be granted to other cases, particularly imported goods for direct use in scientific research and technological development and technologies that cannot be produced domestically and ( ii) raw materials, materials and components imported to produce projects on the Specially Listed Investment List or the List of Specially Encouraged Areas.

Imports used for export activities (raw materials and goods, intermediate inputs, finished goods used in the production process) are usually exempt from import duties; The tariff is not paid for the imported goods if the foreign-invested enterprises are located in the special export processing zones.

If foreign-invested enterprises are located elsewhere, they must pay taxes within 275 days from the date of importation and will be refunded the import tax paid upon the export of processed goods at the rate of exported goods.

d. Opening Bonded Warehouse by FIE

An FIE manufacturing products for export to set up “bonded warehouses”, in which import inputs for export processing can be kept in stock with import duties levied only on a fraction of unused inputs. in export processing.

Foreign-invested enterprises are allowed to set up bonded warehouses under the following conditions:

The warehouse must be located in an appropriate area of the city, allowing customs control (ports, airports);
Products in stock cannot be sold on the Vietnamese market and after paying the corresponding import tax; and
Stocked products in a bonded warehouse are damaged have to be re-exported or destroyed.

2.3. Customs Valuation

Customs valuation must be done simultaneously with the customs declaration of imported goods registered with the customs office. Customs valuation is calculated in Vietnam dong. The exchange rate for determining the customs value of imported goods is the average exchange rate announced by the State Bank of Vietnam.

The main basis for the customs value as prescribed is the transaction value of Argentina, which is defined as the actual price to be paid or paid for goods when sold for export to Vietnam subject to mandatory adjustment including ( or exclude) certain payments set out in (or from) such price.

The following customs valuation methods will be applied alternately in which the customs value cannot be determined based on the transaction value of imported goods:

The method of determining the customs value according to the transaction value of identical imported goods; or
The method of determining the customs value according to the transaction value of similar imported goods; or
The method of determining the customs value according to the deducted value (including the selling price in Vietnam market minus reasonable expenses and profits earned after import); or
The method of determining the customs value according to the calculated value (including costs and profits for producing imported goods but subject to some adjustments such as transaction value); or
Method of assumption.

3. Value Added Tax

VAT applies to goods and services circulated and consumed in Vietnam. VAT is collected through production, sales, and service provision.

When providing goods and / or services subject to VAT, the business must charge VAT on the value of goods or services provided. In addition, VAT applies to the taxable value of imported goods. Importers must pay VAT to Customs at the same time they pay import duties.

Applicable VAT rates are 0%, 5% and 10%, respectively. The 0% rate applies to exports of goods and certain services including sales to EPZs. VAT is calculated by multiplying the taxable price (net tax) by the applicable VAT rate. For imported goods, VAT is calculated by adding the import price with the import tax and special sales tax (if any).

The VAT system of Vietnam is also characterized by two types of VAT payers: the method of deducting VAT payers and the method of paying VAT directly. Most companies and business organizations are VAT deductible. This means businesses will have to pay the output tax (that is, VAT collected from their customers) after deducting the input tax (that is, VAT businesses have paid their suppliers). surname). Businesses must declare monthly VAT to the tax authorities. The tax authorities in turn will process tax returns and issue tax assessment notices to taxpayers. The payable VAT must be submitted to the State budget in the following month.

The direct method usually applies to small business households that do not keep appropriate accounting records (currently more than 1 million family businesses). For these businesses, VAT is calculated at a rate that is considered to be the total revenue.

4. Special Sales Tax (Excise Tax)

Special sales taxes are levied on the following products and services:

Cigarettes, cigars;
Spirits;
Beers;
Automobiles of less than 24 seats;
Assorted types of petrol, naphtha, reformat components, and other components to be mixed in petrol,
Air conditioners with a capacity of 90,000 BTU or less,
Playing cards,
Votive paper and
Some special services, including dancing halls, massage lounges, karaoke parlors, casinos, jackpots betting entertainment, golf, and lotteries.

Special sales tax rates range from 10% to 75%. Goods and services subject to special sales tax are also subject to 10% VAT. Special sales tax on imported goods is calculated on the basis of taxable import prices plus import duties plus VAT.

5. Personal income tax

Currently, the following individuals are subject to personal income tax:

Vietnamese citizens who are in Vietnam, or working or on business trips abroad;
Other individuals without Vietnamese nationality but residing indefinitely in Vietnam; and
Foreigners working in Vietnam.

The payers of personal income tax (“PIT”) are Vietnamese citizens and foreigners working in Vietnam, earning income. Taxable income includes salaries, wages, wages, bonuses, and allowances (excluding severance allowances that do not exceed the minimum level prescribed by law as discussed above). Below is the progressive tax rate table:

Unit: 1,000,000 VND

Foreigners residing in Vietnam for a total of 183 days or more for a period of 12 consecutive months from the first date of arrival, or in subsequent calendar years, will be considered tax residents in Vietnam. .

Foreigners staying for less than 183 days (please note that the arrival date and departure date together are counted as one day) for a period of 12 consecutive months after the first arrival date, or in subsequent calendar years, are considered tax-free residents in Vietnam. Residents are not subject to PIT with a tax rate of 20% on income derived from Vietnam in the tax year.

A foreigner residing in Vietnam for 183 days or more in a tax year will be considered a tax resident unless the tax treaties between Vietnam and other countries provide otherwise.

Foreigners or foreign individuals working in Vietnam are allowed to transfer their income abroad after income tax and other salary deductions have been paid.

Source: GOV

To find more about guide for business and investment in Vietnam, you can click here: https://lookoffice.vn/economy-business-investment/guige/

For Foreign companies want to start or expand businesses and look for an office in Vietnam:

CONTACT US

We offer a free consultation to support you to find an suitable Office For Lease In Ho Chi Minh:

Phone: (+84) 398 716 459 – Available via Whatsapp/ Viber/ Zalo

Email: contact@lookoffice.vn

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Thursday, June 18, 2020

Weekly Vietnam Property News (12 – 18 June, 2020)

Petition the city under the eastern city

Ho Chi Minh City People’s Committee proposed merging three districts including District 2, District 9 and Thu Duc District into the city under the east.

Prime Minister Nguyen Xuan Phuc has also recently expressed his support for Ho Chi Minh City’s proposal for the eastern creative urban area.

East HCMC is currently the place with the most dynamic and dynamic pace of development in the city. There is available a synchronous transport infrastructure system. The position is the gateway of trade with many major economic centers of the region such as Binh Duong, Dong Nai, Ba Ria – Vung Tau …

More information

The Ministry of Construction proposes allowing foreigners to buy tourism real estate in Vietnam

In order to solve difficulties for the real estate market, the Ministry of Construction has launched a series of solutions, both immediate and long-term. Notably, the Ministry of Construction introduced solutions to amend and supplement the Housing Law and Real Estate Business Law 2014 towards increasing the number of houses that foreign organizations and individuals are allowed to own in each apartment building; allow foreign organizations and individuals to buy and own tourist properties in Vietnam.

Regarding this proposal, the Vietnam Real Estate Association (VNREA) has also proposed in writing the National Assembly to consider amending Clause 2, Article 14 of the Law on Real Estate Business in the direction of allowing foreign individuals to buy other properties that are not residential. In addition to the Law on Real Estate Business, the conditions for purchase, lease-purchase and lease of non-residential properties of foreign individuals are required.

“Fire test of gold” of resort real estate

According to some market research units, real estate enterprises in the first months of 2020 due to the impact of Covid-19 have been under pressure and challenges, especially the most serious damage is the group. Enterprises developing resort real estate projects. However, this industry is also considered to recover the earliest after the epidemic has passed.

In fact, the demand for tourism returned after the epidemic and the effectiveness of the stimulus packages has begun to take effect. Simultaneously in many localities, from May 2020, the large and medium resorts are ready and operating again. Many businesses and localities are encouraged to jointly launch programs to stimulate tourism on a large, medium and small scale … in order to attract special attention and motivate tourists to leave; The reality was more bustling than expected when a large number of guests came to the resort after long social isolation.

The tourism industry promises to enjoy many benefits, bringing other industries such as transportation, accommodation, food, and real estate to catch the economic recovery wave. This confirms that investment channels in tourism, such as resort real estate will never be outdated, even more promising.

Compiled from many sources by LOOKOFFICE

For Foreign companies want to invest property or look for an office in Vietnam:

CONTACT US

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Wednesday, June 17, 2020

Procedures For Establishing A Foreign Investment Enterprise in Vietnam

1. Investment certificate

For the first time, foreign investors must have an investment project before being granted an investment certificate. Investment certificates also serve as business registration certificates. The investment certificate will be issued as part of the investment registration and / or evaluation process based on (i) the type of project, (ii) the size of the investment and (iii) whether the project is under conditional investment or not.

The investment certificate for a foreign-invested project will have a fixed term of not more than 50 years, which can be extended for up to 70 years with the approval of the Government.
The investment certificate will set out the specific scope of business activities that a foreign investor is permitted to conduct in Vietnam, the amount of investment capital, the location and land area to be used and therefore the relevant incentives. (if). The investment certificate must also indicate the project implementation schedule for the investment.

2. Procedure

The licensing agency will issue an investment certificate within 15 working days (for foreign projects subject to the registration process) or 30 working days (for foreign projects that must follow the evaluation process) from the date of receipt of an entire and valid application.
The registration process applies to foreign-invested projects with investment capital of but VND 300 billion and not on the list of conditional business lines. The evaluation process applies to the following two cases:
· Foreign projects with a capital of at least VND 300 billion: the evaluation process will focus on projects that comply with the master plan of infrastructure, land use planning and master plan of raw materials and other natural resources. Other factors considered include land use requirements, project implementation schedule and environmental impact.
·Foreign projects are on the list of conditional businesses no matter the dimensions of investment capital: The evaluation process will specialise in compliance with applicable industry conditions. If the project has a capital of over VND 300 billion, other factors as discussed above will also be considered.

3. Licensing authority

Licensing agencies continue to be decentralized to provincial people Management Committees and management boards of industrial parks, export processing zones and high-tech parks (Management Boards). For some important or sensitive business areas, the investment certificate issued by the provincial People’s Committee or the Board of Directors must be based on the investment policy or economic plan approved by the Prime Minister. approved.

a. Prime Minister approved

The following projects are required to obtain investment policy approval from the Prime Minister:

(i) Airport construction and operation; air transport;

(ii) Construction and commercial operation of national seaports;

(iii) Exploration, production and processing of oil and gas; exploration and exploitation of minerals;

(iv) Radio and television broadcasting;

(v) Commercial activities of casinos;

(vi) Tobacco production;

(vii) Establishment of higher education institutions;

(viii) Establishment of industrial parks, export processing zones, hi-tech parks and economic zones.

If any of the above projects has been included in the economic plan approved by the Prime Minister and in accordance with the conditions of an international treaty to which Vietnam is a signatory, mandate Provincial People’s Committees or Management Boards may proceed to issue investment certificates without the Prime Minister’s own approval. If any of these projects is not in the economic plan approved by the Prime Minister or does not meet the conditions of an international treaty to which Vietnam is a signatory, the provincial People’s Committee or the Management Board The approval must be approved by the Prime Minister before issuing the investment certificate and coordinated with MPI and other ministries at the same time to propose to the Prime Minister to decide any additions or adjustments to the plan. economic planning.

b. Provincial People’s Committees

The Provincial People’s Committee has the right to review and issue an investment certificate for any investment project in its territory regardless of the intended investment capital or investment activity. In particular, an authorized Provincial People’s Committee:

Investment projects located outside industrial parks, export processing zones and hi-tech parks; and
Infrastructure development investment project for industrial zone, export processing zone and hi-tech zone where the Board of Directors in that province has not been established.

The Department of Planning and Investment of the province is responsible for receiving applications for investment certificates for and on behalf of relevant committees.

c. Administrative Council

The Board of Directors will consider and issue investment certificates for investment projects carried out in industrial parks, export processing zones and hi-tech parks.

Source: GOV

To find more about guide for business and investment in Vietnam, you can click here: https://lookoffice.vn/economy-business-investment/guige/

For Foreign companies want to start or expand businesses and look for an office in Vietnam:

CONTACT US

We offer a free consultation to support you to find an suitable Office For Lease In Ho Chi Minh:

Phone: (+84) 398 716 459 – Available via Whatsapp/ Viber/ Zalo

Email: contact@lookoffice.vn

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Tuesday, June 16, 2020

Vietnam Real estate Outlook after covid-19

Covid-19 has a mixed impact on Vietnam Real estate, a slight negative impact on housing and residential areas, and a significant short-term negative impact on retail, office, and holiday properties.

Vietnam’s picture

Advantages of Vietnam:

Labor costs are relatively low compared to other countries in the region and young labor force (52% of people of working age).
Stable economy and high growth.
Large market with increasing purchasing power and growing middle class, with a total population of 95 million.
Strategic geographic location: Located next to China, Vietnam is close by making it an ideal alternative location for investors seeking to diversify their supply chains from China.
Increasing participation in global connections: recent strategic trade agreements: AFTA, EU-Vietnam FTA, CPTPP
Supporting the legal framework: the government is improving the investment environment to become more transparent and fair.

Impacts from Covid-19 to Vietnam

In the long run, Vietnam could benefit:

Vietnam’s international reputation has benefited from the successful handling of Covid-19 and is currently exporting masks and medical equipment to the world, promoting the nation’s brand.
In addition, businesses from the US and the world will tend to withdraw from China, for example, Japan recently spent more than US $ 2 billion to support businesses withdrawing from China because of the Covid-19 epidemic. disrupting the supply chain between the two countries.
Besides, Vietnam has joined a series of free trade agreements (FTAs), including EVFTA, which have recently been expected in the long term.

However, in the short term and especially in 2020, industrial enterprises will encounter negative factors from:

Global economic activities plummeted from Covid-19, causing businesses to face financial difficulties. Businesses planning / preparing for investment will have to halt due to financial impacts, ambiguous macro factors from diseases, and travel experts to check for new restricted projects.
Investment capital into Vietnam in the first quarter of 2020 decreased in both quantity and total investment capital, in the first quarter of 2020 only reached 8.55 billion USD, down 20.9% over the same period in 2019. Investment capital disbursement also decreased but still at a good level, reaching 3.85 billion USD, equaling 93.4% over the same period in 2019.
Vietnam’s infrastructure construction process has slowed down by 2020 due to social isolation.

Therefore, at least in the first half of 2020, the revenue of industrial zone enterprises will drop sharply.

Opportunities from Government efforts

To deal with Covid-19 and supporting companies, the government could:

Regarding monetary policy, the State Bank of Vietnam (the State Bank) has continuously cut interest rates since September 2019, both mobilizing and lending rates of commercial banks. Credit growth is expected to reach about 10% by 2020.
The Government also promotes public investment to promote growth, with a total planned investment of 700,000 billion VND in 2020. At the same time, implementing economic support packages is estimated at 600,000 billion VND, equivalent to approximately 10% of GDP.
Infrastructure investment will be supported and promoted by the government after a slow 3 years, first of all by removing bottlenecks related to public-private partnerships (PPP), including the legal framework. Comprehensive PPP projects and improve public response to fares and tolls, etc.
Maintaining high GDP growth (in a good scenario where GDP growth is 5%), stable economic factors include inflation and exchange rate.

Covid-19’s impacts on Vietnam Real Estate

1. Industrial Parks:

– On the one hand, the slow growth of the global economy and capital withdrawal due to Covid19 may negatively affect FDI inflows into Vietnam. Potential foreign and domestic manufacturers may face financial difficulties from viruses and may postpone their plans in new projects. The travel restriction due to Covid-19 also affects the progress of new/potential projects.

– On the other hand, the Vietnamese Government has handled Covid-19 quite well, prevented the spread of Virus completely and the lock time is very short compared to other countries. Vietnam will benefit from supply chain movements away from China, recent trade agreements, and strong macroeconomic factors.

2. Residential

Covid-19 slows down both the supply and demand sides of the market, and can also affect the psychology of home buyers. However, the Government can support by increasing spending on infrastructure and loosening policies/regulations to support real estate developers.

3. Retail

Footfalls in shopping centres decreased significantly due to Covid-19 (about 70% YoY in Q1 / 2020 – according to CBRE). Retail sales decline, leading to tenants facing increases and landlords having to lower rental/payment rates.

4. Vacation property, hotel, condotel

Tourism significantly affected by Covid-19, the Vietnam National Administration of Tourism (VNAT) has forecast two scenarios:

(1) The coronavirus to be contained by June 2020 – international tourist arrivals would reduce by 70% ;

(2) The coronavirus to be contained by September 2020 – international tourist arrivals would reduce by 75%

5. Office

Businesses may delay the decision to rent a new office in the first half of 2020, but demand will mostly return. However, remote working habits/cultures may start in certain businesses, so the demand for offices is lower.

Source: MB

For Foreign companies want to invest property or look for an office in Vietnam:

CONTACT US

We offer a free consultation to support you to find an suitable Office For Lease In Ho Chi Minh:

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Saturday, June 6, 2020

Weekly Vietnam Property News (30 May – 6 June, 2020)

Investors return to the resort real estate “race track”

Given the potential of the resort real estate market, long-term investors continue to pour money into this segment. Looking at new projects, you can see potential investors and have their own directions to follow the market trend to catch up.

Three new trends for investors:
Diversify the market to continue to maintain growth, taking into consideration potential tourist destinations that are not yet developed such as Nam Hoi An, Binh Thuan, Ba Ria-Vung Tau, as well as diversifying types product images and professionalization of operational management.
Actively in developing new tourism real estate products. The most prominent is the coastal shophouse / shopvilla in Phu Quoc and Ha Long markets.
Type of wellness resort (wellness resort). This is a new type and has a lot of potential for development in Vietnam, as the middle-class population in Vietnam is expected to grow fastest in Southeast Asia in the next five years, and tourists from other North Asian countries are increasingly favoring products with a combination of tourism and health rehabilitation.

Potential of resort real estate in a special economic zone in the future after Covid-19

The impact of the Covid-19 epidemic has pushed the resort real estate market to “freeze” in the short term. At the time, the given scenarios were all gray when Covid-19 was spreading at a dizzying rate worldwide. Social isolation policy continues to make the index on the resort real estate market more gloomy.

However, in May, with the end of the social gap period, the resort real estate quickly regained its growth momentum. A series of stimulus policies from the tourism industry has been launched such as cheap travel packages, building safe destinations. A series of positive activities has brought about the excitement of the resort real estate soon.

From the perspective of tourism growth, if the expectations of the growth are forecasted at the end of 2019, experts think that it will be difficult to achieve. However, if you look at the number of more than 18 million domestic tourists in 2019, the belief that the number of domestic tourists will leverage the supply of resort real estate is entirely possible.

The operation of the resort real estate market in Vietnam in the open period after the period of social separation has shown positive signs of the recovery process, along with the possibility of rapid recovery of the tourism industry. , tourism real estate will be a field that can recover quickly. Recent efforts and ways of Vietnam against the epidemic have “scored” greatly in the eyes of the international community. With good epidemic control, Vietnam is expected to become a tourist attraction in the world in the near future.

“Lighting” tourism real estate by “lighthouse” night economy

The night economy has brought great economic value to many countries around the world. In Vietnam, the night economy is still open while this industry can help diversify tourism products and increase the value of resort real estate.

Night economics are not unfamiliar in many countries. As a whole, this is an economic – service activity that takes place between the hours of 18:00 and 6am. Due to the characteristics, this activity is often associated with cultural events – art, entertainment services, entertainment, food, shopping … In many countries, the night economy has made a great contribution to promoting socio-economic development, creating jobs, surplus value and attracting foreign currencies.

In Vietnam, the night economy is a new concept. Although the number of international visitors to Vietnam has increased steadily every year, tourism revenue and spending of visitors are still low compared to other countries in the region. According to the Vietnam Tourism Advisory Council (TAB), the average visitor to Vietnam is 96 USD / day, while Thailand is 163 USD / day and Singapore is 325 USD / day. Partly because, the exploitation of night services such as entertainment, entertainment, eating and drinking in the tourist cities of Vietnam is still small, lacking in identity, even though many places consider the night economy to be just a business. food service provider.

Vietnam has many advantages for night-time economic development, such as a young population who prefer to live concentrated in cities, in addition to unique cultural – artistic and culinary factors, degree of integration and globalization. high. It is time for Vietnam to change its perspective and management to promote the advantages of night economic development.

It can be affirmed that if a beautiful land attracts tourists, the night economy is the product that helps retain visitors and maximize profits for the tourism industry. If the night economy is well implemented, it is also potential to increase the value of real estate.

Compiled from many sources by LOOKOFFICE

For Foreign companies want to invest and look for an office in Vietnam:

CONTACT US

We offer a free consultation to support you to find an suitable Office For Lease In Ho Chi Minh:

Phone: (+84) 398 716 459 – Available via Whatsapp/ Viber/ Zalo

Email: contact@lookoffice.vn

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From: LOOKOFFICE

Wednesday, June 3, 2020

HCMC Office Leasing Guide

This is the overall characteristics and guidelines about Ho Chi Minh – HCMC Office Leasing for companies that want to start or expand businesses and look for an office in Vietnam.

Of course, there will be a lot of issues that need to be clarified and agreed upon in the search and lease agreement process. In order to get the best agreement as well as save your resources and time, it is better for a professionalism and credibility local agency to represent you to work with the landlords by their relationship, knowledge about the local and office leasing market.

TYPICAL HCMC OFFICE LEASING

Term	3 – 5 years. Longer for tenants required large space
Breaks	Rarely negotiated
Renewals	Negotiable
Rent basis	Rental fee + service charge
Currency	Must be denominations in VND
Free-rent	1 week – 1 month for fitting-out
Escalation	Corrected if the lease is for less than 3 years, but the growing rental includes escalation to address forex concerns
Security	3 months
Tenant’s broker	The landlord pays, with the guarantor of the tenant
Fit-out	Landlord delivers bare shell. Tenant pays fit-out, typically within rent free fit-out period
Right to sublet	Negotiable
Transparency	Disclosed with the consent of the parties

LEASE LENGTH OF HCMC OFFICE LEASING

Term	In Vietnam, the lease term usually lasts from three to five years. Anchor or international tenants looking for longer leases can negotiate terms from five to ten years.
Termination or Break	Breaking options are rare but can be negotiated.
Renewal	Renewal options are negotiable, usually have caps and collar in place. A collar is the opposite of a cap, ie, the minimum rental rate.

SPACE MEASUREMENT OF HCMC OFFICE LEASING

Space Measurement	Space is measured in square meters.
Definitions	Gross Floor Area (GFA): All areas within exterior walls at each floor level, excluding mechanical and electrical service rooms, elevators, and stairs.Net Leasable Area (NLA): space does not include all common areas such as corridors, stairs, lift lobbies, toilets, and electromechanical service rooms, and usually includes columns.
Efficiency	The percentage of carpet area with NLA is 95%. The ratio of NLA to GFA is usually around 80, 85%, although this may be as low as 60%.

OCCUPANCY COST

Rent	Rent Quoted Rents are usually quoted in USD per square meter per month. Currency for PaymentThe tenant pays rent in VND. By law, the landlord must have a VND bank account. If the tenant pays in USD, the bank will convert the payment into VND before crediting to the landlord.When the USD to USD exchange rate decreased in 2009 – 2011, tenants with US $ rent were subject to hidden costs because the US dollar rent required greater payment in the dong when the currency depreciated.New leases are almost entirely signed and signed in bronze, due to increased enforcement of government regulations. With persistent depreciation pressure on the VND, both landlords and tenants try to hedge risks. Leases are made in VND with a fixed annual increase that allows some compensation for the expected devaluation of the currency. Forcing a dong to rent at the rate of USD / VND does not comply with the regulations; therefore, homeowners insert a fixed annual increase in rental rates to compensate for the expected currency devaluation. Rent PayableRent is usually due on a quarterly basis, including service charges, in advance. The tax rate of 10% is not included, but due at the same time. Rent-Free PeriodsThe free rental term is negotiable. Typically, the rent exemption period is based on a specific case based on the occupancy of the building, the magnitude of the covenant, the lease term and the title rent. The rental exemption period usually includes a suitable time period, although service charges and 10% VAT are still applicable during this period. Under current market conditions, landlords are increasingly competing for incentives including free rent periods. Rent ReviewLeases longer than three years usually stipulate that the parties will renegotiate the rental price after the initial three-year period. The parties manage the risk of long-term lease by agreeing to lease the amendment to a predefined range, usually 10-15% of the base rent.
Service Charge	Service fees include management, 24-hour security for common areas, cleaning, lighting, power supply, plant and machinery maintenance, pest control in common areas, outside window cleaning, clean up trash, lift, and electricity to operate the air conditioning system during normal business hours.The tenant pays a service charge plus 10% VAT in addition to the rent, based on the rented area, on a GFA or NLA basis. The charge varies from building to building, depending on the services provided and the quality of the building. Particular Service fee is:Grade A: USD 5–8 per square meter per month.Grade B: USD 4–6 per square meter per month.Grade C: USD 3–4 per square meter per month
Taxes	VAT tax 10% is due to both rental and service charges. VAT is paid to the landlord
Utilities	Electricity: Typically in buildings A and B, electricity (excluding air conditioning) is metered and paid to the owner. Air conditioning during normal business hours is included in the service charge. In some cases, electricity may be included in the service charge.Water: Water charges in public areas are included in the service charge. The tenant pays water in the tenant’s space. Tap water is not potable in Vietnam, so tenants must arrange and pay for drinking water.Telecommunications: The tenant pays the phone and internet service directly to the service provider
Fit-Out	Standard handover is ceiling cover, ie, concrete floor/floor with the finished ceiling. Tenants usually pay for all tenant improvements, such as receptionists, partitions, interior doors, wiring, cables, furniture, floors, and ceiling modifications. Hardware and IT phone systems are the responsibility of the tenant. Appropriate costs range from 150 – 600 USD / m2.
Restoration	The tenant usually must restore the property to its original condition at the end of the lease term or pay the landlord, unless otherwise agreed.
Security Deposits and Guarantees	The tenant pays the deposit based on the leased area, on a GFA or NLA basis. A three-month security deposit is usually paid when signing the lease. At the end of the lease, the landlord will return the deposit in the same currency as received, excluding interest. If the parties renew the lease for a different term, the security deposit is usually adjusted at the new market rate.
Car Parking	Renters often pay extra for parking. In Ho Chi Minh City, this tax is approximately $100 – $200 + 10% VAT per car parking lot per month for Grade A buildings. In Ho Chi Minh City, motorbike parking is usually $10 – $20 + 10% VAT per bike every month. Depending on market conditions, landlords are increasingly competing for incentives including parking.
Other Occupancy Costs	Air conditioning after working hours, internal hygiene and insurance

TRANSACTION COSTS

Agency Fees	Landlords pay this fee, tenants do not have to spend any cost for an agency to find an office for them.
Legal Fees	Both parties share legal fees.
Other Transaction Costs	Both parties share other costs incurred (if any) related to the preparation and implementation of the lease contract.

OTHER LEASE PROVISIONS OF HCMC OFFICE LEASING

Standard Lease	Landlord or agent provides the draft lease agreement, usually with standard terms and conditions
Right to Sublet	The sublease is carried out on a case-by-case basis, but requires the owner’s consent if the business license does not grant the sublease right.
Option to Expand & Right of FirstRefusal	Options to expand are negotiable. Tenants may negotiate in their lease agreement the first right of refusal to contact space on the same or floors adjacent to the same terms and conditions contained in a party offer. Tuesday, with 15 days to match any third party Party offers. Usually negotiated on a case by case basis
Signage and Naming of Building:	Depending on the market and building conditions, each building has a place to place the company’s name in the building (standard size). If a tenant wants to place a large-size sign outside the building to promote the company’s image, the tenant will have to pay an extra fee to place the billboard.

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Sunday, May 10, 2020

“Bright spot” in the economic picture of Ho Chi Minh City

Although affected by pandemic COVID-19, TP. Ho Chi Minh City has made efforts to overcome difficulties and promote socio-economic development with bright colors to attract investment and export goods.

Investment capital increased by 86.04%

According to the representative of the Management Board of EPZs – IPs TP. HCM (HEPZA), the total investment capital of the city. Ho Chi Minh City attracted from the beginning of the year until now (including new and adjusted ones) reached 117.76 million USD, up 86.04% compared to the same period in 2019.

In particular, the concentration increased sharply in 11 projects with adjusted capital increased by US $ 60.51 million, up 14 times compared to the same period in 2019. There are 6 new projects with registered capital of US $ 5.48 million. , down 74.25% over the same period in 2019. Despite a decrease, in the new investment structure, the investment capital of Vietnamese enterprises increased sharply.

Specifically, the total domestic investment capital reached US $ 51.77 million, up 37.27% over the same period in 2019. Of which, 13 new projects were granted with registered capital of US $ 37.76 million, up 26.55%. In addition, there are 12 adjusted projects increased by 14.02 million USD, up 77.98%.

However, compared to the overall investment attraction of the whole country, including adjusted registered capital and value of capital contribution, share purchase of foreign investors reached nearly 6.5 billion USD (down 23 , 6% compared to the same period in 2019), the situation of attracting investment in EPZs-IPs of the city. HCM has increased over the same period last year. The reason explained by HEPZA is that this capital increase is mainly planned in advance.

Commenting on this development, economic experts said that, although the world economy is seriously affected and unpredictable by the Covid-19 epidemic, Vietnam is now considered a safe destination for Vietnam. investors in the prevention of the Covid-19 epidemic.

In fact, from the end of 2019, to create favorable conditions for domestic and foreign enterprises to invest in the city. HCM, the city has reviewed the current status of operations, as well as the ability to receive enterprises of the EPZs.

According to data from the Department of Industry and Trade of Ho Chi Minh City, up to now, the city has 17 EPZs-IZs out of 19 EPZs-IZs established and put into operation, with the leased land area of nearly 1,800ha / total more than 2,500ha of industrial land, reaching the occupancy rate of 68.4%.

In addition, the city is speeding up the new investment in Vinh Loc 3 Industrial Park in Binh Chanh district with an area of about 200ha, expanding Hiep Phuoc Industrial Park Phase 3 with an additional area of 392.89 ha. According to the plan, by the end of this year, the city will have 23 concentrated EPZs-IPs with a total area of 5,797,62ha.

Export growth was impressive

According to the statistics of the Customs Department. In Ho Chi Minh City, both export and import turnover of enterprises through the border gates have a good growth rate in the first 4 months of 2020.

Accordingly, as of April 15, 2020, export turnover through Ho Chi Minh City border gates. HCM reached 15.4 billion USD, up 8.1% over the same period in 2019 (the same period reached 14.26 billion USD).

In the first quarter, TP. Ho Chi Minh City remained the leading country in terms of export with a total value of US $ 10.5 billion, up 14.6% over the same period in 2019 and contributing up to 16.6% of the country’s total export turnover.

In April 2020, the amount of goods exported through Ho Chi Minh City border gates. HCM continues to grow. In particular, many key commodity groups of the city have very high export turnover. Leading the group of computers and accessories for export reached US $ 4.78 billion, up 49.7% over the same period in 2019. Next was the export of rice with 675,484 tons, worth 807, $ 39 million, up 31.9% in value over the same period in 2019.

Notably, in the export sector, the non-state economic sector reached US $ 932.7 million, up 15.9%; foreign-invested economic sector reached 2,042 billion USD, up 5.6%. In general, most of the exports in the month increased over the previous month.

Not only export, import goods through ports of the city. Ho Chi Minh City although decreasing compared with the previous time, however, over the same period still grew.

According to the City Customs Department. In Ho Chi Minh City, the import turnover of goods in the first half of April 2020 reached US $ 2.68 billion, accumulated until April 15, 2020 reached US $ 16.71 billion, up 3.57% over the same period in 2019 (period). 1 April 2019 reached US $ 2.53 billion and accumulated 16.13 billion USD.

In particular, many imported items have large and high turnover, such as computers and electronic products with the largest turnover with more than US $ 4.3 billion, up nearly 43% over the same period last year. This group of imported goods has increased, which is also the cause for the increase in export turnover in the last 4 months.

“Household goods and components reached over 328 million USD, up more than 5%; foodstuff for people reached nearly 700 million USD, up about 8%. However, 14 other groups of imported goods with high taxes decreased, causing the budget revenue to decrease by more than 13% compared to the same period in 2019. Representative of HCMC Customs Department. HCM said.

Source: DDDN

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Friday, May 8, 2020

Vietnam’s trade still saw a surplus of US $ 3 billion in the first four months

Vietnam announced a trade surplus of about US $ 3 billion in the first four months of 2020, up 3.4% from the same period last year, according to the latest statistics from the General Statistics Office.

Once broken, the domestic investment sector is estimated to have a trade deficit of US $ 7.1 billion over a four-month period while foreign-invested companies record a trade surplus of 10.1 billion. U.S. dollar.

Exports of domestic companies are estimated to have increased by 12.1% over the same period to US $ 26.45 billion in the period, accounting for 31.9% of the country’s export. Meanwhile, FDI enterprises gained US $ 56.49 billion from foreign shipments, increasing by 1.5% and accounting for 68.1% of the total.

In April alone, Vietnam’s exports and imports reached US $ 19.7 billion and US $ 20.4 billion, down 18.4% and 7.9%, respectively, compared to the previous month.

*Viet Nam enjoys a trade surplus of US$3 billion in the first four months of 2020, according to the General Statistics Office (Photo: chinhphu)*

Overall, Vietnam’s trade turnover may reach USD 162.83 billion during the period from January to April, up 3.4% from the same period last year, of which its export value may be amounted to 82.94 billion USD, up 4.7% compared to the previous year, and imports were estimated at 79.89 billion USD, up 2.1%, as reported by vietstock

During the review period, 15 items participated in the USD 1 billion export club, accounting for 80.1% of the total export value.

Increasing concerns about the possibility of trade suspension in major markets of Vietnam due to the Covid-19 pandemic, local companies have stepped up import and export activities in the last 10 days of March. , Samsung completed exporting its new smartphone.

As a result, phones and parts are expected to have the largest export revenue of all exports between January and April at US $ 16.2 billion, up 1.1% from over the same period and account for 19.5% of Vietnam’s total exports.

VGP has reported that important export items of Vietnam include phones and accessories ($ 16.2 billion), electronics, computers and spare parts ($ 12.4 billion), apparel (8. , $ 9 billion), machinery, equipment and tools ($ 6.9 billion), footwear ($ 5.5 billion), wood and wood products ($ 3.4 billion), vehicles and tools tools (US $ 2.7 billion) and fishery products (US $ 2.2 billion).

In addition, electronic products, computers and components earned about 12.4 billion USD, up 28.6% over the previous year; garments with 8.9 billion USD, down 5.8%; equipment and spare parts with US $ 6.9 billion, up 29.6%; footwear with US $ 5.5 billion, up 1.3%; wood and wooden products with US $ 3.4 billion, up 10.1%; means of transport with US $ 2.7 billion, down 3.9%; seafood with US $ 2.2 billion, down 8.5%, among others.

The US remained Vietnam’s largest importer for four months with 20.3 billion USD, up 13.4%. Followed by China (13.1 billion USD), EU (10.7 billion USD), ASEAN (8.2 billion USD), Japan (6.7 billion USD) and South Korea (6.2 billion USD). .

China was the largest exporter of Vietnam in four months with 22.7 billion USD, down 0.1%, followed by South Korea (15.5 billion USD), ASEAN (9.9 billion USD), Japan. Japan (US $ 6.4 billion), US (US) US $ 4.7 billion) and EU US $ 4.5

Source: GOV

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Wednesday, May 6, 2020

Foreign groups have stepped up their plans to penetrate or expand in Vietnam

While China is struggling with the pandemic and is losing the confidence of foreign investors, its resilience has been proven to make Vietnam an ideal investment and production center for Southeast Asia.

Vietnam has been chosen as the ideal destination for HZO policy, a US-based company, a US-based company that produces protective nano coatings with a notice of opening a production facility. first production in Vietnam in Yen Phong Industrial Zone, the northern province of Bac Ninh.

The country is also rumored to be Apple’s next destination, the iconic U.S. multinational technology for consumer electronics, computer software and online services. Recently, gigantic recruitment announcements are listed in Vietnam on LinkedIn, including a chief executive position based in Hanoi and test engineers in Ho Chi Minh City.

These job announcements add credibility to reports that Apple can increase manufacturing outsourcing for Vietnam, while Foxconn, the world’s largest electronics contract manufacturer and main supplier. Apple, also has a base in Bac Ninh to produce for the technology giant.

Sharing the same trend, other US giants such as Google, Microsoft, HP and Dell have also announced their plans to settle in Vietnam. While Google asked suppliers to calculate the cost of moving some devices from China to Vietnam via road, sea and air after considering the impact of coronavirus on the operation of themselves, Microsoft aims to launch its latest Surface computers and laptops in the country.

HP and Dell are also expected to transfer up to 30% of their notebook computers to Vietnam.

As China gradually loses priority in global production, large-scale international manufacturers are adopting policies to expand China + 1 – with Vietnam emerging as a clear alternative. Clearly in many reviews.

China dominates decline

In a report published last week, global manufacturing consulting firm Kearney pointed out that China is increasingly losing stakes from American companies during the Trump administration, and the main beneficiary of this. are smaller Southeast Asian countries. Along with American companies, this move has also happened to businesses from other major economies.

The coronavirus has stagnated production and logistics worldwide, especially exposing the holes of Japanese companies dependent on China for more than 20% of their spare parts and materials needs. Japan has prepared 240 billion yen (2.23 billion USD) in subsidies for fiscal year 2020 for companies moving production out of China. Consumer product maker Iris Ohyama is set to become the first Japanese company to receive government subsidies to move production out of China as part of a more flexible supply chain effort.

A survey from credit reporting and marketing firm Tokyo Shoko Search Co., Ltd., said 37% of the 2,600 businesses asked to leave China.

Since the start of the US-China trade war, Japanese electronics maker Sharp has been planning to shift production of computers from China to Vietnam to ship goods to the US. According to Japanese TV channel NHK, Sharp is also considering shifting production of multifunctional office equipment to Thailand instead of China.

Meanwhile, it is reported that Nintendo, one of the largest video game developers based in Japan, will also pull part of console production from China to Vietnam.

Across the pond, European leaders and businesses have also considered such moves to reduce their dependence on the Chinese market. Last week, EU Trade Commissioner Phil Philan said the bloc would try to reduce our trade reliance after a pandemic.

Meanwhile, British Foreign Minister Dominic Raab, representing Prime Minister Boris Johnson when he recovered from coronavirus, spoke of economic relations with China, there was no doubt that we could not do business as usual. after the recent crisis after a phone call with G7 leaders.

Raab explained that the pandemic taught the UK the value and importance of cooperation and that the UK could not depend solely on China.

Last year’s US-China trade war triggered the trend of moving production lines from China to Southeast Asia and other markets, but the virus outbreak reaffirmed the risk of supply chain disruption. when the world economy depends too much on a big market.

Vietnam is currently highly appreciated by the international community for strong and timely actions to respond to pandemics while maintaining economic growth momentum and ensuring social security.

In addition, various support packages to rescue the business community, including foreign-invested enterprises, have emerged as a new driving force of foreign capital inflows into Vietnam after the pandemic ended. end.

Members of the European Chamber of Commerce in Vietnam (EuroCham) welcome government restrictions, including Directive No. 11 / CT-TOT of March 4, which directs urgent tasks and solutions to address them. solving difficulties of production and business establishments, extending tax payment time limits and paying land rents, and suspending social insurance payment.

About 75% of businesses surveyed by EuroCham agree that extending tax payments will help them overcome pandemic difficulties.

Minimize losses

According to Ousmane Dione, Country Director of the World Bank in Vietnam, if the COVID-19 pandemic is gradually under control in the coming months, Vietnam’s economy will recover relatively quickly thanks to a solid foundation.

The World Bank also believes that the Vietnamese government is determined to curb economic losses from the crisis by taking necessary preventive and treatment measures, in addition to providing financial policies to support the majority of people and businesses to cope with the immediate burden.

In addition, the latest market report of real estate services firm JLL shows that companies that want to diversify their production portfolio outside of China are attracted to Vietnam thanks to its proximity to China, Free trade agreement and the government’s desire to build Vietnam into a manufacturing center in Southeast Asia. These comments are a plus in the eyes of foreign businesses planning to relocate facilities or expand operations outside of China, the report noted.

Shirakawa Satoko, head of English and English speaking businesses of Kizuna JV Corporation, said foreign investment inflows will pour into Vietnam after the pandemic if the country can minimize the damage. The company has accelerated the construction of ready-made space in the Mekong Delta province, Long An Giuoc district with the scale of 80,000 square meters. The construction is expected to end in the fourth quarter of the year to welcome foreign investment, Sat Satoko said.

Asia Times quoted Alexander Vuving, professor at the Asia-Pacific Center for Security Studies Daniel K. Inouye in Honolulu, Hawaii, saying the pandemic was a great opportunity for Vietnam to strengthen its soft power, because It helps broadcast generous behavior towards the international community.

Many analysts are now expecting Vietnam to get the lion’s share of the second wave factory moving group, due to the growing pandemic and anti-China sentiment in the west driven by the perception that China Quoc is primarily responsible for the outbreak.

“Vietnam benefits greatly from this diversification because it’s friendly, while still saving costs for investors from the west” Mr. Vuving said. ‘In many cases, Vietnam will be their first choice when they look around for a reliable alternative.”

Source: VIR

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Tuesday, May 5, 2020

Economists: Vietnam is among the safe economies after COVID-19

Vietnam-is-among-the-safe-economies-after-COVID-19-lookofice.vn

Vietnam has been listed as the 12th strongest economy, according to The Economist’s report, on the financial strength of 66 emerging economies after the collapse of COVID-19.

the economist vietnam among safe economies in wake of covid 19

The rankings look at the vulnerability of selected economies on four potential sources of risk – public debt, external debt and the cost of borrowing and contingency insurance.

The economist calculated their likely foreign payments this year (current account deficit plus their foreign debt payments) and compared this to the foreign exchange reserves of surname. The national ranking on each of these indicators is then averaged to determine its overall position.

Vietnam is in a safe group thanks to strong and stable financial indicators.

Accordingly, quite 30 emerging economies face great pressure, the worst being Lebanon and Venezuela.

Botswana tops the list of safe economies, followed by Taiwan (China) and South Korea.

Economists think most economies are strong enough to survive a pandemic. The 30 weakest economies are relatively small, accounting for only 11% of the GDP of 66 economies.

It says COVID-19 hurts emerging economies by locking down their population, damaging their export earnings and discouraging foreign capital.

Even if the pandemic disappears in the second half of this year, GDP in developing countries, measured by purchasing power levels, will be 6.6% smaller than the IMF forecast in October, the report said.

Source: VNA

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