Viet Nam - A Guide for Business and Investment - asean-korea centre

PART III. BUSINESS AND FOREIGN INVESTMENT ENVIRONMENTUnder the WTO’s classification, provision of serviceswill be divided into four modes: (i) cross-border (e.g.electronic money transfer services between countries);(ii) abroad consumption (e.g. tourist service); (iii) commercialpresence (e.g. FDI in services in Vietnam); and(iv) movement of natural person (e.g. foreigners comeand provide services in Vietnam). Liberalization of servicessector, especially in modes (i) and (iv), will affectFDI flows in Vietnam. Firstly, the services sub-sectorsused to be closed or restricted from foreign investment(such as distribution, transport, telecommunication, financeetc.) will be largely liberalized (despite some limitedconditions and transitional period of 3 or 5 years).3. Investment guaranteesThe Government of Viet Nam guarantees fair treatmentfor investors. Capital and other legal assets of investorswill not be expropriated or confiscated by law oradministrative measures and businesses with foreigninvested capital will not be nationalised. Foreign investorsare allowed to remit abroad investment capital andprofits, loan principal and interest, and other legal proceedsand assets.Expatriates working for businesses with foreign investedcapital or for a business cooperation contract (BCC)are allowed to remit their income abroad. The Governmentof Viet Nam respects intellectual and industrialproperty rights and the interests of foreign investorsrelating to technology transfer into Viet Nam.Interests of foreign investors are satisfactorily guaranteedin the event of adverse effects caused by a changein law through the application of a number of measures.The Law on Investment warrants that such changes willbe disregarded or that disadvantages to the investorstemming from a change in law will be compensatedby permission to amend its operations, to be grantedcompensatory tax exemptions or by other means ofcompensation for its damages. Moreover, where morefavourable provisions are enacted, existing investorswill be able to take the benefit of these. Disputes offoreign investors can be brought before Vietnamesearbitration centres or a court, or foreign arbitration canbe agreed to in a contract by the parties. By April 2006,the Vietnamese Government had entered into bilateralagreements on the “Most Favoured Nation” status (nowknown as “Normal Trade Relations”) in trade relationswith 87 countries and double taxation agreements withover 43 countries.Upon the completion of company liquidation procedures,foreign investors may transfer abroad any remainingcapital. If the amount of capital to be transferredexceeds the amount of capital contributed orreinvested, the transfer has to be authorised by theMinistry of Planning and Investment. Investors shouldbe aware however that there have been very few liquidationcases carried out in Viet Nam.4. Investment sectors andregions entitled to incentivesThe Government of Viet Nam encourages foreign investorsto invest in the following sectors and regions:(1) Sectors in which investment is entitled to incentives:• Manufacture of new materials and production ofnew energy, manufacture of high-tech products,bio-technology, information technology and mechanical manufacturing;• Breeding, rearing, growing and procesing ofagricultural, forestry and aquacultureproducts,production of salt, creation of new plantand animal varieties;• Utilisation of high technology and advancedtechniques, protection of the ecological environmentand research, development and creation ofhigh-technology;• Labour intensive industries;• Construction and development of infrastructurefacilities and important industrial large-scaleprojects;• Professional development of education, training,health, sports, physical education andVietnamese culture;• Development of traditional crafts and industries;and28 Viet Nam - A Guide for Business and Investment