The new wave of foreign investment continues on post Covid-19 during the first half of the year. Regarding foreign investment attraction, last week, the Law on Investment, Law on Enterprises, and Law on Public-Private Partnership (PPP) investment were revised to contribute to completing the legal framework, creating transparency and a harmonious legal framework for trading and business in Vietnam.
The past week spotlight
Ministry of Planning and Investment introduces three new laws
The three new laws will provide a more harmonious legal framework for investment and business
The revised Law on Investment, Law on Enterprises, and Law on Public-Private Partnership (PPP) investment will contribute to completing the legal framework and creating transparency and a harmonious legal framework for trading and business in Vietnam.
The revised law clarifies the principles and conditions of applying incentives, with the incentives dependent on the efficiency of project implementation.
The prime minister will be allowed to provide special incentives to lure foreign investment inflows coming from the relocation of production facilities to the ASEAN, including Vietnam. However, the added incentives are not permitted to exceed the highest incentives laid out in the existing regulation by more than 50 per cent.
Let’s look at some other related financial and business news during the past week:
1. Oxford Economics forecast Vietnam’s GDP to grow 2.3 percent in 2020
Vietnam’s effective containment of COVID-19 should allow it to make a quicker rebound than most other economies in the region and its GDP growth can be around 2.3% this year, Sian Fenner, an economist from Oxford Economics wrote in a July 14 report.
2. ASEAN-wide tax race for FDI a road leading into the abyss
ASEAN countries should stop offering aggressive tax incentives in order to attract foreign funds, as it could create an unfair business climate among enterprises and lead to an acute state budget deficit.
5. Vietnam ranks second in Southeast Asia for M&A transactions
The country has risen to the second place in terms of mergers and acquisitions (M&A) transactions with total domestic investment of US$872 million, the majority of which was driven by US$651 million worth of investment from Vinhomes, received from KKR Group, the second largest investment deal to date.
The Vietnamese government has issued a new decree that effectively limits companies to no more than two bond issuances a year.
They may now only issue bonds six months after the previous issue is completed, and an issuance must be completed within 90 days from the date of public announcement of the issue, the recently issued decree, which comes into effect from September 1, stipulates.
9. Trade Ministry proposes opening fuel market to foreign retailers
The Ministry of Industry and Trade has sent the Government a draft decree amending and supplementing certain articles of Decree 83/2014 on petrol and oil trading, proposing allowing foreign investors to enter the country’s fuel retail market.
10. HCM City seeks developers for nearly 300 PPP projects
HCM City is expected to reconsider projects under the public-private partnership investment form meant to combat flooding and land subsidence and resettle people living along canals when new regulations for PPP come into effect.
On 18 June 2021, the Ministry of Finance issued Circular 45/2021/TT-BTC (“Circular 45”) providing guidance on the implementation of Article 41 of Decree 126/2020/ND-CP (“Decree 126”) dated 19 October 2020 of the Government on the application of the Advance Pricing Agreement (“APA”) on tax administration for companies having transactions with their related parties.