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Tax Newsletter No.5 |June 2019

On Friday the British Ambassador HE Gareth Ward addressed members of the British Business Group Vietnam on the UK’s new industrial strategy and opportunities in line with the Vietnamese Governments Industry 4.0 Strategy. I quote below

Grant Thornton Vietnam is pleased to announce the release of the results of our 18th survey - “Private Equity in Vietnam- Catching up and getting ahead”. The survey was conducted in March 2019.

Tax Newsletter No.4 |April 2019

In this newsletter, Grant Thornton Vietnam would like to update the important regulations and tax policies as follows:

Whilst we have talked about the significant potential benefits for Vietnam of membership of the Comprehensive and Progressive Agreement for Trans Pacific Partnership (“CPTPP”) the flip side is that Vietnam has also to deliver on some fairly tough requirements and commitments under the signed Agreement.

The Government has over the last 12 months been highlighting the lack of linkages between the foreign invested sector and the domestic sector, enabling the growth of domestic companies and enabling them to participate in the global supply chain. The Government has also signaled their intention to focus more on higher value added investment into the manufacturing sector to ensure sustainability and higher productivity growth.

2018 saw Vietnam achieve or exceed all socio economic forecasts for the year and this accompanied by the high level of business confidence, maybe with the exception of the construction industry, augers extremely well for 2019. GDP growth exceeded the target of 6.8% recording an 11 year high of 7.08% putting Vietnam as one of the strongest growth economies in Asia and the world. The strongest driver for GDP growth were the manufacturing industries with a growth figure of 12.98% . At the same time inflation remained at under 4%.

This was the theme of the semi-annual plenary session of the Vietnam Business Forum (“VBF”) held in Hanoi, on Tuesday December 4th, which was attended in full by the Prime Minister Nguyen Xuan Phuc. This was also the 21st year of the VBF which was established under the auspices of the Wortld Bank and IFC together with the Vietnam Chamber of Industry and Commerce to provide a platform for dialogue between the private sector and Government.

Doing Business in Vietnam 2018

There is currently a lot of interest in renewables, in Vietnam, and in particular Solar energy projects. There have been over 70 licenses issued recently for solar energy projects and many of these are in Ninh Thuan Province, where there are over 140 projects licensed.. The interest has been generated by the Feed in tariff incentive granted by the Vietnamese Government approved some time ago setting a tariff of US$ 9.35 cents per KWH for those projects operational by June 2019, with a 20 year term.

Explore the opportunities to trade beyond domestic markets and identify current and future trends.

Explore the opportunities to trade beyond domestic markets and identify current and future trends.

The Government has just approved a new decree 63/2018/ND-CP which will come into effect in June 2018, governing PPP projects. The expectations are that the new decree which replaces Decree15/2015 ND-CP will have a positive effect on PPP and BOT projects. This will also be a forerunner on a new law on PPP to be submitted to the National Assembly in November 2019 for approval in May 2020.

Deals or no deals? What next for Private Equity in the mid-market?

Danang has been one of the most successful cities in Vietnam, in developing and growing a tourism industry and is looking at how to successfully develop the City from now to 2035. Tourism currently contributes 23% of GDP and in the first quarter of 2018 Danang has seen its foreign visitor arrivals increase 69% yoy.