Lien Chieu Port Project Attractive to Investors

With the attention of many investors, Lien Chieu port project promises to attract large capital to build and form a large-scale logistics port in the Central of Vietnam and also attractive foreign investors to invest in Vietnam.

The Lien Chieu port project is being implemented by the Government and Da Nang City urged to speed up the implementation process. According to expert, the construction of Lien Chieu port could not be delayed any longer. Because Tien Sa port has been over 118 years, the life cycle is old and does not meet the demand for a large logistics port in the region.

Lien Chieu Port will have an area of about 220 hectares, of which 70% is for warehousing, the capacity of 3 phases is up to 2 million TEUs, general cargo is about 5 million tons. Lien Chieu Port serves not only cargo for Da Nang or neighboring provinces, but also the East-West economic corridor.

The total estimated investment is 3,426 billion VND for the shared infrastructure for Lien Chieu port project, in which the central budget accounts for 87.4% from the contingency of the Medium-term Plan for the period 2016 – 2020 and Medium-term Plan source for the period 2021 – 2025; the budget of Da Nang City is expected to contribute 12.6%; Da Nang has also arranged 30 billion VND capital plan for 2020.

Meanwhile, the call for investment in harbors, container yards, general warehouses, logistics areas, logistics facilities behind the port… is also receiving the attention of many investors. Recently, the Japan International Cooperation Agency (JICA) has proposed a grant of 50 million Yen (equivalent to 11 billion VND) to survey and collect Lien Chieu port development research data.

The research results are the basis for JICA to continue reviewing and supporting the Pre-Feasibility Study Report of Lien Chieu port project. Currently, many domestic and international investors are also interested in participating in the construction of Lien Chieu port such as T&T Group, Tan Cang Saigon, Boskalis Inter A.V Company (Netherlands) and Japanese investors.

Component 2 of Lien Chieu port project will be invested in the form of mobilizing and calling businesses to invest with appropriate sizes in planning and in each development stage. After completing the procedure, Da Nang city will organize bidding, open auction…

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How Mediation and Labor Arbitration Councils Work in Settlement of Labor Disputes?

During and after the Covid-19 pandamic, the financial health of enterprises have been negatively impacted leading to management’s decision to reduce cost through termination of labour contract with employee. The illegal termination of labour contract could lead to disputes between employer and employee which sometime would cost the employer more than it gains. It is important for the employer to engage with labour lawyers to consult before taking the decision to consider factors that would involve. After disputes arise, mediator or labour arbitration councils could be used for resolving disputes.

Individual labor disputes shall be settled through mediation by labor mediators before being brought to the Labor arbitration council or the Court, except for the following labor disputes which mediation is not mandatory: disputes over disciplining under dismissal or unilateral termination of employment contracts; disputes over damages and allowances upon termination of employment contracts; disputes between a domestic worker and his/her employer; disputes over social insurance in accordance with social insurance laws, disputes over health insurance in accordance with health insurance laws, disputes over unemployment insurance in accordance with employment laws; disputes over insurance for occupational accidents and occupational disease in accordance with occupational safety and hygiene laws; disputes over damages between an employee and enterprises, organization that dispatches the employee to work overseas under a contract; disputes between the outsourcing employee and the employer using outsourcing employee.

The mediator shall complete the mediation process within 05 working days from the receipt of the request from the requesting parties or the authority. Both disputing parties must be present at the mediation meeting. The disputing parties may authorize another person to attend the mediation meeting.

In case the two parties reach an agreement, the labor mediator shall make a written record of successful mediation which bears the signatures of the disputing parties and the labor mediator. In case the two parties do not reach an agreement, the labor mediator shall recommend a mediation option for the disputing parties to consider. Where the two parties do not agree with the recommended mediation option or where one of the disputing parties is absent for the second time without a valid reason after having been legitimately summoned, the labor mediator shall make a record of unsuccessful mediation which bears the signatures of the present disputing parties and the labor mediator.

The disputing parties shall be entitled to request the settlement from Labor arbitration councils in the following cases: a disputing party fails to perform the agreements specified in the record of successful mediation; mediation is not mandatory; the labor mediator fails to initiate the mediation by the deadline; the mediation is unsuccessful.

After the Labor arbitration council has been requested to settle a dispute, the parties must not simultaneously request the Court to settle the same dispute. If within 07 working days from the receipt of the request, an arbitral tribunal is not established; or within 30 working days from the establishment of the arbitral tribunal, it fails to issue a decision on the settlement of the labor dispute, parties shall be entitled to request the settlement from the Court. In case a disputing party fails to comply with the decision of the arbitral tribunal, the parties are entitled to bring the case to Court.

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In 6 Months, Da Nang Attracted Over 80 Million USD of FDI

In the first 6 months of 2020, Da Nang City has attracted over 13.2 trillion VND of domestic investment capital, more than 80.2 million USD of FDI in Danang.

According to Department of Planning and Investment of Da Nang City, although affected by the Covid-19 pandemic, the situation of attracting investment in the city achieved positive results.

Accordingly, in the first 6 months of 2020, Da Nang has attracted more than 13.2 trillion VND of domestic investment capital, more than 80.2 million USD of FDI capital. In particular, the investment capital for projects outside the Industrial Park has increased to a record, only 4 projects with a total capital of over 10.8 trillion VND, increase by nearly 600%. So far, Da Nang city has 337 domestic investment projects with a total capital of over 115 trillion VND, 855 FDI projects with a total capital of over 3.4 billion USD.

Set-up company in Da Nang

Real estate lawyers in Da Nang

According to Director of Planning and Investment Department of Da Nang, the above result is thanks to the city has well implemented the disbursement of public investment, implemented many motivational infrastructure projects. With more than 12.4 trillion VND of public investment approved for 2020, Da Nang has issued a series of policies to remove obstacles in terms of ground and procedures. A series of motivational projects have been implemented such as roads and bridges crossing Co Co River, West Ring Road 2, Eastern Son Tra district water environment improvement project, Hoa Lien water plant, project to renovate the cluster of intersections west of Tran Thi Ly bridge, Center for neurosurgery, trauma and plastic burns i- Danang Hospital…

Da Nang City has also granted investment certificates for the project of manufacturing synthetic rubber specialized for machine manufacturing, electricity and electronics, Table Table Asia management consulting project, Ubisoft Viet Co., Ltd, Kansei Kindergarten in Danang.

Da Nang City is currently promoting major projects such as Bilingual Intermediate School, International Center for Diagnosis and Treatment, International Hospital for Cancer and Infertility, Getaway Complex with investment of 2 billion USD, Downtown Duty Free project… While also dealing with problems related to procedures of land allocation and land lease related to the Nam O Ecological Tourism projec; Extending the implementation schedule of the FPT Urban Area project; Vinacapital Danang Golf Course project…

In the coming time, Da Nang will focus on organizing well the Investment Forum, expected in September 2020. The city will also promote investment in the form of online, maintain connection with international organizations such as JETRO, KOTRA, AMCHAM, AUSCHAM, SBF, IE Singapore, AHK… to connect businesses, cooperation on investment promotion. The investment attraction orientation of Danang in the coming time will be directed at large, high-tech, modern, environmentally friendly multinational corporations.

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Wind Power: The Inevitable Trend of Sustainable Development

With the increasing demand for electricity, Vietnam is also gradually considering investing in renewable energy, including wind power as the key to addressing energy security, contributing to the realization of the country’s green development strategy.

Energy is one of essential human needs and an indispensable input of economic activity. As the living standards of the people are improving, the level of production of the economy is more modern, the demand for energy is also growing, and satisfying this demand is a real challenge for almost every country.

The race to exploit fossil fuels at all costs of human beings is reaching the limits of nature’s endurance, causing polluted living environments, climate change, causing unrest for the welfare of the community and become one of the global non-traditional security issues, threatening the survival of humanity.

Being aware of that, many countries around the world have been switching from fossil fuel to renewable energy for sustainable development. In many areas, power source from renewable energy projects is equivalent to those from fossil fuel projects, breaking the threshold that we believed to be impracticable.

Currently, in Europe, nearly 50% of new power development projects are wind power projects. In China – the most populous country, in March 2017, the Government shut down its last coal-fired power plant in Beijing to switch to renewable and gas electricity and.

According to the IEA latest report, globally, in 2016, investments in wind and solar power have doubled investments in fossil-fuel power. Furthermore, it is estimated that wind, solar and gas powers will completely replace coal power in the next 25 years.

In Vietnam, the development of the economy has made demand for electricity surge while supply capacity has not developed in time. The Ministry of Industry and Trade has forecasted that average electricity production growth rate of Vietnam in the period 2016 – 2020 is 10.7% per year and the period 2021 – 2025 is 8.6% per year.

Therefore, the Government of Vietnam considers the exploitation and utilization of renewable energy resources have special and strategic meaning in terms of socio-economic, national security and defense, energy security, sustainable development and minimizing environmental impact.

Most experts said that Vietnam has enormous potential for wind power. According to a study by the World Bank, Vietnam has the largest wind energy potential in the region, surpassing Laos, Cambodia and Thailand.

Accordingly, Vietnam’s wind reserve is estimated at 513,360 MW, more than 6 times the estimated total capacity of the electricity sector by 2020. The World Bank study also showed that 8.6% of Viet Nam’s land area is very potential, convenient for the installation of large wind turbines. The corresponding figure of Cambodia is 0.2%, Laos is 2.9% and Thailand is 0.2%.

Understanding the general trend of the world as well as encouraging investment incentives of the Government, about 50 wind power projects have been registered for investment in Vietnam and there are 4 projects with total capacity of 159.2 MW has gone into commercial operation.

Most recently, the Phuong Mai 3 Wind Power Project in Nhon Hoi Economic Zone (Quy Nhon – Binh Dinh), has a capacity of 21 MW – 28 MW, including 14 turbines with a total investment of 40 – 50 million USD are invested by HALCOM Company and its international partners. With an area of 140 hectares, the project is expected to supply about 72 million kWh of electricity per year and reduce emissions by 40,000 tons of CO2 per year. According to representatives of HALCOM, the project will be implemented in 2017 – 2018. Once completed, the estimated revenue can reach 150 billion VND per year.

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Thai Giant Acquires Solar Power Project in Vietnam

Many foreign investors have chosen Vietnam as a destination to invest in solar power project in Vietnam.

Together with the explosion of solar power projects, 2019 is considered to be the peak year of the ‘underground waves’ surrounding the race for additional licenses for solar power planning in all levels from central to local. The situation of license trading, project transfer to foreign investors also appeared.

Along with the rush of solar power projects, in recent days, a series of news that many weak investors still have acquired large-scale renewable energy projects, then quickly transferring to foreign investors to make profit gradually appearing in many forums about renewable energy. Even, according to the announcement of foreign investors, the transfer of solar power projects in Vietnam is taking place very excitingly.

Most recently, the Board of Directors of Super Energy Corporation Company Limited (Super Energy) of Thailand announced that at the end of March 2020, they have sent a letter to the Thai Securities Commission announcing the decision to spend no more than 456.7 million USD to invest in 4 solar power plant projects, including Loc Ninh 1 (200 MW), Loc Ninh 2 (200 MW), Loc Ninh 3 (150 MW) and Loc Ninh 4 (200 MW) in Binh Phuoc province (Vietnam).

According to the announcement, the investment in Loc Ninh 1 solar power project is 99.7 million USD; in Loc Ninh 2 is 140 million USD; in Loc Ninh 3 is 105 million USD and in Loc Ninh 4 is 112 million USD. In order to raise the ownership rate at businesses implementing the 4 solar projects, the Super Energy project has to pay a total of 72.9 million USD as scheduled. In particular, the amount paid in March 2020 is more than 5.7 million USD. Specifically, the payment in March 2020 was 13,667 million USD. The amount payable in June 2020 will be 32.4 million USD and the amount payable in November 2020 will be 11.6 million USD. Under the agreement, if the purchase price is different from the forecast of 7.09 US cents/kWh, the value of the stock will be adjusted according to the actual purchase price.

However, according to initial information, not all Vietnamese partners (many believe that subsidiaries of Hung Hai Group) will receive all this money. Currently the first payment took place with the amount of 5,732 million USD. The remaining payments will be accompanied by detailed conditions such as when there is land lease decision, construction permit, grid contract, land use right certificate, or certificate of eligibility for commercial electricity generation with the purchase price of electricity is 7.09 UScents/kWh…

Notably, before the acquisition of the 4 mentioned projects, the Thai energy company owned 6 solar power projects in Vietnam. As of March 2020, these 6 projects alone had a total capacity of up to 286.72 MW, equal to half of the total capacity of 100 solar power projects in Thailand that SEC owns.

A special feature is that all 6 power projects in Vietnam that Super Energy acquired earlier only had the return on investment (EIRR) of 12-13%. And power projects under Loc Ninh project cluster have much higher EIRR, from 16.59% to 17.4%. In addition to solar power projects, the SEC also owns 4 wind power projects in Vietnam, in Bac Lieu, Soc Trang, Phu Yen and Gia Lai provinces. These projects are expected to be fully or partially operational from Q4/2021.

According to research, through the form of joint venture, transfer of shares with Vietnamese enterprises, many foreign energy and investment corporations have owned dozens of solar and wind power projects and enjoyed preferential prices of 9.35 UScents/kWh for 20 years in Vietnam.

Among these are the two solar power plants TTC 1 and TTC 2 in Tay Ninh, invested and operated by Thanh Thanh Cong Group and Gulf Energy Group (Thailand), operated in the middle of 2019. At that time, Thai group owns 49% of the capital but in the latest change, Gulf has increased its holding to 90%. Apart from the solar power projects in Tay Ninh, Thai group also holds wind power projects in Ben Tre with 95% ownership.

In addition to the above mentioned projects, Super Energy has also invested in the form of buying shares in solar power projects in Ninh Thuan, An Giang… In addition to Thailand, many investors come from Singapore, China, Philippines… also owns dozens of solar and wind power projects in Vietnam through shares and joint ventures.

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How to distinguish a Limited Liability Company and a Joint Stock Company?

Vietnam Law allows the establishment of a company in Vietnam in various forms. It is an important step in investment process.

Investors could choose different forms depending on the needs and capacity on the ability to raise capital and sharing the risk in business as well as the management and operating costs. Each form will have its own organizational structure, operating mechanism, rights and obligations specified under Law on Enterprise 2014.

Currently, Limited Liability Company (“LTD”) and Joint Stock Company (“JSC”) are two popular enterprise forms operating in Vietnam.

What is the difference between these two forms of companies?

I. Organizational Structure

Number of members/shareholders:

LTD

-Single member LTD: Having only one member (member can be an organization or an individual);

-Multi members LTD: Having at least 2 members and not exceed 50 members (member can be an organization or an individual).

JSC

Joint Stock Company has at least 3 shareholders and not limit the maximum number.

Management structure

LTD

-Single member LTD

Single member LTD owner by an organization shall be organized under two models: Company president, Director/General director and Supervisor; (OR) Members Council, Director/General director and Supervisor.

Single member LTD owner by an individual shall be organized as follows: Company president, Director/General director.

-Multi members LTD

Multi members shall be organized by: LTD Council members, Chairman of the Members Council and Director/General director;

Multi members LTD having 11 members or more shall establish the Board of Supervisors.

JSC

JSC can be organized under two models: General Meeting of Shareholders, Board of Directors, Board of Supervisors and Director/General director; (OR) General Meeting of Shareholders, Board of Directors (Board of Internal Supervisors under Board of Directors) and Director/General director.

II. Capital Contribution

Raising capital

LTD

-Single member LTD: Owner increases charter capital

-Multi members LTD: Members increase their charter capital, or increasing the number of capital contributors

JSC

Different from LTD, JSC can raise its capital by various methods as follows: Selling shares to existing shareholders; Selling shares individually to non-shareholders; Issuing shres on the stock market.

Transfer of contributed capital

LTD

-Single member LTD: Owner transfers a part of contributed capital to other persons and this could lead to changes of the type of business or other procedures if all capital is transferred (for instance in a M&A deal).

-Multi members LTD: Offer the stakes to other members in proportion to their stakes in the company under the same conditions; The stakes could only be transferred to other persons if the members do not buy or do not buy completely within 30 days from the offering date.

JSC

The shareholders of JSC are free for transfer their contributed capital after 03 years from the establishment.

Having said that, LTD is a type of enterprise that the capital contribution is not the only link between the members of the company but they are also linked together by relationship. They may be acquaintances and trust each other to jointly contribute capital to establish an enterprise. Therefore, the management of the LTD is as complicated as JSC. With the larger the number of shareholders, the level of capital mobilization, voting power to decide on issues of the company based on the ratio of capital contribution of each shareholder, the management and operation of the JSC is more complex.

The ability to raise capital of a JSC is higher than a LTD. Because, JSC can issue shares to the public in the form of securities. When the stocks are listed on stock exchange, the information of company’s business operations must be public and more transparent.

The procedure to set up a company in form of an LTD or a JSC has not much differences.

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Exxon Mobil Wants to Participate in Series of LNG Gas Power Projects in Vietnam

Exxon Mobil wants to invest in Vietnam, specifically invest in Vietnam energy sector.

The chain of ports, depots and LNG gas plant in Hai Phong has a scale of 4,000 MW and in Long An has a scale of about 3,000 MW.

In a conversation with Vietnam Prime Minister in June 2020, Global President of Exxon Mobil said that the Group wants to take advantage of opportunities and invest in the energy sector in Vietnam.

Accordingly, Exxon Mobil wants to invest in the chain of port, LNG gas storage and LNG power plants with the most modern technology in Hai Phong. The scale of the electricity production project from LNG is up to over 4,000 MW, expected to go into operation in the period of 2025 – 2030.

As for the current gas-electric chain with a capacity of about 3,000 MW in Long An, Exxon Mobil will ensure continuous supply of LNG directly from the United States and from some other countries. The import of LNG will contribute to creating a harmonious trade balance between Vietnam and the United States.

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Ho Chi Minh City Attracted USD 1.92 Billion of FDI

Ho Chi Minh City is one of the major economic, political and cultural centers of Vietnam as it has many favorable conditions for development. That’s why many foreign investors chooose to set up company in Ho Chi Minh city.

In the first 4 months of 2018, the total registered capital of new, increased, and contributed capital, purchase of shares of foreign investors in Ho Chi Minh City was 1.92 billion USD, accounting for 23.8% of the total investment capital of the whole country.

According to the Foreign Investment Department – Ministry of Planning and Investment, from the beginning of the year until now, foreign direct investment (FDI) projects have disbursed 5.1 billion USD, increase by 6.3% over the same period in 2017.

The whole country has 883 new projects have just been granted investment certificate with a total registered capital of 3.55 billion USD, equaling 76.1% over the same period in 2017. There are 303 projects registering to adjust investment capital with total increasing registered capital of 2.24 billion USD, equivalent to 51.5% compared with the same period in 2017.

In terms of investment sector, in the past four months, foreign investors have invested in 17 industries, of which the processing and manufacturing sectors are still attracting more attention of foreign investors with total capital of 4.52 billion USD, accounting for 56.1% of total registered capital. The real estate business ranked second with a total investment capital of 807.5 million USD, accounting for 10% of total registered capital. The third was the wholesale and retail sector with total registered capital of 779 million USD, accounting for 9.7% of total registered capital.

In terms of investment partners, there are 82 countries and territories have investment projects in Vietnam, of which Korea ranks first with total investment of 2.32 billion USD, accounting for 28.7% of total capital. Japan ranks second with total registered capital of approximately 1.29 billion USD, accounting for 16% of total investment. Singapore ranks third with total registered capital of 808 million USD, accounting for 10% of total investment.

Ho Chi Minh City continues to attract the most capital with a total registered capital of 1.92 billion USD, accounting for 23.8% of total investment. Hai Phong ranks second with a total registered capital of 1.03 billion USD, accounting for 12.8% of total investment. Hanoi ranks third with a total registered capital of 746 million USD, accounting for 9.25% of total investment.

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Medical Heathcare Industry

The demand for medical equipment in Vietnam has been increasing due to the need to for treatment for cancer, heart disease, injuries, with focus on imaging equipment, operation room, emergencies resuscitation, intensive testing. The reason behind is the rising income and awareness of treatment for better quality of life. The foreign companies also tend to seek market entry solutions from independent consultant or local partners whom will be distributing the products into Vietnam to maximize the success chance.

In 2012, the size of medical equipment and supplies had been estimated by Ministry of Health at USD 515 m and the growth rate is between 10-11% per year.

However, the market development has been faster than anticipated. In 2016, total investment in medical equipment in Vietnam was USD 950 million USD. By 2017, this figure increased to USD 1.1 bil and that growth rate has been 18% over the past 5 years.

It has been reported 90% of equipment and supplies are imported from Japan, Germany, USA, China and Singapore, the 3 leading countries are United States, Germany and Japan. The imported imaging equipment such as magnetic resonators, CT machines, ultrasound machines, x-ray machines accounted for 30% of the import volume.

The Ministry of Health has policy to improve the capacity of medical equipment production in Vietnam over the last 20 years ago but the success is limited. Currently, there are about 50 domestic enterprises, but mainly produce medical bed and cabinet. The more advanced machines are being assembled by enterprise that cooperate with Japanese and Korean partners.

It has been evaluated that medical equipment is one of four attractive sectors for foreign investors when targeting Vietnam, in addition to investment in electronics, IT and communication and textiles. Public hospitals, which account for 70% of the market share, are still the largest customers of these manufacturers. The remaining other customer groups include foreign invested hospitals, private hospitals and research institutes, universities.

Government investment capital will continue to play an important role and public hospitals will tend to be more self-reliant in seeking financing for medical equipment investments.

For foreign companies entering Vietnam for supplying medical equipment, they have to follow strict process for bidding for public service. It is important for the foreign medical equipment to follow the Vietnam law and undertake regulatory investigation and research on medical equipment there are different implications for the import, sales and distribution into Vietnam.

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Wind Power in Vietnam Attracts the Attention of Foreign Investors

Tra Vinh People’s Committee has approved the policy for three investors to implement the Hiep Thanh wind power plant project in the province with a total investment of nearly 3,370 billion VND; of which 20% is contributed by investors, the rest is loan from bank Landesbank Baden-Wurttembrg-LBBW, Germany. It shows that Vietnam wind power sector is attracting attention of foreign investors.

The Hiep Thanh wind power plant project will be built on a total area of 2,747 ha in the coastal alluvial land of Hiep Thanh commune, Duyen Hai town (Tra Vinh province) with the design capacity of 78MW, with 18 – 19 wind turbine columns.

Investors implementing the project include Ecotech Vietnam Renewable Energy Joint Stock Company (based in Hai Ba Trung District, Hanoi); Janakuasa Pte LTD (Singapore) and Mr Lam Minh (Ba Dinh District, Hanoi). Investors have established Ecotech Tra Vinh Renewable Energy JSC to carry out the project. The duration of the project is 49 years.

According to General Director of Tra Vinh Ecotech Renewable Energy Joint Stock Company, the project was included in the Power Development Plan for Tra Vinh province in the period 2016 – 2025, with a view to 2035, which was approved by the Ministry of Industry and Trade on May 19th 2016. Currently the project is implementing investment procedures with the aim of putting into operation in the first quarter of 2020.

Sharing about the wind power price, according to leader of Tra Vinh Ecotech Renewable Energy JSC, the price of wind power is currently approved by the Prime Minister under Decision 37/2011/QD-TTg on the mechanism to support the development of wind power projects in Vietnam and take effect from August 20th 2011 is 7.8 cents/kWh.

According to leader of Tra Vinh Ecotech Renewable Energy JSC, Vietnam is the most potential country in ASEAN in recent years and coming years.

However, with the electricity price of 7.8 cents/kWh in this project, it is difficult to arrange capital, but the company is willing to bet on the project because they believe in the development of the Vietnam economy and want to contribute to the development of power plants in Vietnam. Investors also believe that the Government of Vietnam will study and reconsider bring the price of wind power to a more harmonious level, ensuring equality between renewable energy sources.

Hiep Thanh wind power plant is the fourth wind power project which was granted investment policy in Tra Vinh province. Previously, Tra Vinh province has granted investment certificates for 3 wind power projects, with a total designed capacity of 192 MW, in Truong Long Hoa commune (Duyen Hai town) and Dong Hai commune (Duyen Hai district).

These projects are in the stage of implementing appraisal procedures, approving the basic design… to start the construction. These projects are also in the list of projects calling for investment of Tra Vinh province in the period 2016 – 2020.

According to Tra Vinh wind power development plan up to 2020, with a view to 2030, which was approved by the Ministry of Industry and Trade on December 4th 2015, Tra Vinh province has planned 6 wind power projects at 6 coastal mudflats of Duyen Hai district and Duyen Hai town; in which there are 3 plants in Truong Long Hoa commune, 2 plants in Hiep Thanh commune and 1 plant in Dong Hai commune.

By 2020, the total installed capacity is about 270MW, the corresponding wind power is 634 million kWh. By 2030, the installed capacity will be about 1,338 MW. Total investment for wind power grid connected projects by 2020 is about 14,313 billion VND.

The wind power development projects will bring many benefits to the socio-economic development of Tra Vinh province such as increasing the local budget from taxes, increasing the electricity supply to create jobs for local workers; create landscapes to attract tourists.

In order to implement Vietnam’s national energy development strategy up to 2020 with a vision to 2050 (promulgated together with Decision No. 1855/QD-TTg, December 27th 2007), Vietnam strives to increase the ratio of new and renewable energy sources to around 5% of primary commercial energy by 2020 and about 11% by 2050.

According to Decision No 1208/QD-TTg dated July 21st 2011 of the Prime Minister on the approval of the Power Plan VII will bring the total wind power capacity from current level to about 1,000 MW in 2020 and around 6,200 MW by 2030. Electricity produced from wind power accounts for 0.7% in 2020 to 2.4% in 2030.

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Risk Management Necessity in Vietnam?

As Vietnam further integrates into the world business, more investors are eyeing Vietnam for investment. As part of investment due diligence, risk management are always well considered before foreign investors decide to do business with Vietnam partners.

In any parts of the world inluding Vietnam, risk is an inevitable factor in business operation activities; higher return is always accompanied by higher risks. Coping and managing risk is an integral part of any business in order to make profit and create value to shareholders in import export transaction, investment, or merger and acquisition activities in Vietnam.

However, in our daily consulting practice, we have seen a number of businesses whom do not manage risk effectively and furthermore not fully understand about the risks that they are facing.

Typical risks in developing countries like Vietnam are political risks, policy risks, regulations risks, credit risks, bribery and corruptions, and organized crimes.

On daily transaction in trading, according to Vietnam Ministry of Industry and Trade, there are situations a number of corporate scams between Vietnam and foreign enterprises are reported. In particular, foreign companies sell goods or provide services to partners in Vietnam and in return the Vietnam partner fail to pay.

On a larger scale in FDI through business formation or M&A origination and execution, businesses that do not improve the risk management process will have to face with a lot of different types of risks: serious financial losses, adversely affecting cash flows and the value of shares, decreasing prestige with customers, employees and investors.

Many business leaders often put heavy emphasis on the business activity, profit, and revenues instead of concentrating more on risk management especially understading business partners through corporate intelligence investigation, background studying, adverse media search through professional consultants in Vietnam whom understand languages, cultures, legal environment and busieness practices. Further searches could help foreign investors to understand the company itself, owners, shareholders, members of board of directors of partner companies whom make daily decisions of the business.

In the period that global crisis has been predicted that almost bottom out and start to show signs of recovery, although the recovery process can occur with different speed and characteristics depending on sector and location of the business, the fully preparation of business in all aspects including process and risk management strategy could helps business not falling into the passive and also have more possibilities to take advantage of growth opportunities after the recession.

Recently in Vietnam with the impact of high inflation rate and economic recession caused by the global financial crisis, enterprises are increasingly concern about risk management activities. Many experts believe that an effective and well organized risk management system will help businesses withstand and overcome fluctuations.

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Cooperation between Vietnam and Japan After the Covid Epidemic

On May 15, 2020, the Minister of Planning and Investment met Ambassador Mr. Yamada Takio (Japan) on the occasion of starting his working term in Vietnam. The parties spent time welcoming and sharing a number of problems that need to be resolved to promote investment activities between the two countries in the context of the Covid-19 epidemic, including promoting public investment, promoting investment in the private sector, attracting investors to set up company, factory and implement investment into export processing zones in Vietnam.

The Ambassador said there are currently more than a thousand Japanese experts who wish to have work permit, investment visa, temporary residence card to go to Vietnam to restore business production. In addition, Japanese small and medium enterprises are very interested in the Vietnam market. Japan Government has provided 23.5 billion yen (USD 220 million) to encourage domestic enterprises to transfer production activities to Southeast Asian countries, including Vietnam, which is an opportunity for Vietnam to attract FDI to register investment project in setting up factory in Vietnam.

Following the the investment shift after the US-China Trade war (2019) and the Covid-19 epidemic, many Japanese investors intend to withdraw from China to invest in Vietnam to set up factory, and company and form a new supply chain. Accordingly, Vietnam will have a plan to create a working group to attract Japanese enterprises to invest in the fields and provinces that Vietnam wishes to contribute more to the socio-economic development of Vietnam. In 2019, Japan is the fourth-largest FDI country in Vietnam, the second largest investment partner in Vietnam implementing the project, with a total investment of USD 59.3 billion.

With its advantages and experience, Japanese investors are investing in Vietnam in the fields of professional science, technology, information technology, wholesale, retail, engineering and real estate. These industries are the advantages of Japanese investors when investing in Vietnam, which it not only brings benefits to investors but also helps Vietnam to learn management experience and operation from Japan, helping Vietnam to apply to develop the domestic economy.

The Vietnamese representative emphasized the importance to attract Japanese enterprises to invest smoothly and successfully in Vietnam, including large and small and medium-sized enterprises to contribute more to the socio-economic development of Vietnam. At the same time, the Ministry of Planning and Investment continued to work closely with the Embassy as well as with the Ambassador’s individual to bring closer cooperation between the two countries.

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Solar Energy Power Future in Vietnam

Although the initial investment cost for solar energy in Vietnam is high but it brings in opportunities for cheaper option than thermal power technology being used in Vietnam.

In other country, solar power plants are competing fiercely with the thermal power plants running on coal.

Energy consultant in Vietnam

Energy and resources lawyers in Vietnam

In Vietnam, Thien Tan solar energy plant has been started to construct on 24 ha land in Quang Ngai with capacity of 19.2 MW at investment of VND 800 bil. The Ministry of Industry and Trade has also approved the investment project of Tuy Phong solar energy plant on 50 ha land in Binh Thuan with capacity of 30 MW at investment of VND 1,454 bil. This will open opportunities for renewable energy to contribute to the effort of protecting the environment and curbing climate change.

The solar energy is new in Vietnam therefore the investment in this area is at very early stage. However, the foreign investors have been increasingly interested in seeking opportunities in investment in solar energy projects.

Similar to investment in wind power energy in Vietnam, one of the concerns for investors is the expected increase in purchasing price from Electricity Vietnam Corporation, the party whom purchase the electricity on Power Purchase Agreement (PPA). Further, legal frameworks for promoting solar energy investment are not yet finalized. Accordingly, the contribution ratio of renewable energy in Vietnam is minimal. The Vietnam government has been trying to put some effort to increase the renewable energy contribution to 5,6% (in 2020) and 9,4% (2030).

To achieve this, Vietnam government shall need to be consulted on plan to support the solar energy investment project in Vietnam in tax, land, capital, power purchase agreement. Investors would need to be consulted by local consulting firm on process, procedures on investment policy, appraisal process, power purchase agreement, and other steps to develop and execute an energy project in Vietnam to improve the effectiveness of the investment in renewable energy.

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