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Govt guidesre-registration for foreign enterprises

September 29, 2006
Govt guidesre-registration for foreign enterprises. Check it out:
(Saigon Times Magazine Via Thomson Dialog NewsEdge) A decree guiding the implementation of the Common Investment Law and the Unified Enterprise Law has just been issued by the Government.

Decree 101/2006/ND-CP, which gives detailed guidance for re-registration of foreign-invested enterprises that were licensed under the old Foreign Investment Law, is applicable to foreign-invested joint ventures, 100% foreign-owned companies, foreign-invested joint-stock companies and projects under the business cooperation contract.



Under the decree, joint ventures and 100% foreign-owned companies with more than two owners must register for conversion into limited liability companies. 100% foreign-owned companies owned by a foreign organization must also re-register into a one-member limited liability company. Joint-stock companies with foreign investment have to re-register into joint-stock companies.

Licensing authorities must examine and issue certificates within 15 days; otherwise they must notify the investors concerned in writing.

The decree also allows joint ventures and 100% foreign-owned companies to convert into one-member limited liability companies. The conversion process can start either after foreign-invested enterprises re-register or can be simultaneously carried out.

Licensing authorities must examine and reply within 30 days from the date of receiving complete documents for conversion.

More stock investors join the market

Two Korean companies have been licensed by the State Securities Commission to open rep offices to trade stocks in Vietnam, joining the trend of increasing international interest in the local stock market.

Tong Yang Investment Bank and Korea Investment Trust Management will open their offices in HCM City with an operational term of five years. Korea Investment Trust Management has set up two investment funds to invest in Vietnams stock market and potential shareholding companies. The Vietnam Growth Fund, capitalized at US$25 million, is for institutional investors, and the Worldwide Vietnam Fund, at US$75 million, is for individual investors.

Earlier, three foreign stock companies have also been licensed for opening rep offices in Vietnam, including Nomura International Limited (Hong Kong), Blackhorse Asset Management (Singapore) and Mirae Asset Maps Investment Management (South Korea).

Last week, Citigroup also organized a two-day trip to Vietnam for a delegation of more than 20 senior leaders from the worlds leading investment funds. The investors met representatives of the Government, experts, economists, bankers and business people in Hanoi and HCM City. Charly Madan, general manger of Citigroup in Vietnam, said the visit aimed to help global investors study attractive opportunities in Vietnam stock market.

Vietnams stock market is rated as one of the most attractive market in Asia, with the stock index expected to increase 66% this year. There are 49 stocks with total market value of US$3.1 billion listed on the HCM City Securities Trading Center. Vietnam expects the stock markets share of the GDP to increase from the current 6% to 30% by 2010.

The number of stocks is expected to increase strongly with Vietnams accession to the WTO, which will attract more foreign companies to the country.

Big port complex in Vung Taugets nod

The Government has approved the development of a complex of port and oil and gas services in Ben Dinh-Sao Mai in Ba Ria-Vung Tau Province.

PetroVietnam and Vietnam National Shipping Lines (Vinalines) have been allowed to cooperate in developing this project. The two companies have signed a cooperation agreement to develop Ben Dinh-Sao Mai port into a complex supplying oil and gas services, shipyards, container handling services and a petroleum depot.

Ben Dinh-Sao Mai is one of the 30 key national projects planned for development in the 2006-2010 period. According to the master plan for seaports prepared by the Ministry of Communications and Transport, the project will require US$637 million in investment and is designed to handle 25-50 million tons of cargo a year.

September FDI surpasses US$1 billion

Foreign direct investment (FDI) in September surpassed US$1 billion, including US$886 million of 154 newly licensed projects and US$206 million in added capital of 112 operational projects.

According to the Ministry of Planning and Investments foreign investment agency, the figure has brought the total FDI inflow in the first nine months to US$5.15 billion, up 25.9% from the same period last year. Newly licensed projects make up US$3.7 billion.

The ministry hopes that with this strong growth, the FDI target of US$6.5 billion for this year is achievable. It is evaluating many big FDI projects; among them are iron ore mining in Thach Khe of Ha Tinh Province (US$1.9 billion) by S.H.T Iron & Steel, shopping mall chain development (US$500 million) by Lotte Vina Shopping and a horserace track in Vinh Phuc Province (US$700 million).

In the first nine months, the realized capital of FDI projects amounted to US$2.78 billion, 8.8% higher than the same period last year. FDI enterprises reported sales of US$3.3 billion in September, bringing their total sales in the first nine months to US$21.6 billion, up 28.7% year-on-year.

To attract more FDI into Vietnam, the ministry plans to hold the Vietnam Investment Conference 2006 in Hanoi and HCM City in mid-October. At the conference, officials will introduce Vietnams investment environment and latest policies as well as investment opportunities in various sectors.

First trade plaza to open in Vung Tau

A luxury shopping and entertainment center will be opened for business late this year in Ba Ria-Vung Tau Province.

The center, the first of its kind in the southern coastal province, is part of the Imperial Plaza and Hotel Complex in Vung Tau City. According to Richard Leech, director of retail service at CB Richard Ellis Vietnam (CBRE Vietnam), construction of the four-level shopping and entertainment center has been completed and it will officially open for business on December 25. Retailers are invited to join the center, which will have more than 50 shops and kiosks.

CBRE Vietnam has been appointed by Lac Viet Corporation, the owner of the Imperial Plaza Complex, the retail consultant and marketing agent for the center.

The VND246-bilion Imperial Plaza and Hotel Complex will include shopping and entertainment facilities, and a five-star hotel of 150 rooms and 60 luxury apartments. It is expected to become a popular shopping and entertainment destination for business people, local residents and tourists. The designer of the project is Graham Taylor Designs, a well known architecture company.

New oilfield to start production soon

The Government has approved a report on the potential reserves and exploration of the Ca Ngu Vang (Golden tuna) oilfield off the southern coast.

The approval will pave the way for the Hoan Vu Joint Operating Company to carry out further test drilling at the newly discovered oilfield. The company has estimated reserves of nearly 222 million barrels of crude oil and more than 11 billion cubic meters of gas at Block 09-2 where the oilfield is located.

The oilfield in the Cuu Long Basin, which was discovered in 2002 and test drillings last year seem to indicate substantial oil reserves, is expected to begin commercial production next year with an annual output of 70,000 barrels per day.

Ca Ngu Vang is jointly exploited by PetroVietnam, which holds a 50% stake, Britains Soco International and Thailands PTTEP, which hold a 25% stake each.

Export maintains robust growth

Vietnams export in the first nine months maintained momentum, with a year-on-year rise of 24.2%.

Figures from the General Statistics Office show that the total export revenue in the period reached US$29.4 billion, or nearly 78% of the years target. The foreign investment sector gained strong growth, with revenue up by 32.6% to US$10 billion. The domestic sector earned US$12.3 billion, up 20.7%, and crude oil contributed US$6.5 billion.

Key export items remained traditional commodities like crude oil, garments (US$2.6 billion), footwear (US$2.6 billion) and seafood (US$2.3 billon).

In the period, imports rose 19.3% year-on-year to US$32.75 billion, accounting for 77% of the years target. Main import commodities are machinery (US$4.7 billion), steel (4.3 million tons) and fertilizers (2.4 million tons).

Cheap Chinese steelthreatens local producers

Vietnams steel market is being hit hard by the inflow of cheap Chinese steel, which is threatening the local steel industry.

According to the Vietnam Steel Association, local steel consumption in August was only 177,000 tons, much lower than the monthly average of 250,000 tons, due to inflow of cheap Chinese steel, especially rolled steel. The steel is sold at a price that is the same as that of steel ingots, making it hard for local steel producers to compete. It is estimated that Chinese steel now holds a 30% of the local market.

Anti-dumping lawyers say under its own law, Vietnam can sue China for steel dumping although the country has yet to become a WTO member. Vietnam Steel Association has worked with the Ministry of Trades Competition Management Department on the possibility of taking legal action.

Vietnams demand for construction steel is about four million tons a year, while the domestic steel industry can produce seven million tons.

Lam Dong invites investment in industry

Lam Dong Province is calling local and foreign investors to join projects in the industrial sector.

At a promotion seminar held in HCM City last week, provincial officials introduced advantages of the sector to potential investors and invited them to build factories in 11 industrial sites and parks. Hoang Si Son, vice chairman of Lam Dong, said the province would prioritize investment that utilizes local resources and materials and employs large labor, such as bauxite mining, agro-product processing and textile and garment production.

Lam Dong is a center of agro products like coffee, tea, mulberries, rubber and vegetables, so investors can take advantage of the abundant supplies to expand business.

According to Lam Dong Industrial Zone Authority, the rate of leasing land in industrial parks in the province is lower than elsewhere. For example, the land rent is only US$0.12-0.15 a square meter as compared with US$0.5 in Dong Nai Province and US$0.34 in Tay Ninh Province. Investors can also enjoy support in site clearance and infrastructure construction.

By August, Lam Dong had 267 investment projects with total capital of VND12.5 trillion licensed, of which 48 were operational and 83 under construction.

Kumho gets license for US$380-milliontire project

The leading South Korean auto tire manufacturer Kumho Tires has received a license to invest in an auto tire factory in Binh Duong Province.

With an investment of US$380 million, it has become the biggest foreign-invested project in the southern province. Kumho Tires has signed a 50-year land lease contract for the project with Becamex IDC Corp., the developer of My Phuoc Industrial Park. Jongsun Sun, general director of Kumho Tires (Vietnam), said the company would invest US$155 million in the first phase of the project, which is due to start next month.

Beginning in 2008, the factory will produce 3.15 million radial auto tires a year for local sale and export. The company will also build a rubber processing factory in Binh Duong, home of vast rubber plantations, to supply raw materials for its operations.

The project in Vietnam is part of Kumhos expansion plan aimed to make it become the fifth biggest tire manufacturer in the world.

Tourist information center opens

The Tourist Information Center was officially opened in the city last week, with more centers around the country in the pipeline.

The center at the corner of Le Loi and Nguyen Hue streets in District 1 offers a variety of services to tourists, such as ATM, foreign currency exchange, airline and travel, tour bookings, visa arrangement and handicraft promotion. Tourists can enjoy some free services like Internet access, drinking water and tourist maps.

The center collaborates with partners to provide some services for tourists, such as foreign currency exchange by HSBC, travel services by Asiana Travel Mate and spa services by Qi Spa. Geeshah Perry, the centers director, says the center targets not only international visitors but also locals and foreigners living in HCM City. It welcomes 300 visitors a day, and 60% of them buy its services. He plans to open four centers next year in Hanoi, Phan Thiet, Danang and Hoi An.

HCM City tourism authorities have plans to establish a tourist information center in September 23 Park near Ben Thanh Market in the future.

City welcomes more touristsdespite low season

International visitors to HCM City are rising, with nearly 1.5 million coming in the first eight months of this year, a year-on-year increase of 9%.

HCM City Tourism Department says although tourism is in the low season, the city welcome 178,000 visitors last month, most of them from the U.S. and Japan. Visitors from South Korea, China, Malaysia, Australia and Singapore also increased strongly.

Le Nhut Tan, deputy director of the department, says to attract more tourists, the city is promoting standard service shops and restaurants in the media and improving foreign language and professional skills for tourist security staff. The tourism department has selected 50 shopping venues and 10 eateries meeting tourist service standards.

The department will also step up efforts to promote the citys tourism overseas and organize tourism events in the city. It will launch 200,000 tourist maps in English and Japanese and guidebooks for foreign tourists and establish more tourist information booths in the city.

HCM City expects to welcome 2.3 million international visitors this year, up 15% on 2005, and 3.5 million local tourists, up 15%. Tourism revenue should increase 20% on last year to VND16 trillion (US$1 billion).

Banks urged to find ways to boost lending

Experts have urged commercial banks in HCM City to find ways to ease capital glut, as the banks have mobilized more funds but their lending is still stagnant.

According to a banker seminar recently, banks in the city mobilized VND238.9 trillion (nearly US$15 billion) in the first eight months, posting an annualized growth rate of 26.5%. Meanwhile, their lending growth was much slower, growing only 17.5% in the period to VND205.7 trillion.

Asia Commercial Bank (ACB), Sacombank and Eximbank are the most successful in fund mobilization. In July alone, ACB raised nearly VND1.5 trillion, followed by Eximbank with VND1.45 trillion and Sacombank with VND937 billion. The hike in interest rates is seen as the main driver for the surge in these banks mobilized funds. Upheavals on the gold and stock markets also lend a part in boosting mobilization.

One more underground car park approved

HCM City authorities have recently approved the construction of an underground car park at the football field of Phu Nhuan District.

With the approval, the city now has nine underground car park projects in the pipeline. Three projects on Nguyen Hue Boulevard, on Nguyen Du Street and at the Phu Nhuan football field are calling for investment. Six others are under preparation. They include car parks at Lam Son Square by Indochina Corporation, Chi Lang Park by Hoa Binh Construction Corporation, Bach Tung Diep Park by Electronics, Informatics and Chemicals Company, Le Van Tam Park by Underground Space Investment and Development Company Hoa Lu Stadium by Indochina Corporation and Tao Dan Football Field by T.T.C.

The city government has just approved the Department of Communications and Public Works proposal to exempt land rent for the developer of the underground car park on Nguyen Hue Boulevard and to call for investment in the project in the build-operate-transfer form.

Copyright 2006 The Saigon Times Magazine. Source : Financial Times Information Limited - Asia Intelligence Wire


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