Vietnam Encourages Investment in Solar Power

 The Vietnam government has stepped up to encourage investment in solar power plant and project, which is part of the effort to close the gap of energy growth demand versus supply, and support the sustainable energy development in Vietnam.

According to Decision No. 11/2017/QD-TTg issued on Apr 11th, 2017 to be effective from Jun 1st, 2017, organizations and individuals involved in the development of solar power projects are entitled to investment, tax and land incentives.

Specifically, organizations and individuals involved in the development of solar power projects can legally mobilize capital from domestic and foreign organizations and individuals to invest in the implementation of solar power projects in accordance with the provisions of current law.

Solar power projects are exempted from import duties on imported goods to create fixed assets for the project; complying with the current law on import tax and export tax on goods imported for production of projects which are raw materials, supplies and semi-finished products which cannot be produced at home.

The exemption and reduction of corporate income tax for solar power projects shall be implemented the same as for projects in the field of investment incentives in accordance with current tax law.

On land preference, the Decision stipulates that solar power projects, transmission lines and transformer stations for connecting to electricity grids shall be exempted from or reduce land use fees, land rents and water surface rents in accordance with current law applies to projects in the field of investment incentives.

Based on the planning approved by competent authorities, the provincial people’s committees create conditions for arranging land funds for investors to carry out solar power projects. The compensation and support for ground clearance shall be implemented in accordance with the current land legislation.

The decision also specifies that organizations and individuals investing in the construction of solar power projects have the responsibility to install solar power equipment must ensure the safety of structures and work safety in accordance with the current regulations.

The investment in the construction of solar power projects shall comply with the current law provisions on investment, construction, fire prevention and fighting, environmental protection and other relevant regulations.

The Vietnam laws on electricity will be changed to attract investment of the private sector, boosting the industrial development of the country, which is always hunger for power to develop.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have law firm in Hanoi, law firm in Ho Chi Minh City and law firm in Da Nang.

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Regulation on Grid Connected Solar Power Investment Project

 The Ministry of Industry and Trade has recently issued Circular 16/2017/TT-BCT on project development and the model purchase contract for solar power projects.

Accordingly, the grid connected solar power investment projects are regulated as follows:

– The investor can only set up a solar power investment project included in the provincial and national level solar-power development plan; or provincial and national power development plan that are approved.

– The contents of the solar power investment project must comply with the regulations on management of investment in construction and the following requirements:

+ Evaluate the impact of solar power project connection plan on the power system in the area.

+ Having equipment connected to the SCADA system or moderation information so that the forecast information on electricity output can be transmitted per hour to the regulated agency.

– The equity ratio of grid connected solar power projects should not less than 20% of the total investment.

– The area of long-term land use shall not exceed 1.2 ha/01 MWp.

Circular 16/2017/TT-BCT takes effect on October 26th 2017.

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Regulation on Grid Connected Solar Power Investment Project

 The Ministry of Industry and Trade has recently issued Circular 16/2017/TT-BCT on project development and the model purchase contract for solar power projects.

Accordingly, the grid connected solar power investment projects are regulated as follows:

– The investor can only set up a solar power investment project included in the provincial and national level solar-power development plan; or provincial and national power development plan that are approved.

– The contents of the solar power investment project must comply with the regulations on management of investment in construction and the following requirements:

+ Evaluate the impact of solar power project connection plan on the power system in the area.

+ Having equipment connected to the SCADA system or moderation information so that the forecast information on electricity output can be transmitted per hour to the regulated agency.

– The equity ratio of grid connected solar power projects should not less than 20% of the total investment.

– The area of long-term land use shall not exceed 1.2 ha/01 MWp.

Circular 16/2017/TT-BCT takes effect on October 26th 2017.

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Regulations on Investment in Telecommunications Services in Vietnam

 The field of telecommunications has appeared in Vietnam for more than 30 years and has helped the business environment and social life of Vietnam to develop. The process of liberalizing the telecommunications sector in Vietnam has led to the expansion of the telecommunications network and has become an attractive field for investors to set up company in telecom service, internet service, or join with Vietnamese partner on business cooperation contract in the same fields.

Currently, telecommunications services are not just telephones and telex, but variy with many types from simple to complex such as audio, video, data transmission services,… Besides the conveniences brought in life, telecommunications services have really become one of the important infrastructures of the economy. However, Vietnam government also impose certain requirements on foreign investors entering Vietnam in this sector.

Specifically, at present, foreign investors can only participate in investments in the form of joint ventures or business cooperation contracts with Vietnamese enterprises to provide telecommunications services. However, for the provision of services with network infrastructure, the partner in which the investor joins the joint venture must be a licensed telecommunications service provider in Vietnam. In addition, foreign investors are also limited on the percentage of charter capital in joint ventures. Accordingly, for services without network infrastructure, foreign investors own not more than 65% of charter capital and for services with network infrastructure, foreign investors do not own more than 49% legal capital of the joint venture.

On the other hand, foreign investors participating in business cooperation contracts will be able to sign a new agreement or switch to another form of presence with conditions no less favorable than those they are currently receiving. Furthermore, an organization or individual that already owns more than 20% of the charter capital or shares in a telecommunications enterprise may not own more than 20% of the charter capital or shares of another telecommunications enterprise doing business in the same company a market for telecommunications services.

Therefore, if the investor meets the above conditions, the investor will carry out the procedures for establishing an economic organization. Like other foreign-invested organizations, the establishment will go through two stages: investment registration and business establishment. For foreign investment projects in the business of telecommunications services, it is necessary to receive the investment approval of the Prime Minister. Accordingly, the investor submits the application for approval of the investment policy of the investment project to the investment registration agency and within 03 working days from the date of receipt of the complete dossier, the investment registration agency submit the application for appraisal opinions of the Ministry of Information and Communications. Within 15 days from the date of receipt of the dossier, the Ministry of Information and Communications shall give its appraisal opinions on the extent under its state management and send it to the Ministry of Planning and Investment. Within 40 days from the day on which the application is received, the investment registration agency shall organize the appraisal of the dossier and make an appraisal report and submit it to the Prime Minister for approval of the investment policy. After receiving the approval of the investment policy, the investor proceeds to establish the business as domestic entities.

The telecommunication services are subject to strong regulations hence the conditions for foreign investors to invest and set up company in telecommunication services or take part in providing telecommunication services are also relatively complicated. Therefore, investors are suggested to undertake research on telecommunication regulatory specific to their business with the help of telecommunication services lawyers to make the investment effectively.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Da Nang.

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