connects: clmv - zico law | connect: people, … foreign firms raising capital, though credit rating...

In This Issue

A U S T R A L I A | C A M B O D I A | I N D O N E S I A | L A O S | M A L A Y S I A | M Y A N M A R | S I N G A P O R E | T H A I L A N D | V I E T N A M

ISSUE NO: 3NOVEMBER 2014

CONNECTS:C L M V

Vietnam commercial banks not allowed to provide personal

consumption loans(Page 03)

]

Myanmar to open more oil exploration blocks to investors

(Page 05)

]

Foreigners permitted full ownership of more businesses

in Myanmar(Page 05)

]

Foreign investors unable to buy land, despite legal right

in Laos(2)

]

EU gives 3.9 mil USD to attract investment in Cambodia

(Page 07)

ZICOlaw Connects CLMV is a bi-monthly publication aimed at keeping you abreast of the latest happenings in and around the CLMV region which constitutes Cambodia, Laos, Myanmar and Vietnam. Our regional network provides this publication to keep you informed of the latest happenings affecting the region’s legal, regulatory and business spheres. For further information on any of the issues raised in this publication, or any issues affecting the CLMV region in general, please feel free to contact us (see last page).

ZICOlaw NewsZICOlaw now in Hanoi, Vietnam

ZICOlaw has expanded its footprint in the region by opening an office in Hanoi, Vietnam. The launch of the Hanoi office follows the establishment of ZICOlaw (Vietnam) Limited in Ho Chi Minh City in 2012. Marking the establishment, ZICOlaw will host a cocktail reception to celebrate this achievement with our friends and clients from the region for their continuous support. The event will be held in La Veranda, Sofitel Legend Metropole Hanoi, on the 21st of November.

ZICOlaw in Myanmar

ZICOlaw Myanmar’s Resident Partner, Khoo Yu Lin, has been invited to give a presentation on “Meeting Tomorrow’s Opportunities”, in the vocational training sector in Myanmar. The event is organized by the Malaysia-Myanmar Institute of Vocational Training on the 19th of November.

For more on Khoo Yu Lin, click HERE

ZICOlaw in Thailand

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•

This event will take place on the 27th of November.

On 12 November, Chulapong Yukate, ZICOlaw Thailand’s Chairman, gave a speech to the directors and senior management of Maybank Kim Eng Securities (Thailand) Pcl and Maybank Asset Management Plc in Bangkok on compliance and regulatory requirements in the competitive market.

Maybank is among the top 5 banks in South East Asia with total assets of more than USD 166 billion. It has an international network of over 2,200 branches and offices in 20 countries, employing 47,000 employees who serve over 22 million customers.

For more on Chulapong Yukate, click HERE

ZICOlaw Thailand’s Insurance Practice Group will also be conducting a seminar on claims handling and management of insurance companies.

http://www.zicolaw.com/profile/khoo-yu-lin/

http://www.zicolaw.com/profile/chulapong-yukate/

Issue No 3 | ZICOlaw Connects : CLMV | 2

CLMV

Thailand will serve as funding hub

The Thai capital market is steered towards becoming a Southeast Asian funding hub after the Laotian government became the first regional country to raise capital in Thailand. Cambodia, Laos, Myanmar and Vietnam have been allowed by the Thai Finance Ministry to issue unrated bonds in Thailand’s financial market. Laos launched part 1 of its sovereign baht denominated bonds last year worth 1.5 billion baht, with the second instalment worth 3 billion and the third worth 4.5 billion – the third having a greenshoe option that could see sales reach 5 billion baht. The Laotian government planned similar issues to raise funds for energy and infrastructure projects. The move will support governments of neighbouring countries to raise funds from the Thai bond market without a rating. It will also support foreign firms raising capital, though credit rating is required.

Source: Bangkok Post; Dated: 20/10/2014

ZICOlaw in Cambodia

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•

•

ZICOlaw in Laos

ZICOlaw will conduct a seminar on the “Impact of Laos’ Accession to the World Trade Organization (WTO)”, followed by a cocktail and dinner reception. The details of the event are as follows : Date : 9th December 2014Time : 3.00 – 5.30pm (seminar), & 5.30 – 9.00pm (cocktails and dinner)Venue : Lao Plaza Hotel, Vientiane, Laos If you would like to attend, please RSVP to Ms. Joyce Yong at [email protected] or Tel : +856 21 410033, Fax : +856 21 410041.Do let us know if you have any special dietary requirements.

Sok Siphana, Managing Partner of SokSiphana&associates (member of ZICOlaw) and former Vice Minister in the Cambodian Government was conferred the BrandLaureate International Brand Personality Award 2014 by the Asia Pacific Brand Foundation (APBF). The Award honours and recognizes outstanding individuals who have set a benchmark of excellence in their respective industries – remarkable epitomes who have contributed significantly to the world and society at large through their varied fields of expertise.

For more on Dr. Sok Siphana, click HERE

Matthew Rendall, Senior Partner of SokSiphana&associates (member of ZICOlaw) moderated a workshop organized by the International Labour Organization on “the role of the recruitment sector in facilitating more effective intra-regional labour mobility”. The workshop was held in Bangkok on 6 & 7 November.

Matthew also participates in the “7th ASEAN Forum on Migrant Labour”, held in Nay Pyi Taw, Myanmar on 20th and 21st of November.

For more on Matthew Rendall, click HERE

http://www.zicolaw.com/profile/sok-siphana/

http://www.zicolaw.com/profile/sok-siphana/

http://www.zicolaw.com/profile/matthew-rendall/

http://www.zicolaw.com/profile/matthew-rendall/


Vietnam

Commercial banks are not allowed to provide loans for personal consumption

The State Bank of Viet Nam (“SBV”) has prepared and published a draft circular on providing loans for personal consumption (consumer credit) by financial companies. A loan for personal consumption is a loan used for purchasing goods and consumption services that meet consumers’ personal needs or their families’. At present, commercial banks and financial companies are allowed to provide consumer credit to ineligible individuals to buy vehicles and home appliances. However, commercial banks are not allowed to provide consumer loans under the draft circular. The draft circular proposes that (i) financial companies can provide consumer loans to individual clients via amortized loans, overdraft loans by credit cards and issuance of purchasing cards; and (ii) the financial company itself will be responsible for providing consumer loans and risks arising from consumer credit activities. The draft circular has been implemented to ensure that commercial banks focus on high income level customers with good credit records, and financial companies focus on middle or low income level customers with no credit records.

Source: The Saigon Times; Dated: 18/9/2014

Re-organizing business lines prohibited from investment and business; business lines subject to conditions

In preparation for the draft Amended Law on Investment and the draft Law on Enterprise (amended), the Ministry of Planning and Investment (“Ministry”), acting on the Prime Minister’s instruction, has reviewed and made a report regarding the list of business lines in which investment and/or business is prohibited (“List of Prohibited Businesses”) and the list of business lines in which investment and/or business is conditional (“List of Conditional Businesses”). Accordingly, the List of Prohibited Businesses has been reduced to 11 (compared to the 51 business lines that were prohibited previously) comprising of: trading of weapons, military equipment or techniques, ammunition, special-use facilities for military or public security purposes; trading of narcotics of all kinds; trading, producing, storing and exporting Schedule-1 chemicals; trading of firecrackers; prostitution business, organizational trading of human; trading of wild, rare plants or animals, including live animals and their processed parts; experimentation of human cloning; producing genetically modified products; trading of cultural products infringing upon national security, social ethics; trading of counterfeit goods, harmful goods encroachment upon the lives and health of persons except for goods provided for in the List of Conditional Businesses. PM Nguyen Tan Dung has also tasked the Ministry of Planning and Investment to quicken the administrative procedures on business registration and dissolution to two days from the current four days. PM Dung has also ordered inferior levels to replace staff incapable of performing administrative procedures.

Source : VGP News ; Original Title : Prohibited business sectors reduced to 11 ; Dated ; 10/9/2014

Expressway to link Vietnam and China opens

Vietnam’s longest expressway connecting No Bai in Hanoi and the north-western Lao Cai province bordering China is now open, Extending over 245 km, the expressway will significantly reduce travel time between Hanoi and Lao Chai from from 10-12 hours to 3-4 hours.

Source : Vancouverdesi.com ; Dated : 24/9/2014


EU, Vietnam push to ink Free Trade Agreement

The Free Trade Agreement is aimed at further integrating Vietnam into the global economy and opening its industries to foreign competitors. “This is an important deal that will allow all parties to resolve the current and future economic challenges we are facing”, said the Vietnamese Prime Minister in Belgium. It is hoped that the deal will be finalised by the end of this year.

Source: Telesur; Dated: 14/10/2014

Vietnam imposes share listing rule

Vietnam has introduced a rule compelling state-owned companies to list shares more quickly following initial public offerings (IPO) in an attempt to accelerate a privatization programme lagging behind schedule. From 1st November, companies that conduct IPOs will have to register shares on the official UpCom over-the-counter market within 90 days of receiving business registration certificates, according to a decision issued by the Vietnamese Prime Minister. Shares must then begin trading on one of the country’s two main stock markets in Hanoi or Ho Chi Minh City within a year of certification. The Ruling also applies to state enterprises that have already sold shares to the public. The government is hastening asset sales after excessive borrowing by state-owned companies saddled the banking system with bad debt, dragging economic growth to a thirteen year low in 2012. Money managers have avoided IPOs even as they poured a net USD 236.5 million into the country’s stock market this year, over concerns that the shares are illiquid and stakes held by non-state shareholders are too small to influence corporate governance.

Source : Bangkok Post ; Dated : 18/9/2014

Myanmar

Import-export e-licences to debut by end of year

The Ministry of Commerce plans to launch an e-system for applications for import-export licences by the end of the year, Deputy Minister for Commerce Dr Pwint Hsan said. The system will be introduced for the garment industry first, but any company that has received approval from the Myanmar Investment Commission will be able to use it.

Source: Eleven Myanmar; Dated: 08/09/2014

Credit bureau coming

The Central Bank’s Department of Financial Institutions Supervision, with technical support from a Singaporean credit corporation, is preparing for the emergence of a credit bureau or rating agency that could offer loans without collateral.

Source: Myanmar Times; Dated: 01/09/2014


Foreign investors permitted full ownership of more businesses

In an August 14 directive, the Myanmar Investment Commission (MIC) – which oversees foreign investment in the country – said that foreign investors with joint ventures in 30 industries, including beverages and small and medium-sized power generating, can boost their ownership to 100 per cent. Full foreign ownership can be granted to 43 joint venture businesses with endorsement from the relevant ministries. It also defines 21 industries that must be operated under special terms and conditions. For instance, cigarette production is permitted on the condition that investors must use at least 50 per cent of its local content and 90 per cent of its output must be exported. The Industry Ministry will supervise the industry.


Registration fees for SMEs to be halved

The date for the move however, is yet to be set.

The cut in registration fees will coincide with a reduction in the amount of capital a company requires to register with DICA.

There are about 64,000 registered SMEs in Myanmar, while the number of unregistered SMEs is estimated to be about the same.

Other incentives for SMEs : A loan guarantee organization has been set up for SMEs who lack collateral. The Small and Medium Industrial Development Bank has said it will double total lending to SMEs in the next fiscal year.

At present, obtaining loans remains a major hurdle for SMEs, with a process described as intricate and time consuming, and the requirement to provide collateral and detailed reports on their business plans to the Central Department for SMEs Development in order to apply for a loan from the Small and Medium Industrial Development Bank.


Myanmar to open more oil exploration blocks to investors

Myanmar has announced that it will release another 15 blocks for oil exploration by the end of 2015 as it further opens its oil and gas sector to international investors.

To date, 40 blocks have been awarded, merely half of what is available in Myanmar.

Source: Channel News Asia; Dated: 16/10/2014

Union Government forms Anti-Money Laundering Central Board

The Government of Myanmar has formed a 15-member central body to combat money laundering.

The Union Minister of Home Affairs will chair the Board in accordance with Section 6 of the Anti-Money Laundering Law. Amongst the responsibilities of the Central Board are formulating policies on anti-money laundering and combating financial support for terrorism, cooperation with international and regional organizations and neighbouring countries, combating financial support for terrorism etc.

Source: The New Lights Of Myanmar; Dated: 18/08/2014


Special Task Force for investment and trade

A special task force has been formed to promote trade and investment, according to the Ministry of Commerce. The Task Force will reform economic policies so that they meet international standards. The Task Force will conduct research on trade promotion that can link local and Foreign markets, and will draw up easy and effective plans after holding talks with working groups from the private sector.

Source : Eleven Myanmar ; Original Title : Special Task Force to be formed to boost trade and investment ; Dated : 14/9/2014

Energy Bill limits on extraction, selling natural gas, electricity

The Energy Bill, which sets limits on the extraction and selling of energy resources and electricity production, was drafted in October. According to the Ministry of Energy, it will be tabled in parliament when it resumes on Monday and is expected to be enacted as a law next year. It will allow for extraction and the selling of natural gas within the limits of the law.

Source: The Global New Light of Myanmar; Dated: 14/10/2014

Loan interest rates could float by 2015

The Central Bank of Myanmar plans to allow freely floating interest rates shortly, though initially for US dollar loans only, according to its deputy governor U Set Aung. Current limits on commercial bank loans – a ceiling rate of and a floor of 10 percent – are often criticised as being overly restrictive. In practice, most loans are made near the 13 percent ceiling.


Securities regulator to be under Ministry

According to insiders, the Securities and Exchange Commission (SEC) will first operate under the Ministry of Finance without any independence for five years.

As stated by a SEC executive director who has requested to remain anonymous, the SEC, which is to oversee the Yangon stock exchange in 2015 along with other exchanges, will take time to become an autonomous body as it must first develop its hard and soft infrastructure.


Foreign banks picked for licences

The Central Bank of Myanmar has announced nine banks that have won preliminary approval to operate in Myanmar.

The nine banks are Australia’s ANZ Bank, Thailand’s Bangkok Bank, Japan’s Bank of Tokyo-Mitsubisihi, Mizuho Bank and Sumitomo Mitsui Banking Corporation, China’s Industrial and Commercial Bank of China, Malaysia’s Maybank and Singapore’s OCBC and UOB.


Draft of amalgamated investment law nearing completion, says DICA

The Director General of the Directorate of Investment and Company Administration, U Aung Naing Oo, told Mizzima that draft legislation amalgamating Myanmar’s two investment laws is expected to be completed in November.

U Aung Naing Oo said the legislation will merge the Foreign Investment Law enacted in November 2012 and the July 2013 Myanmar Citizens Investment Law.

Source: Mizzima; Dated: 29/09/2014

Cambodia

EMAXX, Huawei to build 4G network

Telecommunications firm EMAXX signed a deal with Chinese technology giant Huawei to build a nationwide 4G LTE network.

Representatives from both companies and the Ministry of Posts and Telecommunications (MPTC) gathered in Phnom Penh to sign off on the agreement.

“The aim is to fulfill the increasing demand for data usage in the Kingdom. Both EMAXX and Huawei will progress to build the most reliable and stable 4G LTE network here,” EMAXX board of directors member Sean Ngu said.

Source: The Phnom Penh Post; Dated: 18/09/2014

EU gives 3.9 mil USD to attract investment

The European Union will spend €3 million ($3.9 million) on a program to encourage small and medium enterprises to invest in Cambodia.Speaking at a conference in Phnom Penh, EU Ambassador to Cambodia, Jean-Francois Cautain, said the five-year grant – to be managed by EuroCham – will be used to market Cambodia as an investment destination for European businesses and to strengthen advocacy in order to create a favorable business environment in the Kingdom.


Green-lit Airlines target China

Cambodia’s aviation authority approved operations for the first of three Chinese market-focused airlines, all of which are expected to take to the skies by the end of the year.

The State Secretariat of Civil Aviation granted an Airline Operations Certificate (AOC) to Apsara International Air (AIA) – jointly owned by private Chinese and Cambodian investors – after a more than yearlong application process.

Source: The Phnom Penh Post; Original Title: Green-lit airlines target China; Dated: 16/09/2014



As Banking Sector Booms, Overbanking Looms

Last month, Cambodia’s nascent yet rapidly expanding banking sector saw the new arrival of Phillip Bank through the acquisition of Hwang DBS Commercial Bank by Singapore’s Philip Capital in a $40 million deal.

The number of banks in the country has more than doubled since 2005, during which there were 19 banks, according to the National Bank of Cambodia (NBC). In the NBC’s 2013 report, it says there are now 43 banks, 35 commercial and nine specialized.

Source: The Cambodia Daily; Dated: 10/09/2014

Rice husks to pump energy to the grid

Malaysian company PMTI Energy (Cambodia) Co has signed a 10-year deal to supply Electricite du Cambodge with 48,000 megawatts of energy derived from rice husks every year.

Phou Puy, president of PMTI, told the Post yesterday that about 70 per cent of the power generated from his biomass plant would be supplied to his own rice-milling company, Baitang Plc, as well as several other rice millers in the Battambang province.


Businesses Must Pay Property Tax by October

Businesses registered in Cambodia have until the end of the month to pay their annual property tax to the country’s General Department of Taxation (GDT).

Business owners who have not previously paid property tax must submit an assessment to tax authorities in the district where the property is located.

Source: The Cambodia Daily; Date: 10/09/2014

Census Used to Identify Those Without Work Permits

The Interior Minister clarified that an ongoing census of foreign nationals was part of a larger drive to enforce a long-ignored law that requires foreigners employed in Cambodia to hold work permits.

“The immigration law created the mechanism, and it is now our obligation to plan and act. We are taking our first steps and going into the provinces to carry out a census of all foreigners,” Mr. Sar Kheng, Interior Minister said.

Interior Ministry spokesman, Khieu Sopheak, said on Wednesday that the census would also identify “any foreigners who use tourist passports to work in Cambodia,” who would then be fined and deported.

Stung Treng’s deputy provincial police chief, Seng Vutha, said officials in the province had visited all “foreigners who have permanent addresses.”

Source: The Cambodia Daily; Dated: 04/09/2014


Russia pledges duty-free trade

Russia is set to approve duty- and quota-free imports for up to 3,000 Cambodian agricultural products, according to local government officials.

A statement issued by Cambodia’s Ministry of Commerce on Friday states that Russia’s Minister for Economic Development, Alexey Ulyukaev, agreed in principal to increase the number of Cambodian products eligible for duty-free import status.

Ulyukaev made the pledge during out-of-session talks with Cambodia’s Commerce Minister Sun Chanthol at last week’s 46th ASEAN Economic Ministers Meeting in Myanmar.

“We are working on listing down the potential of agricultural products for Russia to review and we will be able to sign a memorandum of understanding soon after that,” Ken Ratha, a spokesman for the ministry, said, without detailing how long it might take for an official MoU to be signed.


Work Permits Now Required for Foreigners

The Labor Ministry has begun to enforce a long-neglected law that requires foreigners employed in Cambodia to have work permits, according to ministry officials.

Teams of inspectors have begun scouring the country to ensure that foreign employees and business people have the proper documentation, with employers and workers facing hefty fines in the event that they are not certified.

Fines will also be applied retroactively to offenders, according to Labor Ministry spokesman Heng Suor.

“If the inspection teams find that foreigners do not have a work permit they will face a fine of up to 720,000 riel (about USD 177) and will have to pay back $100 for each year of missed pay,” Mr. Suor said.

He added that paid NGO workers would be part of the audit, while the Labor Law stipulates that employees of foreign embassies are exempt from the rule.

A joint statement issued by the Interior and Labor Ministries on the 16th of August warned institutions that employ foreigners are obligated to ensure that employees have relevant visas, passports and work permits.

Source: The Cambodia Daily; Original Title: Census Used to Identify Those Without Work Permits; Dated: 28/08/2014

US firms eye $900M projects

A handful of US-based energy firms have met with the government over the past week to discuss plans for two large-scale power-generation projects worth a total of $900 million.

According to the Ministry of Commerce’s official Facebook page, representatives from US renewable energy firms Willowbrook Company and Sun Edison met with Commerce Minister, Sun Chanthol, on August 20 to present plans for a 200-megawatt solar power plant valued at $400 million.

“If approved, the project is scheduled to commence in 2015 and is expected to be completed by the end of 2017,” the statement said, adding that the firms would need to negotiate and sign an agreement with Electricite du Cambodge before getting the go-ahead.



Quality control to lift exports

China will work with Cambodian officials to broaden the range of agricultural products that the Asian economic giant allows to be imported from the Kingdom, government officials said.

Ken Ratha, spokesman for the Ministry of Commerce, confirmed that China’s General Administration, Quality Supervision, Inspection and Quarantine (AQSIQ) had agreed to establish a joint task force, which will develop a new Sanitary and Phytosanitary (SPS) protocol, which will grant more Cambodian agricultural produce, such as pepper, mangoes and cashews, and give access to the Chinese market.

“This SPS certificate is an important step towards market expansion for our agricultural products,” Ratha said, adding that Historically, Cambodian farmers have been forced to rely on Thai or Vietnamese buyers to relay their produce onto to the Chinese market.


China power plant open

A 246-megawatt Stung Tatay Hydropower plant, owned by China National Heavy Machinery Corporation (CHMC), started generating electricity on Wednesday, Chinese media reported.

CHMC invested $540 million into the hydropower plant, located in Koh Kong province, after receiving a 40-year build-operate-transfer (BOT) agreement from the Cambodian government in 2010. It marks the second Chinese-owned hydropower plant in Koh Kong province to start producing power this year.

In February, China Huadian Corp, which has also been granted a 35-year BOT licence, commenced producing electricity at its $500 million, 338-megawatt plant located on the Lower Russei Chrum River.

According to the Ministry of Mines and Energy, Chinese firms have invested $1.6 billion to construct six hydroelectric dams in Cambodia, with a total capacity of 928 megawatts. All are now in operation.


China signs 100,000-tonne rice import agreement

Local officials says that the Chinese government-run China National Cereals, Oils and Foodstuffs Corporation (COFCO) will formally agree to import 100,000 tonnes of rice from Cambodia.

Representatives from COFCO and Green Trade Co, a Cambodian government-owned agriculture firm, met in Beijing today to sign the agreement, which takes effect this month and is valid for one year.

“Cambodia and China have long been trade partners and the fact that Cambodia is a reliable supplier has built trust for this deal,” Ken Ratha, spokesperson of the Ministry of Commerce said.


Laos

New State investment projects get the cut

The government will cut funding for new state investment projects almost four-fold to prevent a major economic crisis by focusing on paying debts due to revenue shortfall for the past two years. The revenue shortfall has forced a halt of state employees receiving a monthly allowance of 760,000 kip granted to state employees. Meanwhile domestic revenue collection for 2013-14 only reached 90 percent of the yearly plan, causing a slow payment of the salaries for officials.

In 2013-14, the government operated 2,420 projects amounting to more than 1 trillion kip, according to the Ministry of Planning and Investment latest report.

The report stated that in 2014-15, the government will cut its budget to support only 745 state investment projects with a total value of 265 billion kip, which was proposed by sectors in Vientiane and the provinces. The halted projects mainly relate to infrastructure such as the construction of new public offices and other facilities.

The government will focus more on projects that give quicker economic returns. Officials will inspect the effectiveness of provincial projects, while some long-term projects of considerable expense will also be suspended.

Source: Vientiane Times; Dated: 8/10/2014

South Korea to assist Laos revenue collection with advanced systems

To improve the skills and transparency of the Lao Customs Administration in revenue collection, the Republic of South Korea will be providing technical assistance to Lao Customs staff and installing Korean advanced customs system software with Lao Customs Administration for revenue collection.

Currently, the Customs Department of the Ministry of Finance is using the ASYCUDA system for revenue collection at 11 border check points and it will operate one more at the end of 2014.

Source : Economic and Trade Newspaper ; Dated : 13/10/2014

Laos-China Rail Link prospects increase

The Lao and Chinese governments are negotiating the form of future cooperation to realize the USD7 billion 421 km-long Boten-Vientiane rail track with Laos seeking financing from China to fund the undertaking. Both the Boten-Vientiane rail project and Thailand’s rail project will form part of the regional rail link known as the Kunming-Singapore rail line over a distance of 3,000 km.


Government steps up to expand SSS coverage

The National Social Security Fund was established to expand the Social Security System (SSS) to a wider range of people. Previously, only civil servants and employees of enterprises could join in accordance with two prime ministerial decrees issued to regulate the system pursuant to the Law on Social Security. According to the Social Security Law, 8% of state employee salaries are to be contributed monthly to the fund while the government contributes 8.5%. An enterprise employee, including state enterprises, is required to pay 5.5% of his or her monthly income while the employer contributes 6%. The social security funds for enterprise employees and state employees will be merged into the National Social Security Fund (NSSF).



The administrative board of the fund is scheduled to convene their first meeting next month to discuss on how the NSSF is to be operated and a timeline to allow individuals and self-employed people to join the system. It will also discuss the proportion of or percentage the government should contribute for these people.


Laos Stock Market seeks hydropower spark

Lao Securities Exchange expects to list more than 23 firms by 2020. The stock market would approach companies which invest in hydropower plants in Laos to list on the stock market so these firms can access long term investment capital. Since its debut in 2011, three companies: EDL Generation, Banque Pour Le Commerce Exterieur Lao and Lao World have listed on the LSX.

At present, most of the investors who are active in the market are from Thailand, Japan and China. More foreign investors have been active since the market introduced an online trading system last year, allowing investors to purchase and sell shares via the internet. Shares of BCEL and EDL Gen are actively traded while shares of Lao World have remained inactive over the past several months.


Foreign investors unable to buy land, despite legal right

Foreign business operators are still unable to buy small plots of land in Laos despite being entitled to do so under the new Investment Promotion Law, which was revised five years ago. Under the law, foreigners with a registered investment of USD500,000 can own a plot of residential land.

According to the prime ministerial decree on the implementation of the Investment Promotion Law, eligible foreign investors can buy 800 square meters of land from the government only. They may retain land use rights until they stop doing business in Laos. They may sell the land use rights to other foreign investors if they wish to receive cash, or use it as a guarantee for a bank loan.

The Chief of the Investment Promotion Department’s Legal Division said that the ministry would reconsider the article in question. The problem lies in the fact that the government has no land available for sale to foreign business operators.

Source : Vientiane Times ; Dated : 4 September 2014

Visa eyes electronic payment service in Laos

Visa Inc. is interested in developing its electronic payment service in Laos. Mr Adam Wand, Visa Inc’s Vice President of Government Affairs and Public Policy in South Asia, Southeast Asia, Australasia and Pacific said that the company was interested in a partnership with the ministry to provide specific knowledge about Visa’s system to the relevant officials at the ministry.

Currently, Laos also widely uses electronic payments in business activities, but improvements to the system still need to be done. The Minister of Science and Technology, Prof. Dr Boviengkham Vongdara said that the National Assembly recently approved the law on electronics as a tool for the control and management of all electronic activities and hopes to cooperate with Visa Inc. to create various essential policies and regulative tools to manage the electronic payment process.



Vietnam

Circular No. 103/2014/TT-BTC instructing implementation on taxation obligations of foreign organizations, individuals conducting business in Vietnam or having income in Vietnam issued by the Ministry of Finance on August 6, 2014

Under the Circular, income comes from providing and distributing goods in new objects, subject to corporate income tax of foreign contractors and foreign sub-contractors.

Moreover, the tax rate (%) which is used to calculate VAT on enterprise revenue of some business operations has been significantly decreased. To be specific, services, rental of machinery and equipment, insurance, construction, installation exclusive of raw materials, machinery and equipment have changed from 50% to 5%. Production, transportation, services attached to goods; construction, installation inclusive of raw materials, machinery and equipment have changed from 30% to 3%. Other business operations have changed from 30% to 2%.

This Circular takes effect on October 01, 2014 and replaces the Circular No. 60/2012/TT-BTC on the same matter.

Official letter No. 5186/BKHĐT-QLĐT guiding procedures on announcement of bidding information issued by the Ministry of Planning and Investment on August 11, 2014

According to the Law on Bidding 2013, from July 01, 2014, all bidding organizations will have to announce bidding information on the national bidding network system.

At this time, the circular guiding announcement on bidding information is under drafting. Under this Official letter, investors will have to announce information stipulated in Article 8 of the Law on Bidding 2013 on the following website: http://muasamcong.mpi.gov.vn. If the investors do not satisfy the conditions to announce bidding information by themselves, they can have the Newspaper on Bidding to conduct this action.

The announcement fee will be charged in relation to regulations of Circular 20/2010/TTLT-BKH-BTC, and will be repaid when the official Circular is issued.

Circular No. 11/2014/TT-BXD on publishing information on construction capability of organizations engaged in construction activities issued by the Ministry of Construction on August 25, 2014

This Circular stipulates provisions, receipt, review and publication of construction capability in developing construction projects; providing project management on construction; developing the quality of construction planning; reviewing the construction design; conducting construction tests; supervising construction process; inspecting construction quality; making surveys, developing designs and carrying out construction.

Moreover, this Circular regulates the management authority receiving applications for publishing information on construction capability of organizations. For example, the Construction Activity Management Agency of the Ministry of Construction shall receive applications from contractors engaged in construction activities managed by the Ministry of Construction; and organizations issued with investment certificates, construction companies established in Vietnam with 100% foreign ownership and other foreign organizations operating construction activities.

This Circular takes effect on October 10, 2014 and replaces the Decision No. 02/2008/QĐ-BXD.


Circular No. 134/2014/TT-BTC guiding procedures to extend time limit for tax payment and tax refund of value added tax on imported machinery and equipment in order to create fixed assets for investment projects issued by the Ministry of Finance on September 12, 2014

According to this Circular, newly-established enterprises having projects but not yet being operated and enterprises operating investment projects which import directly or is authorized to import machinery and equipment to create fixed assets for investment projects may extend VAT payment upon satisfaction of the following conditions: not having found money to pay VAT when imported and borrowing money from banks to import machinery and equipment.

In order to be entitled to the policy, enterprises must satisfy some conditions e.g registering to pay tax according to the tax credit method, having enterprise registration or investment certificates or investment certificate; having sealed accounting vouchers, deposit accounts at banks according to the corporate tax code; total value of imported machinery and equipment to create fixed assets up to 100 billion; investing in projects involved in production, trading goods and services subject to VAT.

Enterprises may conduct an extension of VAT payments within 60 days from the date of expiry of tax payment.

This Circular takes effect on October 27, 2014.

Circular No. 25/2014/TT-NHNN guiding procedures for registration and change of non-government guaranteed foreign loans issued by the State Bank of Vietnam (“SBV”) on September 15, 2014

According to Circular 25, a short-term foreign loan to be extended without a written contract shall be registered with the SBV in the event that such loan has not been fully repaid within 10 calendar days from the first anniversary of the first disbursement.

Circular 25 newly regulates that if there is a change in the plan already certified by SBV on capital drawdown, loan repayment or remittance of expenses within 10 calendar days from the day of registration, the borrower must notify such change to the commercial bank providing account services and does not have to register it with the SBV.

Regarding the time-limit to conduct registration or change of a foreign loan, it has been reduced from 30 business days to 30 calendar days, beginning from the date of signing the loan agreement, or the first anniversary of the first disbursement.

Regarding the time-limit for SBV to provide written certification of registration or change of a foreign loan shall be reduced from 15 business days to 20 calendar days if such foreign loan is denominated in foreign currency. Moreover, Circular 25 stipulated that if a foreign loan is denominated in Vietnam Dong, SBV will provide written certification within 60 calendar days from the date of submission for registration.

Foreign loans of borrowers implemented prior to the effective date of this Circular shall continue to be implemented in accordance with the certification of registration of such foreign loan provided by SBV. Otherwise, it must be registered under the provisions of this Circular.

This Circular takes effect on November 01, 2014.

Decree No. 91/2014/NĐ-CP amending and supplementing a number of Decrees on tax issued by the Government on October 1, 2014

This Decree amends provisions on tax administration, corporate income tax, personal income tax, value-added tax in existing relevant decrees.

Regarding tax administration:

Enterprises are required to inform the local tax authorities when enterprises suspend their businesses or are back to business.

Quarterly value-added tax declaration applies to taxpayers who have total turnover of less than 50 billion Vietnamese Dong in the previous year.


Regarding corporate income tax:

Income earned from performance of contracts for scientific research and technological development will be exempt from tax payment but the exemption will not exceed 3 years. Income earned from products made from new technology applied for the first time in Vietnam will be exempt from tax payment but the exemption will not exceed 5 years.

Regarding personal income tax:

Employee benefits related to houses built by employers in less favorable areas or in industrial zones are not subject to taxable income.

Regarding value added tax: in case a borrower, who is authorized by the lender, sells secured assets to repay the secured loan, this credit service is not subject to value- added tax.

This Circular takes effect on November 15, 2014.

Cambodia

Prakas on “Tax Registration”

The objective of this Prakas is to determine the rule and the procedure of tax registration in compliance with article 101 of the Law on taxation. This Prakas applies to the tax registration of legal entities or business companies or single member private limited companies or other persons who have economic activities in the Kingdom of Cambodia.

Source: http://www.tax.gov.kh/files/1139MEF_20141009.pdf; General Department of Taxation, Ministry of Economy and Finance;Original Title: Prakas on tax registration; Dated: 09/10/2014; Practice Areas: Tax.

Myanmar

Law Amending Labor Dispute Settlement Law (Final)

The amendments have come into force on 30 September 2014. Amongst the main amendments are the amendments made to the definitions of certain terms and the penalties imposed by this Law.

Myanmar Architect Council Law (Final)

The Myanmar Architect Council Law has come into force on 30 September 2014. This law governs the formation the Architect Council and its power and duties.

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ZICOlaw Myanmar Ltd

No. 33, 7 Mile AvenueParami Road (Corner of Parami Road and Pyay Road)Mayangone Township,YangonMyanmar

Tel : +951 654 929Fax : +951 654 927

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