Vietnam to Investigate Anti-Dumping Case of Sorbitol Chemical Products from China, India and Indonesia

On August 18th, 2020, Trade Remedies Authority of Vietnam (TRAV) acknowledged the Dossier on request of investigation to impose the anti-dumping measures to Sorbitol chemical products originated from China, India and Indonesia from the companies representing the domestic industry (Requester). If there are anti-dumping actions, the anti-dumping investigation will be initiated and related parties would cooperate with TRAV to provide data as required.

On the basis of assessing the Dossier, on September 30th, 2020, TRAV had confirmed the sufficiency of the dossiers according to the laws on trade remedy.

Within 45 days from the date of receiving sufficient and lawful dossier, TRAV will assess the dossier to submit to the Minister of Ministry of Industry and Trade for consideration whether to process the investigation.

The assessment’s contents includes:

-Identify the legal representative status of the domestic industry of organizations and individuals who submit dossier in accordance with the Law on Foreign Trade Management;

-Define evidence on the dumping of imported goods that cause or threaten to cause significant losses to a domestic manufacturing industry or substantially prevent the formation of a domestic manufacturing industry.

In order to serve the assessment process, as well as to ensure the legitimate rights and interests of the enterprise, TRAV recommends that the domestic enterprises manufacturing trading in the same goods mentioned above provide the following information.

-Enterprise’s information;

-Capacity/design and production of Sorbitol chemical products in 2017, 2018, 2019 and 2020;

-Enterprise’s opinion on the case (to agree, oppose, have no opinion);

-Any document/evidence which companies consider to be related to the case

-The due date to provide the above information is before 5p.m October 16th, 2020.

Our competition, anti-dumping, and countervailing duty lawyers of international trade and tax practice at ANT Lawyers, a law firms in Vietnam, always follow up trade remedy development to update clients on regular basis.

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What Rights Shareholder Holds in Joint Stock Company?

Shareholders are individual or organization that owns at least one share of the joint-stock company and also are owner of the joint-stock company. Along with these roles, their interests are tied to business operations although they may not directly manage the day-to-day company affairs. In order to implement governance, the powers and responsibilities of each interest group such as shareholders, the board of directors, managerial personnel, etc. should be assigned based on the statutory principles and procedures.

According to the regulations on shareholders in the Law on Enterprise 2020, the rights of shareholders can be categorized into the following groups: economic rights, governance rights, information rights, and litigation rights.

Economic rights

Economic right is the right to gain all pecuniary interest with respect to the shares. The purpose of starting a business or investing in securities comes mainly from earning income or gaining profits. Economic rights accordingly include:

-Right to entitlement to dividends

-Right to transfer ownership

-Priority right to acquire the newly issued shares

-Right to entitlement to a portion of the assets after dissolution or bankrupt

-Appraisal Right

Among these above rights, right to entitlement to dividends and right to transfer ownership are the fundamental economic rights of a shareholder.

Dividend of common shares is determined according to the realized net profit and the dividend payment from the company’s retained earnings. Despite right to entitlement to dividends, shareholders are still subject to a number of limitations in law and in fact. Dividend entitlement is determined by the General Meeting of Shareholders based on the recommendation of the Board of Directors, after the company has fulfilled tax obligations and other financial obligations, contributed to reserve fund, paid for previous losses and met the solvency for all due debts and other property obligations. Dividend is not required to be distributed annually. Depending on the business situation, the General Meeting of Shareholders may decide to retain profits for reinvestment.

Besides dividend entitlement from the company’s operating results, shareholders can also gain profits by share transfer. This kind of investment is popular with respect of shares or securities of public companies, investors do not aim for corporate governance rights as well as dividend, they intend to earn benefits by the difference of the market values of stocks, especially when the stock value increases.

Governance rights

Modern corporate governance has two principles, one is to separate ownership and governance and to separate governance and management. It means that the major shareholders should not hold senior managerial positions in the company and Chairperson of the Board of Directors should not be assigned to other senior managerial positions such as General Director and/or Director.

Shareholders may be an individual or organization which they have their own different interests, goals and abilities. The separation between ownership and management makes the situation of whom the owner is and how the share get transferred not to affect the business operation. In the meantime, the separation helps gather professional managers to implement target intended by the company. According to the laws, members of the Board of Directors of a public company concurrently holding several executive titles must be reduced to the minimum to ensure the independence of the Board of Directors, specially the Chairperson of the Board of Directors shall not be the Director/General Director in a public company as of August 1st, 2020. There are no similar rules applicable to joint stock companies which are not public company.

Attendance, speaking and voting at General Meeting of Shareholders are fundamental in governance right of common shareholders, applicable to all shareholders holding at least one share. ty. In principle, being a shareholder who holds shares of the company regardless of the number has equal rights to attend and vote at the General Meeting of Shareholders. By the General Meeting of Shareholders, the shareholders holding a certain number of shares can impact decisions on some matters such as election, dismissal, and removal of members of the Board of Directors and Controllers, amendment and supplementation of internal documents, major transactions, and others as stipulated in law on enterprise or charter. In addition to the above rights, the majority shareholders also have a number of other rights related to governance as follows:

The shareholder or group of shareholders holding at least 5% of the total number of common shares (charter may require a smaller percentage) is entitled to:

-Call a General Meeting of Shareholders

-Request Board of Controllers to inspect each specific matter relating to management, governance of company affairs if necessary

-Recommend matters to be included in agenda of General Meeting of Shareholders

-The shareholder or group of shareholders holding at least 10% of the total number of common shares (charter may require a smaller percentage) is entitled to nominate candidates for the Board of Directors, Board of Controllers

Information rights

Shareholders have the right to access documents and information of the company. In addition to the basic documents such as the charter, list of shareholders, meeting minutes and resolutions of the General Meeting of Shareholders, shareholders have the right to access to reports related to the business affairs.

However, some information is only reviewed by shareholders who own required percentage of share:

-Access and extract information on full name and contact address as specified in list of shareholders having voting right and list of shareholders having right to attend General Meeting of Shareholder; request to adjust his/her inaccurate information

-Access, extract and scan charter of company, meeting minutes of General Meeting of Shareholder and its resolution

-Access, extract and copy partial or whole list of involved persons and their contracts, transaction of which the company is other party, interests of Board of Directors, Controllers, Directors or General Directors and other managerial positions of company

-Access and extract minutes and resolutions of Board of Directors, annual or mid-year financial reports, reports of Board of Controllers, contracts and transaction approved by Board of Directors and other documents, excepting for documents related to company’s know-how and trade secrets (applicable to shareholder and group of shareholders who own at least 5% of total number of common shares, the charter may require a smaller percentage)

-Access profit and loss statements, finacial reports, governace and management assement reports; inspection reports of Board of Controllers (applicable to shareholder who own shares at least 1 consecutive year, the charter may require a smaller percentage)

Different to common joint stock company, a public company must annouce fully, accurately and promptly the periodic and extraordinary information on business, finance and governace. Other information must be annouced if it influences share price and investment decisions of shareholders and investors.

Litigation rights

The Law on Enterprises has provided a mechanism to request the Court or Arbitration to rescind the resolution of the General Meeting of Shareholders or sue the managerial personnels when they fail to fully and properly implement their tasks, including:

The shareholder or group of shareholders holding at least 5% of the total number of common shares (charter may require a smaller percentage) is entitled to:

-Request to rescind resolutions of the General Meeting of Shareholders when the orders and procedures of calling the meeting and making resolution of the General Meeting of Shareholders seriously violate the regulations of the Law on Enterprises and company’s charter

-However, the resolution of the General Meeting of Shareholders adopted by 100% of the total number of voting shares is legal and effective even when the orders and procedures of calling the meeting and adopting such resolution violates regulations of the Law on Enterprises and company’s charter.

-Request to rescind resolutions of the General Meeting of Shareholders when its provisions violates the laws or company’s charter

-The shareholder, group of shareholders holding at least 1% of the total number of common shares is entitled to:

-Sue members of Board of Directors, Directors, General Directors separately or jointly under certain circumstances

The Chairperson of Board of Directors or the Director or General Director usually acts as the legal representative of the company, representing the company to perform rights and obligations arising from the company’s transactions, representing the company to take proceedings before the court or arbitrator. However, when their interests conflict with those of the shareholders, shareholders have the right to initiate a lawsuit claiming benefits or compensation. The Law on Enterprise also permits shareholders to sue on behalf of the company when the above managerital personnels commit violations, causing damage directly to the company and indirectly to shareholders.

Not all shareholders have the right to sue for the above managerial personnels, only those who own at least 1% of the total number of common shares. This restriction makes sense with respect of public companies, in order to eliminate unfair competition actions conducted by minority shareholders who is controlled by the rival companies because amount of 1% in public company is not a small number.

Similar to a lawsuit against a manager, shareholder or group of shareholders is also required to own at least 5% of the total number of common shares to request rescission of the resolution of the General Meeting of Shareholders if there is violation on substantive law and procedural law. Accordingly, all resolutions of the General Meeting of Shareholders violating the substantive laws or the company’s charter are rescinded at the request of shareholders, but only serious procedural violations may be rescinded. There is no specific instructions for serious procedural violations at this time, the assessment will depend on personal perspective of the court and arbitrator.

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What Are Tax Obligations of a Representative Office in Vietnam?

The Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam.

Accordingly, a representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative offices in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise. As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign traders in Vietnam is a dependent unit of foreign traders, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, the representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative offices in Vietnam, the taxable incomes are based on salaries and wages. Declaring, withholding, paying taxes and settling personal income tax of employees working at foreign representative offices is the responsibility of such representative offices.

ANT Lawyers, a law firms in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help clients to set up representative offices in Vietnam and advise on the compliance on a regular basis.

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Regulations on Online Civil Status Registration in Vietnam

On July 28th, 2020, the Government issued Decree No. 87/2020/ND-CP (Decree 87) regulating the electronic civil status database, online civil status registration i.e. birth certificate registration, marriage certificate registration, death certificate registration.

The Decree is the provisions on the building, management, updating, exploitation and use of the electronic civil status database; connecting and sharing data between the electronic civil status database with the national population database, the national public service portal, the public service portal, the provincial electronic one-door information system, other databases of ministries, branches and localities; issue copies of civil status extracts, certify civil status information; online civil status registration. Although an application can be submitted online, the person applying for civil status registration must still be present at the civil status registry to sign the civil status book and receive results in case of registration of the following procedures: birth certificate registration; marriage registration; guardian registration; recognition of parents, children; change, correct civil status, redefine ethnicity, supplement civil status information; death registration.

Upon receiving results at the civil status registration office, the requester for civil status registration must submit and present papers and documents that are part of the civil status registration dossier as prescribed.

Cases in which the requester is not present at the civil status registration office to sign the civil status book and receive the results, but still have to submit and present papers and documents that are part of the household registration dossier civil status according to the law on civil status, including: confirm civil status information; record in the civil status book the birth, marriage, divorce, marriage cancellation, guardianship, recognition of father, mother, child, identification of father, mother, child, adoption, change of civil status, death registration of Vietnamese citizens who have been settled at a foreign competent authority.

To perform online civil status registration, the requester needs to access the National Public Service Portal, the Provincial Public Service Portal to register an account and authenticate users according to the instructions. Upon successful account login, the requester must provide information in the available form; attach photocopies or electronic copies of papers, documents as prescribed; pay fees and charges through the online payment function or by other means as prescribed by law. After the submission of the dossier is completed, the system will automatically send a number of administrative documents for the requester to follow up, look up the progress of the application or access to complete the application when requested by the civil status registration agency.

Decree 87 will take effect from September 15, 2020. The construction of the civil status database, the development of online civil status registration, helps people to handle administrative procedures anytime, anywhere, without having to travel many times, without having to queue and not take time to wait, limiting crowds. In addition, the use of online public services also contributes to reducing the harassment, bureaucracy and troubles of a part of cadres and civil servants, increasing the publicity and transparency of the state agencies file handling.

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Vietnam Attracts Japanese Investors

During the volatility of the Covid-19 pandemic, the decision to invest in Vietnam became more and more interesting to Japanese investors.

Since 10 years ago, many Japanese enterprises have considered Vietnam as a promising foreign investment market after China. However, the outbreak of Covid-19 has left serious consequences for the Chinese economy, when a series of the world’s no.1 supply chains in this country were broken. Many foreign investors have chosen ASEAN, including Vietnam to invest, where there is a safe political system and a stable health system, and a favorable legal corridor.

According to the report of the Ministry of Planning and Investment, as of mid-June this year, the total foreign investment in Vietnam reached 15.67 billion USD. Japan ranks 4th among countries with total registered capital to invest in the Vietnam market. In the investment scenarios in Vietnam, finding local businesses becomes a short but effective step. Foreign investors choose potential businesses to invest in or buy back businesses. In which, Saizo is a typical example.

Saizo Japan is a prestigious brand in Japan, famous for its comprehensive range of health care products. During the scientific cooperation at the Center for Scientific Research of Vietnam, realizing the potential for development from products of natural origin, Saizo Japan planned to invest in chain technology, as well as the application of the Japanese biological science and technology background.

Saizo Japan is a prestigious brand in the country of the sun, famous for its comprehensive range of health care products. During the scientific cooperation at the Center for Scientific Research of Vietnam with Master of Science Nguyen Xuan Phu, realizing the potential for development from products of natural origin, Saizo Japan planned to invest in chain technology, as well as the application of the Japanese biological science and technology.

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Millenium Oil and Gas Corporation Applied to Invest 15 Billion USD in Khanh Hoa

Millennium Oil and Gas Corporation (USA) proposed to invest in Vietnam energy sector with a liquefied gas power project in Nam Van Phong area, Khanh Hoa with a total investment of up to 15 billion USD.

After studying, Chairman of Millenium Vietnam Company (a member of Millenium Petroleum Group), if approved, they will invest in this project with a scale of 600ha, total investment capital of 15 billion USD, capacity of the power plant is 9,600MW.

In addition, Millenium Oil and Gas Group will invest in a port system to supply gas to power plants and LNG distribution agents for the whole of Southeast Asia. The location chosen by the investor is in My Giang village, Ninh Phuoc commune or maybe in Ninh Hai ward, Ninh Hoa town.

If the Khanh Hoa Provincial People’s Committee agrees to permit the investment, the project will be guaranteed by the US Government and will work with the Government of Vietnam to implement. The group hopes to turn the LNG terminal in southern Van Phong into the energy hub of Southeast Asia. Because Millenium is a corporation specializing in oil exploitation, it will sell gas directly to consumers without intermediaries, this is an advantage.

According to the Chairman of Khanh Hoa Provincial People’s Committee, the area of investors applying for investment in the power plant and LNG storage is totally consistent with the local development orientation.

It is known that Millenium Petroleum has 35 years of experience in implementing advanced power projects from natural gas, liquefied natural gas, wind, solar, geothermal and waste.

The Group has implemented power projects in the US and countries around the world with a total investment of more than 36 billion USD. At the same time, the group is also the unit that holds many of the world’s leading advanced technologies and techniques, many of which are not available to other businesses.

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The Development of Renewable Energy in Vietnam

On June 15th, 2020, at the National Assembly’s socio-economic discussion session, the Ministry of Industry and Trade clarified a number of issues related to the implementation of power projects and energy security in Vietnam amid the the situation of energy supply, especially electricity supply is facing many difficulties when hydroelectric and thermal power reserves are almost fully exploited and the risk of energy import is increasing.

Vietnam has the advantage of being an equatorial country, with high annual sunshine hours (average from 1800-2600 hours/year) which is an advantage to develop solar energy. Vietnam has a long coastline (3260 km) and favorable terrain, the construction of wind power stations is a solution that can help improve Vietnam’s electricity output in the next years.

As reported by the Ministry of Industry and Trade, for solar power, the total planned capacity of about 10,300 MW has been operated on 90 solar power projects with a total capacity of about 5,000 MW. For wind power, as proposed by the Ministry of Industry and Trade, the Prime Minister has agreed to supplement the planning of an additional 7,000 MW of wind power, raising the total scale of wind power capacity planned to 11,630 MW.

In addition, according to Vietnam’s commitment at COP21, Vietnam will reduce the greenhouse gas emissions by 8% by 2030. And with effective support from the international community, Vietnam can cut its emissions by 25% greenhouse gas emissions by 2030. And the Clean energy technology is one of the best solutions to fulfill this commitment.

In addition, the installation, operation and maintenance of wind and solar power systems are relatively simple, at low cost therefore will save time and cost for investors. Besides, clean energy does not cause impacts on large-scale migration environment, such as deforestation, emissions of dust, water and ash, etc. In contrast, it also creates beautiful and majestic landscapes, and attractive to visitors, this is in line with Vietnam’s sustainable development goals in the future.

With economic and environmental advantages, the scientists forecast that, in the world to 2040 and 2050, the percentage of solar power capacity in total generating capacity will be 45% and 50 %; The structure of electricity production by 2050 is as follows: Number 1 is solar power: 35.8%; followed by onshore wind power: 24.3%; Offshore wind power: 12.1%; Hydroelectricity: 12.4% and the rest are other sources of renewable energy and fossils and nuclear: 15.4%.

In order to ensure the implementation of the overall plan for the coming time, the Ministry of Industry and Trade is focusing on speeding up the construction of the electricity Planning No. VIII to submit to the Government in the fourth quarter of 2020. In particular, following the contents of the Resolution No. 55-NQ/TW of the Politburo on “Vietnam’s national energy development strategy orientation to 2030, vision to 2045” on February 11th, 2020, according to which ratio of sources of renewable energy in the total primary energy supply will reach about 15-20% by 2030; 25-30% by 2045.

According to Resolution No. 55-NQ/TW, Vietnam will develop breakthrough mechanisms and policies to encourage and promote the renewable energy sources in order to replace fossil energy sources at maximum. Prioritizing the use of wind and solar energy for electricity generation; encourage investment in building power plants using urban waste, biomass and solid waste in parallel with environmental protection and economic development of the circulation. To establish and develop a number of renewable energy centers in advantageous regions and localities. Then researching and assessing the overall potential and developing development orientations for geothermal energy, ocean waves, tides and ocean currents; deploy a number of application models, conduct pilot tests to evaluate the effectiveness. To undertake technological research, formulate a number of production pilot projects and encourage the use of hydrogen energy in line with the general trend of the world. In addition, the Resolution prioritizes the development of renewable energy in line with the ability to ensure system safety with reasonable electricity costs and encourage the development of rooftop and surface solar power. To develop groundbreaking support policies and mechanisms for offshore wind power development in association with the implementation of the Vietnam’s Sea Strategy.

With advantages and priority policies for renewable energy development as above, Vietnam hopes that more international investors will invest and set up company in renewable energy to in Viet Nam.

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