In this issue:
1 LATEST NEWS VSIP Binh Duong received nearly US$600 million in FDI February 20, 2014 marked the inauguration of the Binh Duong Province Integrated Administration Centre at the Binh Duong New City center. Seven of VSIP s customers received their investment certificates at the inauguration ceremony which was witnessed by the Vietnam Prime Minister Nguyen Tan Dung and key political leaders. Wonderful Saigon Electrics (Japan) which manufactures printed circuit boards and cameras modules for mobile phones was one of the recipients at the ceremony. They have injected additional US$240 million to their existing investment at VSIP I thus increasing their total investment capital to US$450 million. Kimberly Clark, a major household name of consumer products from US will raise their total investment capital to US$183 million at their current location at VSIP II to produce baby diapers for local consumption. Midea Consumer Electric from China has increased their total investment capital to US$81 million to produce white goods for local market. Other enterprises from VSIP who also received their investment certificates at the ceremony include ACE Elite, Medochemie, Molenbergnatie and Camoplast. The commitments and pledge from the seven enterprises in VSIP demonstrated their strong confidence and trust in the Vietnam s growth and potential and also in VSIP and the province. Seven VSIP s customers ACE Elite; Camoplast Solideal Vietnam; Kimberly Clark; Midea Consumer Electric; Molenbergnatie; Medochemie; and Wonderful Saigon Electrics received investment certificates VSIP Management Board will officially operate at the Integrated Political Administration Center in Binh Duong New City from April 01, 2014.
1 LATEST NEWS VSIP and its six customers are proud to receive the Golden Dragon Award 2013 On March 18, 2014, VSIP and six of its customers were among 78 foreign invested enterprises awarded the Golden Dragon Award 2013 for their outstanding performance and contribution to the Vietnamese economy and community. The Golden Dragon Awards was started in 2001 by the Vietnam Economic Times in collaboration with the Foreign Investment Agency and the Ministry of Planning and Investment set out to recognize and celebrate foreign-invested enterprises for their significant contributions to society. This is the seventh conservative year VSIP has been awarded this prestigious award. This award to VSIP recognizes our commitment to Vietnam and the society. We wish to take this opportunity to congratulate the following enterprises for receiving the Golden Dragon Award 2013 : 1. Amway Vietnam Co., Ltd. 2. SCG 3. Seamaster Paint Vietnam Co., Ltd. 4. Toyota Motors Vietnam 5. Unilever Vietnam International Co., Ltd. 6. United International Pharma Co., Ltd.
1 LATEST NEWS VSIP FMS launches its website VSIP Facility Management Service Co., Ltd. (VSIP FMS); a wholly-owned subsidiary of VSIP JV Co., Ltd; will offer VSIP's customers full facility management services including: industrial cleaning, maintenance and landscape. For further information, please visit VSIP FMS's website at: www.vsip-fms.com. w w w. v s i p - f m s. c o m. v n
2 TENANT NEWS Amway Vietnam builds the second facility On March 21, Amway Vietnam Co, Ltd under the auspices of US Amway Corporation officially broke ground its second factory in Vietnam. With an initial investment capital of $25 million, the factory located in VSIP II will be built on an area of 55,000 square metres. The new 5-hectare facilities will produce vitamins, mineral nutrients and dietary supplements with three production assembly lines at an annual capacity of 23 million units worth $200 million a year. Grand Opening of Masterbatch Compound Factory of Polymer Asia Joint Stock Corporation On 13 March 2014, Polymer Asia Joint Stock Corporation commenced operation of its plant in VSIP II their second factory in Vietnam. After 06 months of construction, the plant has started its production and will have an initial annual production capacity of 2,000 tons masterbatch compound, exclusively supplying for Sumitomo Chemical. The total investment of the plant is US$800,000. Thanh Hoa Printing One Member Co., Ltd Breaks Ground On 22 February, 2014 Thanh Hoa Printing One Member Co., Ltd held its ground breaking ceremony at VSIP II. The total investment capital of the project is valued at eight billion Vietnam dongs. The factory will specialize in printing label and mainly supply to local market.
3 WORKSHOP Tax Seminar by Ernst & Young Vietnam Limited on 17 Jan VSIP together with Ernst & Young Vietnam Limited co-organized a tax update seminar in Vietnamese for customers of VSIP on 17 January. The aim of the seminar is to equip participants with an overview of common concern and tax treatments which are relevant to 2013 PIT/ CIT Finalization. Seminar on Performance Management Secrets of World Class Companies on 12 Mar On March 12, VSIP partnered with CEL Consulting to organize a seminar on How CEOs can take better decisions faster. Participants gained an insight into current performance management practice in Vietnam, as well as some key learning points of solutions to improve performance management challenges. Training Courses held in Quarter I/ 2014 In the Quarter I/ 2014, VSIP proudly offered following practical courses: 1. Advanced Inventory Management by CEL Consulting on 26 & 27 March 2. The fire fighting training course by Binh Duong Fire Fighting Department on 28 March
4 UPCOMING EVENTS 1 2 3 Labour update seminar by VSIP Management Board on April 23, 2014 at 9 AM. Dialog session with Binh Duong Tax and Customs on April 24, 2014 at 8 AM. The 12 th VSIP Charity Day on May 10 & 11 If you are interested in the event, please kindly drop us an email at: csd@vsip.com. VSIP 2014 HAVE FUN & RAISE MONEY FOR COMMUNITY Lucky Draw Cap Award Join us by: Sponsoring our event Giving donations Please contact: Ms Mong Hang_CSD Email: hang.htm@vsip.com. Tel: 0650 3743 898 Fax: 0650 3743 430 Deadline: 28 April 2014
5 LEGAL UPDATES Decree 218 on Corporate Income Tax (CIT) Decree 218 guiding the implementation of the amended CIT law has just been issued, and is effective from 1 January 2014. The circular to implement this decree is still awaited. Some notable changes include: 1. CIT rate reduced The standard CIT rate is reduced from 25% to 22% in 2014, and further reduced to 20% from 2016. For enterprises with total revenues of less than VND20 billion (equivalent to approximately US$1 million), the 20% rate will apply from 2014. 2. CIT incentives Manufacturing projects (except for those manufacturing products subject to special sales tax or exploiting mineral resources) are eligible for CIT incentives if the projects meet either of the following criteria: (i) (ii) having minimum investment capital of VND 6,000 billion, disbursed within 3 years after being licensed, and having minimum revenue of VND 10,000 billion/annum for at least 3 years after the first year of generating revenue; or having minimum investment capital of VND 6,000 billion, disbursed within 3 years after being licensed, and using minimum 3,000 headcount for at least 3 years after the first year of generating revenue. New investment projects in industrial zones (except for industrial zones in cities Type 1) are now entitled to CIT incentives. Cities Type 1 include Ho Chi Minh City, Hanoi, Hai Phong, Da Nang, Can Tho, Hue, Vinh, Dalat, Nha Trang, Quy Nhon, Buon Me Thuot, Thai Nguyen, Nam Dinh and Viet Tri. New investment projects are defined as projects which are carried out for the first time or are independent of an existing project, except projects established from division, demerger, merger, acquisition or conversion and projects established from a change of owner, or inheriting fixed assets, business location, and business sectors from existing enterprises. This definition will likely be a contentious area. Business expansion projects are now entitled to CIT incentives if any of the following criteria are met: (i) (ii) (iii) they involve additional fixed assets costing at least VND 20 billion (or VND 10 billion if the projects are in certain specified regions with difficult socio-economic conditions); or they involve additional fixed assets of at least 20% compared with the period before expansion; or they constitute an increase of at least 20% of the designed capacity compared with the period before expansion. 3. Taxable income The definition of taxable income of foreign companies in Vietnam is changed to include income sourced from Vietnam for the distribution of goods (this clause overs on-the-spot export/import and supply of goods under certain Incoterms (e.g. DDP, etc)). Losses from transfer of immovable property, transfer of investment projects, transfer of rights to participate in an investment project (except exploiting mineral resources) are allowed to be offset against profits from normal business activities. 4. Deductible expenses The deductibility cap applying to A&P expenses is increased from 10% to 15% for all enterprises. Payment discounts are now not subject to the A&P cap. The requirement for registration of material consumption levels is abolished. Voluntary employer pension contributions are now deductible, but subject to a cap of VND 1 mil/month/person and the entitlement must be stated in the labour contract, internal labour agreement or financial rules of the company. (Soure: PwC)