Read and follow the top economic indicators for Vietnam, M&A activity, and major developments in finance, banking, and legal. Published Monthly with contribution from LNT & Partners Law Firm.

1. > Investment Digest
Vietnam
COLLIERS INTERNATIONAL
Quarter 4 | 2013
There have been more winners than losers in
2014. A late surge in GDP highlighted a positive
forth quarter despite muted CPI growth. Some
of the major winners include a Q4 GDP of over
6%, a surge in FDI of over 50%, trade turnover’s
continued strong growth, PMI’s continued
growth, and an inflation of just 6.04% for the
year.
There were few losers this quarter, which
included a weak credit market, underperforming
retail market, and weak domestic industrial
growth. The investment environment continues
to improve as the macroeconomics stabilizes
and structural reform continues to show
progress. State interests continue to recede
ponderously, through divestments of the SCIC
in the Hanoi stock exchange, opening the door
to the private sector.
*Arrows indicate monthly trends
**Data is accurate as reported by the source on the indicated date
OverviewMarket Indicators
30-Day
Trend
Indicator December November Date
10-year bond yield 8.9% 8.84% 12/30
Credit Market +9.5% - 11% ytd +5.83% ytd 01/01
Deposit Rate 7%-8% 7% 01/01
Exp/Imp +15.4%/+15.4% yoy +15.7%/+15.5% yoy 12/24
FDI +54.5% yoy to $21.6b +36% yoy to $15b 01/01
FDI Disbursement +9.9% yoy to $11.5b +6.4% yoy 01/01
Fitch B+ B+ 01/01
GDP +6.04% Q4, +5.42% +5.14% ytd 12/24
Inflation +6.04% ytd, 6.04% yoy +4.63% ytd, 7.5% yoy 12/24
Lending Rate 7-9% short, 9-11% long 7-9% short, 9-11% long 01/01
Moody’s B2 B2 01/01
Overnight Rate 3.37% 2.77% 01/06
PMI 51.8 51.5 01/06
Refinance Rate 7% 7% 01/06
Repurchase Rate 5% 5.5% 01/06
Retail Sales +12.6% yoy +13.7% yoy 12/24
Standard & Poors BB- BB- 01/01
VND-USD 21,036 21,117 01/06
VN-Index 504,63, +21,63% ytd 492.63, +17.7% ytd 12/31
1 Vietnam Investment Digest | 4Q 2013 | Market Indicators COLLIERS INTERNATIONAL
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2. Dung has promised in 2014. Circular 02 was also pushed to
June 1st, which it lays down new guidelines for classifying
assets and provisioning for risk.
As for the non-competitive and highly leveraged SOE sector,
the target is to equitise 500 over the next two years, which will
be a tall order considering only 40-50 were equitised in 2013.
There are approximately 1,200 SOEs in operation currently,
down from a high of an estimated 12,000 in 1990.
The second key factor is deleveraging. We’re witnessing an
environment where the banking system is flush with capital,
but is unwilling to lend amid current reforms and high levels
of NPLs. At the same time, firms are unwilling to borrow, as
many are still fixing their balance sheets and reducing their
level of debt. Both lenders and firms are too engrossed in
deleveraging to focus on investment activities – which is the
real driver behind domestic demand and GDP growth.
We do expect foreign demand to pick up due to the recovery
of leading global economies. Keep in mind the FDI sector
accounts for 2/3rds of exports, for which approximately 80%
of inputs are imported. While industrial and manufacturing will
experience strong growth in the year ahead, it will have a
muted affect on the economy due to low localization ratios -
another area for investment opportunities.
What does this mean for the investment environment in
Vietnam? There are opportunities abound that are being left
on the table due to a focus on deleveraging and limited access
to capital. It’s a good time to get your feet on the ground
just before the economy shifts into gear – driving valuations
upwards and squeezing yields. There’s a one to two year
window before structural reform is sufficiently implemented
and firms shift from deleveraging to expansion.
For Vietnam to approach its development potential, the private
sector will have to address acute needs in the following arenas
over the next 5-10 years:
1. Banking and Finance
2. Support and Supply Chain
3. Infrastructure
4. Education and Human Resource
5. Retail
2013 will be remembered as a stabilizing year. While the
macroeconomic environment improved significantly over
2012 and 2011, weak structural fundamentals is still a major
roadblock to strong recovery. Let’s take a glance at 2013,
which was really a tale of two halves as the economy shifted
into second gear by early third quarter:
4Q of 2013 was a very strong quarter with GDP rising over 6%
– pulling the year’s GDP to 5.42%. Manufacturing output rose
to the highest level since mid-2011 according to HSBC’s PMI
and domestic orders were on the rise. Somewhat surprisingly,
inflation slowed and ended the year at 6.04% despite the jump
in GDP. Trade continued its strong run this year with both
exports and imports rising 15.4% and registered FDI soared
54.5% to US$21.6b – with over 75% committed to industrial
and manufacturing. Foreign currency reserves have reached
the highest level in years at over US$30 billion, or just under
3 months of import coverage. Equities experienced a strong
year as well, with the VN-Index rising 21.6% to 504.6 and the
HXN-Index rising 18.83% to 67.8. Rounding out the overview,
the residential market has finally picked up in the 2nd half,
showing strong gains in low-income and mid-income units of
50-80sqm and in commercial properties, the year ended on a
positive note with the completion of the Gemadept Tower sale
to Korea’s CJ Group.
While the market looks to be picking up steam as we enter
2014, let’s shift our focus to two key trends driving market
recovery: structural reform, which includes banking sector,
SOEs, and public investment, and deleveraging. These two key
factors will dictate when the economy will truly turn.
Structural reform has been a focus of the government since
2011 and mixed progress has been achieved thus far. In banking,
the VAMC has purchased nearly US$2 billion of NPLs over
the past 6 months and plans to address a further US$4.76-
US$7 billion in 2014 and set up a debt trading market. The
actual restructuring of banks has been limited where only a
handful of banks have been consolidated or dissolved. Foreign
ownership limits remain low as protectionism is still high on
the agenda.
The market is still waiting for more progress including stronger
oversight, more transparency, elimination of cross-ownership,
higher foreign ownership limits, and the entry of international-
standard credit rating agencies – all of which Prime Minister
Investment Manager’s Letter
KYNAM DOAN
Investment Manager
kynam.doan@colliers.com
+84 1223 128 032
2 Vietnam Investment Digest | 4Q 2013 | Investment Manager’s Letter COLLIERS INTERNATIONAL

3. Investment Headlines
VAMC Buys VND39 Trillion of NPLs in 6 Months
The Viet Nam Asset Management Company (VAMC) purchased
VND38.9 trillion (US$1.85 billion) worth of bad debts below a cost of
VND32.4 trillion ($1.54 billion) in the form of special bonds from 35
credit institutions in 2013
While the underlying assets haven’t been “resolved,” this move will
increase liquidity in the marketplace and takes us one step closer
to deleveraging credit institutions by reducing their level of risk
provisions. The VAMC has indicated a focus on selling these debts in
2014 and are considering several different mechanisms.
VIETNAM INVESTMENT DIGEST | 4Q 2013
3 Vietnam Investment Digest | 4Q 2013 | Investment Headlines COLLIERS INTERNATIONAL
Bond Market Gaining Momentum
Vietnam’s bond market continues to grow at a healthy pace and
fluctuated between $25 and $30 billion in 2013 according to Asian
Development Bank. According to other reports, approximately $1.9
billion worth of corporate bonds was publicly issued, which doesn’t
account for private placement.
Bond issuers included VIPD Group ($362 million), Vingroup ($143
million), CII ($48 million), Hoang Anh Gia Lai ($45 million), BIDV
Bank ($150 million), VP Bank ($214 million), Vinacomin ($357
million), and Masan ($105 million). Annual interest rates ranged
from 9.8% to 15.5% for 2-5 year bonds.
The bond market is about to benefit from the establishment of at
least one credit rating agency in 2014, but still lacks some basic
infrastructure such as secondary transaction systems and a bond
yield curve.
Credit Rating Agencies
The Ministry of Finance (MOF) is expected to launch a new state-
run credit rating agency in 2014. The MOF also expects independent
CRAs to establish themselves this year. This long-awaited move
should help shore up structural reform as it helps establish one
reliable measure of risk.
Retail Up 12.6% YOY
Retail sales and service revenues reached US$124.66 billion in
2013, up 12.6% over the year before. While this number looks strong,
it is the lowest growth rate since 2010. Retail grew 24.5% in 2010,
14.2% in 2011, and 16% in 2012.
However, retail supply is experiencing somewhat of a boom as both
foreign and local retailers are investing in the mid and long term.
The long-game has always looked very promising in Vietnam as
modern retailing accounts for only 25% of the entire retail market.
Compare this with modernization rates of 33%, 34%, 51%, 60%,
and 90% in the Philippines, Thailand, China, Malaysia and Singapore,
respectively.
On the ground in Ho Chi Minh City, one cannot help but notice
the proliferation of retail outlets rapidly gobbling up high visibility
frontage properties. Both foreign and local brands are bidding up
rental rates along all major streets in District 1 and spilling out to
other districts such as D2, D3, D4, D5, D7, D10, and Phu Nhuan. F&B
is leading the way with foreign brands such as McDonalds, Burger
King, Starbucks, and Coffee Bean & Tea Leaf.
Several new malls have also launched this past quarter including
AEON Tan Phu Celadon, the Japanese retail group’s first shopping
mall with approximately 50,000 sqm of retail area. Following their
first Vietnamese Mall, they plan to open a second in the southern
area of Binh Duong. Cantavil Premier has also opened in December
in District 2 with 23,000 sqm of retail area. A little earlier in the
year, in 3Q, Vincom’s Megamall opened in Hanoi with an impressive
230,000 sqm of retail. Vincom also plans to open VinKC, the largest
commercial zone targeted towards children ages 0-15, in 2014.
HCMC Residential Q4
Quarter 4 has seen some of the fastest residential absorption in
the past several years. Approximately 3,700 units were sold in the
quarter, up from 2,800 the quarter before. Compare this with 1,300
in Q1 and 1,600 in Q2. Total inventory at the end of 2013 stands at
around 7,800 compared to 11,200 units the year before.
Demand for low-income housing still leads the way as HCMC
continues to experience high rates of urbanization. However,
supply still remains low due to low margins and difficulty accessing
government incentives such as the VND30 trillion preferential loan
package.
Some of the larger residential offerings in Q4 were Nam Long’s
Ehome 5 in D7 with almost 600 units at around US$48,000 per,
CapitaLand’s PARCSpring in D2 with nearly 400 units offered at
US$800/sqm, and Hung Loc Phat’s Hung Phat stage 2 in Nha Be
District with 80 units at US$720/sqm.
Bank Ownership Limits to 20%
Strategic foreign investors will now be able to own 20% of a local
bank without requiring approval from the Prime Minister, while the
cap for total foreign holdings remains at 30%. As is par for the
course, the Prime Minister will be able to raise this limit for special
cases such as for struggling banks. This new cap will take effect
after Tet on February 20th.
Non-strategic foreign investors will have their cap raised to 15%
from the current 10%. According to the decree, strategic investors
must meet a set of requirements, including establishing a long-term
relationship.

4. 4 Vietnam Investment Digest | 4Q 2013 | Investment Headlines COLLIERS INTERNATIONAL
VIETNAM INVESTMENT DIGEST | 4Q 2013
Investment Headlines
M&A
» Nov 2013: Vietnam-based Indochina Land enters into a 35/65 co-
development deal with Vietnam’s Nam Long to develop Ehome 3
project. The 35% share is worth approximately US$24.5 million.
» Dec 2013: The sale of Gemadept Tower to Korea’s CJ Group has
finally gone through valuing the property at approximately US$44
million.
» Dec 2013: Vietnam-based Vinamilk acquires 70% of US-based
Driftwood Dairy for US$7 million, valuing the company at US$10
million.
» Dec 2013: UK-based Tesco lead a US$250 million round of funding
in Lazada, a seller of non-food consumer goods in southeast Asia
with a major presence in Vietnam.
» Dec 2013: Hong Kong-based GaoLing Fund purchased a 24%
share in Bien Hoa Vinacafe for approximately US$42 million,
valuing the company at US$175 million.
OTHER NOTES
» Cell Phones topple Garments as top export: It comes as no
surprise, but 2013 was a major year for cell phones and their parts
as shipments jumped 70% over the year before and exceeded
US$21.5 billion. Cell phones has now surpassed textiles and
garments, at US$17.9 billion, which had long been the country’s
number 1 export.
» Metro Line 1 Progress: It was announced that contractors will
begin work on the 3rd and final section of Metro line 1 by the end
of this year with a target to complete in 2017.
» Gold Successfully Tackled : Gold prices have fallen by a record
US$545/tael in 2013 and the price difference between domestic
and world gold prices shrank from US$314/tael to US$190/tael.
This drastic drop has reduced gold’s demand as a safe haven and
has helped increase short-term money supply.
» In their fight against dollarization, the SBV has successfully
reduced foreign currency deposits and loans to 16.3% and 16.9%
from 17.8% and 22% the year before.
SOE Reforms Slow
There are currently around 1,200 SOEs in operation today and both
the Prime Minister and Deputy Prime Minister have voiced intent to
eliminate most of them by 2020, including 400-500 this year. Given
the recent track record of eliminating only double digit numbers of
SOEs in each of the past two years, these targets overly optimistic.
Instead, expect more modest progress, such as 50-100 equitisations
per year.
According to the plan, the government will no longer hold controlling
stakes in industries such as production of science, documentary,
and cartoon films. The government will hold over 50% stakes
in industries such as tobacco, environmental sanitation, urban
electricity, marine transportation, railway, aviation, finance and
banking. In addition, industries such as petroleum, food, process
of oil and natural gas, and airport and road maintenance would no
longer be wholly state-owned.
Over the next three years, the State Capital Investment Corporation
(SCIC), representing the state’s interest in the private sector, will
reduce its ownership at 376 companies, but will continue to retain
stakes in non-essential firms such as Vinamilk, FPT Telecom,
Hau Giang Pharmeceuticals, and Vietnam National Reinsurance
Corporation.
The SCIC will continue to partner with the Hanoi Stock Exchange to
divest their shares as they have done so in the past.
As Vietnam strives to reduce the stagnant role of SOEs in the
economy, many opportunities will arise for the private sector.
HCMC Office Sector
During last quarter, Grade A office buildings retained upward trend
in both asking rents and occupancy rate. The median rentals gained
3% while occupancy rate also rose 3% q-o-q. Rents fell slightly for
Grade B while occupancy grew approximately 3% q-o-q as well.
Approximately 75,000 sqm of Grade A and Grade B+ space will
enter the market in 2014. We expect that this 8% growth in floor area
will be efficiently absorbed given rising market demand. Premium
location and larger floor plates are highly sought after.
Vietnam’s Corruption Rating Improves 7 spots
to 116/177
Transparency International’s Corruption Perceptions Index ranks 177
countries and territories based on how corrupt their public sector is
perceived to be on a scale from 0 (very corrupt) to 100 (very clean).
Vietnam scored a 31/100 and rose 7 spots to which is 116/177 from
2012. In general, a score below 50 represents significant risk due
to corruption.

5. Major Economic Indicators
VIETNAM INVESTMENT DIGEST | 4Q 2013
5 Vietnam Investment Digest | 4Q 2013 | Major Economic Indicators COLLIERS INTERNATIONAL
GDP
Gross domestic product rose 6.04 percent in the fourth quarter
from a year earlier, quickening from a 5.54 percent gain in the
three months through September, according to data released by the
General Statistics Office.
For the full year the economy grew 5.42 percent, faster than a
5.25 percent pace in 2012, and beating the median estimate of 5.3
percent in a Bloomberg survey. Services, which made up 43% of
the economy, grew 6.6% in 2013 from a year earlier, while industry
and construction, which accounted for 38% of GDP, expanded 5.4%.
Trade
Vietnam has once again run a trade surplus, repeating the feat it
accomplished in 2012. According to the General Statistics Office,
export turnover in 2013 reached US$132.2 billion, up 15.4%
compared with 2012, and import turnover in reached US$131.3
billion, up 15.4% over the previous year.
As has been the norm, the FDI sector’s contribution to trade turnover
continues to far outpace the local sector. Of exports, the FDI sector
accounted for 66.9% to US$88.4 billion, up 22.4% over the year
before. The local sector contributed US$43.8 billion, which is only
up 3.5% over the year before. For imports, the FDI sector accounted
for 56.7% to US$74.5 billion, up 24.2%. The local sector accounted
for US$56.8 billion, up 5.6%.
The FDI sector posted a surplus value of nearly US$14 billion while
the local sector suffered a deficit of US$13.1 billion.
EU, America, ASEAN are Vietnam’s top 3 export markets with value
of $24.4bn (up 20.4% over 2012), US$23.7bn (up 20.3% over
2012), and US$18.5bn (up 6.3% over 2012), followed by Japan and
Korea.
Meanwhile, the largest Vietnam import markets are China with total
value of US$36.8bn, up 26.7% compared with 2012. China was also
the major cause of Vietnam trade deficit with the largest deficit value
FDI
FDI has been accelerating quickly over Q3 and into Q4 with a year-
end figure of US$21.6bn, up 54.5% compared to 2012. FDI disbursed
2013 is estimated to reach US$11.5 billion, up 9.9%. FDI was pumped
primarily in the processing and manufacturing industry with
approximately US$16.6 billion, accounting for 76.9% of registered
capital. Korea and Singapore lead all other countries with pledged
investments of US$3.75 billion and US$3.01 billion respectively.
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6. Strong Stock Market Performance
In 2013, the VN-Index posted an increase of 22% and closed the
year at 504.63 with foreign investors as net buyers for the year
with over US$250 million in capital inflows. Earlier in the year, the
VN-Index hit a high of 527.95 on June 7. Vietnam emerged as the
strongest performer in South East Asia with Malaysia coming in far
behind at 11.22%. The HNX-index was also up 18.83% to 67.8.
However, the stock market’s strong performance was dampened by
a record high of 37 de-listings.
To explain the strong performance and net foreign capital inflows,
analysts have pointed to a stable political climate amid Thailand’s
strife and China’s strong geopolitical movements, strengthening
structural reforms such as the VAMC, and improved macroeconomics
such as falling lending rates and stabilized exchange rates.
Inflation
December inflation grew only slightly at 0.51% month-over-month
despite the end-of-year holiday demand that usually drives prices
upwards. The GSO reported that inflation eased to 6.04% from
6.81% the year before and well below the target of 7.05%. Topping
gains of 2013 were health care by 62.7% and education services by
15.7%, while food decreased by 2.2%.
Credit Growth Between 9.5% and 11%
It is unclear at what rate credit grew in 2013 as conflicting numbers
have been published between 9.5% and 11%. However, what is clear
is that a focus on deleveraging, fixing balance sheets and a lack
of credit rating agencies are the limiting factors, and not liquidity
among credit institutions.
Currency Remains Stable
The Vietnam Dong has shown stability over the past two years and
has remained unchanged since late June’s 1% devaluation. The SBV
has indicated that the US dollar-VND exchange rate will not grow
more than 2% in 2014. With strong forward guidance for 2014, the
SBV hopes to allay any fears a weaker than expected currency.
The Dong is propped up by anti-dollarization policies, high
remittances, strong FDI disbursed, and and a trade surplus over the
past two years.
Index of Industrial Production (IIP) Up 8% in 4Q2013
According to the GSO, quarterly IIP increased 5%, 5.5%, 5.4%, and
8% from quarters 1 through 4 – ending the year at 5.9%
Garment and textile industry, production of leather and related
products, production of prefabricated metal products (excluding
machineries and equipments), production of motor vehicles are
among top gain in IPP last year. The highest gain belongs to garment
and textile industry with 21.8%, followed by other gainers such as
production of leather and related products (up 15.3%), production
of prefabricated metal products (excluding machineries and
equipments), up 14.4%, and production of motor vehicles (up 13.5
%).
Manufacturing continues its torrid growth (HSBC’s
PMI)
Vietnam’s manufacturing output increased for the fourth month in
a row following four months of decline. December’s index of 51.8
marked the strongest growth since April of 2011 and improved upon
November’s reading of 50.3.
New orders increased (increase in domestic orders outweighed
decrease in export orders), job creation increased, input prices
increased, output prices decreased, and inventories declined.
Manufacturing
Major Economic Indicators
VIETNAM INVESTMENT DIGEST | 4Q 2013
QUARTERLY INVESTMENT DIGEST
This digest is published quarterly by Colliers Vietnam Investment Services, led
by Peter Dinning and KyNam Doan, with contribution from our legal partner,
LNT-Partners. We advise an asset portfolio that focuses on appropriate returns
to match diverse risk-return profiles. Our portfolio tracks a wide range of assets
including land, developments, and income-producing properties across all market
sectors - commercial, hotel, industrial, residential, and retail. Contact us to learn
more.
General Director
Peter.Dinning@colliers.com
Investment Manager | HCMC
KyNam.Doan@colliers.com
Investment Manager | Hanoi
Tung.Nguyen@colliers.com
COLLIERS INTERNATIONAL VN
6 Vietnam Investment Digest | 4Q 2013 | Major Economic Indicators

7. Circular No. 30/2013/TT-BTNMT
A new circular guiding Decree No. 88/2009/ND-CP was issued
on 14 October 2013 and took effect from 29 November 2013.
Accordingly, stages of measurement, revising cadastral maps,
detailed measurement of cadastral maps in the field, demarcated
plots of land etc. will be integrated with other works to shorten
the time for granting certificates of land use rights. Obtaining these
certificates and/or housing title certificates for the sold units is
often a nightmare for property developers. With the issue of this
Circular, it is hoped that the formalities are more transparent and
less time-consuming, thereby benefiting both property developers
and homebuyers.
Dispute on Calculating Apartment Area
Following the advent of numerous disputes between residents and
owners on how to calculate the area of apartments, the Ministry of
Construction has cited Circular No. 16/2010/TT-BXD as grounds to
settle the disputes. Accordingly, there are two methods to calculate
the floor area of the apartment: either determination on the principle
of calculating the apartment’s clearance or determination by
calculating the area from the middle of the surrounding walls and
walls separating apartments.
In addition, the method of calculating the floor area of the apartment
in one of the above two methods do not infringe on the buyer’s
interest and may benefit the seller. However, homebuyers are not
satisfied with these methods to calculate the apartment area under
the Circular No. 16/2010/TT-BXD due to the inconsistency with the
regulations of the Housing Law and Decree No. 71/2010/ND-CP.
This has been the leading cause of recent property disputes.
The disputes may be concluded only when the State stipulates one
method to calculate the apartment area. In common, the best method
to calculate the area is the principle of calculating the apartment’s
inner area necause this method truly reflects the area of the buyer’s
demand.
The National Assembly passed the revised Land Law
On 29 November 2013, the National Assembly passed the revised
Land Law with 89.96% of the delegates agreeing. Notably, the new
Land Law clearly stipulates competence to recover land as referred
to in Article 62 (recovery of land for the development of socio-
economic, national purpose, community) in order to avoid arbitrary
recovery of land.
The Land Law also has a new article for sequences and procedures
of coercive land recovery. With detailed regulations for procedures
in land recovery, this will motivate the implementation of real estate
projects. Particularly, the new law stipulates that “suspended
projects” (or inactive projects) must continue to be implemented
or they will be recovered without compensation for land and assets
attached to land from the competent authority, unless due to force
majeure (Article 64).
Furthermore, adjustments to the land price brackets and land price
tables according to market volatility have also been added to the new
Land Law. The State determination on land prices will also become
more objective and more specific when the price was determined
based on considering the valuation of the organization with valuation
consultancy functions (Article 114.3). This factor is directly related
to the financial problems that real estate investors have to weigh
when deciding whether to invest or not. The new Land Law shall
take effect from 1 July 2014.
Decree No. 164/2013/ND-CP
On 12 November 2013, the Government issued Decree No. 164/2013/
ND-CP amending and supplementing a number of articles of Decree
No. 29/2008/ND-CP stipulating provisions for industrial parks,
export processing zones and economic zones. Notably, this new
Decree supplements Article 21(b) on the rights and obligations of
enterprises operating in industrial parks and economic zones and
investors in the construction and business of industrial parks and
economic zones.
The rights of management bodies in the industrial parks and
economic zones are expanded as a local government in such areas
as environmental and labour management. This will facilitate the
operation and business of those enterprises in the industrial parks
and economic zones. This Decree shall take effect from 1 January
2013.
Decree No. 188/2013/ND-CP stipulating the
development and management of social housing
This new decree amending Decree No. 71/2010/ND-CP and guiding
the Law on Housing was issued on 20 November 2013 and will
take effect from 10 January 2014. This Decree will provide more
incentives to developers who invest in social housing projects (or
low-cost housing projects), including 50% reductions in land use
levies for social housing project land, local government provides
assistance in site clearance and compensation and allowance for
infrastructure investment to the boundaries of the projects.
The homebuyers of social housing projects may sell the sold unit
with certain conditions attached within the first 5 years, but they
may freely sell the unit after these 5 years. The issue of this Decree
is expected to facilitate the development of social housing projects
and enhance the purchasing power of products in these projects.
Together with the real estate stimulus package of VND 30,000
billion designed for low-income homebuyers, the segment of low-
end housing units is expected to significantly improve in the near
future.
VIETNAM INVESTMENT DIGEST | 4Q 2013
7 Vietnam Investment Digest | 4Q 2013 | Legal Brief COLLIERS INTERNATIONAL
Legal Brief

8. VIETNAM INVESTMENT DIGEST | 4Q 2013
8 Vietnam Investment Digest | 4Q 2013 | Legal Brief COLLIERS INTERNATIONAL
Legal Brief
Constitution 2013
On 28 November 2013, the National Assembly approved the new
Constitution in 2013, which includes 11 chapters and 120 Articles
(a reduction of 1 chapter and 27 Articles compared with 1992
Constitution). Notably, under this new Constitution, everyone has the
right to do business freely in business lines that are not prohibited
by law. Also, the Constitution stipulates the recovery of land for
the purpose of national defense and security and socio-economic
development in order to avoid arbitrary recovery of land. The new
Constitution shall take effect on 1 January 2014.
Decree No. 155/2013/ND-CP
On 11 November 2013, the Government issued Decree No.
155/2013/ND-CP stipulating the administrative sanctions in the field
of investment and planning. The Decree focuses on investments
sourced from the State’s financial sources and business registration
and operation, and imposes fines for failures to carry them out in
accordance the required procedures and formalities.
Notably, for violations of domestic investment provisions, the
minimum penalty is set at VND 5 million and the maximum penalty
is VND 80 million. For administrative violations in tendering, the
penalty level ranges from VND 1 million to VND 40 million. These
penalty levels, which are applied to organizations, are twice as
much as those applied to individuals. Decree No. 155/2013/ND-CP
replaced Decree No. 53/2007/ND-CP and shall take effect from 1
January 2014.
Amendment on Regulations of Construction Contract
On 11 December 2013, the Government issued Decree No. 207/2013/
ND-CP amending and supplementing a number of articles of
Decree No. 48/2010/ND-CP dated 7 May 2010. The new Decree
supplements some articles regarding signing construction contracts,
prices of construction contracts and conditions for application,
security for construction contract performance and guarantee
for contract advance payment and construction contract advance
payments.
The new Decree more comprehensively regulates the contents of
construction contracts and protects the rights of contracted parties.
This Decree shall take effect on 1 February 2014. Construction
contracts which have been signed and performed prior to the
effective date of this Decree shall not be required to conform to
provisions of the Decree.
Joint Circular No. 20/2013/TTLT-BXD-BNV
Joint Circular No. 20/2013/TTLT-BXD-BNV was issued on 21
November 2013 to guide some provisions of Decree No. 11/2013/
ND-CP dated 14 January 2013 on investment management of
urban development. Notably, depending on the needs of urban
development and suggestion of the owner, the Provincial People’s
Committee shall define the areas, with infrastructure built by the
owner, of which land use rights can be transferred to households or
individuals. This regulation may increase liquidity in the land market
and will attract new inflows into it.
Decree No. 182/2013/ND-CP
On 14 November 2013, the Government issued a new decree
stipulating region-based minimum wage levels for laborers working
in enterprises, cooperatives, cooperative groups, farms, households,
individuals and agencies, organizations employing laborers. These
wage levels will be approximately 14% higher in comparison with
those stipulated in Decree No. 103/2012/ND-CP (which was
replaced by Decree No. 182/2013/ND-CP). These wage levels shall
be applied from 1 January 2014.
Decree No. 187/2013/ND-CP: Supplementing List of
Prohibited Import and Export Goods
Decree No. 187/2013/ND-CP was issued on 20 November 2013 to
detail the implementation of the Commercial Law with respect to
international purchases and sales of goods, activities of agencies
for sale and purchase, and processing and transit of goods involving
foreign parties.
In comparison with Decree No. 12/2006/ND-CP which was
replaced by this Decree, the list of prohibited export goods have
been expanded to include certain types of publications and postal
stamps as prescribed by the Law on Post, radio equipment and
equipment emitting radio waves in accordance with the Law on
Radio Frequencies, all types of automobiles in which the structure
has been changed as compared to the original design or in which
the frame or engine number has been erased, changed or remade,
and chemicals stipulated in Annex III of the Rotterdam Convention.
The new Decree adheres to the Vietnam’s commitments to the WTO
and resolves current issues in import/export. The new Decree shall
take effect from 20 February 2014.January 2014.
The Government Issued New Decree Guiding
Amendments of Law on Value-Added Tax (VAT)
On 18 December 2013, Decree No. 209/2013/ND-CP was issued
to instruct the implementation of the Law on Value-Added Tax.
Accordingly, organizations and individuals that transfer investment
projects for production of and trading in goods or services subject to
VAT to enterprises or cooperatives shall not be required to declare,
calculate and pay VAT. Also in this Decree, VAT on provision of
goods and services outside Vietnam must be stated and paid (it was
previously exempt from tax in Decree No. 121/2011/ND-CP). This
Decree takes effect on 1 January 2013.

9. 9 Vietnam Investment Digest | 4Q 2013 | Investment Services
LEGAL PARTNER
LNT & PARTNERS is a leading full-service independently ranked local law firm in
Vietnam with offices in Ho Chi Minh City, Hanoi, Hong Kong, and San Francisco.
The firm is among Vietnam’s most prominent, representing a wide range of
multinational and domestic clients, including Fortune Global 500 companies as
well as well-known Vietnamese listed companies on a variety of business and
investment matters.
LNT & PARTNERS
Partner
Binh.Tran@LNT-Partners.com
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Reach out to the Vietnamese
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contact kynam.doan@colliers.com
VIETNAM INVESTMENT DIGEST | 4Q 2013
Colliers International
Investment Services
Colliers International is a world
leader in connecting capital
with real estate investment
opportunities. We provide
breadth and depth of services
to both international and local
investors, developers, and
landowners.
Colliers Vietnam is committed
to helping our clients make
informed decisions - whether
it's through investing, divesting,
or holding - to increase the
value of their porfolios and
achieve target liquidity, risk,
and returns.
We manage a portfolio of
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This portfolio includes bare land,
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Backed by an outstanding track
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our team is able to deliver the
Acquisitions
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to help you achieve your porfolio
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of letter of intent through to
settlement of contract
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Due Diligence as well as advise on
best use of land
Dispositions
> Execute marketing of asset
through our strong network of
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investors, banks, developers
and high net worth individuals
in Vietnam and throughout the
Asia Pacific
> Conduct initial due diligence
of interested parties prior to
negotiation
> Assist/Conduct negotiation
through to completion of
divestment

10. Accelerating success
With more than 100 professionals in 2 offices in Vietnam, the team is market driven and
has proven and successful track record with both international and local experience.
From Hanoi to Ho Chi Minh City, we provide a full range of real estate services
• Research
> Market research across all sectors
> Market analysis, advisory, and strategy
• Valuation & Advisory Services
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The foundation of our services is the strength and depth of our experience.
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HO CHI MINH CITY
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482
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Accelerating success
About Colliers International
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Through a culture of service excellence and a shared sense of initiative, we integrate the
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We connect through a shared set of values that shape a collaborative environment throughout
our organization that is unsurpassed in the industry.
Publication Coverage Frequency Content Availability
Research & Forecast
Report
Vietnam Cities Quarterly All market sectors Publicly available
CBD Report HCMC CBD Monthly Office, Retail, Hotel and
Serviced Apartment
Publicly available
Asia Pacific Office
Report
Asia Pacific in-
cluding Vietnam
Quarterly Office market Publicly available
Vietnam Property
Market Report
Vietnam cities Quarterly All market sectors On subscription
Development
Recommendation
Vietnam cities At request All market sectors On subscription
With more than 100 professionals in 2 offices in Vietnam, the team is market driven and
has proven and successful track record with both international and local experience.
From Hanoi to Ho Chi Minh City, we provide a full range of real estate services
Valuation for land, existing property or development sites
Feasibility studies to determine NPV, IRR and highest & best use
The foundation of our services is the strength and depth of our experience.
COLLIERS INTERNATIONAL
HO CHI MINH CITY
Bitexco Office Building, 7th Floor
19-25 Nguyen Hue Street
District 1, HCM City, Vietnam
Tel: + 84 8 3827 5665
HANOI
Capital Tower, 10th Floor
109 Tran Hung Dao Street,
Hoan Kiem District, Hanoi, Vietnam
Tel: +84 4 3941 3277
482
offices
in
62 countries on
6 continents
Colliers International is a leader in global real estate services, defined by our spirit of
excellence and a shared sense of initiative, we integrate the
resources of real estate specialists worldwide to accelerate the success of our partners.
We connect through a shared set of values that shape a collaborative environment throughout
unsurpassed in the industry.
collaborative environment throughoutcollaborative environment throughoutcollaborative environment throughoutcollaborative environment throughout
$2
billion in
annual revenue
2.5
billion square feet
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www.colliers.com/vietnam
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+84 1223 128 032