Doing Business 2018 Vietnam Economy Pro le of Vietnam Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Vietnam Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region East Asia & Pacific DB 2018 Rank 190 1 Vietnam Income Category Lower middle income 68 Population 92,701,100 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 2,050 0 100 67.93 City Covered Ho Chi Minh City DB 2018 Distance to Frontier (DTF) 0 100 78.43: Malaysia (Rank: 24) 67.93: Vietnam (Rank: 68) 66.47: Indonesia (Rank: 72) 62.70: Regional Average (East Asia & Pacific) 58.74: Philippines (Rank: 113) Page 3   53.01: Lao PDR (Rank: 141) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Vietnam Ease of Doing Business in Region East Asia & Pacific DB 2018 Rank 190 1 Vietnam Income Category Lower middle income 68 Population 92,701,100 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 2,050 0 100 67.93 City Covered Ho Chi Minh City DB 2018 Distance to Frontier (DTF) 0 100 78.43: Malaysia (Rank: 24) 67.93: Vietnam (Rank: 68) 66.47: Indonesia (Rank: 72) 62.70: Regional Average (East Asia & Pacific) 58.74: Philippines (Rank: 113) 53.01: Lao PDR (Rank: 141) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Vietnam 1 20 29 28 55 64 63 66 81 86 82 94 Rank 109 123 129 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Vietnam 100 82.02 79.03 78.69 80 75.00 72.77 70.61 70.83 60.22 60 55.00 DTF 40 35.16 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+6.46 Change:0.00 Change:+5.00 Investors Change:+14.78 Borders Change:+0.93 Change:+0.08 Change:+0.26 Permits Change:0.00 Change:+0.91 Change:+0.14 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+6.46 Change:0.00 Change:+5.00 Investors Change:+14.78 Borders Change:+0.93 Change:+0.08 Change:+0.26 Permits Change:0.00 Change:+0.91 Doing Business 2018 Vietnam Change:+0.14 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Vietnam Standardized Company Legal form Cong ty trach nhiem huu han - Private Limited Liability Company Paid-in minimum capital requirement VND 0 City Covered Ho Chi Minh City East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Procedure – Men (number) 9 7.0 4.9 1.00 (New Zealand) Time – Men (days) 22 22.7 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 6.5 18.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 9 7.0 4.9 1.00 (New Zealand) Time – Women (days) 22 22.8 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 6.5 18.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 15.1 8.7 0.00 (113 Economies) Figure – Starting a Business in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 83.78: Malaysia (Rank: 111) 82.32: Regional Average (East Asia & Pacific) 82.02: Vietnam (Rank: 123) 77.93: Indonesia (Rank: 144) 72.56: Lao PDR (Rank: 164) 68.88: Philippines (Rank: 173) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Vietnam – Procedure, Time and Cost Time Cost 5 20 4 ost (% of income per capita) 15 Time (days) 3 10 2 Page 6   5 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Vietnam Figure – Starting a Business in Vietnam – Procedure, Time and Cost Time Cost 5 20 4 Cost (% of income per capita) 15 Time (days) 3 10 2 5 1 0 0 1 2 3 4 5 *6 *7 *8 *9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the proposed company name; obtain the Enterprise Registration 5 days VND 200,000 (official Certi cate from the local business registration o ce under the fees) Department of Planning and Investment Agency : Business Registration O ce, Department of Planning & Investment The applicant has to submit documents in accordance with Government Decree 78/2015/NĐ-CP on enterprise registration dated 14 September 2015. When the application le for enterprise registration fully satis es the conditions for issuance of an enterprise registration certi cate, information about that le shall be transferred to the database of the Department General of Taxation (Ministry of Finance). The Department General of Taxation is responsible, within two working days from the date of receipt of information from the national database of information, to create an enterprise code number and to transfer it to that national database in order for the provincial business registration o ce to issue it to the enterprise. Each enterprise is issued one unique enterprise code number. This code number is both the business registration code number and the tax code number of that enterprise.  2 Make a company seal 1 day VND 165,000 - VND Agency : Sealmaker 370,000 for bronze seal The company obtains a company seal from a seal maker. The company has the right to decide on the design, content and quantity of its seal and can have several seals with the same design and content. Prior to using the seal, the enterprise must send a noti cation to the Business Registration O ce (Article 34 Decree 78/2015/ND-CP) Page 7   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Vietnam Details – Starting a Business in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the proposed company name; obtain the Enterprise Registration 5 days VND 200,000 (official Certi cate from the local business registration o ce under the fees) Department of Planning and Investment Agency : Business Registration O ce, Department of Planning & Investment The applicant has to submit documents in accordance with Government Decree 78/2015/NĐ-CP on enterprise registration dated 14 September 2015. When the application le for enterprise registration fully satis es the conditions for issuance of an enterprise registration certi cate, information about that le shall be transferred to the database of the Department General of Taxation (Ministry of Finance). The Department General of Taxation is responsible, within two working days from the date of receipt of information from the national database of information, to create an enterprise code number and to transfer it to that national database in order for the provincial business registration o ce to issue it to the enterprise. Each enterprise is issued one unique enterprise code number. This code number is both the business registration code number and the tax code number of that enterprise.  2 Make a company seal 1 day VND 165,000 - VND Agency : Sealmaker 370,000 for bronze seal The company obtains a company seal from a seal maker. The company has the right to decide on the design, content and quantity of its seal and can have several seals with the same design and content. Prior to using the seal, the enterprise must send a noti cation to the Business Registration O ce (Article 34 Decree 78/2015/ND-CP) 3 Registration of the seal-sample with the Business Registration O ce 5 days no charge Agency : Business Registration O ce According to the Law on Enterprise: Article 44, every enterprise is entitled to decide the form, quantity, and contents of its seal. A seal must specify: a) The enterprise’s name; b) The enterprise’s ID number. Entrepreneurs must send the seal-sample to the Business Registration O ce, thereafter the Business Registration O ce will send a receipt to the enterprise and publish the seal-sample on the National Business Registration Portal.The enterprise may start using the seal upon receipt of the Publication Notice. 4 Open a bank account 1 day no charge Agency : Bank Each bank requires a di erent minimum deposit to open an account. For instance, whereas Vietcombank requires the xed amount of VND 1 million for an account in VND and USD 300 for one in USD, Asian Commercial Bank requires VND 1 million for a VND account and US 100 for a USD account. To open the account, the bank requires a bank-issued application form, a copy of the noti cation on use of the seal with a con rmation stamp of the Business Registration O ce, the Charter of the Company, the Enterprise Registration Certi cate (ERC) and relevant documents as required by each Page 8   Registration Portal.The enterprise may start using the seal upon receipt of Doing the Publication Business Notice. 2018 Vietnam 4 Open a bank account 1 day no charge Agency : Bank Each bank requires a di erent minimum deposit to open an account. For instance, whereas Vietcombank requires the xed amount of VND 1 million for an account in VND and USD 300 for one in USD, Asian Commercial Bank requires VND 1 million for a VND account and US 100 for a USD account. To open the account, the bank requires a bank-issued application form, a copy of the noti cation on use of the seal with a con rmation stamp of the Business Registration O ce, the Charter of the Company, the Enterprise Registration Certi cate (ERC) and relevant documents as required by each bank. 5 Buy pre-printed VAT invoices from the Municipal Taxation Department 10 days, about VND 200,000 or obtain and print self-printed VAT invoices simultaneous with per book Agency : Municipal Taxation Department previous procedure All companies shall use their shelf-printed VAT invoices from 1 January 2011 according to Decree No. 51/2010/ND-CP ("Decree 51") dated May 14, 2010 and its guidelines (if any), therefore, the Company must contact with the publisher to order the print of its VAT Invoice Books for its demand and must implement the legal procedure on registration and circulation of shelf- printed VAT Invoices with the Municipal Taxation Department. To register for self-printing of invoices, company founders must submit an application on a standard form, along with (a) a sample self-printed invoice, including all statutory details; (b) a map showing the location of the company’s o ce or copy of the lease contract if the premises are leased, certi ed by the ward commune people’s committee; (c) the general director’s identi cation card; (d) a copy of the business registration certi cate; and (e) and the tax registration certi cate and copy. According to Ministry of Finance Circular 64/2013/TT-BTC (May 15, 2013) which amending Ministry of Finance Circular 153/2010/TT-BTC (28 September 2010), a company can self-print the VAT invoices if it has incurred a total tax penalty amount of less than 50 million Vietnamese dong within 365 consecutive days before the rst self-print. The company shall prepare an announcement of self- issuance of invoice and send it to the relevant tax authority of where the company has its head o ce, within 10 business days from the date of signing the announcement and 5 business days at the latest before the date on which the invoice is in use, and the announcement must immediately be listed at all establishments using such invoice to sell goods and services during the entire period of such use (Article 11 of Decree 51 and Article 9.4 of Circular 153/2010/TT-BTC guiding the implementation of Decree 51). In total, it may take about 10 days to get the printed VAT invoices and register them with the Municipal Taxation Department. 6 Publish the registration contents on the National Business Registration 5 days, VND 300,000 Portal (NBRP) simultaneous with Agency : Business Registration O ce previous procedure According to Article 33, Law on Enterprises 2014 No. 68/2014/QH13, the enterprise must make an announcement on the National Business Registration Portal and pay the fee within 30 days after establishment registration. The announcement must include information on the Certi cate of Business registration and information of business lines and a list of founding shareholders and any shareholders who are foreign investors. The fee to publish the registration contents on the National Business Page 9   Registration Portal is VND 300,000 according to Circular No.106/2013/TT-BTC In total, it may take about 10 days to get the printed VAT invoices and Doing register Businessthem with the 2018 Municipal Taxation Department. Vietnam 6 Publish the registration contents on the National Business Registration 5 days, VND 300,000 Portal (NBRP) simultaneous with Agency : Business Registration O ce previous procedure According to Article 33, Law on Enterprises 2014 No. 68/2014/QH13, the enterprise must make an announcement on the National Business Registration Portal and pay the fee within 30 days after establishment registration. The announcement must include information on the Certi cate of Business registration and information of business lines and a list of founding shareholders and any shareholders who are foreign investors. The fee to publish the registration contents on the National Business Registration Portal is VND 300,000 according to Circular No.106/2013/TT-BTC of the Ministry of Finance dated on 10 November 2016. 7 Pay business license tax 1 day, simultaneous VND 2,000,000 Agency : Tax o ce or commercial bank with previous (business license tax) procedure The business license tax is paid to the tax authority where the enterprise registers its tax reports or through designated commercial banks. Such business license tax is paid annually and in the rst month of a year (with regards to enterprises are operating) and in the month when the newly established enterprise obtains the tax code. The new company established during the rst 6 months of the year shall pay the entire annual business license tax, if established during the last 6 months, then pay 50% of annual license tax. According to Article 4 of Circular 302/2016/TT-BTC, the business license tax depends on the charter capital of the enterprise as follows: - An enterprise with charter capital more than VND 10 billion: VND 3,000,000 per year; - An enterprise with charter capital of VND 10 billion or less: VND 2,000,000 per year; - Branches, representative o ces, business locations, business units, other economic organizations: VND 1,000,000 per year. 8 Register with the local labor o ce to declare use of labor (Municipal 1 day, simultaneous no charge Department for Labor, Invalids and Social A airs). with previous Agency : Municipal Department for Labor procedure Within 30 days of starting operations, the employer must register all employees and their quali cations with the Labor O ce (in conformity with set forms). The relationship between the employer and its employees are regulated by the Labor Code and set forth in labor contracts. 9 Register employees with the Social Insurance Fund for the payment of 1 day, simultaneous no charge health insurance and social insurance. with previous Agency : Social Insurance Fund procedure The company must register with the Social Insurance Fund all employees who have contracts for 3 months or longer. The employer must complete a form provided by the Hanoi Social Insurance and include the following information: the employee name and date of birth, salary (as stated in the labor contract), the social insurance book serial number (for employees already issued with those books), a certi ed copy of the company's business registration certi cate, and a copy of each labor contract. Page 10   set forms). The relationship between the employer and its employees are Doing regulated Business the Labor by2018 Code and set forth in labor contracts. Vietnam 9 Register employees with the Social Insurance Fund for the payment of 1 day, simultaneous no charge health insurance and social insurance. with previous Agency : Social Insurance Fund procedure The company must register with the Social Insurance Fund all employees who have contracts for 3 months or longer. The employer must complete a form provided by the Hanoi Social Insurance and include the following information: the employee name and date of birth, salary (as stated in the labor contract), the social insurance book serial number (for employees already issued with those books), a certi ed copy of the company's business registration certi cate, and a copy of each labor contract. The Social Insurance O ce must, within 30 days from the date of receipt of the application le, issue an insurance registration book for each new employee that was not issued such book by the previous employer. The employer is responsible for paying social and health insurance contributions for each employee. Since the health insurance merged with the social insurance funds, payment is made (monthly or quarterly) directly to the Social Insurance Fund. Health insurance certi cates are issued during the rst month of the year. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land Page 11   plot of Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Vietnam Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 12   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Vietnam Standardized Warehouse Estimated value of warehouse VND 2,282,250,038.20 City Covered Ho Chi Minh City East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Procedures (number) 10 15.2 12.5 7.00 (Denmark) Time (days) 166 138.2 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 0.7 2.2 1.6 0.10 (5 Economies) Building quality control index (0-15) 12.0 8.9 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 82.19: Malaysia (Rank: 11) 79.03: Vietnam (Rank: 20) 75.25: Lao PDR (Rank: 40) 69.60: Regional Average (East Asia & Pacific) 66.84: Philippines (Rank: 101) 66.08: Indonesia (Rank: 108) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Vietnam – Procedure, Time and Cost Time Cost 0.6 160 140 0.5 Cost (% of warehouse value) 120 0.4 100 Time (days) 80 0.3 60 0.2 40 0.1 20 0 0 1 2 3 4 5 6 7 8 9 10 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 13   component indicators. Doing Business 2018 Vietnam Figure – Dealing with Construction Permits in Vietnam – Procedure, Time and Cost Time Cost 0.6 160 140 0.5 Cost (% of warehouse value) 120 0.4 100 Time (days) 80 0.3 60 0.2 40 0.1 20 0 0 1 2 3 4 5 6 7 8 9 10 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Vietnam and comparator economies – Measure of Quality 14 13.0 13.0 12.0 12.0 12 10 8.9 Index score 8 6.5 6 4 2 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Dealing with Construction Permits in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the certi cation of the designs from the Police Department for 30 days VND 202,664 Fire Fighting and Fire Prevention of Ho Chi Minh City Agency : Police Department for Fire Fighting and Fire Prevention of Ho Chi Minh City According to Decree 79/2014/ND-CP dated 31 July 2014 of the Government and Decree No. 46/2012/ND-CP dated 05/22/2012 of the Government on amending and supplementing some provisions of the government's Decree 79/2014/ND-CP dated 31 July 2014 implementing certain articles of the Law on Fire Prevention and Fire Fighting and the Government's Decree No. 130/2006/ND-CP dated 08/11/2006 on the compulsory re and explosion insurance regime, all new commercial buildings must obtain a certi cation of Page 14   their designs by the Police Department for Fire Fighting and Fire Prevention. Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Doing Business 2018 Vietnam Details – Dealing with Construction Permits in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the certi cation of the designs from the Police Department for 30 days VND 202,664 Fire Fighting and Fire Prevention of Ho Chi Minh City Agency : Police Department for Fire Fighting and Fire Prevention of Ho Chi Minh City According to Decree 79/2014/ND-CP dated 31 July 2014 of the Government and Decree No. 46/2012/ND-CP dated 05/22/2012 of the Government on amending and supplementing some provisions of the government's Decree 79/2014/ND-CP dated 31 July 2014 implementing certain articles of the Law on Fire Prevention and Fire Fighting and the Government's Decree No. 130/2006/ND-CP dated 08/11/2006 on the compulsory re and explosion insurance regime, all new commercial buildings must obtain a certi cation of their designs by the Police Department for Fire Fighting and Fire Prevention. The certi cation is required for the construction permit application. 258/2016/TT-BTC dated 10/3/2016 on rates, collection, payment, management and use of fees for appraisal of re safety designs the applicable fee for this procedure is as follows: 0.00888%*warehouse value. 2 Request and obtain construction permit from the (District) Department 82 days VND 100,000 of Construction of Ho Chi Minh City Agency : Department of Construction of Ho Chi Minh City (Municipality) The decision to grant a construction permit is made by the District People's Committee, at the provincial level, and the Construction O ce. The following documents are required: a) Application for issuance of building permit (standard form) b) Notarized or certi ed copy of one of the papers on the land use right in accordance with the Law on Land. Land is national property in Vietnam. Only a business can be the holder of the land-use right. It is assumed that the BuildCo already holds the land-use certi cate. c) Two sets of design drawings, each of which includes: - Drawing of the works position on the land lot with a scale of 1/100 - 1/500, together with the outline of works position; - Drawing of surface, main elevation and section of the works with a scale of 1/50 - 1/200; - Drawing of foundation with a scale of 1/100 - 1/200 and foundation section of 1/50, together with the connection diagram to the system of transportation infrastructure, water supply, wastewater and rainwater drainage, wastewater treatment, electricity supply, communications and other technical infrastructure related to the project with a scale of 1/50 - 1/200. If deemed necessary, the Construction O ce consults any of the following related o ces: • O ce of the Chief Architect • O ce for Land Planning • O ce for Land Management • Department of Culture • Department of Health • Department of Natural Resources and Environment • Fire Protection O ce • Department of Public Tra c and Transportation • Local National Defense O ce Page 15   management and use of fees for appraisal of re safety designs the Doing applicable Business fee procedure is as follows: 0.00888%*warehouse value. for thisVietnam 2018 2 Request and obtain construction permit from the (District) Department 82 days VND 100,000 of Construction of Ho Chi Minh City Agency : Department of Construction of Ho Chi Minh City (Municipality) The decision to grant a construction permit is made by the District People's Committee, at the provincial level, and the Construction O ce. The following documents are required: a) Application for issuance of building permit (standard form) b) Notarized or certi ed copy of one of the papers on the land use right in accordance with the Law on Land. Land is national property in Vietnam. Only a business can be the holder of the land-use right. It is assumed that the BuildCo already holds the land-use certi cate. c) Two sets of design drawings, each of which includes: - Drawing of the works position on the land lot with a scale of 1/100 - 1/500, together with the outline of works position; - Drawing of surface, main elevation and section of the works with a scale of 1/50 - 1/200; - Drawing of foundation with a scale of 1/100 - 1/200 and foundation section of 1/50, together with the connection diagram to the system of transportation infrastructure, water supply, wastewater and rainwater drainage, wastewater treatment, electricity supply, communications and other technical infrastructure related to the project with a scale of 1/50 - 1/200. If deemed necessary, the Construction O ce consults any of the following related o ces: • O ce of the Chief Architect • O ce for Land Planning • O ce for Land Management • Department of Culture • Department of Health • Department of Natural Resources and Environment • Fire Protection O ce • Department of Public Tra c and Transportation • Local National Defense O ce Under Law on Construction No. 50/2014/QH13 of the Government dated 18 June 2014, The Department of Construction has 30 working days from the date of receiving the completed le to issue or deny the construction permit. In practice, this time limit is seldom met. The application form can be obtained at the local department of construction. It is currently required for a construction company to go to the o ce and obtain the form. After obtaining a construction permit, within a time limit of 7 working days prior to the date of commencement of construction of the warehouse, BuildCo is required to provide written noti cation of the commencement date to the People's Committee at the district level where the warehouse is located (according to Article 106.2.c of the Law on Construction No. 50/2014/QH13, dated 18 June 2014). 3 Notify the Department of Construction about the commencement of 1 day no charge construction and receive inspection Agency : Department of Construction of Ho Chi Minh City (Municipality) This inspection and the following ones are not stipulated by speci c regulations. However, because the authority is mandated to supervise the construction, these do take place in practice. 4 Request and receive inspection from the municipality after completion 3 days no charge of foundation works Page 16   regulations. However, because the authority is mandated to supervise the Doing construction, Business 2018these do take place in practice. Vietnam 4 Request and receive inspection from the municipality after completion 3 days no charge of foundation works Agency : Department of Construction of Ho Chi Minh City (Municipality) This inspection and the following ones are not stipulated by speci c regulations. However, because the authority is mandated to supervise the construction, these do take place in practice. 5 Request and receive inspection from the municipality upon completion 3 days no charge of building surroundings Agency : Department of Construction of Ho Chi Minh City (Municipality) This inspection and the following ones are not stipulated by speci c regulations. However, because the authority is mandated to supervise the construction, these do take place in practice. 6 Request water and sewage connection 1 day VND 4,000,000 Agency : Ho Chi Minh City Water Supply Company Di erent areas in Ho Chi Minh City are covered by di erent public water companies. Therefore, BuildCo is required to contact the relevant water company and submit the following documents: • The application form (available at the water company) • A notarized copy of the business registration certi cate of BuildCo • A certi ed copy of the land use right certi cate or the construction permit The costs of obtaining water/sewage connection depend on the usage capacity of the warehouse, as well as on its exact location in relation to the main water lines. The standard water meters cost approximately VND 1.5 million. 7 Receive inspection by water company 1 day no charge Agency : Ho Chi Minh City Water Supply Company 8 Connect to water and sewage services 14 days no charge Agency : Ho Chi Minh City Water Supply Company 9 Notify and receive inspection from the municipality after completion of 1 day no charge building Agency : Department of Construction of Ho Chi Minh City (Municipality) At the end of construction, the Department of Construction visits the site to con rm that the building was built according to the master plans, rules, and regulations. BuildCo must provide written noti cation of the completion of construction. 10 Register the building at the Department of National Resources and 30 days VND 11,911,250 Environment Agency : Department of National Resources and Environment According to Decision 52/2016/QD-UBND dated 10/12/2016 and Article 7 Decree 140/2016/ ND-CP dated 10/10/2016, Article 4 Circular 301/2016/TT- BTC dated 15/4/2016, the cost for registering ownership of the warehouse should include an administrative fee of VND 350,000.00 and a registration fee of 0.5% of the warehouse value. For the registration fee, the value of the construction contract signed between BuildCo and the construction contractor will be taken as the warehouse value, provided that it is higher than the minimum value calculated by the Tax Department based on the minimum unit price as provided for by the People’s Committee of Ho Chi Page 17   Minh City. regulations. BuildCo must provide written noti cation of the completion of Doing construction. Business 2018 Vietnam 10 Register the building at the Department of National Resources and 30 days VND 11,911,250 Environment Agency : Department of National Resources and Environment According to Decision 52/2016/QD-UBND dated 10/12/2016 and Article 7 Decree 140/2016/ ND-CP dated 10/10/2016, Article 4 Circular 301/2016/TT- BTC dated 15/4/2016, the cost for registering ownership of the warehouse should include an administrative fee of VND 350,000.00 and a registration fee of 0.5% of the warehouse value. For the registration fee, the value of the construction contract signed between BuildCo and the construction contractor will be taken as the warehouse value, provided that it is higher than the minimum value calculated by the Tax Department based on the minimum unit price as provided for by the People’s Committee of Ho Chi Minh City. The application le should be submitted to the Department of Natural Resources and Environment of Ho Chi Minh City.According to Article 61 of Decree 43/2014/ND-CP (dated 15 May 2014), providing details on the Law on Land, the time for issuance of the certi cate of ownership of construction work shall not exceed 30 days. The work carried out by the Department of Construction includes the time for taking measurements or checking the measurements of the construction works, if any; reviewing the application le; submitting the le for approval and signature; and notifying the applicant to make payment of nancial obligations (e.g., payment of the registration fee at Tax Department). Decree 88 also states that the applicant must pay all nancial obligations within 60 working days from the date of receipt of the noti cation from the Department of Construction. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Vietnam – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house Page 18   Takes place simultaneously with previous procedure. Doing Business 2018 Vietnam Details – Dealing with Construction Permits in Vietnam – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Page 19   Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 Liability Doing 2018 regimes and insurance Business index (0-2) Vietnam 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certi cation exam. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: Page 20   all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. certi cation exam. Doing Business 2018 Vietnam Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 21   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Vietnam Standardized Connection Price of electricity (US cents per kWh) 12.0 Name of utility Ho Chi Minh City Power Corporation (EVNHCMC) City Covered Ho Chi Minh City East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Procedures (number) 5 4.5 4.7 2 (United Arab Emirates) Time (days) 46 71.6 79.1 10 (United Arab Emirates) Cost (% of income per capita) 1191.8 712.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 6 3.7 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 94.33: Malaysia (Rank: 8) 84.31: Philippines (Rank: 31) 83.87: Indonesia (Rank: 38) 78.69: Vietnam (Rank: 64) 72.23: Regional Average (East Asia & Pacific) 52.65: Lao PDR (Rank: 149) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Vietnam – Procedure, Time and Cost Time Cost 1400 45 40 1200 Cost (% of income per capita) 35 1000 30 Time (days) 800 25 20 600 15 400 10 5 Page 22   200 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Vietnam Figure – Getting Electricity in Vietnam – Procedure, Time and Cost Time Cost 1400 45 40 1200 Cost (% of income per capita) 35 1000 30 Time (days) 800 25 20 600 15 400 10 200 5 0 0 1 *2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Vietnam and comparator economies – Measure of Quality 9 8 8 7 6 6 Index score 5 5 5 4 3.7 3 2 2 1 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Getting Electricity in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to EVN HCMC and await clearance 4 calendar days VND 0 Agency : Ho Chi Minh City Power Corporation (EVN HCMC) The request for a new electrical connection can be made in the following manners: (1) directly at the utility, (2) online, through the utility's website, (3) through its Customer Care Center, (4) via other legal manners. Once received, the request is transferred to the utility's Exchange Team, according to the "one door" mechanism, to process and approve applications. List of documents/information sent to Distribution Department (information of customer is led in the supplied forms): + Information of customer: name, power supply location, power use Page 23   schedule, registered capacity, estimated load pro le. Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Doing Business 2018 Vietnam Details – Getting Electricity in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to EVN HCMC and await clearance 4 calendar days VND 0 Agency : Ho Chi Minh City Power Corporation (EVN HCMC) The request for a new electrical connection can be made in the following manners: (1) directly at the utility, (2) online, through the utility's website, (3) through its Customer Care Center, (4) via other legal manners. Once received, the request is transferred to the utility's Exchange Team, according to the "one door" mechanism, to process and approve applications. List of documents/information sent to Distribution Department (information of customer is led in the supplied forms): + Information of customer: name, power supply location, power use schedule, registered capacity, estimated load pro le. + Arrangement layout. + Characteristics of technology chain, load components of customer directly recognized from power distribution grid. Document copies are not requested to be notarized, accordingly, the utility compares copies and originals and returns the originals to the customer immediately. 2 Obtain external inspection by EVN HCMC 1 calendar day VND 0 Agency : Ho Chi Minh City Power Corporation (EVN HCMC) After the utility has received the application, it inspects the site to determine the speci cs of the connection. No estimate of connection fees is prepared. However, the client needs to await approval (clearance) of Ho Chi Minh City Power Corporation (EVNHCMC) on the requested power. 3 Obtain design approval and excavation permit from Tra c and 15 calendar days VND 0 Transport Department Agency : Tra c and Transport Department The customer has to obtain an excavation permit for the underground connection at the Tra c and Transport Department. Also, based on Decree No. 15/2013/NĐ-CP dated February 06, 2013 of the Government on work quality management, the customer must also receive approval of their design as well as comments on the suitability of the local power grid development plan. 4 Hire private rm to design and carry out external works 20 calendar days VND 544,000,000 Agency : Electrical Contractor The customer can either ask the Distribution Department of EVN HCMC to do the works for them or hire a private rm. The more common approach is to hire an outside rm. If more than 100 kVA is needed, a substation must be built. In the case where the customer chooses to hire an outside agency to carry out the works, the electricity company must rst approve the designs. A contract is signed after both parties have agreed on the capacity, construction schedule, construction border, etc. There is no inspection of the entire internal wiring, and any electrician can carry out the internal installation. To ensure liability, the customer usually hires a licensed Page 24   design as well as comments on the suitability of the local power grid Doing development Business 2018 plan. Vietnam 4 Hire private rm to design and carry out external works 20 calendar days VND 544,000,000 Agency : Electrical Contractor The customer can either ask the Distribution Department of EVN HCMC to do the works for them or hire a private rm. The more common approach is to hire an outside rm. If more than 100 kVA is needed, a substation must be built. In the case where the customer chooses to hire an outside agency to carry out the works, the electricity company must rst approve the designs. A contract is signed after both parties have agreed on the capacity, construction schedule, construction border, etc. There is no inspection of the entire internal wiring, and any electrician can carry out the internal installation. To ensure liability, the customer usually hires a licensed electrical construction company. 5 Obtain meter installation and nal connection from EVN HCMC 7 calendar days VND 0 Agency : Ho Chi Minh City Power Corporation (EVN HCMC) When the external works have been completed, the customer requests the meter installation from the Distribution Department of the utility. Takes place simultaneously with previous procedure. Details – Getting Electricity in Vietnam – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 8.6 System average interruption frequency index (SAIFI) 5.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Page 25   Are e ective tari s available online? Yes Takes place simultaneously with previous procedure. Doing Business 2018 Vietnam Details – Getting Electricity in Vietnam – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 8.6 System average interruption frequency index (SAIFI) 5.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://cskh.hcmpc.c om.vn http://cskh.hcmpc.c om.vn/chitiettin/36 Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 26   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Vietnam Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value VND 2,282,250,038.20 City Covered Ho Chi Minh City Page 27   East Asia & OECD high Doing Business 2018 Vietnam Standard Property Transfer Property value VND 2,282,250,038.20 City Covered Ho Chi Minh City East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Procedures (number) 5 5.5 4.6 1.00 (4 Economies) Time (days) 57.5 74.5 22.3 1.00 (3 Economies) Cost (% of property value) 0.6 4.3 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 14.0 15.8 22.7 29.00 (Singapore) Figure – Registering Property in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.06: Malaysia (Rank: 42) 70.61: Vietnam (Rank: 63) 69.55: Lao PDR (Rank: 65) 59.01: Indonesia (Rank: 106) 57.55: Philippines (Rank: 114) 57.21: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Vietnam – Procedure, Time and Cost Time Cost 0.6 50 0.5 Cost (% of property value) 40 0.4 Time (days) 30 0.3 20 0.2 10 0.1 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 28   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Vietnam Figure – Registering Property in Vietnam – Procedure, Time and Cost Time Cost 0.6 50 0.5 Cost (% of property value) 40 0.4 Time (days) 30 0.3 20 0.2 10 0.1 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Vietnam and comparator economies – Measure of Quality 30 27.5 25 20 Index score 15.8 14.0 15 12.5 11.3 10.5 10 5 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Registering Property in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Build an application for the transfer of land use rights and ownership of 1 day VND 4,000 assets attached to the land Agency : Land Use Right Registration O ce under the Department of Natural Resources and Environment (LUR O ce) Parties obtain a Land Use Right (LUR) transfer contract (standard form) for free at the notary's o ce or online at http://moj.gov.vn/huongdannv/Lists/TaiLieuNghiepVu/View_Detail.aspx? ItemId=138. At the LUR o ce, the buyer will make a search on the ownership. Page 29   Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Doing Business 2018 Vietnam Details – Registering Property in Vietnam – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Build an application for the transfer of land use rights and ownership of 1 day VND 4,000 assets attached to the land Agency : Land Use Right Registration O ce under the Department of Natural Resources and Environment (LUR O ce) Parties obtain a Land Use Right (LUR) transfer contract (standard form) for free at the notary's o ce or online at http://moj.gov.vn/huongdannv/Lists/TaiLieuNghiepVu/View_Detail.aspx? ItemId=138. At the LUR o ce, the buyer will make a search on the ownership. The dossier includes: (i) LUR certi cate, (ii) Decision or Resolution of the highest decision-making body of the company regarding the LUR transfer; and (iii) company's legal status documents and the construction works. 2 Notary checks for any encumbrances on the property Less than a day No cost Agency : Notary Public (online procedure) Under Section I.5.1(c) of Circular No. 04/2006/TTLT-BTP-BTNMT, the notary Under Section public is required to check that the contents of the transfer agreement do I.5.1(c) of Circular not contradict social ethics or violate laws and regulations. In practice, the No. 04/2006/TTLT- notary public will also check the encumbrances on the property with the LUR BTP-BTNMT, the O ce prior to notarizing the transfer contract. If the property is subject to an encumbrance, the notary public will not conduct the notarization unless notary public is otherwise agreed by the existing mortgagee (or any other owner of the required to check encumbrance) and the transferee. The notaries have their own system to that the contents of check the encumbrance on the transferred property before notary and it the transfer only takes few minutes to do so. There is no cost arising from such searches. agreement do not He will study the contract and the results of the search before he notarizes. contradict social ethics or violate laws and regulations. The notary public will also check the encumbrances on the transferred property with the LUR Office prior to notarizing the transfer contract. 3 The buyer and seller will sign the contract which will be witnessed and 7 days VND 1 million + certi ed by a notary located in the same area as the property 0.06% of the amount Agency : Notary Public exceeding VND 1 billion The land use right (LUR) transfer contract shall be made in duplicate, one for the seller and another for the buyer. This contract must be notarized by the public notary where the land is located (according to Article 167.3 of Land Law No. 45/2013/QH13 of the National Assembly dated November 29, 2013 which became e ective from July 1, 2014 (the "New Land Law")). The dossier for the public notary o ce includes: (i) Request for notarization of the Page 30   notarizing the Doing Business 2018 Vietnam transfer contract. 3 The buyer and seller will sign the contract which will be witnessed and 7 days VND 1 million + certi ed by a notary located in the same area as the property 0.06% of the amount Agency : Notary Public exceeding VND 1 billion The land use right (LUR) transfer contract shall be made in duplicate, one for the seller and another for the buyer. This contract must be notarized by the public notary where the land is located (according to Article 167.3 of Land Law No. 45/2013/QH13 of the National Assembly dated November 29, 2013 which became e ective from July 1, 2014 (the "New Land Law")). The dossier for the public notary o ce includes: (i) Request for notarization of the contract or transaction (in standard form); (ii) LUR transfer contract; (iii) Document evidencing transferor’s title of the land and warehouse (e.g., land use right certi cate for the 557.4 square meters land and construction works ownership registration certi cate for the warehouse or certi cate of land use right and assets attached to the land for both land and warehouse; (iv) Business registration certi cate of the transferor and transferee; (v) The transferor's corporate approval on transfer of property to the transferee; (vi) Power of attorney granted by the legal representatives of the transferor and transferee if the signatory is not legal representative of the transferor and transferee; (vii) ID card of the signatory (including the legal representative and authorized person, if any), according to Joint Circular No. 04/2006/TTLT-BTP-BTNMT dated June 13, 2006 of the Ministry of Justice and the Ministry of Natural Resource and Environment); (viii) Copies of other documents relevant to the contract or transaction which the law stipulates must be available according to Article 40.1.dd of Law on Notarization No. 53/2014/QH12 dated June 20, 2014 of the National Assembly, e ective as of January 1, 2015 (Law on Notarization). The time-limit for notarization shall not exceed 2 working days in the case of a complex contract or transaction, this time-limit may be extended but not beyond 10 working days (Article 43 Law on Notarization. If the value of property or contract between VND 1,000,000,000 and VND 3,000,000,000 notary fee is VND 1,000,000+0,06 % of the amount of the value of property or value of the contract/transaction exceeding 1,000,000,000 . (Joint Circular No. 08/2012/TTLT-BTC-BTP dated January 19, 2012 of the Ministry of Finance and the Ministry of Justice on rates, collection, payment, management and use of notary fees, as amended by Joint Circular No. 115/2015/TTLT-BTC-BTP of the Ministry of Finance and the Ministry of Justice dated August 11, 2015) 4 The parties pay income tax on assignment of the land-use right and the 25-30 days The registration fee registration fee at the relevant District Department of Taxation (paid by the Agency : District Department of Taxation transferee) is 0,5% (Circular 79/2008/TT- The registration fee (paid by the transferee) is 0.5% (Decree 45/2011/ND-CP BTC dated 15/9/2008 and Circular 124/2011/TT-BTC on registration fee) . replaced Item II Section II Circular Corporate Income Tax (CIT): From January 1, 2016, the tax rate of the income tax from the assignment of land use right (paid by the transferor) is 20% 95/2005/TT- BTC (Article 10.1 and Article 3.2 of Law on Corporate Income Tax No. guiding on 14/2008/QH12 dated June 3, 2008, as amended by Law No. 32/2013/QH13 registration fee). The dated June 19, 2013 and Law No. 71/2014/QH13 dated November 26, 2014 tax rate of the (the "CIT Law")). income tax from the assigment of land Registration Fee: From June 1, 2011, there are certain reforms related to use right (paid by the registration fees as follow: (1) Decree No. 45/2011/ND-CP dated June 17, 2011 transferor) is 22% Page 31   of the Government guiding on registration fees which replaced Decree No. based on Article 11.2, (the "CIT Law")). income tax from the assigment of land Business 2018 Doing Registration Vietnam Fee: From June 1, 2011, there are certain reforms related to use right (paid by the registration fees as follow: (1) Decree No. 45/2011/ND-CP dated June 17, 2011 transferor) is 22% of the Government guiding on registration fees which replaced Decree No. based on Article 11.2, 176/1999/ND-CP dated December 21, 1999 of the Government as amended Decree No. by Decree No. 80/2008/ND-CP dated July 29, 2008 of the Government; and (2) 218/2013/NĐ-CP Circular No. 124/2011/TT-BTC dated August 31, 2011 of the Ministry of dated December 26, Finance guiding on registration fees replaced Circular 68/2010/TT-BTC dated 2013 of the April 26, 2010 of the Ministry of Finance which abolished Circular 79/2008/TT- Government guiding BTC and Circular 95/2005/TT-BTC of the Ministry of Finance. the implementation of the Law on Corporate Income The transferee is required to declare and pay in full the registration fees Tax ("Decree 218")). when registering its ownership and rights to use of the property with the The transferor is competent authority of Vietnam (e.g., application for a LUR certi cate with required to declare respect to the 557.4 square meters land and the warehouse with the LUR the corporate O ce) (Article 3 of Decree No. 45/2011/ND-CP dated June 17, 2011 of the income tax for each Government and Article 2 of Circular No. 124/2011/TT-BTC dated August 31, time of transfering 2011 of the Ministry of Finance), instead of the 30-day period as provided property (Article previously in Decree 176. 12.5.b of Circular No. 156/2013/TT-BTC dated November 06, 2013 of the Ministry of Finance guiding Law on Tax Management ("Circular 156")). The taxation authority will base on the declaration to record, adjust the payable tax and issue a tax notice to the taxpayer within 3 working days from the day of receiving such declaration. (Article 18.4.(b) of Circular 156). A transfer of land use rights is not subject to VAT (Article 5.6 of the VAT Law), but a transfer of the warehouse is subject to VAT rate of 10% (Article 8.3 of the VAT Law). 5 The land-use right transferee shall register the right to use land 15-30 days VND 50,000 Agency : Land Use Right Registration O ce under the Department of Natural (Updating existing Resources and Environment (LUR O ce) LUR Certificate) The Land Use Right Registration O ce is the prescribed authority. Currently, According to Circular there are many land use rights registration o ces in Ho Chi Minh City, 106/2010/TT-BTC including the provincial land use rights registration o ce (immediately dated 26 July 2010 under the Department of Natural Resources and Environment of Ho Chi Minh City) and district land use rights registration o ces (under the people's issued by the committee of districts). According to Article 17.1(a) and (k) of Circular No. Ministry of Finance, Page 32   the cost for (Article 8.3 of the VAT Doing Business 2018 Vietnam Law). 5 The land-use right transferee shall register the right to use land 15-30 days VND 50,000 Agency : Land Use Right Registration O ce under the Department of Natural (Updating existing Resources and Environment (LUR O ce) LUR Certificate) The Land Use Right Registration O ce is the prescribed authority. Currently, According to Circular there are many land use rights registration o ces in Ho Chi Minh City, 106/2010/TT-BTC including the provincial land use rights registration o ce (immediately dated 26 July 2010 under the Department of Natural Resources and Environment of Ho Chi Minh City) and district land use rights registration o ces (under the people's issued by the committee of districts). According to Article 17.1(a) and (k) of Circular No. Ministry of Finance, 23/2014/TT-BTNMT of the Ministry of Natural Resources and Environment, the cost for providing for land use right or house and land-attached asset ownership registering the LURC certi cates (e ective as of July 5, 2014), in order to obtain the LUR certi cate, are as follows: the transferee may request the LUR O ce to issue a new LUR certi cate or (a) Not over an update on the existing LUR certi cate. VND100,000 for the issuance of a new LURC; or 1. In order to issue a new LUR certi cate, the application dossier has to (b) Not over VND include according to the above mentioned Circular, Decree No. 43 and No. 50,000 for the 88: (i) application for issuance of LUR certi cate (in stipulated form); (ii) a update/amendment copy of the business license; (iii) the sale and purchase contract for the to the existing LURC Property; (iv) the original LUR certi cate and the certi cate of ownership of in the event of 1 (b) the warehouse; (v) copies of relevant tax payment receipts evidencing for above occurs ful llment of relevant nancial obligations; and (vi) a map of the Property (if existing documents on the Property do not have such a map). Time-limit: 30 working days from the date of receipt of the proper dossier (Article 61.2(a) and (b) of Decree No. 43 detailing a number of articles of the Land Law ("Decree 43"), e ective as of July 1, 2014). 2. In order to update an existing LUR certi cate, the application dossier should contain According to the above mentioned Circular: (i) the sale and purchase contract for the Property; and (ii) the original LUR certi cate and the certi cate of ownership of the warehouse. Time-limit: not over 15 working days from the date of receipt of the valid dossier ((Decree 43, Article 61.2 (i)). Takes place simultaneously with previous procedure. Details – Registering Property in Vietnam – Measure of Quality Answer Score Quality of the land administration index (0-30) 14.0 Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? Land Department of the Environmental and Natural Resources Department Page 33   In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 Takes place simultaneously with previous procedure. Doing Business 2018 Vietnam Details – Registering Property in Vietnam – Measure of Quality Answer Score Quality of the land administration index (0-30) 14.0 Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? Land Department of the Environmental and Natural Resources Department In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Department of Survey and Map In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 3.0 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://congchun g.gov.vn/ho-so- cong-chung/HD- chuyen-nhuong- dat.html Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://congchun g.gov.vn/blog/de Page 34   tail/18-Bieu-phi- immovable property registration in the largest business city made publicly available– and if Doing so, how? 2018 Business Vietnam Link for online access: http://congchun g.gov.vn/blog/de tail/18-Bieu-phi- cong-chung.html Does the agency in charge of immovable property registration commit to delivering a Yes, on public 0.5 legally binding document that proves property ownership within a speci c time frame– boards and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, on public 0.5 —and if so, how? boards Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a Yes, in person 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 5.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Page 35   Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property Doing registry Business them opposable to third parties? to makeVietnam 2018 Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a Province property worth 50 times gross national income (GNI) per capita and located in the People's court largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) Page 36   security interest is created, publicized and enforced according to the law. Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Vietnam Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Strength of legal rights index (0-12) 8 7.2 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.2 6.6 8.00 (34 Economies) Page 37   Credit registry coverage (% of adults) 51.0 16.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Vietnam East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Strength of legal rights index (0-12) 8 7.2 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.2 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 51.0 16.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 19.7 22.3 63.7 100.00 (23 Economies) Figure – Getting Credit in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: Malaysia (Rank: 20) 75.00: Vietnam (Rank: 29) 65.00: Indonesia (Rank: 55) 57.00: Regional Average (East Asia & Pacific) 55.00: Lao PDR (Rank: 77) 30.00: Philippines (Rank: 142) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Vietnam and comparator economies 9 8 8 8 7.2 7 6 6 6 Index score 5 4 3 2 1 1 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Legal Rights in Vietnam Strength of legal rights index (0-12) 8 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 38   Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Doing Business 2018 Vietnam Details – Legal Rights in Vietnam Strength of legal rights index (0-12) 8 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Vietnam and comparator economies 10 8 8 7 7 Index score 6 5 5 4.2 4 2 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Credit Information in Vietnam Page 39   0 Vietnam Doing Business 2018 Indonesia Vietnam Lao PDR Malaysia Philippines East Asia & Pacific Details – Credit Information in Vietnam Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes Yes 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes Yes 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 12,600,000 32,288,172 Number of firms 189,000 829,005 Total 12,789,000 33,117,177 Percentage of adult population 19.7 51.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 40   transactions; Available legal remedies (damages, Percentage of adult population 19.7 51.0 Doing Business 2018 Vietnam Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Extent of conflict of interest regulation index (0- 4.3 5.7 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.7 4.8 6.4 Page 41   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Vietnam East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Extent of conflict of interest regulation index (0- 4.3 5.7 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.7 4.8 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: Malaysia (Rank: 4) 63.33: Indonesia (Rank: 43) 55.00: Vietnam (Rank: 81) 52.33: Regional Average (East Asia & Pacific) 40.00: Philippines (Rank: 146) 31.67: Lao PDR (Rank: 172) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Vietnam and comparator economies – Measure of Quality Vietnam 7 4 7 6 7 2 Indonesia 7 5 10 7 7 2 Lao PDR 1 1 6 4 4 3 Malaysia 8 9 10 6 8 7 Philippines 7 3 2 5 0 7 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 East Asia & Pacific 5.6 4.6 6.2 3.9 5.3 6.1 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Vietnam – Measure of Quality Answer Score Page 42   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Vietnam Details – Protecting Minority Investors in Vietnam – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 4.3 Extent of disclosure index (0-10) 7 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 1.0 2) the transaction only Extent of director liability index (0-10) 4 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Not liable 0.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 2 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) No 0.0 Page 43   Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction Doing 2018 (0-1) documents? Business Vietnam Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) No 0.0 Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) No 0.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6.7 Extent of shareholder rights index (0-10) 7 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected No 0.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 6 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Page 44   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Doing Business 2018 Vietnam Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 7 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general No 0.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with Page 45   post ling processes. Information is also compiled on frequency of ling Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Vietnam Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Payments (number per year) 14 21.8 10.9 3 (Hong Kong SAR, China) Page 46   return, but within the tax assessment period. Doing Business 2018 Vietnam East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Payments (number per year) 14 21.8 10.9 3 (Hong Kong SAR, China) Time (hours per year) 498 189.2 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 38.1 33.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 95.71 56.55 83.45 99.38 (Estonia) Figure – Paying Taxes in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.07: Malaysia (Rank: 73) 72.77: Vietnam (Rank: 86) 72.42: Regional Average (East Asia & Pacific) 69.27: Philippines (Rank: 105) 68.04: Indonesia (Rank: 114) 54.18: Lao PDR (Rank: 156) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Vietnam and comparator economies – Measure of Quality 120 100 95.71 80 Index score 68.82 52.65 56.55 60 50.00 40 18.57 20 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Paying Taxes in Vietnam Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate contribution (number) Payments (hours) tax rate Tax base (% of profit) Notes on TTR Page 47   Employer paid - Social 1 147 18% gross 20.30 Doing Business 2018 Vietnam Figure – Paying Taxes in Vietnam and comparator economies – Measure of Quality 120 100 95.71 80 Index score 68.82 52.65 56.55 60 50.00 40 18.57 20 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Paying Taxes in Vietnam Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate contribution (number) Payments (hours) tax rate Tax base (% of profit) Notes on TTR Employer paid - Social 1 147 18% gross 20.30 Security contributions salaries Corporate income tax 5 132 20% taxable 12.13 profit Employer paid - Health 0 paid 3% gross 3.38 0.045119559203592 insurance jointly salaries contributions Employer paid - 0 paid 1% gross 1.13 Unemployment jointly salaries insurance Income tax from 1 20% capital 1.01 transfer of land use gains rights Business Licensing Tax 1 VND fixed fee 0.08 1,500,000 Non Agricultural Land 1 0.3% Value of 0.02 Tax land Value added tax (VAT) 4 219 10% value 0.00 not included added Environmental Tax 0 VND40,000 by weight 0.00 per ton Fuel tax 1 included 0.00 in fuel price Employee paid - 0 paid 1.5% gross 0.00 withheld Health insurance jointly salaries contributions Page 48   in fuel Doing Business 2018 Vietnam price Employee paid - 0 paid 1.5% gross 0.00 withheld Health insurance jointly salaries contributions Employee paid - Social 0 paid 8% gross 0.00 withheld Security contributions jointly salaries Employee paid - 0 paid 1% gross 0.00 withheld Unemployment jointly salaries insurance Totals 14 498 38.1 Details – Paying Taxes in Vietnam – Tax by Type Taxes by type Answer Profit tax (% of profit) 13.1 Labor tax and contributions (% of profit) 24.8 Other taxes (% of profit) 0.1 Details – Paying Taxes in Vietnam – Measure of Quality Answer Score Post ling index (0-100) 95.71 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Carry forward for 12 months Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 1.5 97 Time to obtain a VAT refund (weeks) 8.6 89.49 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 3.5 96.33 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study Page 49   scenario to comply with TimeBusiness Doing 2018 a corporate Vietnam income tax audit (hours) 3.5 96.33 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the Page 50   chosen export or import product and the trading partner, as is the a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Vietnam Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 51   of agriculture or industry, national security agencies and any other Doing Business 2018 Vietnam government authorities. East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Time to export: Border compliance (hours) 55 55.9 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 290 387.5 149.9 0.00 (19 Economies) Time to export: Documentary compliance 50 68.2 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 139 112.1 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 56 70.5 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 373 431.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 76 65.6 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 183 111.4 25.6 0.00 (30 Economies) Figure – Trading across Borders in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 82.75: Malaysia (Rank: 61) 70.83: Vietnam (Rank: 94) 69.97: Regional Average (East Asia & Pacific) 69.39: Philippines (Rank: 99) 66.59: Indonesia (Rank: 112) 62.98: Lao PDR (Rank: 124) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Vietnam – Time and Cost Time Cost 80 373 76 400 70 350 290 56 60 55 300 50 Time (hours) Cost (USD) 50 250 40 183 200 139 30 150 20 100 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 52   Doing Business 2018 Vietnam Figure – Trading across Borders in Vietnam – Time and Cost Time Cost 80 373 76 400 70 350 290 56 60 55 300 50 Time (hours) Cost (USD) 50 250 40 183 200 139 30 150 20 100 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Vietnam Characteristics Export Import Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and HS 8708: Parts and reproducers, television image and sound recorders and reproducers, and parts and accessories of motor accessories of such articles vehicles Trade partner Japan Japan Border Cat Lai port Cat Lai port Distance (km) 26 26 Domestic 7 7 transport time (hours) Domestic 181 181 transport cost (USD) Details – Trading across Borders in Vietnam – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.0 60.0 Export: Clearance and inspections required by agencies other than customs 8.0 25.0 Export: Port or border handling 55.0 205.0 Import: Clearance and inspections required by customs authorities 16.0 85.0 Import: Clearance and inspections required by agencies other than customs 8.0 0.0 Import: Port or border handling 32.0 288.0 Page 53   Details – Trading across Borders in Vietnam – Trade Documents (USD) Doing Business 2018 Vietnam Details – Trading across Borders in Vietnam – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.0 60.0 Export: Clearance and inspections required by agencies other than customs 8.0 25.0 Export: Port or border handling 55.0 205.0 Import: Clearance and inspections required by customs authorities 16.0 85.0 Import: Clearance and inspections required by agencies other than customs 8.0 0.0 Import: Port or border handling 32.0 288.0 Details – Trading across Borders in Vietnam – Trade Documents Export Import Bill of Lading Bill of Lading Commercial invoice Commercial invoice Packing list Packing list Customs export declaration Certificate of origin Technical standard Cargo release order SOLAS certificate Customs import declaration Inspection report SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees Page 54   economies the data are also collected for the second largest business city. SOLAS certificate Doing Business 2018 Vietnam Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value VND 108,912,790.00 Court name People's Court of Ho Chi Minh City, District Level Court City Covered Ho Chi Minh City East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Time (days) 400 565.7 577.8 164.00 (Singapore) Cost (% of claim value) 29.0 47.3 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 6.5 7.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 66.61: Malaysia (Rank: 44) 60.22: Vietnam (Rank: 66) 56.22: Lao PDR (Rank: 97) Page 55   of judicial processes Quality Business Doing index (0-18) 2018 Vietnam 6.5 7.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 66.61: Malaysia (Rank: 44) 60.22: Vietnam (Rank: 66) 56.22: Lao PDR (Rank: 97) 53.09: Regional Average (East Asia & Pacific) 47.23: Indonesia (Rank: 145) 45.96: Philippines (Rank: 149) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Vietnam – Time and Cost Time Cost 1200 80 70.3 962 70 1000 Cost (% of claim value) 60 800 47.3 Time (days) 50 565.7 37.3 577.8 600 40 443 31.6 31.0 29.0 403.2 425 400 30 400 21.5 20 200 10 0 0 East Asia & Indonesia Lao PDR Malaysia OECD high income Philippines Vietnam Pacific Figure – Enforcing Contracts in Vietnam and comparator economies – Measure of Quality Vietnam 2.5 1 0 3 Indonesia 2.5 1.8 0.6 3 Lao PDR 2.5 2 0 1 Malaysia 2.5 3 2.5 4 Philippines 2.5 1.5 0.5 3 OECD high income 2.5 2.9 2 3.6 East Asia & Pacific 2.2 2 1.3 3 0 2 4 6 8 10 12 Page 56   14 East Asia & Indonesia Lao PDR Malaysia OECD high income Philippines Vietnam Pacific Doing Business 2018 Vietnam Figure – Enforcing Contracts in Vietnam and comparator economies – Measure of Quality Vietnam 2.5 1 0 3 Indonesia 2.5 1.8 0.6 3 Lao PDR 2.5 2 0 1 Malaysia 2.5 3 2.5 4 Philippines 2.5 1.5 0.5 3 OECD high income 2.5 2.9 2 3.6 East Asia & Pacific 2.2 2 1.3 3 0 2 4 6 8 10 12 14 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Vietnam Indicator Time (days) 400 Filing and service 50 Trial and judgment 200 Enforcement of judgment 150 Cost (% of claim value) 29.0 Attorney fees 21 Court fees 5 Enforcement fees 3 Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 1.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Vietnam – Measure of Quality Page 57   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Vietnam Details – Enforcing Contracts in Vietnam – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 3.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 1.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 0.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 58   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Vietnam 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 59   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Vietnam Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Recovery rate (cents on the dollar) 21.8 35.4 71.2 93.1 (Norway) Time (years) 5.0 2.6 1.7 0.4 (Ireland) Page 60   Cost (% of estate) 14.5 20.6 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Vietnam East Asia & OECD high Indicator Vietnam Pacific income Overall Best Performer Recovery rate (cents on the dollar) 21.8 35.4 71.2 93.1 (Norway) Time (years) 5.0 2.6 1.7 0.4 (Ireland) Cost (% of estate) 14.5 20.6 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 7.5 7.0 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Vietnam and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 67.61: Indonesia (Rank: 38) 62.51: Malaysia (Rank: 46) 55.22: Philippines (Rank: 59) 40.78: Regional Average (East Asia & Pacific) 35.16: Vietnam (Rank: 129) 0.00: Lao PDR (Rank: 168) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Vietnam – Time and Cost Time Cost 6 32.0 35 5.0 5 30 21.6 25 Cost (% of estate) Time (years) 4 20.6 20 3 2.6 2.7 14.5 15 2 10.0 1.7 9.1 10 1.1 1.0 1 5 0 0 East Asia & Indonesia no practice Malaysia OECD high income Philippines Vietnam Pacific Lao PDR Figure – Resolving Insolvency in Vietnam and comparator economies – Measure of Quality Vietnam 3 2.5 0 2 Page 61   Indonesia 5 3 2 0.5 East Asia & Indonesia no practice Malaysia OECD high income Philippines Vietnam Pacific Lao PDR Doing Business 2018 Vietnam Figure – Resolving Insolvency in Vietnam and comparator economies – Measure of Quality Vietnam 3 2.5 0 2 Indonesia 5 3 2 0.5 Lao PDR 2 2 0 0.5 Malaysia 2 2 2 0 Philippines 5.5 2.5 3 3 OECD high income 5.4 2.8 2.3 1.9 East Asia & Pacific 3.7 2.3 1.2 1 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Vietnam and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 90 81.3 80 70 64.7 60 50 40 35.4 30 21.8 21.3 20 10 0.0 0 Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Details – Resolving Insolvency in Vietnam Indicator Answer Explanation Proceeding liquidation According to articles 5.3 and 5.4 of the Law on Bankruptcy No. 51/2014/QH13 (thereafter, (after an "Law on Bankruptcy 2014"), the legal representative/owner of Mirage has the obligation to attempt at file a petition for commencement of bankruptcy procedures when Mirage become insolvent. reorganization) With the assumption that Mirage's management want to keep the company operating, they will initiate reorganization and secured creditors are subject to an automatic stay of reorganization. If the reorganization plan is not approved during the meeting of creditors, the court shall issue a decision to commence procedures for liquidation of assets according to Article 107 of the Law on Bankruptcy. If the reorganization plan is approved, Mirage will undergo a recovery business. However, if such reorganization plan fails (in case Mirage cannot implement the approved reorganization plan, or Mirage remains insolvent upon expiry of the time-limit for implementation of the reorganization plan), Mirage shall be subject to liquidation procedures in accordance with a decision of the judge in charge of the case. Page 62   Vietnam Indonesia Lao PDR Malaysia Philippines East Asia & Pacific Doing Business 2018 Vietnam Details – Resolving Insolvency in Vietnam Indicator Answer Explanation Proceeding liquidation According to articles 5.3 and 5.4 of the Law on Bankruptcy No. 51/2014/QH13 (thereafter, (after an "Law on Bankruptcy 2014"), the legal representative/owner of Mirage has the obligation to attempt at file a petition for commencement of bankruptcy procedures when Mirage become insolvent. reorganization) With the assumption that Mirage's management want to keep the company operating, they will initiate reorganization and secured creditors are subject to an automatic stay of reorganization. If the reorganization plan is not approved during the meeting of creditors, the court shall issue a decision to commence procedures for liquidation of assets according to Article 107 of the Law on Bankruptcy. If the reorganization plan is approved, Mirage will undergo a recovery business. However, if such reorganization plan fails (in case Mirage cannot implement the approved reorganization plan, or Mirage remains insolvent upon expiry of the time-limit for implementation of the reorganization plan), Mirage shall be subject to liquidation procedures in accordance with a decision of the judge in charge of the case. Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal conducted by an auctioneer in a public sale after the liquidation proceeding (Art. 124 of the Bankruptcy Law). Time (in years) 5.0 A reorganization procedure that is then converted into liquidation will approximately take 5 years in practice. The following are main steps and relevant timeline as stipulated under the 2014 Bankruptcy Law (with an assumption that the bankruptcy procedures is accepted by the competent court, and reorganization will be apply): 1. Acceptance of the bankruptcy procedures: about 2 months from the submission of relevant petition for commencement of bankruptcy procedures (Chapter II of the 2014 Bankruptcy Law). 2.Issuance of decision on commencement of bankruptcy procedures: 1 month from acceptance date (Article 42 of the 2014 Bankruptcy Law).3.Submission of notices requesting for payment of debts by the creditors: 1 month from the date of a decision to commence the bankruptcy procedures (Article 66 of the 2014 Bankruptcy Law).4. Preparation of list of creditors: 0.5 month from the date of expiry for submission of notices for payment of debts by creditors (Article 67 of the 2014 Bankruptcy Law). 5.Convening and sending notice of meeting of creditors: about 1 month from the date of finalization of list of creditors (Article 75 of the 2014 Bankruptcy Law).6.Formulation and implementation of plan for recovery of business: In practice, it will take almost 2 years to prepare the creditors list, draft and vote the plan, which would be rejected under our case study assumptions. (Chapter VII of the 2014 Bankruptcy Law). 7. The case will then be converted into liquidation (where the assets would be sold as a going concern), taking the formal conversion and the organization and execution of the sale will take approximately 3 years (until the proceeds of the sale are finally distributed among creditors). Cost (% of 14.5 The costs associated with the case would amount to approximately 15% of the value of the estate) debtor's estate. The costs incurred during the entire insolvency process mainly include court fees (0.03%), attorney fees (6%), insolvency representative fees (3%), fees of accountants, assessors, inspectors and other professionals (4%), auctioneer fees (1%), costs of publication and other fees (1%). Recovery rate (cents on the 21.8 dollar) Details – Resolving Insolvency in Vietnam – Measure of Quality Answer Score Page 63   Strength of insolvency framework index (0-16) 7.5 dollar) Doing Business 2018 Vietnam Details – Resolving Insolvency in Vietnam – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 3.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 2.0 Which creditors vote on the proposed reorganization plan? (c) Other 1.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 0.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 Page 64   Creditor Doing participation Business 2018 index (0-4) Vietnam 0.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to No 0.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for Page 65   work of equal value and nondiscrimination based on the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Vietnam Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Vietnam Answer Hiring Page 66   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Vietnam Details – Labor Market Regulation in Vietnam Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) 36.0 Maximum length of xed-term contracts, including renewals (months) 72.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 168.4 Ratio of minimum wage to value added per worker 0.7 Maximum length of probationary period (months) 1.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 30.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 12.0 Paid annual leave for a worker with 5 years of tenure (working days) 13.0 Paid annual leave for a worker with 10 years of tenure (working days) 14.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 13.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? Yes Retraining or reassignment obligation before redundancy? Yes Page 67   Third-party Doing approval Business 2018 if nine workers are dismissed? Vietnam Yes Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 0.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 0.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 0.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure 8.7 Severance pay for redundancy dismissal for a worker with 5 years of tenure 21.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 43.3 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 24.6 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 180.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Business Reforms in Vietnam In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Vietnam implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Electricity: Vietnam increased the reliability of power supply by rolling out a Supervisory Control and Data Acquisition (SCADA) automatic energy management system for the monitoring of outages and the restoration of service. Getting Credit: Vietnam strengthened access to credit by adopting a new civil code that broadens the scope of assets that can be used as collateral. Paying Taxes: Vietnam made paying taxes easier by abolishing the 12-month mandatory carry forward period for VAT credit and by introducing an online platform for ling social security contributions. Page 68   Trading across Borders: Vietnam made exporting and importing easier by upgrading the automated cargo clearance system and Minimum contribution period for unemployment protection (months)? 12.0 Doing Business 2018 Vietnam Business Reforms in Vietnam In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Vietnam implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Electricity: Vietnam increased the reliability of power supply by rolling out a Supervisory Control and Data Acquisition (SCADA) automatic energy management system for the monitoring of outages and the restoration of service. Getting Credit: Vietnam strengthened access to credit by adopting a new civil code that broadens the scope of assets that can be used as collateral. Paying Taxes: Vietnam made paying taxes easier by abolishing the 12-month mandatory carry forward period for VAT credit and by introducing an online platform for ling social security contributions. Trading across Borders: Vietnam made exporting and importing easier by upgrading the automated cargo clearance system and extending the operating hours of the customs department. Enforcing Contracts: Vietnam made enforcing contracts easier by adopting a new code of civil procedure and by introducing a consolidated law on voluntary mediation. DB2017 Starting a Business: Vietnam made starting a business more di cult by requiring entrepreneurs to receive approval of the seal sample before using it. Protecting Minority Investors: Vietnam strengthened minority investor protections by making it easier to sue directors in cases of prejudicial transactions between interested parties, by increasing shareholder rights and role in major corporate decisions, by strengthening the ownership and control structures of companies and by increasing corporate transparency requirements. Paying Taxes: Vietnam made paying taxes easier and less costly by streamlining the administrative process of complying with tax obligations and abolishing environmental protection fees. Trading across Borders: Vietnam made exporting and importing easier by implementing electronic customs clearance system. DB2016 Starting a Business: Vietnam made starting a business easier by reducing the time required to get the company seal engraved and registered. Getting Electricity: The utility in Vietnam reduced the time required for getting an electricity connection by reducing delays and increasing e ciency in approving connection applications and designs for connection works. Getting electricity was also made easier by eliminating the need to obtain a substation certi cation from the Fire Fighters Prevention Department for connections to the medium-voltage grid. Getting Credit: Vietnam guaranteed borrowers’ right to inspect their credit data while the new credit bureau expanded borrower coverage, improving the credit information system. Paying Taxes: Vietnam made paying taxes less costly for companies by reducing the corporate income tax rate—and made it easier by reducing the number of procedures and documents for ling VAT and social security contributions, reducing the number of lings for VAT and replacing quarterly lings of corporate income tax with quarterly advance payments. On the other hand, Vietnam increased the rate for social security contributions paid by employers. Resolving Insolvency: Vietnam made resolving insolvency easier by clarifying and simplifying provisions on liquidation and reorganization, modifying the standard for commencement of insolvency proceedings, changing provisions on voidable transactions, regulating the profession of insolvency trustees and establishing the rules for enterprise asset managers. DB2015 Getting Credit: Vietnam improved its credit information system by establishing a new credit bureau. Page 69   Paying Taxes: Vietnam made paying taxes less costly for companies by reducing the corporate income tax rate. Doing Business 2018 DB2015 Vietnam Getting Credit: Vietnam improved its credit information system by establishing a new credit bureau. Paying Taxes: Vietnam made paying taxes less costly for companies by reducing the corporate income tax rate. DB2014 Getting Credit: Vietnam improved its credit information system through a decree setting up a legal framework for the establishment of private credit bureaus. Protecting Minority Investors: Vietnam strengthened investor protections by introducing greater disclosure requirements for publicly held companies in cases of related-party transactions. Paying Taxes: Vietnam made paying taxes more costly for companies by increasing employers' social security contribution rate. Labor Market Regulation: Vietnam abolished priority rules for redundancy dismissals or layo s and increased the minimum wage. DB2013 Starting a Business: Vietnam made starting a business easier by allowing companies to use self-printed value added tax invoices. DB2012 Protecting Minority Investors: Vietnam strengthened investor protections by requiring higher standards of accountability for company directors. DB2011 Starting a Business: Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Dealing with Construction Permits: Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Getting Credit: Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Paying Taxes: The government of Vietnam eased paying taxes by reducing corporate income tax rate. DB2010 Paying Taxes: Vietnam made paying taxes less costly for companies by reducing the corporate income and value added tax rates and eliminating the surtax on income from the transfer of land use rights. Trading across Borders: Vietnam reduced the time for exporting and importing by implementing World Trade Organization rules for customs administration; increasing competition in the logistics industry also helped reduce delays. DB2009 Getting Credit: Vietnam’s public credit registry extended the coverage of historical credit information that it distributes from 2 years to 5, expanding its coverage of individuals and rms. DB2008 Getting Credit: Vietnam strengthened its secured transactions system by expanding the range of assets that can be used as collateral and allowing a general description of collateral in the security agreement. Protecting Minority Investors: Vietnam strengthened investor protections by increasing disclosure requirements for both regular and related-party transactions. Page 70   Protecting Minority Investors: Vietnam strengthened investor protections by increasing disclosure requirements for both Doingand regular 2018 transactions. related-party Business Vietnam Page 71