Vietnam is known as a rich of natural resources country. The energy industry of Vietnam has developed for a number of years but the lack of modern technology and capital, that makes Vietnam has still stalled in this potential field.
By the strength of resources, reasonable low labor cost, Vietnam is attracting many foreign investors to invest in energy industry. Our energy and resources lawyers in Vietnam always monitor the legal environment and keep our client posted to changes that could impact their business.
In particular, Vietnam has considerable supplies of oil, natural gas and refineries. Proven oil reserves in Vietnam amount to 3.3 billion barrels as the second-most in Southeast Asia, after Indonesia. Revenues from oil and gas contribute about 30% of Vietnam’s GDP.
Law on Petroleum in Vietnam
For exploration and production, sea zones in Vietnam are divided into different geographic “blocks”. The size and scope of these blocks can vary from year to year, depending on the scale of the activities undertaken by the company currently assigned to it.
According to Law on Petroleum 1993, amending in 2000 and 2008, to participate in this field, the investors have to join the bidding for researching and exploiting petroleum.
In special case, the Vietnam Government may appoint the contractor to select investor wishing to engage in petroleum.
Then the investor must enter into a dividing products or joint venture or other contract in which contents all terms as required by Article 15 (amended), managed by Vietnam Government.
This contract’s term shall not exceed 25 years in which period of research and exploration not exceed 5 years. The duration may be extended 5 years for the contract and 2 year for period of research and exploration. In case projects encouraged to invest in petroleum and exploring natural gas, the term can be 30 years and 7 years for period of research and exploration.
Taxation for petroleum activities is based on type of natural resources exploited, economic, technical conditions of the mines, the amount produced.
According to law on Petroleum and other provisions on taxation, natural resources tax rate is from 4% to 25% for crude oil, 0% to 10% for natural gas. To ensure the reserve aiming to domestic demand, Vietnam has regulated export rate for natural resources, especially tax rate at 20% for crude oil and coal. This regulation was implemented to encourage companies in Vietnam to refine crude oil in country as the new refineries come online.
Vietnam has more potential in petroleum and energy industry.
How energy and resources lawyers in Vietnam could help?
Energy and resources lawyers in Vietnam play a crucial role in assisting foreign clients in entering the market by providing legal expertise and guidance on navigating the complex regulatory landscape.
Regulatory Compliance: Energy and natural resources sectors in Vietnam are heavily regulated. Lawyers can help foreign clients understand and comply with the country’s laws and regulations, which cover areas such as licensing, environmental protection, land use, and taxation.
Market Entry Strategy: Energy and resources lawyers in Vietnam can assist in devising an effective market entry strategy tailored to the client’s specific needs. This may involve choosing the right business structure, such as joint ventures, partnerships, or wholly foreign-owned enterprises.
Due Diligence: Conducting due diligence is critical to assess the risks and opportunities in the Vietnam market. Energy and resources lawyers in Vietnam can assist in comprehensive due diligence, including reviewing contracts, licenses, permits, and compliance records of potential partners or targets.
Intellectual Property Protection: Protecting intellectual property rights is vital, especially in industries like renewable energy and mining. Lawyers can help clients with trademark registration, patent protection, and ensuring compliance with intellectual property laws.
Contract Negotiation: Negotiating contracts with local partners, suppliers, or customers can be complex. Energy and resources lawyers can help ensure that contracts are legally sound, protecting the interests of foreign clients.
Dispute Resolution: In the event of disputes, energy and resources lawyers in Vietnam can provide guidance on dispute resolution mechanisms, which may include negotiation, mediation, arbitration, or litigation. They can represent foreign clients in legal proceedings, if necessary.
Environmental and Social Responsibility: As sustainability becomes increasingly important, energy and resources lawyers in Vietnam can advise clients on adhering to environmental and social responsibility standards and assist in obtaining necessary permits related to environmental impact assessments.
Taxation and Incentives: Energy and resources lawyers in Vietnam can help foreign clients understand the tax implications of their investments and identify available tax incentives and exemptions that can make their investments more cost-effective.
Government Relations: Building relationships with government agencies is often essential in highly regulated sectors. Energy and resources lawyers in Vietnam can help clients engage with relevant government bodies, obtain permits, and navigate bureaucratic processes.
Market Intelligence: Lawyers can provide valuable market intelligence and insights into industry trends, regulatory changes, and potential risks, helping foreign clients make informed decisions.
Crisis Management: In the event of unforeseen challenges or crises, energy and resources lawyers in Vietnam can provide guidance on crisis management strategies, including legal compliance and risk mitigation.
Exit Strategies: Planning an exit strategy is as important as market entry. Lawyers can help foreign clients with options such as selling assets, winding down operations, or exiting joint ventures.
In summary, energy and resources lawyers in Vietnam serve as invaluable partners for foreign clients looking to enter the market. They offer legal expertise, regulatory insight, and strategic guidance that can help clients navigate the complexities of the Vietnamese market and ensure a successful market entry.
About ANT Lawyers, a Law Firm in Vietnam
We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.
How ANT Lawyers Could Help Your Business in Vietnam?
The changes of laws will be monitored by ANT Lawyers Energy and Project practice. For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 28 730 86 529