How to Create a Tidal Wave of Foreign Investment in Electricity and Infrastructure? By These 5 Steps. (VDB Loi Insights)

31
Jul
2019

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INSIGHTS THIS MONTH
JULY 2019
 
Highlight of This Month / In This Issue / Recent VDB Loi Work / New Myanmar Laws and Regualtions / Upcoming Events / Recent Publications
HIGHLIGHT OF THIS MONTH
How to Create a Tidal Wave of Foreign Investment in Electricity and Infrastructure? By These 5 Steps.
From our Energy and Infrastructure Team – Myanmar
Not much works without electricity, and not much moves without roads, ports and railways to move it on. Infrastructure, including electricity, is the obvious key to unlocking the huge economic potential of Myanmar and the road to prosperity for its people.

IN THIS ISSUE
Taxation    
Client Alert: Cambodia Concludes Double Taxation Agreement with Hong Kong
[From our Cambodia office]
In June 2019, the Royal Government of Cambodia announced that a double taxation agreement (“DTA”) was signed with the Government of Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), bringing the number of DTAs signed by Cambodia to seven.
Phnom Penh    
Cambodia Legal Update: Seniority Payments – New Regulations Bring Some Things into Clearer Focus
[From our Cambodia office]
As you may be aware, the Ministry of Labor and Vocational Training (“MLVT”) has issued several regulations since its introduction of an employee seniority payment for those with unlimited duration contracts (“UDCs”) (which replaced the indemnity for dismissal previously stipulated in the 1997 Labor Law) through an amendment to the Labor Law (for more details about these and other pertinent regulations.
Taxation    
Client Alert: GDT Tightens the Definition of Zero-Rated VAT Export Services
[From our Cambodia office]
When applying Value Added Tax (“VAT”), a key consideration is the place of delivery of the goods or services, which is often determined by reference to the place of consumption. If goods are consumed outside of the territory, then they are considered to be export goods, and 0% VAT is usually applied. Likewise, services consumed outside the territory are considered to be export services and again, 0% VAT is usually applied.
Companies    
Client Alert: Immediate Enforcement of Capital Requirements for Foreign-invested Trading Companies
[From our Laos office]
On 5 June 2019, the Microfinance Business Supervisory Committee issued Directive 1/2019 (the “Directive”) which revises the interest rates applicable to micro-credits and savings of the members.
Foreign Business    
Enforcement Against Illegal Foreign Businesses in the Lao PDR
[From our Laos office]
On 12 June 2019, the Division of Industry and Commerce, Vientiane (“DIC-Vte”) issued Instruction No. 0651 (the “Instruction”) regarding measures to be taken against the illegal operation of businesses by foreigners.

OUR UPCOMING EVENTS

CLMV (Cambodia, Laos, Myanmar and Vietnam) Projects and Finance Update
6 August, Singapore

1. Deal roundup

  • Cambodia
    • The Government’s new tender for a 100MW PV (solar) plant
    • Stake in an existing coal-fired plant for sale
    • Financing acquisition of microfinance institutions 
  • Laos
    • Transmission line financing update
    • Hydropower projects update 
    • What is the status of the Lao-China expressway?
  • Myanmar
    • LNG to Power and hydropower projects progress update
    • Now allowed: acquiring a 35% stake in Myanmar banks and insurance
    • Update on Yangon Elevated Ringroad project and other PPPs
    • Retail and wholesale liberalized
    • Key Points of Myanmar’s New LNG/Gas Power Rental tender
  • Vietnam
    • The Hanoi-Ho Chi Minh City hi-speed railway project
    • Cai Mep Terminal project and opportunities in the port sector
    • Industrial infrastructures in Vietnam (Steel and warehouses)
    • Renewable Energy opportunities (Solar power generation plants)

2. Due diligence case studies

  • Acquiring a stake in a Myanmar bank: what to expect in the due diligence?
  • Case study: Financing of a medical facility in Laos
  • Financing the acquisition of a stake in a producing power asset in Cambodia
  • Lessons learned from the Xe-Pian Xe-Namnoy dam collapse in Laos
  • Case study: what went wrong with this (canceled) expressway project in Vietnam?

3. Deal structuring

  • Financing the acquisition of a large MFI in Cambodia: Case study in deal structure
  • How to best structure an LNG to power project in Myanmar? FSRU, LNG supply, surprising tax rules
  • Case study: Tax efficient structure for an infrastructure project financing in Vietnam
  • How to structure a transmission line financing in Laos?

4. Local approvals and government guarantees

  • How is the new regulation on PPP and Government guarantees in Myanmar affecting current projects?
  • How workable are Vietnam’s new Government guarantee rules?
  • Case study: Approval package for financing an expressway in Laos
  • Cambodia’s tax rules on approving foreign loans

5. Security package and debt enforcement

  • Security package for a solar plant in Cambodia: registration and enforcement issues
  • Real lessons learned from the first High Court and Supreme Court cases in Myanmar on foreign arbitration
  • Case study on enforcing security in Laos as a foreign lender
  • Litigation and debt enforcement experiences in Vietnam all foreign lenders should be aware of

South East Asia Project Finance Overview

Panel Discussion:

  • Debt on security enforcement in CLMV: The Achilles heel?
  • Is there a trend towards less rather than more foreign exchange restrictions?
  • Sovereign guarantees: Country differences and practical insights

RECENT VDB LOI WORK
Power barge tender: The Energy Team is advising on the tender for a power barge rental project.

Infrastructure financing: VDB Loi is advising a Chinese multinational banking company on its financing of a port terminal project.

TMT financing: VDB Loi is assisting a major Myanmar tower company on the financing of tower acquisitions and construction.

Tax structure optimization: A regional design company has engaged our experts to advise on tax structuring options for a new and complex services project.

Labor compliance: The Regulatory team is assisting on employment contract matters for a global insurance company.

Land for power project: VDB Loi’s special land acquisition team has started work on the process for land procurement for a large electric power project.

NEW MYANMAR LAWS AND REGULATIONS THIS MONTH
  • Child Rights Law 2019 (Law No: 22/ 2019)
    (23 July 2019)
    Newly enacted for the protection of child rights and repealed the old one of 1993
     

VDB LOI NEWS
   
VDB Loi joins IPFA and Willis Towers Watson Event Panel

On 10 July 2019, IPFA hosted an event in partnership with Willis Towers Watson titled “Yangon – A New Era for Public-Private Partnerships (PPPs) in Myanmar – Opportunities, Associated Risks and Risk Mitigation“.

Maxim Kobzev, Counsel of VDB Loi moderated the panel and Mary Ann, Senior Legal Associate participated as a panelist. The panel mainly discussed the key dimensions for implementing PPP Projects in Myanmar.

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