Brunei is a member of the Association of Southeast Asian Nations (ASEAN), as association of ten Southeast Asian nations, which has Free Trade Agreements (FTA) with Australia, New Zealand, China, India, and South Korea, and a Comprehensive Economic Partnership Agreement with Japan.

Brunei currently has Bilateral Investment Treaties with Bahrain, China, Germany, India, the Republic of Korea, Kuwait, Oman, and Ukraine.  Brunei does not currently have a Bilateral Investment Treaty with the United States.

Brunei served as the ASEAN Coordinator in negotiations for the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), which was signed February 2009 in Thailand and entered into force January 2010.  Brunei is also a negotiating party to the Regional Comprehensive Economic Partnership (RCEP) and a signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Brunei does not have a Bilateral Taxation Treaty with the United States.  Brunei has signed Tax Information Exchange Agreements with Canada, Iceland, Norway, Finland, Greenland, Sweden, Australia, Denmark and Faroes.  Information on Brunei’s tax exchange agreements and treaties can be found on the Ministry of Finance and Economy: http://www.mofe.gov.bn  .  In 2017, Brunei became a signatory to the Organisation for Economic Co-operation and Development (OECD) multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Host country data available at depd.gov.bn  

Table 3: Sources and Destination of FDI

Brunei’s Department of Economic Planning and Development and IMF Coordinated Direct Investment Survey data are not available.

Table 4: Sources of Portfolio Investment

Brunei’s Department of Economic Planning and Development and IMF Coordinated Portfolio Investment Survey data are not available.

Burma has signed and ratified bilateral investment agreements with China, India, Japan, South Korea, Laos, Philippines, and Thailand.  It has also signed bilateral investment agreements with Israel and Vietnam although these have not yet entered into force. Burma has engaged in investment treaty negotiations with Bangladesh, China, Hong Kong, Iran, Mongolia, Russia, and Serbia.  Texts of the agreements or treaties that have come into force are available on the UNCTAD website at: http://investmentpolicyhub.unctad.org/IIA/CountryBits/144  .

In 2013, the United States and Burma signed a Trade and Investment Framework Agreement.

Burma does not have a bilateral investment treaty or a free trade agreement with the United States.

Through its membership in ASEAN, Burma is also a party to the ASEAN Comprehensive Investment Agreement, as well as to the ASEAN-Australia-New Zealand Free Trade Agreement, the ASEAN-Korea Free Trade Agreement, and the China-ASEAN Free Trade Agreement, all of which contain an investment chapter that provides protection standards to qualifying foreign investors.

Burma has border trade agreements with Bangladesh, India, China, Laos, and Thailand.

Burma has Avoidance of Double Taxation Agreements with the United Kingdom, Singapore, India, Malaysia, Vietnam and South Korea.

Burma does not have a bilateral taxation treaty with the United States.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* https://www.dica.gov.mm/sites/dica.gov.mm/files/document-files/yearly_country.pdf  . In 2018, Burma changed its fiscal reporting period from an April to March reporting period to an October to September period.  This amount only represents U.S. FDI between April and September 2018
**Accurate statistical data is limited in Burma, although this capacity is also being developed.

Table 3: Sources and Destination of FDI

* According to http://data.imf.org/CDIS  

Table 4: Sources of Portfolio Investment

Data not available.

BITs or FTAs

Cambodia has signed bilateral investment treaties (BITs) with 27 countries: Austria, Bangladesh, Belarus, China, Croatia, Cuba, Czech Republic, Democratic People’s Republic of Korea, France, Germany, Hungary, India, Indonesia (later terminated), Japan, Kuwait, Laos, Malaysia, the Netherlands, Pakistan, the Philippines, the Republic of Korea, Russia, Singapore, Switzerland, Thailand, Turkey, the United Arab Emirates, and Vietnam.  Cambodia does not have a BIT with the United States.

As a member of the Association of Southeast Asian Nations (ASEAN), Cambodia has signed regional investment agreements including the ASEAN Comprehensive Investment Agreement, the ASEAN-Hong Kong Investment Agreement, the ASEAN-India Investment Agreement, the ASEAN-China Investment Agreement, and the ASEAN-Korea Investment Agreement.

Cambodia is also a party to several regional free trade agreements that include provisions to liberalize trade as well as investment.  They include the ASEAN-Australia-New Zealand Free Trade Agreement, the ASEAN-Japan EPA, and ASEAN Framework Agreements with Korea, India, China, and the EU, that include investment provisions.  ASEAN is also a party to the Regional Comprehensive Economic Partnership Agreement (RCEP) that is currently under negotiation.

In July 2006, Cambodia signed a Trade and Investment Framework Agreement (TIFA) with the United States to promote greater trade and investment in both countries and provide a forum to address bilateral trade and investment issues. In January 2019, the fifth TIFA meeting took place in Siem Reap, Cambodia.

Bilateral Taxation Treaties

Cambodia does not have a bilateral taxation treaty with the United States, but has entered into six double taxation agreements with Brunei, China, Indonesia, Singapore, Thailand, and Vietnam. Details of those agreements are available on Cambodia’s General Department of Taxation (GDT) website: www.tax.gov.kh/en/ir.php  .

In the past, Cambodia’s GDT has lacked the capacity to collect taxes on a large scale. As a result, many companies evaded paying salary taxes, value-added taxes, and real estate taxes, despite being required to do so under Cambodian laws. The GDT has taken steps, however, to increase tax revenue both by building capacity within the organization and through better implementation of existing tax laws.

Application of Cambodia’s tax laws, while improving, remains inconsistent. In some cases, foreign investors face greater scrutiny to pay taxes than their domestic counterparts.  In others, the GDT has been criticized for employing audits and assessing large tax obligations for political purposes.

There has been a surge in FDI inflows to Cambodia in recent years. Though FDI goes primarily to infrastructure, including commercial and residential real estate projects, it has also recently favored investments in manufacturing and agro-processing. Cambodia reports its total stock of FDI reached USD 7.1 billion in 2018, up from USD 6.8 billion in 2017.

Investment into Cambodia is dominated by China, and the level of investment from China has surged especially in the last five years. Cambodia reports that its FDI from China reached USD 1.6 billion (year-end 2018), while fixed asset investment from China reached USD 15.3 billion. Taiwan and Hong Kong are also major sources of investment in Cambodia, accounting for USD 614 million and USD 376 million of FDI, respectively, through 2018.

Cambodian investments into other countries are still quite small. Through 2017, the IMF reports a total of USD 367 million of Cambodian investments, with most going to China and Singapore.

NOTE: Discrepancies exists between IMF counterpart country data and the investment figures reported by Cambodia’s official source, the Council for the Development of Cambodia (CDC). In some cases, counterpart country data reports much larger FDI stocks in Cambodia than reported by CDC. In other cases, the data from the Cambodia government is the only source available. Many of Cambodia’s key FDI partners (notably China, Taiwan and Hong Kong) do not report FDI figures to the IMF.

There are also discrepancies in the reported total stock of U.S. FDI in Cambodia. For FDI through 2017, the U.S. government (BEA) reports USD 151 million, the IMF reports USD 110 million, and Cambodia reports only USD 100 million.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: The Council for the Development of Cambodia (CDC) provides official government data on investment in Cambodia, but not all data is published online. See:  www.cambodiainvestment.gov.kh/why-invest-in-cambodia/investment-environment/investment-trend.html 

Table 3: Sources and Destination of FDI

Data retrieved from IMF’s Coordinated Direct Investment Survey database (mirror data, as reported by counterpart economies) presents a much different picture of FDI into Cambodia as compared to that provided by the Cambodian government. For example, Cambodia reports USD 6.8 billion total FDI through year-end 2017 (USD 7.1 through year-end 2018), while the IMF reports only USD 2.8 billion.

Table 4: Sources of Portfolio Investment

N/A – IMF CPIS Data for Cambodia is not available.

Indonesia has investment agreements with 41countries, including: Algeria, Australia, Bangladesh, Chile, Croatia, Cuba, Czech Republic, Guyana, Iran,  Jamaica, Jordan, Libya, Mauritius, Mongolia, Morocco, Mozambique, Norway, Pakistan, Philippines, Poland, Qatar, Russia, Saudi Arabia, Serbia, Slovak Republic, South Korea, Sri Lanka, Sudan, Suriname, Syria, Sweden, Tajikistan, Thailand, Tunisia, Turkmenistan, Ukraine, United Kingdom, Uzbekistan, Venezuela, Yemen, and Zimbabwe.

In 2014, Indonesia began to abrogate its existing BITs by allowing the agreements to expire. By 2018, 26 BITs had expired, including those with Argentina, Belgium, Bulgaria, Cambodia, China, Denmark, Egypt, France, Finland, Germany, Hungary, India, Italy, Kyrgyzstan, Laos, Malaysia, Netherlands, Norway, Pakistan, Romania, Singapore, Spain, Slovakia, Switzerland, Turkey, and Vietnam. However, Indonesia renewed its BIT with Singapore in October 2018. Indonesia is currently developing a new model BIT that could limit the scope of Investor-State Dispute Settlement provisions.

The ASEAN Economic Community (AEC) arrangement came into effect on January 1, 2016, and was expected to reduce barriers for goods, services and some skilled employees across ASEAN. Under the ASEAN Free Trade Agreement, duties on imports from ASEAN countries generally range from zero to five percent, except for products specified on exclusion lists. Indonesia also provides preferential market access to Australia, China, Japan, Korea, India, Pakistan, and New Zealand under regional ASEAN agreements and to Japan under a bilateral agreement. In accordance with the ASEAN-China Free Trade Agreement (FTA), in August 2012 Indonesia increased the number of goods from China receiving duty-free access to 10,012 tariff lines. Indonesia is also participating in negotiations for the Regional Comprehensive Economic Partnership (RCEP), which includes the 10 ASEAN Member States and 6 additional countries (Australia, China, India, Japan, Korea and New Zealand). In February 2019, RCEP entered the 25^th round of negotiations, which included discussion on trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, SMEs and other issues. In March 2019, ASEAN and Japan signed the First Protocol to Amend their Comprehensive Economic Partnership Agreement.

Indonesia has been actively engaged in bilateral FTA negotiations. In 2018, Indonesia signed trade agreements with Australia, Chile, and the European Free Trade Association (Iceland, Liechtenstein, Norway, and Switzerland). Indonesia is currently negotiating bilateral trade agreements with the European Union, Iran, Japan, Malaysia, Morocco, Mozambique, South Korea, Tunisia, and Turkey. In addition, Indonesia seeks to initiate trade negotiations with Bangladesh, Sri Lanka, the Gulf Cooperation Council, South Africa, and Kenya.

The United States and Indonesia signed the Convention between the Government of the Republic of Indonesia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of the Fiscal Evasion with Respect to Taxes on Income in Jakarta on July 11, 1988. This was amended with a Protocol, signed on July 24, 1996. There is no double taxation of personal income.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

*Bank of Indonesia, GDP from the host country website is converted into USD with the exchange rate 13.400 for 2018.

*Indonesia Investment Coordinating Board (BKPM), January 2019

There is a discrepancy between U.S. FDI recorded by BKPM and BEA due to differing methodologies. While BEA recorded transactions in balance of payments, BKPM relies on company realization reports. BKPM also excludes oil and gas, non-bank financial institutions, and insurance.

Table 3: Sources and Destination of FDI

Source:  IMF Coordinated Direct Investment Survey for inward investment data. World Investment Report 2018 UNTCAD for outward investment data, country specific data for outward investment is unavailable.

Table 4: Sources of Portfolio Investment

Source: IMF Coordinated Portfolio Investment Survey, 2018. Sources of portfolio investment are not tax havens.

The Bank of Indonesia published comparable data.

According to the United Nations Conference on Trade and Development (UNCTAD), Laos has bilateral investment agreements with Australia, Belarus, Cambodia, China, Cuba, Denmark, France, Germany, India, Indonesia, Japan, Republic of Korea, Kuwait, Malaysia, Mongolia, Myanmar, Netherlands, Pakistan, Russia Federation, Singapore, Sweden, Switzerland, Thailand, the United Kingdom, and Vietnam.  On February 1, 2005, a Bilateral Trade Agreement (BTA) entered into force between the United States and the Government of Laos that contains some investment provisions. The original BTA is available on MOIC’s website.

Laos and the United States do not have a bilateral taxation treaty.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available.

As a member of ASEAN, Malaysia is a party to trade agreements with Australia and New Zealand; China; India; Japan; and the Republic of Korea. During the review period, the ASEAN-India Agreement was expanded to cover trade in services. Malaysia also has bilateral FTAs with: Australia; Chile; India; Japan; New Zealand; Pakistan; and Turkey.

Reference: https://www.wto.org/english/tratop_e/tpr_e/s366_sum_e.pdf 

Malaysia has bilateral investment treaties with 36 countries, but not yet with the United States.  Malaysia does have bilateral “investment guarantee agreements  ” with over 70 economies, including the United States. The Government reports that 65 of Malaysia’s existing investment agreements contain Investor State Dispute Settlement (ISDS) provisions.  Malaysia has double taxation treaties with over 70 countries, though the double taxation agreement with the U.S. currently is limited to air and sea transportation.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

The Philippines has neither a bilateral investment nor a free trade agreement with the United States.  The only bilateral free trade agreement the Philippines has is with Japan. The Philippines has signed bilateral investment agreements with 39 countries or entities: Argentina, Australia, Austria, Bangladesh, Belgium-Luxembourg Economic Union, Cambodia, Canada, Chile, China, Czech Republic, Denmark, Finland, France, Germany, India, Indonesia, Iran, Italy, Kuwait, Mongolia, Myanmar, Netherlands, Pakistan, Portugal, Republic of Korea, Romania, Russian Federation, Saudi Arabia, Spain, Sweden, Switzerland, Syria, Taiwan, Thailand, Turkey, United Kingdom, and Vietnam.

The Philippines is party to ASEAN regional trade agreements, including an investment chapter with trading partners Australia and New Zealand, Republic of Korea, India, and China.  It also has an investment agreement with Iceland, Liechtenstein, Norway, and Switzerland under the Philippines-European Free Trade Association (EFTA) Free Trade Agreement.

The Philippines has a tax treaty with United States to avoid double taxation and provide procedures for resolving interpretative disputes and tax enforcement in both countries.  The treaty encourages bilateral trade and investment by allowing the exchange of capital, goods, and services under clearly defined tax rules and, in some cases, preferential tax rates or tax exemptions.

U.S. recipients of royalty income qualify for preferential tax rates (currently 10 percent) under the most favored nation clause of the United States-Philippines tax treaty.  A preferential tax treaty rate of 15 percent applies to dividends and interest income from bona fide loans; and 10 percent on interest income from government bonds. The Philippine Supreme Court ruled in 2013 that securing a tax treaty relief ruling from the Bureau of Internal Revenue (BIR) is not a legal requirement to qualify for preferential treatment and tax treaty rates; however, based on experience, tax experts generally still advise filing a tax treaty relief application to avoid potential challenges or controversies.  Despite efforts to streamline processes, taxpayers find documentation requirements for tax treaty relief applications burdensome. The volume of tax treaty relief applications has resulted in processing delays, with most applications reportedly pending for over a year. Inconsistent taxation rulings are also a concern.

The BIR rules and regulations for tax accounting have not been fully harmonized with the Philippine Financial Reporting Standards.  The BIR requires taxpayers to maintain records reconciling figures presented in financial statements and income tax returns. Additional information regarding BIR regulations is available on the BIR website   (https://www.bir.gov.ph/ ).

The Philippines and United States signed a reciprocal Inter-Governmental Agreement (IGA) in July 2015 for automatic exchange of information between tax authorities to implement the U.S. Foreign Account Tax Compliant Act (FATCA).  The bilateral agreement has yet to enter into force pending completion of domestic legal remedies to overcome stringent bank secrecy restrictions to the disclosure/sharing of information.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

*Host Country Statistical Sources:
Philippine Statistical Authority (http://psa.gov.ph/nap-press-release/data-charts  )
Bangko Sentral ng Pilipinas (http://www.bsp.gov.ph/statistics/efs_ext2.asp#FCDU  )

Table 3: Sources and Destination of FDI

The Philippine Central Bank does not publish or post inward and outward FDI stock broken down by country.  Total stock figures are reported under the “International Investment Position” data that the Central Bank publishes and submits to the International Monetary Fund’s Dissemination Standards Bulletin Board (DSBB).  As of the 4th quarter of 2018, inward direct investment (i.e. liabilities) is USD 83 billion, while outward direct investment (i.e. assets) is USD 51.9 billion.

Table 4: Sources of Portfolio Investment

The Philippine Central Bank disaggregates data into equity and debt securities but does not publish or post the stock of portfolio investments assets broken down by country.  Total foreign portfolio investment stock figures are reported under the “International Investment Position” data that Central Bank publishes and submits to the International Monetary Fund’s Dissemination Standards Bulletin Board (DSBB).  As of 2018, outward portfolio investment (i.e. assets) was USD 19.5 billion, of which USD 1.9 billion was in equity investments and USD 17.7 billion was in debt securities.

Singapore has 33 bilateral investment treaties (BIT) currently in force. These agreements mutually protect nationals or companies of either economy against non-commercial risks of expropriation and nationalization. It has signed an additional eight BITs that have yet to be implemented, including some that were signed several years ago.

Singapore has 13 bilateral and ten regional free trade agreements (FTA) currently in force. Singapore has signed free trade or economic cooperation agreements that include investment chapters with ASEAN, Australia, Canada, Chile, Mexico, China, the European Free Trade Association (Switzerland, Norway, Liechtenstein, and Iceland), India, Japan, New Zealand, Panama, Peru, South Korea, Costa Rica, the United States, Turkey, Sri Lanka, and Chinese Taipei. Singapore also has agreements with Jordan and the Gulf Cooperation Council (comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), but these agreements do not contain investment chapters. Singapore is a member of ASEAN, which has in force FTAs with Australia and New Zealand, China, India, South Korea, and a Comprehensive Economic Partnership Agreement with Japan. Singapore also has a Trans-Pacific Strategic Economic Partnership Agreement with Brunei, Chile, and New Zealand.

Singapore and the European Union signed a bilateral FTA in October 2018, which is awaiting ratification. Singapore also signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Singapore is actively negotiating FTAs with the Eurasian Economic Union (including Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan) and the Pacific Alliance (Chile, Colombia, Mexico, and Peru). ASEAN is currently negotiating FTA extensions with Japan, China, and Australia, as well as the Regional Comprehensive Economic Partnership (RCEP), which includes ASEAN members plus Australia, China, India, Japan, New Zealand, and South Korea.

Singapore has signed Avoidance of Double Taxation Agreements (DTAs) with 90 countries, but Singapore does not have a comprehensive Avoidance of Taxation Agreement with the United States. U.S. financial regulations do not restrict foreign banks’ ability to hold accounts for U.S. citizens. U.S. citizens are encouraged to alert the nearest U.S. Embassy of any practices they encounter with regard to the provision of financial services. No tax disputes have been reported.

In November 2018, Singapore signed a Tax Information Exchange Agreement and a reciprocal Foreign Account Tax Compliance Act Model 1 Intergovernmental Agreement with the United States. The new reciprocal Intergovernmental Agreement will supersede the current non-reciprocal one (entered into force in 2015) upon ratification.

In November 2018, Singapore’s parliament passed a bill to apply the goods and services tax (GST) to digital service supplies beginning January 1, 2020.  The current GST rate of seven percent is scheduled to increase to nine percent between 2021 and 2025.  Currently, GST is not applied to services provided by a foreign-based digital service supplier with no presence in Singapore. Other recent changes in Singapore’s taxation regime include an extension of the Writing Down Allowance for acquisition of qualifying Intellectual Property Rights.  In the 2019 budget, Singapore revised the quantum of GST import relief for travelers for the value of goods bought overseas. Singapore plans to initiate a carbon tax in 2019 by pricing carbon at approximately USD 3.61 (5 Singaporean dollars) per metric ton of greenhouse gas emissions from 2019 to 2023.  The initial pricing level for the first five years was designed to provide companies with a transition period to adjust to the law. Singapore will review the rate by 2023 and intends to increase the pricing level between USD 7.30 to USD 10.95 (10 to 15 Singaporean dollars) per metric ton by 2030.  At that time, Singapore will take into account its economic competitiveness, international environmental developments and Singapore’s progress towards its environmental goals. Instead of imposing differing taxes on specific sectors, Singapore opted for a simple carbon tax with no exemptions. Despite new tax announcements, the Government of Singapore pledged to “extend and strengthen” tax incentives to enhance business competitiveness.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Data taken from www.singstat.gov.sg  . Note: Exchange rate of SGD$1/US$0.7381

Table 3: Sources and Destination of FDI

Outward investment not available from CDIS. Data taken from www.singstat.gov.sg  .

Table 4: Sources of Portfolio Investment

The 1966 iteration of the U.S.-Thai Treaty of Amity and Economic Relations allows U.S. citizens, and U.S. majority-owned businesses incorporated in the United States or Thailand, to engage in business on the same basis as Thai companies (national treatment). However, the FBA applies restrictions to U.S. investment in the following sectors:  communications; transportation; exploitation of land and other natural resources; and domestic trade in agricultural products.

In October 2002, the United States and Thailand signed a bilateral Trade and Investment Framework Agreement (TIFA), which established a forum to discuss bilateral trade and investment issues, such as intellectual property rights, customs, market-access barriers, and other areas of mutual concern.

Thailand has bilateral investment treaties with Argentina, Bahrain, Bangladesh, Belgium-Luxembourg Economic Union, Bulgaria, Cambodia, Canada, China, Croatia, Czech Republic, Egypt, Finland, Germany, Hong Kong, Hungary, Indonesia, Israel, Jordan, Democratic People’s Republic of Korea, Republic of Korea, Lao People’s Democratic Republic, Myanmar, Netherlands, Peru, Philippines, Poland, Romania, Russian Federation (signed, not in force), Slovenia, Sri Lanka, Sweden, Switzerland, Taiwan, Tajikistan (signed, not in force), Turkey, United Arab Emirates, United Kingdom, Vietnam, and Zimbabwe (signed, not in force). Thailand is a member of the Regional Comprehensive Economic Partnership (RCEP), currently under negotiation.  Thailand is also preparing its application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which entered into force on December 30, 2018.

Thailand belongs to the 10-member Association of Southeast Asian Nations (ASEAN), a regional free-trade and economic bloc comprising a total population of 600 million. ASEAN has free trade agreements with Australia, New Zealand, China, India, Korea, and Hong Kong. ASEAN also has a comprehensive economic partnership with Japan and is pursuing FTA negotiations with the EU, Pakistan, and Canada.

Thailand and the United States concluded a bilateral tax treaty in 1996. Thailand signed the U.S.-Thailand Foreign Account Tax Compliance Act (FATCA) on March 4, 2016. Implementing legislation for FATCA, the Act on the Agreement between the Government of the United States of America and the Government of the Kingdom of Thailand to Improve International Tax Compliance and to Implement FATCA, BE 2560, went into effect in October 2017.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment: https://www.bot.or.th/English/Statistics/EconomicAndFinancial/
Pages/StatInternationalInvestmentPosition.aspx  

Vietnam maintains trade relations with more than 200 countries, and has 66 bilateral investment treaties (BITs) and 26 treaties with investment provisions. It is a party to five free trade agreements (FTAs) with ASEAN, Chile, the Eurasian Customs Union, Japan, and South Korea. As a member of ASEAN, Vietnam also is party to ASEAN FTAs with Australia, New Zealand, China, India, Japan, South Korea, and Hong Kong.   

In addition, CPTPP entered into force January 14, 2019, in Vietnam. Once fully implemented, CPTPP will form a trading bloc representing 495 million consumers and 13.5 percent of global GDP – worth a total of USD 10.6 trillion.  

In July 2018, the EU and Vietnam agreed on the final text of the EV FTA and the EU-Vietnam Investment Protection Agreement (EV IPA), which are due to be voted upon by the European Parliament in 2019.

Vietnam is a participant in the Regional Comprehensive Economic Partnership (RCEP) negotiations, which include the 10 ASEAN countries and Australia, China, India, Japan, South Korea, and New Zealand, and it is negotiating FTAs with other countries, including Israel. A full list of signed agreements to which Vietnam is a party is on the UNCTAD website:  http://investmentpolicyhub.unctad.org/IIA/CountryBits/229#iiaInnerMenu  .

Vietnam has signed double taxation avoidance agreements with 80 countries, listed at http://taxsummaries.pwc.com/ID/Vietnam-Individual-Foreign-tax-relief-and-tax-treaties  . The United States and Vietnam concluded and signed a Double Taxation Avoidance Agreement (DTA) in 2016, but it is still awaiting ratification by the U.S. Congress.

There are no systematic tax disputes between the government and foreign investors. However, an increasing number of U.S. companies disputed tax audits, which resulted in retroactive tax assessments. U.S. businesses generally attribute these cases to unclear, conflicting, and amended language in investment and tax laws and the government’s desire for revenue to reduce chronic budget deficits. These retroactive tax cases against U.S. companies can obscure the true risks of operating in Vietnam and give some U.S. investors pause when deciding whether to expand operations.

Decree 20/2017/ND-CP, effective since May 2017, introduced many new transfer-pricing reporting and documentation requirements, as well as new guidance on the tax deductibility of service and interest expenses. The Ministry of Finance (MOF) is drafting revisions to its Law on Tax Administration and expects to submit the draft law to the National Assembly for review and approval in 2019.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

*No IMF Data Available; Vietnam’s Foreign Investment Agency under the Ministry of Planning and Investment (fia.mpi.gov.vn)

**No local data available

Table 4: Sources of Portfolio Investment

*No IMF Data Available; Vietnam’s Foreign Investment Agency under the Ministry of Planning and Investment (fia.mpi.gov.vn)
**No local data available