In this issue:

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LATEST NEWS1

Vietnamese Government ensures the security of foreign investment at VSIP Binh Duong

More FDI at VSIP Binh Duong

Binh Duong, May 17, 2014 – Vietnamese President Truong Tan Sang toured the VSIP Binh Duong to survey the damage after thousands of Vietnamese staged protests in the province over China's activi-ties off the coast of Vietnam.

During the visit, he also met with the VSIP manage-ment and tenants. The President expressed his re-gret that damage was caused to tenant properties and the industrial park. President Sang assured eve-ryone of the police's commitment to ensure safety.

President also shared that this was the first of such incident in Vietnam after more than 30 years, add-ing that the violence was unexpected.

Binh Duong, June 4, 2014 – Eight more foreign investors of VSIP Binh Duong were granted in-vestment certificates by the Binh Duong People’s Committee. Of the total, three are newly set up en-terprises while the remainders are existing invest-ments that have injected more capital into their operations. With the new investment, these have increased the total number of investment projects at VSIP Binh Duong to more than 400.

In the first half of 2014, VSIP Binh Duong has achieved very impressive FDI results. There has been a remarkable 253% year on year increase in investment capital reaching US$500million. The FDI source came primarily from Korea, USA, Netherland, Malaysia and Singapore.

H.E. Truong Tan Sang (L) has acknowledged the important con-tributions of foreign investors to Vietnam's economy and the role of the Vietnam Singapore Industrial Park ( VSIP) in facilitat-ing the country's economic development.

Chairman Le Thanh Cung of Binh Duong Province (C) congratu-lates the enterprises at the investment certificate award ceremo-ny in the province.

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TENANT NEWS2 Binh Duong, May 30, 2014 – Branch of Indo Trans Keppel Logistics Vietnam kicked off the construction of its 1.5–hectare factory in VSIP I Binh Duong. Once completed, the complex will provide cargo handling services, customs clearance services, freight forwarding services, and warehouse services. With the total investment capital of US$5.5 million, the cargo complex will become operational in the first quarter of 2015.

Quang Ngai, May 29, 2014 - King Riches (UK) held the groundbreaking ceremony of its footwear export manufacture plant in VSIP Quang Ngai Integrated Township and Industrial Park, Quang Ngai province.

The plant covers an area of 25.3-hectare with an investment of US$30 million to $50 million in two stages. The first stage of development with an investment of US$20 mil-lion scheduled to complete and put into operation by May 2015. The massive devel-opment will compromise of: 3 plants, 1 production facilities, 1 dormitory for workers, 1 cafeteria, 1 kitchen, 1 parking lot and others.

King Riches is a subsidiary of Kingmaker Footwear Group (Hong Kong), a corporation listed on Hong Kong and Taiwan Stock Exchange. Kingmaker opened its first plant at VSIP Bình Dương in 1999. To date, it has escalated and increased the total investment capital to US$24 million, creating jobs for more than 9,000 workers.

In his opening remarks, Chairman of King Riches Viet Nam, Mr Mickey Chen said he trusted the Vietnamese Government and people as well as the VSIP management. He acknowledged that the support has strengthened the company’s trust and created favorable conditions for the implementation of King Riches’ project in Quang Ngai.

Binh Duong, April 9, 2014 – Molenbergnatie Group hold the ground breaking cer-emony of its first factory in VSIP II Binh Duong. As one of the leading, innovative and trustworthy partners in the supply chain management of soft commodities from Belgium, Molenbergnatie Vietnam Limited Company (MBN Vietnam) will specialize in operating bonded and non-bonded warehouses as well as providing storage and warehousing services. They will also provide preservation and packaging service of ag-riculture produce. MBN Vietnam will invest a total investment capital of US$17 million on an area of 12-hectare. The plant expects to commence operation by the early 2015.

Binh Duong, May 12, 2014 – Today, Rohto-Mentholatum (VN) Co., Ltd organizes an open-ing ceremony to inaugurate The 2nd manufacturing building located in VSIP Binh Duong with an aim to strengthen our commitment to long-term investment and sustainable de-velopment in Vietnam.

With the establishment of the second manufacturing building of Rohto-Mentholatum (VN) at No. 16, Street 5, VSIP, the total investment of Rohto Mentholatum in Vietnam is increased to US$33 million. The opening ceremony of this 2nd manufacturing building will help in-crease the company’s output capacity to meet customers’ demands. Covering a total area of over 2.1-hectare, the manufacturing building is well equipped with modern facilities and production lines intended for the manufacture of functional skin-care products.

Since taking its first footstep in Vietnam in 1996, Rohto-Mentholatum (VN) has put into op-eration the first pharmaceutical factory in VSIP Binh Duong granted with GMP standard; ex-panded production area and built a new warehouse with the standard of WHO GMP, PIC/S GMP, J-GMP and C-GMP; invested in the most modern eye drops production line, which is fully operated by robot.

Branch of Indo-Trans Keppel Logistics Vietnam kicks off the project

King Riches breaks ground at VSIP Quang Ngai

Molenbergnatie Vietnam Limited Company starts construction

Rohto-Mentholatum (VN) opens the second manufacturing building in VSIP Binh Duong

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CORPORATE SOCIAL RESPONSIBILITY 3

THE 12TH VSIP CHARITY DAYSUCCESSFULLY RAISED US$40,000Themed “Youth of VSIP”, the 12th VSIP Charity Day raised US$40,000 for VSIP Charity Fund;

Charity Walk event attracted 1,500 participants to raise fund for community.

Binh Duong, May 11, 2014 – The Vietnam Singapore Industrial Park (VSIP) Management Board, the VSIP Trade Union and VSIP JV Company successfully raised US$40,000 at the 12th VSIP Charity Day on May 10 and 11, 2014. The charity drive started in 2003 continues to promote charitable activities and support underprivi-leged organizations in the province of Binh Duong.

The 2-day events which featured a fun fair, charity walk, tra-ditional games and art performances brought together gov-ernment officials, Management and staff of the 300 operat-ing tenants of VSIP to do their part for the less privileged community. The proceeds and donations collected will go toward the numerous homes that the VSIP Charity Fund sup-ports such as the VSIP Community Clinic in Tan Uyen District which provides free medical consultation, scholarships to workers’ children, homes for the disabled such as the hear-ing and visually impaired and homes for the elderly folks and orphanages.

For the first time in the history of VSIP Charity Day, a 2.5km Charity Walk was added to the 2 days fun filled charity event and it drew 1,500 participants to walk together to raise fund for the community. “Taking part in a charity walk and contrib-uting to the community will be one of my best moments for me to remember,” said a disabled participant joining the walk on a wheelchair. He is amongst the 30 disabled and visually impaired participants at the charity walk.

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3 CORPORATE SOCIAL RESPONSIBILITY

In his opening remark, Mr Anthony Tan – Deputy General Director of VSIP JV Company said, “All the VSIP charitable activities would be impossible without the generous support from tenants, busi-ness partners, workers and staffs at VSIP. We would like to take this opportunity to extend our sincere gratitude to all for the strong support including all the sponsors and everyone who participates in the Charity Day activities.” After twelve years since establishment, the VSIP Charity Day has fulfilled its mission to become an an-nual playground for thousands of work-ers, while it also successfully raised the VSIP Charity Fund as a reliable platform for hundreds of VSIP tenants to donate and contribute to the community where they operate.

“VSIP would like to assure you that VSIP Charity fund will be spent in the most ef-fective and appropriate manner. We look forward to your continued support and participation to our VSIP Charity activi-ties,” Mr Anthony added.

Our congratulations to the following VSIP Tenants named in Binh Duong Green Book 20141. Petrolimex Paint Co., Ltd.2. Nitto Denko Vietnam Co., Ltd.3. Hoya Lens Vietnam Co., Ltd.4. Stada Vietnam JV, Co.5. Estec Vina Co., Ltd.6. GS Battery Vietnam Co., Ltd.7. Imexpharm Pharmaceutical JSC8. Kaneka Pharma Vietnam Co., Ltd.9. Roussel Pharmaceutical Vietnam Co.10. Apparel Far Eastern Vietnam Co., Ltd.11. Glomed Pharmaceutical Co., INC12. Glatz Paper Vietnam Co., Ltd.13. Vietnam Parkerizing Co., Ltd.14. Kimberly - Clark Vietnam Co., Ltd.15. Takako Vietnam Co., Ltd.16. Tran Quang Coffee & Tea Co., Ltd.17. Korea United Pharm Int'l Inc18. Esquel Garment Manufacturing Vietnam Co., Ltd.19. Procter & Gamble Indochina Ltd.20. Uchiyama Vietnam Co., Ltd.21. Rohto Mentholatum Vietnam Co., Ltd.22. Omron Healthcare Manufacturing Vietnam Co., Ltd.23. Onamba Vietnam Co., Ltd.24. Green Cross Vietnam Co., Ltd.25. Yakult Vietnam Co., Ltd.

Binh Duong New City, May 31, 2014 - At the ceremony commemorating the World En-vironment Day in Binh Duong New City, VSIP and its 25 customers were among 59 enter-prises honored in the Green Book 2014 of Binh Duong Province for their achievements in the environmental protection in the province.

For enterprises to be named in the Green Book 2014, they must successfully achieved three criteria, i.e.: (1) comply with environmental legislation; (2) comply with the environmental standards and specifications; (3) and comply with environmental management profile and other related issues

The Green Book of Binh Duong province was started in 2011 by the Department of Natu-ral Resources and Environment to recognize and celebrate province-based enterprises for their significant contributions to the provincial environment and to enhance the aware-ness of other enterprises in environment protection by attracting the publicity of the Green Book. In 2012, 22 VSIP tenants were honored in this publication.

VSIP and its 25 customers honored in the Binh Duong’s Green Book 2014

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WORKSHOP 4

In the Quarter II/ 2014, VSIP offered the following practical courses to tenants and customers: 1. Interpersonal skill training course on April 10 & 11. 2. Business correspondence training course from June 5 & 6 to July 17 &18. 3. Application of 7 QC tools in quality management training course on June 9 & 10. 4. Practical methods to enhance production capacity training course on June 23 & 24.

VSIP together with The Liner Co., Ltd. organized a seminar on health and safety at workplace for VSIP tenants on June 25. The seminar provided participants insight on strategic solutions to improve health and safety performance at workplace.

VSIP partnered with PwC to organize a tax seminar on 18 June. The participants acquired useful information relating to transfer pricing such as its changes and practical experience on how to comply with legislative requirements.

Following the earlier success of tax seminars organized in Japanese language, VSIP decided to organize seminar on June 18, focusing on labor issue in Japa-nese. At the seminar, Baker McKenzie updated new regulations on work permit procedure, as well as providing practical advices for customers in dealing with the new regulations.

VSIP Training Courses in Quarter II/ 2014

June 25, 2014: Seminar on Health & Safety at Workplace

June 18, 2014: Tax seminar by PricewaterhouseCoopers (PwC)

June 18, 2014: Seminar on new regulations on work permits(in Japanese)

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WORKSHOP 4

Binh Duong Tax Department and VSIP jointly organized a dialog session with the VSIP tenants on April 24, 2014. The participants received useful informa-tion relating to new regulations on Corporate Income Tax, as well as having discussion on their current difficulties and problems when implementing tax regulations with the Binh Duong Tax officials.

Vietnam Singapore Industrial Park Management Board (VSIP MB) organized a labor seminar at VSIP auditorium on April 23. This seminar aims to circulate the Decree 102/2013/NĐ-CP and Circular 03/2014/ TT- BLĐTBXH and provide guidance on the implementation of Decree 102/2013/NĐ-CP on Work Permit to the enterprises.

VSIP and TUV SUD co-organized an Energy Efficiency Workshop in dual lan-guage English -Vietnamese on April 03, 2014. The aim of the workshop is to equip attendants with an overview of information related to Vietnam Efficien-cy Law, the technical and financial how-to to kick start their energy efficiency journey.

April 24, 2014: Dialog session with Binh Duong TaxDepartment

April 23, 2014: Labor Seminar

April 03, 2014: Energy Efficiency Workshop by TUV SUDVietnam

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5 UPCOMING EVENTS

Tax update by PwC on July 25, 2014. Language: Vietnamese

Tax update by PwC on August 06, 2014. Language: Mandarin.

Methods to collect debts by An Luat on August 14, 2014. Language: Vietnamese.

Tax update by Deloitte on August 27, 2014. Language: Japanese.

Essential Skills for Production Supervisor/Managers Training Course on August 21 &

22, 2014. Language: Vietnamese.

Telephoning Skills Training Course on September 4 & 5, 2014. Language: English.

Effective Sales Technique (Marketing & Sales) Training Course on September 11 &

12, 2014. Language: Vietnamese.

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TRAINING COURSES

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6 LEGAL UPDATES

TAX RELIEF FOR VICTIMS OF RECENT RIOTS

On May 22, 2014, the Prime Minister issued Notice 207/TB-VPCP urgently providing various relief measures to help busi-nesses affected by recent riots in the provinces Binh Duong, Dong Nai and Ha Tinh. The relief measures include (amongst others) the following tax relief:

•Extensionoftimeforfilingtaxreturns. •Upto2yearsofdefermentoftaxdebtswithoutlatepaymentpenalty,inrespectoftaxdebtsincurredpriorto May 2014. Amount eligible for deferral equals the extent of damages suffered. •Import/exportdutyexemption,reduction,orrefundinrespectofinventorylostordamagedbytheriots;and removal of customs blockages against affected businesses that has tax debts. •PromptlyallowinputVATcreditorrefundwithrespecttogoodsorservicesthatwerelostordamagedandnot indemnified for, including cases where invoices, supporting documents have been lost. •Allowcorporateincometaxdeductionsfor(i)lossesordamagesnotindemnifiedfor,ornotcovered [by insurance] (ii) interest expenses on loans acquired to contribute charter capital, to the extent such loans are used to restore losses or damages. Special Sales Tax (SST) reduction up to 30% of SST liability in 2014 or the total amount of unindemnified damaged assets, whichever is lower. •Reductionorexemptionoflandrentalonacasebycasebasis.

CIRCULAR 78 ON CORPORATE INCOME

Circular 78 guiding the implementation of Decree 218 on CIT has been issued and will be effective from 2 August 2014. It will take retrospective effect for the whole 2014 tax year.

1. CIT incentives •TheGovernmenthasreintroducedtaxincentivesforinvestmentsincertainindustrialzones.Industrialzones that do not qualify for CIT incentives are those in the inner districts of Ho Chi Minh City, Hanoi and Hai Phong and those in provincial cities type 1. •CITincentivesareavailableforbotha“newproject”and“businessexpansion”.

•A“newproject”isaprojectthathasbeenissuedaninvestmentcertificateforthefirsttimeandneednotbe a new company. It can also be an investment project issued its investment certificate before 2014 but generating its first revenue after 1 January 2014. However, it is necessary that an amended investment certificate be issued after January 2014.

•“Businessexpansion”requiresthattherebeaprojectinanencouragedsectororlocationandoneofthe following conditions is met: i. The historical cost of the fixed assets increases at least VND20B for investment in an encouraged sector or VND10b for investment in an encouraged location; or

ii. The historical cost of the fixed assets increase at least 20% compared with the total historical cost of fixed assets before the business expansion; or iii. The design capacity increases at least 20% compared to the design capacity before the business expansion.

•ForaprojectprovidedCITincentivesbecauseofitssector,profitfromthesaleofscraps,foreignexchange differences in relation to its main activities and other direct income (except interest from term deposit) are entitled to the CIT incentives.

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6 LEGAL UPDATES

(Soure: PwC)

•ForaprojectprovidedCITincentivesbecauseofitslocation,allprofitsareentitledtoCITincentivesexceptfor profits from capital assignment, transfer of immovable property and from services subject to special sales tax.

2. Deductible expenses •ThecaponthedeductibilityofAdvertisingandPromotion(A&P)expenseshasbeenincreasedfrom10%to15%. For a trading entity, the purchase price of goods must be excluded from the expense base for A&P cap calculation purposes. The purchase price of goods is defined to include import duty, special sales tax and environment tax (if any). •GiftstocustomersareCITdeductiblebutsubjecttotheA&Pcap.

•PaymentdiscountsarenolongersubjecttotheA&Pcap.

•Forcasinoorgamingactivities,deductiblemanagementexpensesarecappedat4%ofrevenue.

•InordertobeCITdeductible,themostupdatedsalaryneedstobementionedinthelabourcontractoritsappendix. •SchoolfeesforthechildrenofexpatriatesarenowCITdeductiblecommencingfrompre-school.

•Fortheonlinepurchaseofairtickets,evidenceofnon-cashpaymentandtheboardingpass(ordecisionon business trip) are required for CIT deductibility purposes. These documents are not required if the air ticket is purchased from an airline/agent and supported by a VAT invoice.

3. Other changes •Thereversalofprovisionsandnetunrealizedforeignexchangegainsrelatingtothemainbusinessactivitiesofa taxpayer are no longer treated as other income.

•A&Pexpensesforarealestatecompanywillberecognisedinthefirstyearofhandoverofrealpropertyinstead of in the year incurred.

•CapitalassignmentwithavalueofVND20mormoremustbesupportedbydocumentsevidencingnon-cash payment. If not, the tax authorities have the right to deem the transfer price for CIT purposes.

•Forentitieswithanalternatetaxyearend(i.e.not31December),theapplicableCITrateswillbeappliedonan apportionment basis e.g. 1 July – 31 Dec 2013 = 25% and 1 Jan – 30 June 2014 = 22%.