Industrial real estate

By Anh Duc

MOIT has submitted a statement to the Government about amending some articles of the decree 83/2014 on petroleum trading management. The document was submitted on March 29, just days before the new Government tenure began.

Foreign-ownership ratio

According to MOIT, when the Government Office collected opinions from Government members on the draft that amends and supplements Decree 83 on petroleum trading, 24 out of 25 members agreed with the draft regulations.

Only one member, who asked for an adjustment, disagreed with the plan to allow businesses trading petroleum products to transfer up to 35 percent of shares to foreign investors.

Three members agreed with the draft document, but also offered suggestions on several issues.

In the document, MOIT gave further explanations about the tentative plan to allow Vietnamese petroleum trading companies that have production activities to transfer shares to foreign investors.

This remains a controversial issue. The ministries of Public Security, Planning and Investment, and Finance say this raises concerns about energy security, legality, and the benefits of opening the market to foreign investors.

MOIT said the regulation was recently legalized, but, in fact, it has already been implemented. Petrolimex, for example, has sold 20 percent of its shares to a foreign investor, PVOil 35 percent, and BSR 49 percent through equitization. The sales were approved by the Prime Minister before they were implemented.

These enterprises have been operating as usual.

MOIT explained that adding the regulation to the draft decree aims to implement the Government decision in March 2016 on issuing shares to Petrolimex’s strategic shareholders to increase its capital.

The ministry said the presence of foreign investors in Vietnamese petroleum companies improves corporate governance and makes financial reports more transparent, thus improving the efficiency and competitiveness of enterprises. It also helps increase the value of enterprises through higher share value.

The presence of foreign investors in Vietnamese petroleum companies improves corporate governance and makes financial reports more transparent, thus improving the efficiency and competitiveness of enterprises. It also helps increase the value of enterprises through higher share value.

MOIT commented that foreign investors are very knowledgeable about Vietnamese laws and strictly observe the laws. However, since there is no official regulation on the exact ownership ratio that foreign investors can hold, Vietnamese enterprises and state management agencies are unclear when negotiating with foreign investors on business issues.

What will happen?

According to MOIT, there are thousands of other petroleum traders, including listed joint-stock companies operating in many business fields which also want to attract foreign investment.

Foreign investors are also interested in these companies, but they face difficulties when planning investment projects because the regulations are not clear enough. Therefore, MOIT believes that the regulation on the foreign-ownership ratio ceiling will suit the practices and development demand of the petroleum industry.

“The limitation on share transfer at 35 percent will help attract investment capital while restricting the intervention of foreign investors into production and business activities of Vietnamese enterprises,” MOIT stated.

The country needs to assess the benefits it can expect if it doesn’t open the market to foreign investors, and the benefits of opening the market, which can help attract capital and technologies.

MOIT affirmed that the proposal on opening the petroleum market was based on the demand of Vietnamese enterprises, not demand from foreign enterprises. It said that most countries in the world and the region have opened their markets, including China, Singapore, Thailand and Japan.

It said that petroleum companies, once they do business in Vietnam, must comply with the requirements and regulations stipulated in the decree and other relevant legal documents. Therefore, there is no need to worry about energy security.

In principle, this is a kind of indirect investment, as foreign investors are not allowed to directly distribute petroleum products in Vietnam. The distribution will be implemented only when foreign companies set up branches in Vietnam.

However, while trying to protect its view to allow foreign investment in petroleum companies, the ministry believes that it would be better to remove the tentative regulation on the foreign-ownership ratio from the draft Decree for now, if the Prime Minister thinks that the issue needs further consideration.

The draft decree has not been approved yet and will be considered by the new Government.

The Ministry of Finance (MOF) has proposed creating a regulation on controlling the number of petroleum distribution businesses in order to prevent over-development.

In reply, MOIT said the increase in number of businesses is suited to real conditions. Prior to 2015, Vietnam had 23 petrol businesses, and the figure now is 40, which is believed not to be a big increase, if compared with 500 in China and over 500 in Singapore.

MOIT has promised to work with MOF and relevant agencies to strengthen post-licensing inspections in an effort to strictly control the quality and quantity of businesses in the petroleum market.

Luong Bang

A lot of people were taken by surprise to know that Nghiem Tien Vien had resigned from a high-paying job to return to his hometown several years ago.

Many of them would like to ask him a question: why?

It is natural to raise the question, in fact.

Vien, a millennial, quit when he had a decent job with a monthly salary of around US$2,500, which would be a dream to many other people in Vietnam.

At the age of 31, Vien is the director of the Gostream Technology Joint Stock Company, one of the seven most excellent startups of Vietnam which participated in Techfest 2019 in Silicon Valley in the U.S.

Gostream managed to raise $1 million in its Series A funding round from the local Vinacapital Ventures Foundation previously.

Facebook once listed it as one of 30 platforms that had been live-streamed most in the world in 30 days.

‘I can do it more simply’

Vien was offered a job as a technical manager in a U.S. company based in Vietnam with a salary of $2,500 a month after he graduated from the Hanoi University of Science and Technology several years ago.

To many people’s surprise, however, he gave up the post to come back to his hometown and work for a newspaper as a technical manager.

While working there, Vien had to do a lot of tasks related to live-stream activities.

He found it uncomfortable to use existing tools and apps that were available on the market then.

“It can be improved. I can do it more simply, why did others make it complicated like that?” Vien wondered to himself.

Vien nurtured the idea for one year before launching a startup offering a technical solution named Gostream.

The app helps users save time by using recorded and edited videos in live-streaming.

Gostream was put in the spotlight virtually immediately after being unveiled, thanks partly to meeting the growing demand of many sellers online at that time in Vietnam.

Being inspired from the first success, Vien continued to introduce a new product, Gostudio, an app that provides users with a tool to live-stream interactively on such popular social media platforms as Facebook, YouTube, and Twitter with many unique features and functions.

“The platform can be used as a mini studio that allows you to add a logo, photos, characters, and videos to live streams,” Vien talks of some special functions of Gostudio.

“You can also operate it as a network of television channels and invite others to live-stream videos from anywhere they have got a connection.

“You can use two cameras from two different corners to flip scenes during a live stream, which is really the same as a real studio.

“Gostudio, however, is easier to use because you can utilize smartphones instead of cameras.”

In the context of the novel coronavirus (COVID-19) pandemic, Gostudio soon became a household name because of a growing demand for virtual meetings and conferences and its capability to cope with the demand domestically and internationally.

“The pandemic turned out to be an opportunity for us and we tried to engage with investors,” Vien told Tuoi Tre (Youth) newspaper.

“They were so persuaded by our existing products that they were willing to invest in our projects in 2021.”

Gradually conquering global market

Three years ago, Vien chose the north-central province of Nghe An, his hometown, as a starting point for making Vietnam recognized on the world’s ‘technology map.’

However, Hanoi and Ho Chi Minh were two only cities whose startups could attract investments at that time.

Vien acknowledged that his decision to choose Nghe An to launch a startup was driven by financial considerations.

He only needed to spend a much smaller amount of money than his peers do in other big cities like Hanoi or Ho Chi Minh City paying for office rent or equipment.

This helped Vien’s enterprise hold on for a longer time to have their first client.

Vien had to deal with human resources as well.

“It is very difficult to compete with major companies,” Vien acknowledged.

The young businessman became a headhunter in his own hometown, looking for potential employees who live and work in the local community and training them for the company.

Apart from setting up a head office in Nghe An, Vien chose a co-founder to be a leader to work with investors in the southern region on his behalf in Ho Chi Minh City.

“Our products are sold via the Internet; we work mainly on the web so where our company locates would not matter,” the millennial explained.

“That is why I chose my hometown, Nghe An, to make my dream come true.

“When our products get well known, it would not matter to investors where our company is based.”

The first steps are always the hardest. This is not different to Vien, who experienced a challenging phase during the very beginning stages with the startup.

Vien took three to four jobs at the same time, including product development and customer service.

Sometimes Vien had to stop eating to fix some errors after receiving a call from his customers.

Vien and his co-workers found the right direction despite encountering many obstacles.

Gostream has become a popular choice amid the increasing demand for selling goods online in Vietnam.

There are more customers who look for the company’s products, as its brand name has become more recognizable.

“Our subscription plans are various, from VND100,000 [US$4.3] to millions of Vietnamese dong per month depending on the client’s demand,” said Vien.

“The customers are willing to pay the fee as long as they are well served in their business goals.

“There have been more than 700,000 Gostream subscribers to date.

“There is an average of 10,000 active users daily, which includes around 50,000 live streams.”

Gostream’s revenue in 2020 was around VND15 billion ($650,000), which created jobs for a team of 40 young employees.

“We are in the process of perfecting Gostudio, making some new improvements to make it suitable for foreign markets,” Vien talked about the ongoing plans.

“We set a goal of entering the Southeast Asian market in the first half of this year.

“In the second half, we will conquer markets in the U.S. and Europe.”

Thanks to the excellent achievements in the startup industry, Vien was included in the list of Vietnam’s 10 most outstanding young faces of 2020.

This year, Vien will be Vietnam’s representative to compete in the ‘Startup World Cup 2021,’ which will be held in the U.S. on November 11.

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