State Committee      Socialist Republic of Vietnam
for Cooperation     Independence - freedom - Happiness
 and Investment          htmlhtmlhtml-----
No. 1536/UB - VP
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                               Hanoi, August 11, 1994

GUIDANCE ON INVESTMENT TO PRODUCE MOTORBIKE AND SPARE PARTS IN VIETNAM

Now, some foreign companies have contacted with Vietnamese partners and want to invest to Vietnam in the field of motorbike and spare parts. To give good facilities in setting up the investment projects, with the agreement of the Ministry of Heavy Industry, State Committee for Cooperation and Investment hereby guides the investment to produce motorbike and spare parts in Vietnam as follows :

1. foreign companies which invest to Vietnam in the field of motorbike and spare parts shall fully observe the Law on foreign Investment in Vietnam and shall be the companies manufacturing motorbike and spare parts ; trading companies that invest in th is field shall not be accepted.

2. Vietnamese State encourages foreign companies to make joint-venture with Vietnamese companies in the field of motorbike and spare parts production in Vietnam.

State shall not allow the foreign motorbike companies to organize the motorbike assembly by simple CKD form, but from the second production year, they shall manufacture the component parts in Vietnam with its value of 5 - 10 % of whole motorbike value, and the value shall gradually increase to ensure the aim that after 5 -6 years from the year of starting the production it shall reach at least 60 % of whole motorbike value.

4. State policy is not to allow the monopolization in manufacturing and trading motorbike, therefore in the application for investment project, should not be the proposal for the monopolization period. The State will create the environment healthy com petition, use the regulating means such as tax to protect the right of producer and consumer.

5. The State specially encourages to the technology transfer, production of spare parts, components and whole motorbike for export, concurrently encourages the motorbike and spare parts production units to produce the components parts and accessories use d for other industrial products like automobile , machinery , etc.

People's Committee of provinces, cities and Vietnamese partners are requested to base on the regulations in this document when exchanging with foreign companies for establishment of motorbike investment project in Vietnam.

for The State Commitee for Cooperation and Investment Minister - Chairman

DAU NGOC XUAN (Signed)