A decree guiding the execution of the law on foreign trade management is being crafted in a way that the age requirements for used machine imports will be eased, according to the HCMC Department of Science and Technology.

Japanese and Vietnamese delegates chat after the roundtable meeting in HCMC on December 20

Nguyen Khac Thanh, deputy director of the department, said the draft decree would provide different age limits for different secondhand machines and equipment imported from other countries. For instance, mechanical engineering equipment that has been used for no more than 20 years can be imported, whereas the age limit for used equipment for food processing is 10 years, he told a roundtable meeting between the HCMC government and Japanese firms in HCMC on December 20.

The universal age limit of 10 years for secondhand machines has made it hard for enterprises to import used equipment and has hindered foreign investment activity in Vietnam. 

Takimoto Koji, chief representative of the HCMC office of the Japan External Trade Organization (JETRO), earlier told the Daily that this rule has prevented Japanese businesses from making fresh investments and expanding operations in Vietnam. 

According to Koji, Japanese firms will bring along their machines that still run well when they invest overseas.

The Japanese Business Association of HCMC (JBAH) has in the past proposed the Ministry of Science and Technology and relevant agencies revise Circular 23 on import of used machines, which went into force on July 1, 2016.

According to Thanh, the Ministry of Industry and Trade has been instructed to coordinate with the Ministry of Science and Technology to include the rule on import of used machines to the draft decree in question. The draft decree, if approved, would come into force early next year.

Regarding the requirement that foreign employees with work permits or practicing certificates in Vietnam have to contribute social insurance from January 1, 2018, JBAH said there is no guiding document yet. It is still unclear who are required to make social insurance contributions, how much to pay and what benefits they are.

The Japanese employees sent to Vietnam by their companies have already contributed social insurance at home. Therefore, they will have to pay social insurance twice, according to JBAH.

Nguyen Thi Thu, deputy director of HCMC’s social insurance agency, said social insurance contributions by foreign workers could only proceed when a guiding decree is available.

Enterprises earlier voiced concerns over the social insurance requirement for foreign workers, saying it is unrealistic to do it.

The roundtable meeting, organized by the Investment and Trade Promotion Center (ITPC) and JBAH, is one of the annual activities under the city’s policy to reform the administration and improve the investment environment.

According to HCMC vice chairman Tran Vinh Tuyen, Japan is an important partner of the city in multiple fields. It is currently the third largest export-import market and the sixth biggest investor of HCMC with 1,110 active projects and total pledged capital of US$3.95 billion.

SGT