Forum updates Indonesian firms on Vietnam’s business climate
A Vietnam-Indonesia forum on trade, business and investment promotion has been held in Surabaya city, the capital of Indonesia’s East Java province to update local firms on the business climate in Vietnam.
The event saw the attendance of about 100 representatives from local enterprises operating in the fields of food, beverage, pharmaceuticals, cosmetics and steel-iron.
This was the first Vietnam-Indonesia business forum held in Surabaya, the second largest city of Indonesia after Jakarta, which possesses great potential for development of investment, trade and services.
Addressing the forum, head of the Vietnamese Trade Office in Indonesia Le Hong Minh gave the attendees a brief overview of the Vietnamese market and its policies on taxation, wages, office rental as well as investment incentives offered by some cities and provinces.
He also estimated the difference in costs for operating a business in Vietnam in comparison with other markets such as Thailand, Hong Kong, China, New Zealand and Australia.
During the event, Vietnamese Ambassador to Indonesia Hoang Anh Tuan and representatives of the Vietnamese Trade Office answered enquiries raised by participating enterprises on Vietnam’s laws and regulations regarding quarantine, trade barriers, import-export, and anti-dumping duty on steel products.
East Java province is Vietnam’s biggest trade partner in Indonesia, Tuan told Vietnam News Agency reporters, expressing his hope that similar forums would be held to attract investors from Surabaya and Indonesia as a whole to Vietnam.
Vice President of the Chamber of Commerce and Industry (Kadin) in East Java Johan Suryadarmar said Kadin has maintained a good contact channel with the Vietnamese Embassy to further enhance business cooperation between the two countries.
Leny Surya from Arrayana food company said the forum provided Indonesian firms with better understanding about the Vietnamese market and hoped to have an opportunity to do business in Vietnam.
Samsung Vietnam back to high export growth path
Samsung Vietnam’s export growth has regained some momentum as it looks to obtain US$11 billion from exports in the second quarter of 2017, said general director Han Myoung Sup.
At his meeting with Prime Minister Nguyen Xuan Phuc at the Government Office in Hanoi on Tuesday, Han briefed the Government leader on his company’s business performance, the Government news website reports.
Samsung Vietnam expects to fetch total revenue of US$60 billion this year, including more than US$50 billion from exports. Samsung Display Vietnam (SDV), a subsidiary of Samsung Vietnam, is forecast to export about US$10 billion worth of products this year. With an investment of US$6.5 billion, SDV is expanding its production.
According to a report by Samsung Vietnam, its revenue amounted to US$46.3 billion in 2016 though it stopped Samsung Note 7 smartphone production over issues with overheating and fires. Its exports totaled US$39.9 billion, growing 9.9% over 2015 and accounting for 22.7% of Vietnam’s export turnover.
Six Samsung factories in Vietnam are employing 107,000 Vietnamese workers. The company plans to increase employment to meet the high demand for the firm’s newest smartphone models, Samsung Galaxy S8/S8+.
Han said he expected the Vietnamese Government, ministries and agencies would provide continued support for Samsung Vietnam and SDV to perform well in Vietnam.
Prime Minister Phuc said he wanted Samsung to expand investment into power generation, port infrastructure, science and technology and health care.
He also asked Samsung to help develop supporting industries in Vietnam, transfer technology to domestic enterprises in supporting industries, especially small and medium enterprises, and buy input materials for its projects in the country.
The Vietnamese Government will create favorable conditions for foreign investors like Samsung to do business, Phuc said.
Samsung factories in Vietnam specialize in electronics and household appliances. Samsung Vietnam exports its products to 52 countries and territories.
Hindrances to business pinpointed
Business executives on May 17 indicated a host of legal impediments to their operations during a meeting between the Prime Minister and the business community in Hanoi on May 17.
Jonathan Moreno, chairman of the Board of Governors of the American Chamber of Commerce in Vietnam (AmCham Vietnam), proposed the Government eliminate costly barriers to trade ties between Vietnam and the United States.
He also suggested amending Government Decree 181 which guides the implementation of the Advertising Law to help reduce costs for small and medium enterprises. Some provisions in the law prevent them from promoting their products and services on the Internet.
AmCham Vietnam objects to a draft decree on road transport business which requires transport service providers to inform the ministry of every trip operated, he said, adding that this would be a costly administrative burden for the sector.
He proposed the Government review mandatory fees if it is to maintain and boost the competitiveness of local businesses.
Le Hoang Chau, chairman of the HCMC Real Estate Association, hailed the Government’s decision to inspect 60 large-scale property projects suspected of irregularities but suggested allowing investors to continue work on those projects to avoid any interruptions. If any problems with financial obligations are found, they should be forced to fulfill these obligations to move on with their projects.
He proposed amending the Law on Public Procurement, especially provisions on the land use right auction mechanism, to ensure transparency, and other legal documents to facilitate the equitization of State-owned enterprises.
Nguyen Huu De, chairman of the Vietnam Private Hospital Association, stressed the need to proceed with a personnel reshuffle to improve the efficiency of State agencies.
There should be incentive policies for attracting the private sector to develop and operate hospitals as public hospitals are overwhelmed with patients.
Le Van Kiem, chairman of Long Thanh Golf Investment and Trading Joint Stock Company, said the Government should provide exchange rate guarantees for investors involved in road projects which often take a long time to recoup investment capital.
His company and its Japanese partners are interested in developing big-ticket road projects like the North-South Expressway and taking over some roads which have been built in build-operate-transfer format from State-owned enterprises.
SBV says interest rates now reasonable
Interest rates of 6-11% per year for Vietnam dong loans and 3-4% for those in foreign currency are reasonable, according to the State Bank of Vietnam (SBV).
Delivering a report at a meeting between the Prime Minister and private business in Hanoi on May 17, SBV governor Le Minh Hung said that compared to regional countries, those rates are acceptable as the rate is 13% in Myanmar, 11.9% in Indonesia, 6.3% in Thailand and 5.4% in Singapore.
The central bank received a total of 29 proposals from businesses in the run up to the meeting, he noted.
Regarding a proposal for lending rate cuts, Hung said interest rates had stayed stable since 2016. In late September 2016, a number of banks lowered deposit rates by 30 to 50 basis points and lending rates by 50 to 100 basis points for priority production and business areas. The current interest rates are much lower than in 2011.
In regard to Resolution 24/2016/QH14 of the National Assembly on the goal of making the average domestic lending interest rate competitive with the rate of ASEAN-4 by 2020, Hung said the central bank will try to keep interest rates stable in line with the inflation control objective. Banks can still bring down interest rates if they cut costs and improve business efficiency.
On the exchange rate, he said the exchange rate between the Vietnam dong and the U.S. dollar had gone up 1.1% to 1.2% on average. But the foreign exchange market in Vietnam is much more stable than elsewhere in the region and the world.
The central bank has bought large amounts of foreign currency, thus taking the nation’s foreign reserves to a record high, he noted.
The central bank will find ways to meet the demand for short-term foreign currency loans to bolster production and business activities in supporting industries, high-tech, agriculture and rural areas, export, and small and medium enterprises (SMEs).
Credit will be prioritized for the manufacturing sector with a ratio of about 80%, Hung said, and key projects will account for 50% of total outstanding loans.
Currently, medium- and long-term loans make up 53% of total outstanding loans, while medium- and long-term capital raised by credit institutions accounts for only 15% of the total, putting pressure on the banking system.
To help inject more funds into the economy, the central bank allows credit institutions to use up to 50% of their short-term capital to make medium- and long-term loans available for corporate borrowers.
Credit grew 18.25% in 2016. This year, high credit growth has been maintained. By the end of April, loans had edged up 5.76% over the end of 2016, higher than the same period last year, with loans in Vietnam dong up 5.87% and those in foreign currency up 4.64%.
In the coming time, the banking sector will continue to concentrate capital on the preferred areas,
The SBV asked the Government and the National Assembly to issue a resolution on settlement of bad debt to create new financing sources for lending to production and business and support businesses to solve their bad debts, said the governor.
More specific rules on veggies traceability needed
The veggies traceability program has produced some encouraging results in HCMC since its launch on January 18 but there are suggestions that specific regulations on traceability should be issued.
Competent agencies should update and supplement regulations on produce traceability, said Nguyen Thi Hong Minh, chairwoman of Traceability Solutions and Services Joint Stock Company.
Minh said the Food Safety Law and Circular 74 of the Ministry of Agriculture and Rural Development require producers to provide information on goods origin. However, they lack details.
“In order to obtain detailed information on food traceability, information about farming and harvesting procedures is needed,” she said. Therefore, she proposed State agencies introduce more stringent regulations on origin traceability.
She noted producers may not mention all details about origin traceability on packaging and that consumers may not notice them. However, they are obliged to store such specific information in their systems so that authorities can check it when food poisoning incidents occur.
She urged State agencies to introduce a standard logo for goods that meet Vietnam Good Agriculture Practice (VietGap) standards.
A representative of the Saigon Union of Trading Co-operatives (Saigon Co.op), which is known for the Co.opmart supermarket brand, said the program has gradually improved consumer confidence.
Tran Ngoc Ho, deputy director of the HCMC Department of Agriculture and Rural Development, said the city government plans to expand the current food origin tracking program in the coming time.
VCCI calls for realistic startup targets
The Vietnam Chamber of Commerce and Industry (VCCI) has warned against setting unrealistic targets as provinces have scrambled to announce their lofty goals of having new enterprises coming in being in the next three years.
The central Government has set a target of having one million active enterprises by 2020 but the number of enterprises which cities and provinces have registered has now reached a staggering 1.5 million.
VCCI Chairman Vu Tien Loc said in a report prepared for a second meeting between Prime Minister Nguyen Xuan Phuc and the business community in Hanoi on May 17 that some provinces have set general goals of doubling the current numbers of businesses.
In 2016, the number of newly-registered enterprises hit a record high of 110,100, with total capital of VND891.1 trillion, up 16.2% and 48.1% respectively from 2015, according to VCCI. In the first four months of this year, 39,580 new businesses came into being, bringing the total number of registered enterprises by April 30, 2017 to a little more than one million.
With those firms suspended, disbanded and resuming operation in 2016 taken into account, the nation had an estimated 546,281 active enterprises on December 30, 2016.
However, a high level of insolvency is still cause for concern. In 2016, over 73,000 enterprises turned inactive or were dissolved, down 9.5% from 2015, of which around 12,500 completed dissolution procedures and the remainder stopped operating.
Loc said, “So far this year, the number of newly-established enterprises has increased but the companies that have suspended operations and been disbanded make up about half the number of newly established entities.”
These are signs of unsustainable business development, according to the VCCI report.
Labor use efficiency went down in 2007-2015 and capital use efficiency dipped as well. The percentage of loss-making businesses rose in 2011-2015 with an average of 40.9%. The return on equity fell from 6.6% in 2012 to 3.2% in 2015.
Business size has not improved much, with the average number of employees per enterprise staying at around 30, far below the criterion for small businesses with fewer than 50 employees.
For three consecutive years (2014, 2015 and 2016), domestic firms were outperformed by foreign-invested enterprises. It was domestic enterprises that caused the trade deficit, and contributed less to the nation’s total exports, only 28.4% in 2016.
Corporate governance at Vietnamese enterprises remains woefully poor. Worse still, they can turn out large volumes of goods but their quality is low.
Thanh Hoa attracts US$6 billion in 32 investment projects
More than 30 projects in the north central province of Thanh Hoa worth a total of VND135.3 trillion (US$6 billion) were given the green light at an investment promotion conference held on May 18.
More than half of investment pledges will go to the manufacturing sector, followed by tourism and urban infrastructure development, which drew VND22.8 trillion and VND21.5 trillion respectively.
The remaining capital is earmarked for agriculture and healthcare projects.
Speaking at the conference, Prime Minister Nguyen Xuan Phuc praised Thanh Hoa province for attracting selective investment in priority sectors, emphasising that with its dynamic economy and great potential, Thanh Hoa will soon become a model province.
He urged the province to continue improving its business environment, increase transparency and reduce costs for enterprises, adding that local authorities should be more active in attracting investment and utilise its competitive advantages.
The Prime Minister asked Thanh Hoa to consider developing a high-tech and large-scale agriculture, diversify its tourism services and enhance the competitiveness of locally based enterprises.
He emphasised that the province needs to give priority to the development of human resources and large enterprises as well as combine fostering economic growth with protecting the environment.
PM Phuc revealed that the government would soon build the Thanh Hoa-Nghe An Expressway, expand rail links, and upgrade Tho Xuan to an international airport.
Earlier the same day, PM Phuc met with the leadership of Thanh Hoa, where he commended the province for determining tourism and related services as a key sector.
The government leader also asked Thanh Hoa to tap into its other strengths to increase the province’s appeal to investors.
Mondelez International invests in cake-making line
Mondelez International is investing in a new cake-making line at its Hung Yen facility to increase its capacity to meet robust market demand. The world-class line is aimed at making Vietnam a key manufacturing country in Asia-Pacific.
According to Mr. Stephane Gripon, Managing Director of Mondelez Kinh Do Vietnam, this investment is a key milestone in the success of Kinh Do’s integration with Mondelēz International. “This investment is part of our integration masterplan and will bring our beloved brands to more consumers across Vietnam and Southeast Asia,” Mr. Gripon told local media. “As the snacks market grows, we aim to increase our production capacity in line with the highest quality standards to systematically anticipate demand in the region. Therefore, we believe it’s the right time to invest.”
The new line follows Mondelez’s global quality standards and strictly follows Good Manufacturing Practices (GMP) to produce various brands of sponge cakes. It has also received Halal “A” certification from the Indonesian Council of Ulama (MUI).
Its integration with Kinh Do since 2015 has been a game changer for Mondelez in Vietnam, creating a business with an annual revenue of more than $200 million and combining shared values and a passion for brands people love.
Mondelēz International completed the acquisition of an 80 per cent stake in Kinh Do in July 2015. First announced in November 2014, the combination brings together Kinh Do’s well-loved local snacks, including Kinh Do mooncakes and biscuits, Cosy biscuits, Solite soft cakes, and AFC crackers, with Mondelēz International's iconic global brands such as Oreo cookies, Ritz crackers, and Cadbury chocolate.
Mondelez’s team has worked hard to renovate their portfolio and innovate in new segments such as premium gifting with brands such as Lu, Cosy, Solite, and AFC. Oreo has also benefited from its strong distribution system in traditional trade channels.
Lu La Collection Française, the company’s new French butter cookies product, found success during the last Lunar New Year (Tet) holidays with very strong demand, and the Kinh Do brand has also been very dynamic across its fresh bread and mooncake offerings.
Mondelēz International, Inc. is a global snack powerhouse, with pro-forma 2014 revenue of more than $30 billion. Creating delicious moments of joy in 165 countries, it is a world leader in biscuits, chocolate, gum, candy, and powdered beverages, with billion-dollar brands such as Oreo, LU and Nabisco biscuits, Cadbury, Cadbury Dairy Milk and Milka chocolate, Trident gum, and Tang powdered beverages.
SolarBK greening out logistics industry
Vietnam’s first solar-powered green logistics centre, Tan Cang-Song Than ICD, is slated for completion in September 2017 and is expected to contribute to the sustainable development trend in the domestic logistics industry.
Solar ESCO JSC, a member of Vietnamese renewable energy firm SolarBK, and Tan Cang-Song Than ICD signed the contract to lease the solar system to ICD Song Than Logistics Center in the southern province of Binh Duong, with a total capacity of 500.96 kWp.
Under the agreement, Solar ESCO JSC would invest in the solar power system being installed by SolarBK at Tan Cang-Song Than ICD.
This solar-powered model is not only economical but also contributes to environmental protection, helping to reduce CO2 emissions by 518.5 tonnes a year.
Nguyen Thanh Son, director of Tan Cang-Song Than ICD said, “the trend of green logistics has been developing globally for many years, and customers increasingly attach environmentally friendly clauses to business contracts.”
He added that they always expect a holistic solution that can solve both economic and social responsibility issues. On this basis, they found that SolarBK provides tailored solutions to these issues.
In this solar grid solution, SolarBK will provide 1,616 IREX solar panels with a total system peak power of 500.96 kWp. Accordingly, the system will generate about 784,218 kWh of electricity annually. To supply stable power for warehouse service, SolarBK has carefully calculated the optimal settings thanks to its previous experience in implementing large projects.
SolarBK is the leading provider of renewable energy solutions in Vietnam, with a wide range of internationally-certified products exploiting wind and solar energy. It is gearing up efforts to extend the list of solar systems implemented in Vietnam, promoting cleaner and greener development.
Crocodile breeders face huge losses amid falling prices
Crocodile farmers in the southern region of Vietnam are suffering from heavy losses in the context of excessive supply but weak demand, resulting in a record low price.
To date, hundreds of thousands of crocodiles in the southern region, including HCM City and Binh Duong and Dong Nai provinces, have been unable to be sold.
Nguyen Minh Tuan, the owner of Thuy Loi crocodile farm in Dong Nai Province’s Dinh Quan District, said that a kilo of crocodile is now sold at VND50,000 (USD2.27) compared to VND200,000 (USD9) last year.
Nguyen Huu Bang, who has 10 years of experience in crocodile breeding in HCM City’s Hoc Mon District, said that his farm now has more than 200 crocodiles which are old enough to be sold, but he is reluctant to sell because of the low price.
“I’ll wait a bit longer and if the situation doesn’t improve, I’ll be forced to sell them at a cheap price to cut my losses. If 100 crocodiles are sold at VND70,000 per kilo, I’ll face a loss of VND40 million,” Bang estimated.
Some years ago, traders rushed to buy crocodiles for sales mainly to China, pushing the prices up, to VND230,000 (USD10.45) a kilo. The number of crocodile farms in the southern region sharply increased. Besides, it is quite simple to rear crocodiles which do not often catch diseases. One person can care for around 400 crocodiles.
To date, Dong Nai Province only is home to 300 crocodile farms with more than 100,000 crocodiles in total. Ca Mau has around 300,000 and HCM City and Bac Lieu has 200,000 each.
According to Nguyen Ngoc Thanh, head of the South Eastern Crocodile Co-operative, HCM City set up Saigon Crocodile Village which ensures to find outlets for breeders at the stable price of VND120,000 per kilo. However, when traders offered much more attractive prices, many farmers broke the contracts signed with the co-operative for the sales to traders.
Thanh suggested the establishment of Vietnam Crocodile Association to protect the domestic crocodile industry from unfair competition by traders. The association should also contribute their opinions to work out measures for the crocodile breeding sector.
K-Park aims to build ‘little Seoul’ in Ha Noi
CenInvest Company and Hi Brand Viet Nam Company on Wednesday signed a co-operation agreement to develop the K-Park apartment project in Ha Noi’s Ha Dong District.
Speaking at the signing ceremony, Han Seung Mok, deputy general director of Hi Brand Viet Nam, said they chose CenInvest as their long-term strategic partner due to its experience in the local real estate market.
The K – Park will have a green and modern living space with South Korean style apartments suitable for young residents.
People can easily reach the city’s centre and entertainment areas. Especially, the project is surrounded by two big parks and big lakes.
European businesses unhappy with tax authorities’ handling of filing errors
How to improve the business environment in Viet Nam with respect to customs, trade facilitation measures and the tax regime by capitalising on the opportunities thrown up by the EU -- Viet Nam Free Trade Agreement were discussed at a European Chamber of Commerce in Viet Nam (EuroCham) meeting in Ha Noi on Tuesday.
The meeting, titled “The changing landscape of trade, customs and taxation in Viet Nam,” was attended by hundred of government officials, experts and business executives who expressed concern about customs audit and penalties for administrative inconsistencies in tax declarations.
Pham Ngoc Thach of the Viet Nam Chamber of Commerce and Industry (VCCI) said while companies were increasingly happy with the improvements in customs and administration, they could not keep abreast of the many amendments to regulations, resulting in delays in filing customs declarations.
Thach quoted a 2016 VCCI report on administrative and customs procedures that said over 20 per cent of companies faced difficulties with procedures related to tax exemptions and refunds.
Business executives warned that setting the rules to impose taxes and apply penalties to administrative mistakes would worsen the investment environment in Viet Nam.
Nguyen Thi Thu Cuc, chairwoman of the Tax Consultants Association, said the Government was making efforts to improve administrative and taxation procedures.
To attract more investors, it needed to have a transparent legal system, and the investment environment should be better and the cost of entering the market lower, she said.
Delegates referred to challenges faced by businesses with respect to customs-related legal documents: For instance, customs authorities’ ability to reject the value declared by a business or their competence in handling businesses’ administrative errors in declarations.
Many businesses have been audited by the customs authorities and had their customs declarations rejected and penalties slapped for administrative errors found in declaration from several years ago.
Shivam Misra, co-chairman of EuroCham’s Wine & Spirits Sector Committee, said: “The European business community is very concerned about the customs framework and its manner of execution, especially if administrative errors are used to open up valuation methods or impose heavy non-merit based penalties. This undermines the confidence that businesses have in Viet Nam and its investment environment. Companies might be forced to reconsider investing and also downsize operations if the environment is not conducive to business operations. We want to co-operate with and support the Government, but it becomes difficult if businesses are not given a fair chance to conduct their operations smoothly.”
Thomas McClelland, chairman of the EuroCham Tax and Transfer Pricing Sector Committee, said: “Viet Nam’s tax framework is increasingly focusing on substance over form as indicated in recently issued tax regulations, for example the recent Decree 20 on transfer pricing.
“However, in practice, our members have experienced that administrative breaches seem to be increasingly the focus of many tax and customs audits.
“The nature of the administrative breaches, such as inconsistencies in a customs declaration or what is considered a failure to follow a non-tax procedure, is simply an administrative mistake which should not be used as the legal basis for the customs or tax authorities to apply tax arrears and penalties or deny a tax refund.
“We see more reasonable and positive treatment when the matter is considered at the higher level such as Ministry of Finance. However, by this time taxpayers have often spent a significant amount of time to try and resolve the issue.”
Gov’t issues tra fish rules
The Government has issued a decree on aquaculture management, and tra fish products processing and export, the Government Office reported this week.
According to the decree, which will be effective on July 1, 2017, activities involving the farming of commercial tra fish must meet four conditions.
Individuals and organisations rearing tra fish must have their location and area suitable with land use plans of the provincial People’s Committee.
They must have infrastructure that meets technical conditions for farming commercial tra fish such as water supply system seperating from waste water system and waste treatment area meeting conditions on protecting environment and veterinary hygiene.
Aquaculture facilities must meet regulations on food safety and have certificate on identification number for ponds farming tra fish according to existing regulations.
The decree also has regulations on commercial tra fish processing conditions. The individuals and organisations farming tra fish must satisfy conditions of investment and business according to the July 1, 2016 decree.
They must implement regulations and technical standards on food safety for seafood processing and have a certificate of eligibility for food safety granted by relevant State offices.
They must have a traceability system meeting regulations and ensuring ability of traceability at the facilities.
Tra fish products that are exported must be processed at tra fish processing facilities meeting all the conditions mentioned above.
If individuals and organisations exporting tra fish products do not have processing facility as per the requirement, they must have contracts on purchasing tra fish products from facilities meeting those conditions or contracts on processing the products from eligible facilities.
Decree 55/2017/ND-CP has specific regulations on registering identification number for ponds farming tra fish and regulations on quality and food safety for commercial tra fish products.
It also stipulates responsibilities of the Ministry of Agriculture and Rural Development, Ministry of Industry and Trade, Ministry of Foreign Affairs, and Ministry of Finance to implement this decree, supervise implementation of this decree and solve commercial disputes related with tra fish export products.
The people’s committees of central-level provinces and cities have been given directions on implementing this decree in their provinces and cities and have land use plans for farming tra fish and reports on farming, processing and exporting of tra fish.
European businesses unhappy with tax authorities’ handling of filing errors
How to improve the business environment in Viet Nam with respect to customs, trade facilitation measures and the tax regime by capitalising on the opportunities thrown up by the EU -- Viet Nam Free Trade Agreement were discussed at a European Chamber of Commerce in Viet Nam (EuroCham) meeting in Ha Noi on Tuesday.
The meeting, titled “The changing landscape of trade, customs and taxation in Viet Nam,” was attended by hundred of government officials, experts and business executives who expressed concern about customs audit and penalties for administrative inconsistencies in tax declarations.
Pham Ngoc Thach of the Viet Nam Chamber of Commerce and Industry (VCCI) said while companies were increasingly happy with the improvements in customs and administration, they could not keep abreast of the many amendments to regulations, resulting in delays in filing customs declarations.
Thach quoted a 2016 VCCI report on administrative and customs procedures that said over 20 per cent of companies faced difficulties with procedures related to tax exemptions and refunds.
Business executives warned that setting the rules to impose taxes and apply penalties to administrative mistakes would worsen the investment environment in Viet Nam.
Nguyen Thi Thu Cuc, chairwoman of the Tax Consultants Association, said the Government was making efforts to improve administrative and taxation procedures.
To attract more investors, it needed to have a transparent legal system, and the investment environment should be better and the cost of entering the market lower, she said.
Delegates referred to challenges faced by businesses with respect to customs-related legal documents: For instance, customs authorities’ ability to reject the value declared by a business or their competence in handling businesses’ administrative errors in declarations.
Many businesses have been audited by the customs authorities and had their customs declarations rejected and penalties slapped for administrative errors found in declaration from several years ago.
Shivam Misra, co-chairman of EuroCham’s Wine & Spirits Sector Committee, said: “The European business community is very concerned about the customs framework and its manner of execution, especially if administrative errors are used to open up valuation methods or impose heavy non-merit based penalties. This undermines the confidence that businesses have in Viet Nam and its investment environment. Companies might be forced to reconsider investing and also downsize operations if the environment is not conducive to business operations. We want to co-operate with and support the Government, but it becomes difficult if businesses are not given a fair chance to conduct their operations smoothly.”
Thomas McClelland, chairman of the EuroCham Tax and Transfer Pricing Sector Committee, said: “Viet Nam’s tax framework is increasingly focusing on substance over form as indicated in recently issued tax regulations, for example the recent Decree 20 on transfer pricing.
“However, in practice, our members have experienced that administrative breaches seem to be increasingly the focus of many tax and customs audits.
“The nature of the administrative breaches, such as inconsistencies in a customs declaration or what is considered a failure to follow a non-tax procedure, is simply an administrative mistake which should not be used as the legal basis for the customs or tax authorities to apply tax arrears and penalties or deny a tax refund.
“We see more reasonable and positive treatment when the matter is considered at the higher level such as Ministry of Finance. However, by this time taxpayers have often spent a significant amount of time to try and resolve the issue.”
CSR holds key to sustainable growth for mining industry
Sustainability has remained a top priority for the mining industry and the Government.
The topic has also been much discussed over the years by experts and specialists in the field, including from the APEC Mining Task Force (MTF), which was established in 2007.
It was again on the agenda at the APEC Mining Policy public-private dialogue held as part of the second APEC Senior Officials Meeting (SOM 2) in Ha Noi recently.
One of the questions asked was: Can mining companies change the negative image of their industry as one that leaves social and environmental scars and achieve sustainable growth?
The answer is yes if they can communicate the value of mining to targeted communities and optimise socio-economic benefits to boost sustainable community development.
One of the ways to do this is through corporate social responsibility (CSR) programmes.
The Government constantly encourages enterprises to deliver on CSR and make it a key to gain a competitive edge.
In his closing speech at the fifth plenary meeting of the 12th Communist Party of Viet Nam Central Committee in Ha Noi, General Secretary Nguyen Phu Trong had stressed the need to comply with CSR laws.
CSR is especially important for mining companies given the industry impacts surroundings and local communities.
According to Nguyen Quang Vinh, deputy general secretary of the Viet Nam Chamber of Commerce and Industry, CSR programmes are highly beneficial for all companies.
If they realise that, then they would be very successful and could achieve sustainable growth, he said.
Nguyen Minh Duong, chairman of the Viet Nam Association of Mineral Processing, said no company can survive without fulfilling its responsibilities to the local community.
After realising the importance of CSR, some companies have begun to engage in community development activities.
Luu Ngoc Anh of Viet Nam Apatit Limited Company said during its 60 years of operation his company has contributed billions of dong to build new schools and participated in building new-style rural areas.
Nguyen Van Chau, deputy director of Bim Son Cement Co, said his company always tries to give back to the community and pays taxes and fees.
Another example is Masan Resources which owns the polymetallic Nui Phao Mine in Thai Nguyen Province’s Dai Tu District.
The mine, which has one of the world’s largest identified tungsten reserves of 66 million tonnes, was visited by 21 APEC delegates, including some from the APEC mining task force, after the dialogue meeting.
The delegates were impressed most by what Masan has done for the local community.
It has provided jobs to people whose lands were acquired. They in fact account for 56 per cent of the company’s employees, while nearly 20 per cent are from six ethnic minorities.
Vu Hong, deputy general director of Masan Resources, said the company always prioritises locals when hiring staff.
“We are committed to providing vocational training to local people.”
He added that 230 people from families whose lands had been acquired had been trained for 18 months and paid US$150 per month during the training.
Masan has the highest rate of women employees in the mining sector: 24 per cent.
“This is quite high and surprising to me because even in developed countries like Canada and Australia, this rate is usually below 20 per cent,” an APEC delegate from the Philippines, who is also a researcher in the mining sector, said during the site visit.
The company has established an economic restoration programme to create livelihoods for local people.
Under it, six enterprises and co-operatives have been set up, including a packaging firm by Dinh Thi Hai Thuy, a former Nui Phao employee.
APEC aims to enhance supply chain connectivity
The third Public-Private Dialogue on Advancing Trade Facilitation and Supply Chain Connectivity through Asia-Pacific Model E-Port Network took place in Hanoi on May 19 as part of events in the APEC Year 2017.
Opening the dialogue, Deputy Minister of Industry and Trade Ho Thi Kim Thoa said the Initiative on Asia-Pacific Model E-Port Network (APMEN) was adopted at the 24th APEC Economic Leaders’ Meeting in November 2014 in Beijing, China, with the aim of forming a regional trade and supply chain network.
The initiative focuses on identifying measures to increase transparency of supply chains through information technology and communication systems.
It practically contributes to APEC’s connectivity priorities, especially enhancing supply and value chain connectivity, thus promoting trade facilitation – one of the most important pillars of APEC.
The dialogue discussed the role of the APMEN in realising the Trade Facilitation Agreement (TFA) and the second phase of the APEC Supply Chain Connectivity Framework Action Plan 2017-2020.
Representatives from APEC member economies and the business circle agreed that increasing information and experience sharing and policy consultancy plays a key role in the region’s policy cooperation process.
The activities of the APMEN, including this dialogue, make important contributions to the sustainable and inclusive development of the Asia-Pacific region in general and each member economies in particular.
ASEAN working group for health supplements meets in Da Nang
The ASEAN Traditional Medicines and Health Supplements Product Working Group (TMHS PWG) convened its 27th meeting in Da Nang city on May 18.
The event attracted more than 150 delegates from traditional medicine and health supplement management agencies and observers in Vietnam and other ASEAN countries.
Speaking at the event, Deputy Minister of Health Truong Quoc Cuong said Vietnam has made substantial contributions to the food and pharmaceutical industries as well as economic growth in ASEAN.
The growing number of health supplements and traditional medicines has helped diversify the food and pharmaceutical market. Therefore, the harmonisation of domestic relevant regulations and standards with those in the region and the world is among top priorities of the Vietnamese Ministry of Health, he noted.
He added the ministry has actively taken part in ASEAN working groups, including the TMHS PWG. It has drawn up guidelines on good manufacturing practice (GMP) for health supplements basing on ASEAN guidelines, and plans to have them compulsorily applied in Vietnam in 2020.
The 27th TMHS PWG meeting was an occasion for ASEAN countries to learn more about the management and development of the health supplement and traditional medicine industry in the region, while seeking coordination to fully tap the sector’s potential.
Cuong called for ASEAN’s investment and cooperation with Vietnam in the industry, thus helping Vietnamese people access more products with good quality and reasonable prices.
At the two-day meeting, participants are set to review the working group’s performance and shared experience in ensuring food safety. They will also discuss the content of an ASEAN agreement on GMP in health supplement and traditional medicine production.
From May 15-17, representatives of regional countries convened a meeting on the ASEAN regulatory framework on traditional medicines and health supplements, a meeting on GMP in traditional medicine and health supplement production, and another also on traditional medicines and health supplements of the ASEAN Committee on Science and Technology.
ASCOPE enhances cooperation as oil prices decrease
The ASEAN Council on Petroleum (ASCOPE) has agreed to enhance cooperation in the context of decreasing world’s oil prices.
The commitment was made at the end of the 83rd meeting of ASCOPE National Committee, which took place in Vietnam’s central Da Nang city from May 15-17.
During the meetings, members of the council agreed to continue the draft of a guidebook on searching and survey activities in ASCOPE.
All sides also agreed to bolster cooperation on various issues such as the reuse of waste catalyst and the upgrade and expansion of oil refineries.
Besides, ASCOPE will devise a strategy for response to urgent shortage of gas, as part of the coordinating mechanism in case of emergencies on energy between ASEAN members.
According to Nguyen Quynh Lam, Deputy General Director of the Vietnam Oil and Gas Group (PetroVietnam), Chairman of the ASCOPE National Committee for Vietnam, said Vietnam proposed initiatives on the provision of means and logistics in country members, along with many other ideas towards ensuring implementation of ASCOPE guidelines and benefits of members.
Vietnam joined ASCOPE in 1996, with PetroVietnam being the representative.
Germany’s Bremen State seeks stronger economic ties with Vietnam
Germany’s Bremen State and Vietnam see great potential for cooperation in trade, high technology, renewable energy, seaport, and vocational training, heard a conference held in Bremen, the largest port city in northern Germany, on May 17.
At the event, titled “Vietnam – future market of Bremen’s economy”, experts and representatives from Bremen State’s Ministry of Economy, Labour and Port, and Chamber of Commerce and Industry, as well as about 50 enterprises from the state and neighbouring areas, spoke highly of Vietnam’sinfrastructure, human resources and investment support.
Bremen’s economic experts highlighted the northern port city of Hai Phong as an attractive investment destination in Vietnam thanks to its favourable transportation with a highway system linking with Hanoi, airports and industrial parks. Hai Phong and Bremen also share many similarities, they said.
Businesses’ queries on administrative procedure and non-official fees were thoroughly answered.
The experts also pointed out a number of Vietnam’s weaknesses such as poor capacity in investment promotion.
Addressing the event, Vietnamese Ambassador to Germany Doan Xuan Hung updated the participants on the political and economic situation of Vietnam as well as the Vietnam-Germany partnership in economy and trade.
He said economic and trade cooperation between the two countries has yet to meet potential as two-way trade reached only 10 billion USD, accounting for under 0.4 percent of Germany’s foreign trade revenue, and German investment in Vietnam was just 1.4 billion USD.
He also lauded Bremen’s efforts to promote economic ties with Vietnam.
Bremen has planned to launch its representative office in Vietnam. Earlier in November 2016, Bremen Senator of Economic Affairs Martin Gunthner also led a delegation of 30 local enterprises to Vietnam to seek partnership opportunities.
Ca Mau targets shrimp exports of 2 billion USD by 2020
The Mekong Delta province of Ca Mau aims to earn 2 billion USD from shrimp exports by 2020, according to the provincial Department of Agriculture and Rural Development.
Shrimp will be bred in a total cultivation area of 280,000 hectares, including 267,000 hectares of improved extensive farming, 12,000 hectares of semi-intensive and intensive farming and 1,000 hectares of super intensive shrimp farming.
The province hopes to achieve 280,000 tonnes of output per year.
The goals are part of a project to enhance shrimp productivity and quality and promote sustainable development of shrimp farming. The province also targets raking in 3 billion USD from exporting 415,000 tonnes of shrimps by 2030.
To realise the goals, the province will enhance the capacity of officials and shrimp breeders and study high-efficiency farming models.
The province will set up monitoring systems and build plans to prevent diseases in shrimps.
A consulting group will be established to support enterprises with administrative procedures, farming techniques and to evaluate shrimp cultivation’s impacts on the environment.
The province also hopes to build a brand name for Ca Mau shrimp, choose prestigious agricultural material suppliers and encourage enterprises to provide disease-free breeding for shrimp growers.
Shrimp farming in the locality has been hampered by its small scale and diseases in shrimps.
Vietnam Airlines launches two daily Hanoi-Dong Hoi flights
The national flag carrier Vietnam Airlines will work with the Vietnam Air Service Company (VASCO) to operate two daily return flights connecting Hanoi and the central province of Quang Binh from May 29, the carrier announced on May 18.
The flights, using Airbus A321, will take off at 6:30 from Hanoi and 8:30 from Dong Hoi city. Meanwhile, passengers on ATR72 aircraft will leave Hanoi at 14:30 and Dong Hoi at 16:30.
Promotional air fares on the route, priced from 299,000 VND (13.18 USD), are available for flights departing between May 29, 2017 and March 31, 2018.
Earlier, Vietnam Airlines authorised VASCO to operate seven round trips on the Hanoi-Dong Hoi air route per week, using the 68-seat ATR72 aircraft.
The transfer is part of the Vietnam Airlines Corporation’s plan to improve the operational efficiency of its subordinate airlines, Vietnam Airlines, VASCO and Jetstar Pacific Airlines and expand VASCO’s business to meet increasing demand.
Vietnam Airlines has so far transferred HCM City- Rach Gia-Phu Quoc, HCM City-Phu Quoc-Can Tho and Hanoi-Dien Bien flights to VASCO.
Meanwhile, air routes between Hanoi-HCM City-Tuy Hoa and HCM City-Chu Lai were transferred to Jetstar Pacific Airlines.
Nestlé opens new factory in Hung Yen
A new MILO producing factory of the Nestlé Vietnam Group opened in Thang Long II Industrial Park in the northern province of Hung Yen on May 18.
The factory will create more than 200 new jobs and many indirect jobs for locals while enabling the firm to develop new innovations and nutritional beverages for Vietnamese consumers, said Nestlé Vietnam’s Managing Director Ganesan Ampalavanar at the event.
The inauguration of the factory underlines the company’s commitment to developing nutrition in Vietnam and to improving life quality and contributing to a healthier future, he added.
Nestlé is the world's largest food company, employing more than 328,000 employees worldwide.
In Vietnam, it operates six factories with more than 2,000 employees nationwide and total investment of 520 million USD.
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