HEPZA proposes 30 per cent slash on CIT to relieve burden on businesses
Ho Chi Minh City Export Processing Zone and Industrial Zones Authority (HEPZA) has made a number of proposals to the municipal People’s Committee to support businesses and workers during the COVID-19 pandemic, including reducing corporate income tax (CIT).
In 2020, the government issued a slew of relief measures to businesses and workers. HEPZA suggested maintaining supporting policies such as delaying the payment of union fees. In particular, the government was also proposed to reduce CIT in 2021 by 30 per cent for businesses with the total revenue of less than VND200 billion($8.7 million) each.
In addition, bussinesses were proposed to receive support in borrowing money to pay wages during the lockdown. HEPZA proposed increasing the terms of these loans to 12 months with zero interest rate. At the same time, businesses should be allowed to borrow from other credit institutions beside the Vietnam Bank for Social Policies. This will help ease wage pressure on bussinesses and provide some working capital to maintain production.
Furthermore, the authority emphasised the importance of simplifying administrative procedures to resolve issues for workers and businesses. HEPZA proposed further delay social insurance payment from 6 to 12 months for businesses to stabilise production and protect the rights of workers.
Another relief measure is to increase the allowances for employees whose labour contracts were terminated due to COVID-19. In case of temporary suspension of labour contracts or unpaid work, the city needs to shorten procedures for employees to receive the subsidy and survive the challenging time. Other measures include reducing electricity and water bills for worker hostels, dormitories, and accommodation so that these facilities can reduce prices for tenants.
At the same time, HEPZA proposed the State Bank of Vietnam to direct commercial banks and credit institutions to offer working capital loans for production and offer guarantees for purchase and sale contracts of raw materials with zero interest rate for businesses affected by the pandemic.
How to ease risk of bankruptcy for local aviation sector amid COVID-19 fight
In order to revive local airlines amid their current circumstances, Government support remains crucial to creating the best possible conditions for them to restore their operations amid the risk of bankruptcy due to the increasingly complicated nature of the COVID-19) pandemic.
The Vietnam Aviation Business Association (VABA) has recently submitted an official document to Minister of Planning and Investment Nguyen Chi Dung proposing urgent solutions aimed at expanding and carrying out a credit support scheme. This would aim to help Vietnamese airlines cope with the negative impact of the COVID-19 pandemic.
Bui Doan Ne, general secretary of the Vietnam Air Transport Association, said that the short-term debts of three airlines, including Vietnam Airlines, VietJet, and Bamboo Airways, amount to VND36,000 billion, VND20,000 billion of which relates to Vietnam Airlines.
“To maintain minimum operations during the pandemic period, airlines have to spend over VND100 billion per day. The accumulated financial and asset resources of the firms have been exhausted, while they find it difficult to have loan accessing opportunities and are facing high borrowing costs. Additionally the Government's support policies remain slow-paced for implementation," Ne said.
According to VABA's assessment, local airlines continue to suffer a sharp fall in revenue and face the risk of cash flow depletion. Therefore, they require significant assistance in terms of loans, mechanisms, and policies implemented by the State as the best way to overcome the damage done by the COVID-19 pandemic.
The VABA have also proposed providing these firms with a credit package of approximately VND25,000 billion, with a preferential interest rate reduction of 4%, and a term of between three and five years to maintain resources, along with capital for recovery and development. In addition, aviation businesses in general are entitled to apply a reduced interest rate of 2% according to Government Resolution No. 84 dated May 29, 2020.
Noi Bai International Airport in Hanoi is mostly deserted, with the scene being quite different compared to the past.
Another proposal put forward by the VABA includes reducing the environmental protection tax at a higher rate for airlines.
Emphasizing solution for a large-scale vaccine rollout and considering the implementation of "vaccine passports", the VABA has asked the Government to direct the loosening of regulations on travel and isolation for those who have received both doses of COVID-19 vaccines. This could be done as a way of easing entry and isolation regulations for fully vaccinated passengers and planning to reopen international flights in the near future.
According to Dinh Viet Thang, director of the Civil Aviation Authority of Vietnam (CAAV), the COVID-19 pandemic has greatly affected all countries globally, along with the world economy, and especially the aviation industry. Up to now, according to the International Air Transport Association (IATA), losses suffering by the global aviation total over US$ 200 billion.
Thang also acknowledged that Vietnamese airlines have also been heavily affected due to only between 1% and 2% of their combined fleet of 250 aircraft being put into operation during the COVID-19 pandemic.
Currently, the aviation sector has only partially recovered, with up to 80% of the fleet remaining at storage facilities.
The CAAV head therefore underscored the urgent need to reopen regular international flights as soon as possible and also proposed a mechanism aimed at applying vaccine passports to passengers.
“Vaccination can prevent disease in the long run, but to be able to restore regular international passenger transport quickly, it is necessary to apply 4.0 technology in certifying that passengers have been already vaccinated or have tested negative.
Using a vaccine passport, combined with a passenger reporting negative PCR test results, is seen an effective solution to restart the regular international air transport market. In addition, the use of electronic data will help limit data falsification,” Thang added.
Vietnam considered in good position to attract FDI: UK-based website
The Vietnamese economy has fared better than most during the COVID-19 pandemic and is well placed to capture renewed FDI interest, according to an article posted on the UK website lexology.com on June 23.
London - The Vietnamese economy has fared better than most during the COVID-19 pandemic and is well placed to capture renewed FDI interest, according to an article posted on the UK website lexology.com on June 23.
The article said in recent years, the Vietnamese Government has focused on opening its market while also boosting its international trade ties. After joining the World Trade Organization (WTO) in 2007 and many regional conventional trade agreement with the US, China, Europe, Japan, the Republic of Korea (RoK) and most of the significant economies in the world, the country has become a member of the “new era” global free trade agreements that form the biggest trading blocks of the world today such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP) as well as free trade agreements with the European Union, Japan and the RoK.
It noted that Vietnam’s position in the World Bank’s annual ease of doing business ratings has climbed from 91 out of 183 countries in 2010 to 70 out of 190 countries in 2019, adding that the country has also begun to look away beyond low-tech manufacturing to high value added and high tech sectors of the new economy, industry 4.0 and digital transformation.
Aware of that the ability to hold on to its competitive edge in the cheap manufacturing space is very limited, Vietnam has thrown its weight behind high-value industries such as electronics and software engineering, positioning itself to capitalise upon the fourth industrial revolution.
The electronics industry is one of the country’s fastest-growing. The value of its electronics exports rose from 47.3 billion USD in 2015 to 96 billion USD in 2020, accounting for a third of national exports. In the global ranking of electronics exporters, Vietnam has climbed from 47th place in 2001 to 12th place in 2019.
The article cited statistics of the Vietnamese Ministry of Industry and Trade data which showed that FDI firms accounted for 95 percent of electronics export revenue in the first quarter of 2021. It affirmed that there is little reason to suspect that this trend will change in the coming years.
Vietnam has committed to climbing the manufacturing value chain through FDI and has been working for years to upskill its population in preparation. The Vietnamese government’s economic and regulatory efforts will help drive FDI towards the Southeast Asian nation in the coming years, wrote the article.
Vietnamese bananas gain a foothold in Japanese market
Vietnamese Goods Week in Japan ended on June 27 with Vietnamese bananas finding a foothold in this choosy market.
During the three-day event, along with lychee and dragon fruit, Vietnamese bananas attracted the attention of Japanese consumers.
Katsuhiko Dan, an office worker in Japan, said “Vietnamese bananas are delicious. This will be my regular choice.”
Soichi Okazaki, Executive Officer of AEON Co. Ltd – the organiser of the Vietnam Goods Weeks, said Japan is importing bananas from many places such as Ecuador, the Philippines and Taiwan (China), but Vietnamese bananas are delicious and taste better.
He said that the company will focus resources on promoting the import of bananas in the coming time.
With competitive prices and good quality, Vietnamese bananas can compete with similar products in the Japanese market, according to Okazaki,
He also said AEON is planning to import longan from Vietnam to sell in its supermarkets in Japan.
The two governments have reached an agreement that Japan will export tangerines to Vietnam, and vice versa, Vietnam will sell longan in Japan, Okazaki said, adding that longan and lychees are types of fruits that are easy to eat.
The annual Vietnamese Goods Week is an annual event organised by AEON Ltd. Co, the Ministry of Industry and Trade, and the Vietnamese Embassy in Japan. It aims to raise AEON’s sales of Vietnamese products in Japan to 1 billion USD by 2025. Through the event, more than 100 businesses from 21 Vietnamese cities and provinces have introduced their products to Japanese consumers./.
Ninh Binh farmers enjoy bountiful pineapple crops
The farmers in Ninh Binh Province have enjoyed a bountiful pineapple harvest and good prices despite the impact from Covid-19.
The farmers in Quang Son Commune, Tam Diep City, were happy as they collected the pineapples under the hot weather. Quang Son Commune has 1,500 hectares of pineapples which has become the main source of incomes for most of the households there.
Nguyen Van Dong said he had two hectares of pineapples, "The pineapples ripen very quickly because of the heat so we harvest the pineapples in the morning to avoid the scorching sun."
Le Van Thi's family has seven hectares of pineapples this year and hired dozens of people to help harvest 45 tonnes of pineapples per hectare.
Another farmer, Pham Ngoc Duy said he had to call for all family members and hire helpers to harvest the pineapples.
"I have five hectares of pineapples and all of it will be sold to agricultural products processing factory. The quality this year is very high and the price has increased by VND1,000 per kilo compared to last year harvest to VND4,800 per kilo," he said. "We earn about VND150m per hectare and profit over VND100m (USD4,300)."
Truong Van Hien, chairman of Quang Son Commune People's Committee, said most farmers sold the pineapple to Dong Giao Company. The pineapple prices once went up to VND10,000 (43 US cents) per kilo before.
"The prices dropped because of Covid-19 but the products are still sold well. We expect the prices to go up in coming months," Hien said. "The income per capita was VND55m in 2020. We hope it will increase to VND58m or VND60m (USD2,600) this year. Freelance labourers in our area also earn good money during harvest seasons."
Freelancer Dinh Van Thanh said he could hardly find any jobs amid Covid-19. After knowing about the pineapple harvests in Quang Son, he immediately went there to find work.
"I was hired for VND300,000 to VND500,000 (USD22) a day. I used to work in the fields so this job is not too hard for me," he said.
Another freelancer, Phan Thanh Thuy, said, "Harvesting pineapples is better than being a bricklayer or porter for me. I only work in the early morning or late in the afternoon."
Eight companies banned from sending workers to Japan
Eight labour export companies have been banned from sending workers to Japan due to the high absconding rate.
The Department of Overseas Labour sent an official document to the Organisation for Technical Intern Training in Japan about the decision. Several companies will also be put under strict supervision. The eight companies that were banned are Viet Nhat HR, JV-System, Hutraserco, Transmeco, Saigon Inserco, Alsimexco, Cienco 1 and Vinalines. The companies must take responsibility for the contracts that are still active.
The Department of Overseas Labour has also worked with the Organisation for Technical Intern Training on how to deal with Japanese supervisory organisations and Vietnamese firms that are negligent and caused a high runaway rate. Firms with a high rate of absconding staff will be suspended from sending guest workers abroad for six months.
Based on the statistics from 2016 to 2019, four companies including Batimex, Hogamex, International ITC and MH Vietnam have will be suspended from August 18. The Organiation for Technical Intern Training will not approve any request for licence renewal or application for additional occupations from Japanese supervising organisations that are collaborating with the four Vietnamese companies.
Guest workers that have been approved can still stay and work in Japan.
The Department of Overseas Labour has asked all companies to tighten monitoring to prevent guest workers from running away while working overseas.
MobiFone registers to sell nearly 9,000 SSB shares, stepping out of SeABank
MobiFone officially divested from SeABank (HSX: SSB) by selling its 8,781 shares.
MobiFone has just announced selling its 8,781 SSB shares with a face value of VND87.81 million ($3.811).
The shares are offered for sale in the form of continuous order matching at the Ho Chi Minh City Stock Exchange from June to December 2021. The starting price is VND40.050 a share ($1.74).
The above shares are dividends MobiFone received after divesting from SeaBank in February 2018. At that time, MobiFone successfully auctioned more than 33.4 million SSB shares with an average price of VND9,978 ($0.43) a share, earning more than VND333.49 billion ($14.48 million).
Notably, compared to the time when MobiFone divested from SeABank three years ago, SSB's stock price has increased four times.
On March 24, SeABank stock was officially listed and traded on HoSE. On March 31, it had six consecutive ceiling-hitting session up to VND28,150 ($1.22) a share, bringing the bank's market capitalization to more than VND34,026 billion ($1.48 billion).
At the end of the first quarter, SeABank reported a pre-tax profit of VND698.3 billion ($30.3 million), 2.3 times higher than the same period of 2020.
As of March 31, SeABank total assets reached VND184.3 trillion ($8 billion), up 24 per cent, of which customer loans increased by 14.3 per cent to VND111.1 trillion ($4.8 billion). Deposits from customers grew by 16.8 per cent at VND115.2 trillion ($5 billion) compared to the end of last year.
At the 2021 annual general meeting of shareholders, SeABank approved targets of VND198.2 trillion ($8.6 billion) in total asset, up 10 per cent, of which customer loans increased by 13 per cent to VND122.98 trillion ($5.3 billion), deposits from customers grew by 9.7 per cent at 124.3 trillion ($5.4 billion) compared to last year.
The bank targeted VND2.4 trillion ($104.2 million) and VND1.93 trillion ($83.77 million) in pre- and after-tax profit, up 39.6 per cent and 42 per cent, respectively, compared to the results from 2020. The bad debt ratio is less than 3 per cent.
Seaport fee collection in HCMC proposed to be delayed until October
The HCMC government has proposed the municipal People’s Council postpone the collection of fees for using infrastructure facilities and public services at seaport terminals in the city until October 1 instead of July 1.
According to the municipal government, the delayed fee collection is necessary to support enterprises facing difficulties caused by Covid-19, the local media reported.
The fee revenue in three months was estimated at VND723 billion.
The city has decided to start collecting the fees in October as it might have controlled the pandemic by that time. The Covid-19 vaccination is being conducted widely and enterprises will have time to recover.
At a meeting in late 2020, the HCMC People’s Council passed a plan to collect infrastructure fees at seaports, starting from July 1 this year to have more than VND3 trillion for the development of the road system near seaports.
According to the plan, the lowest fee is VND15,000 per ton and the highest is VND4.4 million for a 40-foot container. Revenue from the seaport infrastructure fees will be contributed to the city’s budget after deducting a maximum 1.5% of the total revenue for fee collectors.
According to the municipal Department of Transport, if the traffic system near seaports is improved, the cargo transport time will be shortened, benefiting import-export firms. In addition, the city can increase its revenue from import-export, corporate income and value added taxes.
HCMC greenlights public investment plan for 2021-2025 period
The 10th Ho Chi Minh City People’s Council for the 2021-2026 tenure this morning approved a resolution about the plan to allocate medium-term public investment in HCMC for the period from 2021 – 2025.
Accordingly, HCMC People’s Council assigned HCMC People’s Committee to regularly monitor and timely propose adjustments for the medium-term public investment plan in HCMC for the period from 2021 – 2025 (taking from both the state budget and local one) to the Prime Minister, the central state agencies so that major region-connection projects can be launched as scheduled.
This plan is to be perfected gradually by HCMC People’s Committee, along with the completion of necessary investment procedures, to ensure nominators of those public investments are capable of using the allocated money.
The investment plan should focus on key industries and fields which are identified as the main development factors and on major projects to create links between regions. Projects on disaster and disease prevention, living standard improvements should also be concerned.
HCMC People’s Committee is asked to strengthen disciplines, clearly identify the responsibilities of each related organization or individual, and carefully check each project, especially newly launched ones, to ensure investment efficiency and their final outputs.
Vice Chairman of HCMC People’s Committee Vo Van Hoan yesterday delivered the proposal of HCMC People’s Committee about the medium-term public investment estimate for 2021-2025 in HCMC.
The proposal stated that the medium-term public investment will take VND6,957 billion (approx. US$302.4 million) and VND6,968 billion ($302.9 million) from the domestic and international central state budgets, respectively.
The total calculated public investment demand for medium term in HCMC will be about VND672,862 billion ($29.25 billion) for strategic missions for socio-economic development and planning of the city in accordance with the Resolution of the 11th HCMC Party Congress for the 2020-2025 tenure.
In details, HCMC will carry out over 5,600 projects, needing a capital of VND38,788 billion ($1.7 billion) and VND634,073 billion ($27.6 billion) from the city budget overspending and the city budget, correspondingly.
The city can satisfy nearly 39 percent of the medium-term investment demand from 2021-2025 by its own local budget.
This medium-term public investment plan for 2021-2025 focuses on such projects as the Project on HCMC Sanitation (second stage), the Project on Eco-friendly Traffic Development, the Project to Improve Water Environment in HCMC (second stage), the Project on Urban Metro Line 1, and the Project on Subway Line 2 (from Ben Thanh – Tham Luong).
Other important transition projects from the previous period of 2016-2020 are also mentioned in the estimated investment plan.
Truong Le My Ngoc, Deputy Head of the Division for Economy – State Budget under HCMC People’s Council, reported the examination on the proposal.
She mentioned in her speech the need of this estimate to strictly follow the approved missions, goals, and solutions in order to effectively finish the three breakthrough programs and the key program of HCMC in the period from 2020-2025, as cited in the Resolution of the 11th HCMC Party Congress for the 2020-2025 tenure.
In related news, this morning, the 10th People’s Council greenlighted a resolution about investment for the project to expand National Way No.50, with an expense of VND1,500 billion ($65.2 million). The project will work on a total road length of 6.92km for a duration of four years from 2021. It will take VND687 billion ($29.8 million) from the central state budget and VND812 billion ($35.3 million) from the municipal one.
Vietnam bond market estimated at US$71 billion by Q1
On an annual basis, the bond market expanded 19.0% year-on-year in the first quarter of 2021, led by corporate bonds, which more than doubled during the quarter.
Vietnam’s local currency bond market slightly declined by 0.3% quarter-on-quarter to VND1,637.3 trillion (US$71 billion) at the end of the first quarter this year, reversing the previous quarter’s expansion of 8.1%, according to the latest edition of the Asian Development Bank (ADB)’s Asia Bond Monitor.
“The market contraction was due to lower outstanding government debt even as corporate bonds outstanding increased,” stated the report.
According to the ADB, government bonds accounted for a dominant share of Vietnam’s bond market at 82.1% versus corporate bonds with a 17.9% share. On an annual basis, the bond market expanded 19.0% year-on-year in the first quarter of 2021, led by corporate bonds, which more than doubled during the quarter.
In the first quarter, the government bond market contracted by 1.1% quarter-on-quarter during the January-March period, reducing the government’s outstanding debt to VND1,343.5 trillion (US$58.4 billion).
“A large volume of maturities was seen in government securities during the quarter, which was accompanied by low or no issuance across government bond segments,” noted the bank.
Insurance firms and banks together held nearly all government securities outstanding at the end of December 2020, accounting for a combined share of 99.3%.
The remaining outstanding bonds were held by security companies, investment funds, offshore investors, and other investors. Foreign investors held 0.6% of government securities at the end of December 2020, which remained the smallest foreign holdings share among all emerging East Asian economies, noted the ADB.
In contrast, corporate bonds posted growth of 3.3% quarter-on-quarter in the period, lifting the total outstanding amount to VND293.7 trillion (US$12.76 billion) at the end of March.
The increase, however, was slower compared to the growth of 13.5% in the previous quarter. The slowdown in growth can be traced to lower issuance volume from the corporate sector due to regulations that raised standards for corporate bond issuance to promote transparency and fairness in the market, stated the ADB.
The aggregate bonds outstanding of the top 30 local currency corporate issuers amounted to VND199.9 trillion (US$8.68 billion), or 68.1% of the total corporate bond market, at the end of March.
The top 30 corporate issuers were mostly from the banking industry with cumulative outstanding bonds equal to VND107.0 trillion (US$4.65 billion), or more than half of the top 30’s outstanding bonds. Property firms were the next most prolific issuers with VND44.7 trillion (US$1.94 billion) in bonds outstanding or 22.4% of the top 30’s total debt.
Hanoi asks MARD's support for building agricultural chains
The production and consumption of safe agricultural products and food will incorporate QR codes for traceability.
Hanoi has proposed the Ministry of Agriculture and Rural Development (MARD) to support it in building linkage chains for specific fields and regions that are suitable to the nature of the capital city's agriculture.
According to Nguyen Manh Quyen, Vice Chairman of the municipal People's Committee, the city wants to receive the ministry’s technical support for the construction of large-scale wholesale markets at the regional level to control inputs and supply sources as well as controlling food safety.
“We expect the ministry to introduce us capable businesses to build large animal feed processing factories as well as modern slaughterhouses and meat processing plants,” Quyen said at a conference held in Hanoi recently.
Quyen proposed the ministry support the construction of large-scale wholesale markets at the regional level to control inputs and supply sources as well as control food safety.
He said the city expects the ministry to introduce businesses to cooperate in the construction of large animal feed processing factories as well as modern slaughterhouses and meat processing plants.
Tran Thanh Nam, Deputy Minister of the Ministry of Agriculture and Rural Development (MARD) agreed with the city that linkage chains should only be built in some key areas of livestock, farming, and aquaculture.
“Under the policy of the agricultural industry development, products for domestic consumption and export will incorporate codes storing information on safe planting and production areas,” he said.
He suggested that the MARD’s National Agro-Forestry and Fisheries Department and Hanoi Department of Agriculture and Rural Development need to identify the participants in the chain under the policy.
In the 2021-25 period, the city sets a goal of supporting and building 50 linkage chains for key agricultural products associated with its concentrated specialized production areas.
All the subjects participating in the chains will be assisted in technical training, improving chain management skills, production techniques, and market development. The production and consumption of safe agricultural products and food will use QR codes for traceability and offer transparent information to consumers.
In 2020, Hanoi built 141 linkage chains with 70 stores, accounting for 8.8% of the country's total number of chains. About 786 chains in 21 provinces and cities have supplied agricultural products to the capital, with 670 stores.
“This is a very encouraging result in the implementation of the Coordination Program for the supply of agricultural, forestry and fishery product chains for Hanoi in the 2015-20 period,” Nguyen Huy Dang, Deputy Director of the Hanoi Department of Agriculture and Rural Development said.
According to Dang, the construction and development of the chain created safe livestock and crop products with quality control at all stages, raising producers’ awareness on how to ensure the safety and responsibility of consumers. “It is one of the important stages in the city’s agricultural development,” he said.
Safe products, which are managed and produced according to a transparent process, have earned the trust of consumers in terms of product quality, thereby increasing value and expanding the market, Dang added.
Currently, Hanoi is also promoting the development of the One Commune, One Product (OCOP) program to promote the consumption of OCOP products. Thereby, OCOP products and regional specialties are gradually gaining better recognition and appreciation of consumers for their quality, packaging design, and food safety and hygiene, according to the municipal Department of Agriculture and Rural Development.
Import-export value via Lao Cai int’l border gate surges neatly 42 pct in H1
The import-export value via the Lao Cai international border gate in the northern mountainous province of Lao Cai reached 2.08 billion USD in the first half of 2021, up 41.98 percent year-on-year.
Exports surged 42.12 percent to around 895 million USD in the period, while imports were valued at nearly 317 million USD, down 3.76 percent compared to the same period last year.
Temporary import for re-export, bonded warehouses, border-gate transfer, and transit activities implemented by Lao Cai’s enterprises at other border gates reached over 867 million, up 71.61 percent year-on-year.
According to Hoang Chi Hien, Director of the provincial Department of Industry and Trade, the import and export of goods via Lao Cai are mainly carried out through international road and railway border gates.
Local authorities have developed an action plan to realise its export-import target in 2021, with a vision to 2025, which set out specific requirements, goals, orientations, main tasks and solutions on infrastructure construction, production development, economic restructuring, investment, and trade and tourism promotion.
They have also paid attention to developing services to support import-export activities, improving the investment and business environment and the capacity of custom clearance for goods, and strengthening coordination with the Chinese side to implement cooperation agreements on trade, investment and border management.
Nguyen Ngoc Khai, head of the management board of the Lao Cai Economic Zone said in order to facilitate cross-border import-export activities through the Lao Cai – Hekou international border gate amidst the COVID-19 pandemic, relevant agencies of Lao Cai have regularly kept in touch with those of China’s Yunnan province to promptly solve arising difficulties.
The Vietnamese and Chinese provinces have regularly hold online talks or through external affairs channels to report arising issues related to disease management, and propose coordination measures in order to remove difficulties and promote import-export through the Lao Cai ‑ Hekou international border gate.
Lao Cai and Yunnan provinces held an online conference between the Secretaries of the Party Committees of Vietnam’s Lao Cai, Ha Giang, Lai Chau, and Dien Bien provinces and the Secretary of Yunnan Provincial Party Committee in late May to promote friendly exchange, and seek opportunities for investment and business cooperation in all fields of investment, trade and tourism.
They also proposed solutions to remove difficulties and obstacles in the cooperation process and agreed on cooperation contents in the coming time./.
Decree to tighten multi-level marketing rules
In the future, foreign investors who wish to register for multi-level marketing (MLM) activities in Vietnam may need three consecutive years of experience in multi-level marketing in another country.
The condition is part of a draft decree to amend some articles of Decree 40 on the management of MLM business activities, which has been developed by the Ministry of Industry and Trade.
The Vietnam Competition and Consumer Protection Authority (VCCA) under the Ministry of Industry and Trade said the draft would reduce the required basic training time and adjusted the training content to suit reality.
The draft also introduces regulations to improve transparency in the operation of MLM enterprises by adjusting the international patronage mechanism, preventing illegal activities or gaining illicit profits from the Vietnamese market.
Notably, the draft supplements regulations on the minimum commission rate on individual sales of participants to encourage businesses to promote participants' sales activities and limit the risk of disguised MLM business models, which only recruits sellers and consumes goods within the system.
In addition, the draft amends regulations and issues on administrative procedures to ensure consistency and convenience in implementation.
The VCCA is expected to finalise the draft before the Ministry of Industry and Trade submits it to the Government in December this year.
A VCCA report revealed that the number of enterprises registering for MLM business dropped in 2015-2020.
The country had 67 multi-level business enterprises in 2015, with 850,000 people participating in multi-level sales networks.
Multi-level sales networks attracted more than 1.2 million people in 2018. However, the number of MLM enterprises was only 22 last year, with the number of MLM sellers down to about 800,000.
However, revenue from multi-level sales increased sharply.
Total revenue from multi-level sales reached 8 trillion VND (348 million USD) in 2015, contributing 588 billion VND to the State budget, while the figure last year was more than 15.3 trillion VND, contributing 1.8 trillion VND to the State budget.
Thanks to the drastic actions of authorities, the market has purged disguised MLM enterprises in the past five years, said the VCCA.
With the participation of State management agencies from the central to local levels, multi-level sales activities have been gradually stabilised, it added.
The sector’s revenue has increased steadily and businesses have made contributions to the State budget, said a VCCA representative./.
Bac Giang looks to develop night-time economy
The People's Committee of Bac Giang province has recently approved a night-time economic development project for the 2021 - 2030 period with the aim to promote the development of evening economic activities in the locality, and turn Bac Giang into a vibrant and attractive destination, meeting the needs of working, entertaining, shopping, enjoying food and experiencing the nightlife of locals and visitors.
By 2030, the northern province aims to form at least one separate vibrant night-time entertainment complex, at least three large-scale areas with shops, shopping centres, food streets and restaurants around industrial parks, at least three tours combining culinary and cultural services to serve tourists with an average stay of 3-4 days, and at least four products serving night-time tourism.
Under the project, districts and Bac Giang city will have their own pedestrian street or night-time economic activity development zone, associated with local characteristics.
At first, the province will focus on forming and maintaining walking streets with potential for development in Bac Giang city and Viet Yen district, such as the walking street in the southern urban area in Tan Tien commune, and the nigh-time street in My Dien residential area in Nenh township of Viet Yen district.
At the same time, the locality will study and develop the evening economy with a variety of services and activities at night such as cultural and entertainment, catering, shopping and tourism services.
In large-scale tourist areas and tourist accommodation establishments, Bac Giang province will encourage investment in upgrading night-time services such as cafés, bars, pubs, karaoke and massage parlors.
Bac Giang will consider periodically organising cultural and entertainment events like music festivals, carnival parades, light festivals and street dances at night in line with its cultural and historical events such as Xuong Giang Victory Festival, Yen The Uprising Festival, Tay Yen Tu Festival, Luc Ngan Fruit Festival and Tho Ha Pagoda Festival.
It will consider establishing food markets and food streets to serve tourists, and encouraging restaurants and cafés to extend their opening times, establishing shopping streets and commercial centres to encourage famous brands to place booths there, and encouraging convenience stores to remain open around the clock.
To effectively carry out the project, Bac Giang gives priority to the planning of areas which hold potential in developing the evening economy, upgrading infrastructure, developing services, building mechanisms and policies to encourage investment and develop the evening economy, and ensuring security, order, environmental sanitation, food safety and service quality.
Bac Giang province holds a convenient position which is adjacent to the northern key economic region - an important economic centre of the northern region and the whole country and is able to conveniently connect with a number of key tourist destinations in the northern midland and mountainous region such as Mau Son in Lang Son province, Nui Coc Lake in Thai Nguyen province, Ban Gioc Waterfall in Cao Bang province, Ha Long Bay in Quang Ninh province, and Con Son - Kiep Bac tourist site in Hai Duong province.
In 2020, despite the negative impacts of the COVID-19 pandemic, Bac Giang's gross regional domestic product (GRDP) surpassed 13 percent, the highest in the country. The province's average per capita income reached 2,900 USD, 5.5 percent higher than the national average.
Currently, Bac Giang province has five concentrated industrial parks and 35 industrial clusters. There are more than 175,000 labourers working in concentrated industrial parks, with an average wage of 7.5 million VND (325 USD) per month. Meanwhile, there are 6,100 foreigners working in the province, including 2,500 experts, with an average salary of 30-50 million VND (1,300-2,160 USD) a month./.
Viet Nam wood exports to rise to new record level
Wood products exports are expected to rise to a record US$15-16 billion this year despite the impacts of the COVID-19 pandemic.
They were worth $12.5 billion last year.
According to the General Department for Agricultural Products Processing and Market Development, in the first five months they were worth $6.6 billion, up 61.3 per cent year-on-year.
Most companies have received orders for until the end of 2021, and they are 30 per cent higher than in 2020.
The US is the largest market, accounting for 60.4 per cent of all exports, followed by China with 9.9 per cent, Japan with 9.5 per cent, and South Korea with 5.7 per cent.
Viet Nam's wood products have achieved a solid foothold in many markets around the world, highly appreciated for their design and technology.
With the disruption of the supply chain due to the pandemic, the world's leading distributors tend to diversify and seek safer sources, and Viet Nam needs to make use of this opportunity, analysts said.
But the Ministry of Industry and Trade also warned that the rapid growth in exports comes with a concomitant risk of anti-dumping and anti-subsidy threats.
Viet Nam’s wood industry is affected by trade tensions between major countries.
It has already faced anti-dumping lawsuits from the US and South Korea, especially for plywood-related commercial fraud and tax evasion. But plywood is not the only item facing a threat, the Ministry of Industry and Trade said.
Recently the US Trade Representative accused the Vietnamese timber industry of using illegal wood, and the risk of resultant trade restrictions is very high.
The Ministry of Agriculture and Rural Development has issued a decision on geographic origins and timber species risk categories. This plays an important role in controlling the legality of imported timber.
According to the foreign trade defence handling division at the Ministry of Industry and Trade’s department of trade defence, Viet Nam has faced a total of 199 cases so far, and in the last five years there have been 97 commercial defense investigations.
The most problematic markets are the US, India, Turkey, Australia, Canada, the EU and the Philippines, it said.
In 2020 alone Viet Nam faced a total of 37 cases related to tax evasion on plywood products and anti-dumping related to MDF wood.
To avoid anti-dumping and anti-tax evasion investigations, businesses need to have knowledge of trade defence and understand the true nature of this tool to make the right responses.
When exporting to a certain market, they should have information from importers, and as soon as information about anti-dumping investigations is known, businesses must respond.
The ministry has said it will issue warnings to support businesses.
It is also necessary to control exports to that market to ensure the lowest tax rate.
The Ministry of Industry and Trade also said the wood industry faces a severe shortage of human resources, especially tech-savvy workers while vocational training schools and universities find it very difficult to attract students.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes
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