According to Vu Quoc Huy, Director of the National Innovation Centre (NIC), Vietnam saw a robust development of start-up firms last year and was on track to become the next growth driver of Southeast Asia and play a vital role in the region’s start-up golden triangle.

He cited statistics that investment into start-ups hit a record high of 1.4 billion USD in 2021 despite the impacts of the COVID-19 with strict social distancing measures in place, breaking the previous record of 874 million USD in 2019.

The number of new businesses set up in the first four months of this year increased by 12.3 percent over the same period last year, which, together with positive growth momentum in foreign investment inflow, demonstrated the country’s large potential for the development of the start-up ecosystem, he said.

He expects that investment in start-ups will double in the next three years.

With a crowd of young consumers and a workforce that has a high demand for digital technology in the post-pandemic period, the start-up market of Vietnam was predicted to take off in the next few years. About 70 percent of the population was below 35, and the literacy rate of 95.4 percent is among the highest in Asia.

Domestic consumption was forecast to grow at an annual rate of 20 percent, which would make Vietnam a vital driver of Asia’s consumer market over the next decade. The middle-class population was also growing at the fastest pace in Southeast Asia, accounting for about 40 percent of the people today, up from just 10 percent in 2020. By 2030, the middle-class population was expected to make up 75 percent.

There was also an increase in digital consumers, with more than 8 million added from the beginning of the pandemic to the first half of 2021, with 55 percent from non-urban areas.

Vietnam’s Internet economy was estimated at 21 billion USD in 2021, up by 31 percent, driven by the e-commerce market, which expanded by 53 percent. The Internet economy was forecast to reach 57 billion USD with a compound annual growth rate of 29 percent.

Kim Ngoc Thanh Nga, Head of the NIC’s Ecosystem Development Department, said that Vietnam would develop at an unprecedented rate in the next decade, fuelled by high Internet penetration, a huge domestic market, and innovative ideas, which could be expanded abroad together with the presence of funds to promote start-up development.

Significantly, during the past decade, the Government has invested in significant pillars from education to infrastructure and ecosystem development, which was creating an essential foundation for Vietnam to attract investment into start-ups.

Huynh Huu Trung, the founder of Mio, a platform for fresh food, said that Vietnam, Singapore and Indonesia were creating a start-up golden triangle in Southeast Asia.

Trung said that start-ups needed to understand what business models would work well in these markets to create the best products and expand in the region.

On May 30, venture fund Golden Gate Ventures (GGV) and NIC signed a cooperation agreement to strengthen the long-term relationship between the two sides and provide support to the development of the start-up community and innovation ecosystem in Vietnam.

Accordingly, GGV will increase investment in Vietnam, promote exchange and encourage new ideas and innovations, and act as a catalyst to promote the position of Vietnamese start-ups in the region.

GGV has announced the opening of two new offices in Hanoi and Ho Chi Minh City, besides Singapore and Indonesia, affirming that these three countries were forming a Southeast Asia start-up golden triangle.

Golden Gate Ventures is a venture capital firm investing across Southeast Asia. Since 2011, the firm has launched funds and invested in more than 60 firms, such as Carousell, CodaPay, Appota, Loship, Mio, Carro, Bui and Xendit.

Housing supply scarce in all segments

The local property market has witnessed a short supply of homes in all segments, especially the budget-home segment, as there are no new projects on the market.

Dr. Tran Du Lich, vice president of the Vietnam International Arbitration Center (VIAC) said the domestic real estate market is not sustainable. In 2009, the market was frozen, with numerous semi-products and high-class apartments unsold, but affordable homes still sold well, unlike the current situation when few housing products are available.

Lich added, “The reason is not only due to the impact of the Covid-19 pandemic. Rather, the scarcity is related to the mechanism, legal procedures and tightened cash flow into real estate such as credit and corporate bonds, leading hundreds of real estate projects to stall.”

Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), said that from 2015 to 2021, HCMC had few projects licensed leading to a shortage of housing products. Annually, about 30,000 newly built houses were offered for sale, but in recent years, that number has halved to only some 16,000 per year. In particular, the market lacks an affordable housing segment now.

He said that the city’s real estate market is facing many difficulties, with a severe undersupply, and hundreds of projects have faced legal hindrances.

According to him, there are three main funding channels for real estate businesses. However, two channels are being squeezed, including credit and bonds, while raising capital from customers is also “stuck”, making it tough for real estate businesses.

Chau said the real estate market’s health reflects the health of the economy. If the real estate market is in trouble, the economy would feel the impact.

He suggested that the Government smoothen out capital flows for the real estate market to ensure healthy and sustainable development with transparency and fairness.

Can Van Luc, a member of the National Financial Monetary – Policy Advisory Council and chief economist at BIDV, said the real estate market is important as it makes up 4.5% of the nation’s GDP. This market is related to many other industries such as construction, tourism, catering, banking and finance, and also attracts a lot of FDI capital.

According to Luc, the real estate market is closely related to banking, securities, and insurance. If there is a problem in one segment, there would be a big impact on the other markets.

In addition, there are problems related to legal issues in dozens of different laws such as land price, land fee collection, land allocation and land lease, which need to be considered for removal soon.

Cao Phi Van, deputy director of ITPC, said domestic and foreign investors are also interested in the real estate sector. However, due to the inadequacy and overlapping laws causing hindrances, it is considered unattractive to such investors.

Vietnam can become region’s technology centre: Qualcomm Technologies leader

Vietnam has chances to become a technology hub in region, ST Liew, Vice President of Qualcomm CDMA Technologies Asia-Pacific Pte. Ltd., and President of Qualcomm South East Asia, Australia and New Zealand, has said.

In an interview granted to the Vietnam Investment Review, ST Liew stated that Vietnam will see more opportunities to develop and train more experts in technology.

These opportunities will allow Vietnam to go on a right track in the digital transformation roadmap to become a technology centre in the region, he added.

He stressed the importance of human resources training for small- and medium-sized enterprises operating in this field.

According to him, Qualcomm has committed to becoming a partner of Vietnam during its digital transformation.

The company has cooperated closely with Vietnamese partners from different sectors to help the country tap its potential in technology, especially 5G technology, towards the ambition of national digital transformation.

Qualcomm has also made efforts to support the Vietnamese Government through providing resources related to policies and 5G technology, as well as training for telecoms providers like Viettel.

It wants to cooperate with Vietnamese firms in developing smart cities, ST Liew said, adding that his company also hopes to soon introduce educational methods such as EaaS (Education-as-a-Service) in Vietnam, to promote smart education.

The company also wants to contribute more to the “Make in Vietnam” initiative by setting up cooperation with Vietnamese producers and supporting the country’s startups through the organisation of the Qualcomm Vietnam Innovation Challenge 2022 – the second edition of its kind.

Newly established firms up in first five months

The number of newly-established enterprises in the first five months of the year was 62,961, up 12.9 percent over the same period in 2021, according to the General Statistics Office (GSO). This was the highest number ever for the first five months of the year, the GSO said.

In the first five months of this year, newly registered capital reached about 761 billion VND, down 2.2 percent over the same period in 2021.

Meanwhile, 22,108 operating enterprises registered an increase of about 1.68 trillion VND, up 72.7 percent over the same period in 2021.

Therefore, the total registered capital of the economy in the first five months was more than 2.4 trillion VND, up 39.5 percent on the year.

The GSO reported that Vietnam saw 98,600 newly established enterprises and enterprises resume operations in the first five months of this year, up 25.8 percent over the same period last year.

The numbers showed a substantial recovery of enterprises in the first five months.

During this period, 45,900 firms temporarily ceased operation, 19,000 were in the dissolution process, and 6,900 completed dissolution procedures.

The GSO said in May, Vietnam had 13,400 newly established enterprises, down 10.9 percent compared to the previous month but up 15.2 percent over the same period last year.

There were 5,207 enterprises resuming operation, down 26 percent from the previous month and up 6.4 percent over the same period in 2021.

During the first five months, 913 newly-established enterprises operate in the agriculture, forestry and fishery sectors, up 2.4 percent over the same period last year; about 16,200 in the industrial and construction industries, up 5.9 percent, and 45,900 in the service sector, up 15.8 percent.

Vietnam’s export to EU benefiting from free trade agreement

Vietnam’s export value to the European Union (EU) grew further in the first five months of this year, with a trade surplus of 13.4 billion USD, up nearly 47 percent, thanks to their bilateral free trade agreement.

Despite lingering impacts of the COVID-19 pandemic and the Russia-Ukraine conflict which have pushed material and fuel prices as well as transportation costs, Vietnam’s export still expanded, contributing to its macro-economic stability and socio-economic development, according to statistics.

The General Statistics Office (GSO) said the export picked up on cashew nut, coffee, vegetables, fruit, fishery products, rice and timber products.

Notably, the country shipped up to 48,680 tonnes of cashew nut worth 290.23 million USD in the first four months, marking increases of 21.8 percent in volume and 21.4 percent in value.

Dang Hoang Giang, General Secretary of the Vietnam Cashew Association (Vinacas), said the EU was Vietnam’s biggest cashew nut buyer, making up 23 percent of the combined volume and 22 percent of the total value.

Vietnamese cashew nut will climb to No. 1 position in the market as tariff on the staple is lowered to zero percent under the Vietnam-EU Free Trade Agreement (EVFTA), he said.

Fishery exports to the EU also sped up, hitting 422 million USD in the first four months, up 47.3 percent, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Over 92 percent of Vietnamese firms register to use e-invoices

As many as 764,314 firms, or more than 92 percent of Vietnamese total, have registered to convert to electronic invoices, according to deputy head of the General Department of Taxation Dang Ngoc Minh.

Over 52,770 business households and individuals nationwide have also registered to use this kind of document.

Minh said that the use of e-invoices is a key and important task of the tax sector to promote digital transformation at businesses, financial agencies as well as other state ones.

The work will contribute to automating the way of serving the people, the management and organisation methods in order to reform administrative procedures, reduce costs, increase productivity of businesses, and at the same time contribute to promoting the development of e-commerce.

Vietnam launched its national e-invoice system on April 21. It is expected to help create an equal, transparent, and favourable business environment for people and enterprises, thus helping improve labour productivity and carry out the national digital transformation strategy.

Project helps boost agriculture sustainably

The Vietnam Sustainable Agriculture Transformation Project (VnSAT) has become a success model in the agricultural sector after nearly seven years of implementation, according to the Ministry of Agriculture and Rural Development.

The project has over that period of time benefited 19,200 cooperatives and cooperative unions, 16,000 businesses and over 16 million households, equivalent to 62.9 percent of the national population.

It has provided training for rice growers in eight Mekong Delta provinces and coffee cultivators nationwide, and supported the construction and upgrading of about 876km of rural roads, 26km of canals, and 47km of electricity line for 72 electric pumping and 73 transformer stations.

In addition, about 105 million USD, equal to 100 percent of credit capital, has been completely allocated to farmers.

NA deputies discuss curbing petrol prices, settling bad debts

Ensuring flexibility in curbing rising petrol prices and settling bad debts of credit institutions were scrutinised by National Assembly deputies on June 1 at a debate on the implementation of socio-economic development plans and the state budget in 2021 and in the first months of 2022 during the legislature's ongoing third session.

NA deputy Bui Manh Khoa from Thanh Hoa province suggested the NA assign its Standing Committee to adjust the special and value-added tax rates on petrol prices in 2022 to ensure flexibility in curbing rising petrol prices, thus contributing to curbing inflation.

The tax reduction may affect State budget revenue, however, he said that it can be offset by earnings from crude oil exports.

He added that currently, the Government is controlling the domestic petrol prices in line with those of the world.

Given the complicated development in the world situation, it is forecast that oil prices will continue to increase or maintain at a high level, thereby surging the prices of all kinds of products, affecting people's income and living conditions, Khoa said. Recently, the NA Standing Committee has decided to cut the environmental protection tax on petroleum products by 50 percent.

Regarding Government’s Resolution No. 42/2017/QH14 on piloting the settlement of credit institutions' bad debts, deputy Le Dao An Xuan from Phu Yen province said the extension of the entire content of the resolution does not meet its original goals.

He said that it is necessary to consider expanding the subjects covered by the resolution as well as supplementing regulations on the handling of bad debts that have no collateral as well as set forth solutions to deal with specific types of bad debts.

Deputy Nguyen Viet Ha from Tuyen Quang province suggested the Government continue to direct relevant ministries and agencies to finalise and implement guiding documents on the implementation of the resolution, aiming to fix shortcomings in the enforcement in the past time./.

Da Nang city welcomes 1,000 MICE tourists

Da Nang city in central Vietnam welcomed 1,000 tourists joining a MICE (meetings, incentives, conferences, and events) tour on June 1 at the BNI Leadership Team Summit 2022 with the theme “Better Together”.

Organised by Business Connections Asia Ltd. Co (BNI), the trade promotion event gathered 1,000 domestic entrepreneurs ready to exchange knowledge and seek business opportunities.

Da Nang has welcomed over 5,000 MICE guests from the beginning of this year. The city will continue to connect, promote and organise regional and international events to build Da Nang as Asia's leading destination in the MICE tourist market, he said.

Vietnam Airlines earns 35 million USD after divesting from Cambodia Angkor Air

Vietnam Airlines JSC (HoSE: HVN) recently announced that it has completed the transfer of 35 percent of its shares in Cambodia Angkor Air (K6) to the receiver, under an agreement between the two parties in the share transfer contract. 

After the transfer, K6 is no longer an affiliated company of the flag carrier.

According to a 2021 audited consolidated financial statement, on January 3 and March 29, the airline received 30 million USD and 4 million USD respectively from investors to buy back the contributed capital of the company at K6. 

It had also received a deposit of 1 million USD in 2019. The total 35 million USD corresponds to 35 percent of K6 shares.

Although the money was only paid until 2022, due to the transfer of stock ownership in 2021, Vietnam Airlines’ report has no longer recorded K6 as an associate, and revenue from financial activities posted a gain of more than 647.7 billion VND from the profit of the transfer of contributed capital.

The income has helped the carrier reduce its loss in 2021 and its equity is still greater than zero, escaping a delisting sentence.

Fishery export declines in May

Vietnam’s fishery export hit 1 billion USD in May, up 27 percent year-on-year but down from the 1.1 billion USD recorded in the previous month, the Vietnam Association of Seafood Exporters and Producers (VASEP) reported.

The drop was mainly due to a decline in shrimp export which increased only 19 percent to 416 million USD as compared with a 47 percent rise in April, the association explained.  

In the first five months of this year, the total value was over 4.6 billion USD, a rise of 42 percent from the same period last year, of which shrimp export accounted for 39 percent.

Enterprises said the hike in shrimp export in the first four months was thanks to reserve materials and inventories from 2021. In addition, many firms won contracts with high prices late last year when the COVID-19 pandemic was ravaging and the global inflation affecting shrimp prices.

Since May, unfavourable weather conditions have exerted negative impacts on shrimp farming. Therefore, it is forecast that there will be a shortage of material for export in May and the coming months.

Vietnam’s shrimp export is also predicted to grow slowly in the second and third quarters as the demand from major markets will stand still after the surge.

Tra fish export in May also expanded 65 percent to 245 million USD. In the first five months, the value rose nearly 90 percent to more than 1.2 billion USD.

Although the export of other aquatic products like squid, octopus, crab and mollusc increased in May, it still remained lower than that in April.

Experts said the Russia-Ukraine conflict will continue to negatively impact economic sectors, including fishery.

Dong Nai province posts trade surplus of 2.9 billion USD in Jan-May period

The southern province of Dong Nai recorded a trade surplus of nearly 2.9 billion USD in the first five months of 2022, the highest figure over the past two years, according to the provincial Office of Statistics.

Specifically, the province exported nearly 10.9 billion USD worth of goods during the January-May period, up 14 percent year on year, with major exports being coffee, pepper, garments, machinery, computers and electronic parts.

The main markets for Dong Nai’s exports are the US, China, Japan, and European countries.

Meanwhile, Dong Nai imported 8 billion USD worth of goods, including chemicals, plastic materials, raw materials for the garment and footwear industries, and iron and steel products.

Key import countries are China, the RoK and Japan.

Joint efforts made to evaluate EVFTA implementation

The European Union (EU) is striving to support the Vietnamese government to fully materialise the EU-Vietnam Free Trade Agreement (EVFTA) through the ASEAN Regional Integration Support – Vietnam Trade-Related Assistance (ARISE + Vietnam).

The help also includes the grouping's assistance to Vietnam to implement its tax commitments and conduct trade data analysis.

Currently, Vietnam follows the ASEAN Harmonised Tariff Nomenclature (AHTN), which is reviewed every five years in line with amendments to the Harmonised System (HS).

According to the Ministry of Finance, a list of Vietnamese imports and exports is being compiled in accordance with the AHTN to update technology and trade and classify goods to match market demand.

Therefore, it is important for Vietnam to apply the HS and the AHTN consistently and accurately to facilitate customs clearance.

The ministry said officials in the tax sector need to know the latest information on the new tariff system.

In late January, ARISE Vietnam coordinated with the finance ministry to organise a training course on Vietnam’s tariff transition from AHTN 2017 to the 2022 edition.

Thanks to these efforts, Vietnam is preparing for the changes in tariffs and completing its tax reduction roadmap set in the EVFTA.

Under Article 17.14 of the EVFTA, available statistics on preference utilisation will be exchanged each year on July 1, creating a foundation for the two sides to evaluate the efficiency of the implementation of the deal.

Five-month tax revenue ups 16.5 per cent

The total tax collection in the first five months of this year is estimated at nearly VNĐ673 trillion (US$28.8 million), equivalent to 57.3 per cent of the projection for the whole year and a year-on-year increase of 16.5 per cent, according to the General Department of Taxation.

Notably, the collection from the manufacturing and business sector, the biggest contributor to the domestic revenue, represents 54.7 per cent of the estimate for the year, up 11.5 per cent from the figure of the last year’s corresponding period.

The positive results were attributed to the fact that the economy in the first months of the year maintained a good growth rate, the COVID-19 pandemic was kept under control, while production and business activities were on the recovery. The strengthening of examination and inspection to prevent tax loss and evasion as well as efforts to reduce the tax debt rate also contributed to increasing the revenue for the State.

The general department has ordered oganisations under its wings to implement tax support solutions in line with a resolution of the National Assembly which aims to help enterprises and residents quickly resume their production and business.

They were also requested to continue administrative procedure reforms relating to tax and e-invoice nationwide to facilitate taxpayers. The implementation of the second phase of e-invoice will be promoted across the country, along with the sharing of its information and data in the provision of online public services, it said.

Exports to EU set new record

In the first five months of this year, Vietnam’s exports to the EU have continued to flourish reaching $13.4 billion in export surplus and showing a 47 per cent jump on-year by efficiently leveraging the advantages of the EU-Vietnam Free Trade Agreement (EVFTA).

The latest figures from the General Statistics Office show that Vietnam raked in $152.8 billion in total export value in the first five months this year, up 16.3 per cent over the same period last year.

Exports to the EU zone alone shot up by 20.3 per cent, with an export surplus reaching $13.4 billion and soaring by 47 per cent.

The flourishing trade between the EU and Vietnam has followed the success of the previous quarters thanks to the advantages of the EVFTA and the economic rebound in countries within the EU zone.

For the cashews sector in April, export volume to the EU reached over 48,600 tonnes, generating $290 million in export value. It showed a 21.8 per cent hike in volume and a 21.4 per cent rise in value compared to March.

Dang Hoang Giang, general secretary of the Vietnam Cashews Association noted that the EU is currently Vietnam’s second-largest cashew export market, accounting for 23 per cent in volume and 22 per cent in value of the sector’s total.

The EU zone has great potential to progress to seize the number-one position in the near future.

With the EVFTA in place, the duty on cashews imported from Vietnam fell to zero, compared to a 7-12 per cent tariff previously.

HCMC to launch concentrated promotion program

The Department of Industry and Trade of HCMC has launched a concentrated promotion program called Shopping Season 2022 to help businesses promote the consumption of goods and the development of production.

Launched last year, the event attracts thousands of enterprises selling a wide variety of goods, including food, drinks, services, entertainment and tourism, clothing and apparel, household appliances and more with discounts of up to 100 percent.

The event’s organizers strive to meet people’s demand for essential goods with stable prices in the tough time due to the fourth wave of the Covid-19 pandemic.

It also aims to remove difficulties for businesses, reduce inventories, stimulate consumption, and increase goods and service revenue in 2022. The Shopping Season 2022 program will run from June 5 – July 15.

Fraudulent recruitment of e-commerce platform collaborators

The Vietnam Cybersecurity Emergency Response Teams/Coordination Centre (VNCERT/CC) – the Authority of Information Security has warned of a dangerous tendency of fraudulent employment of collaborators for e-commerce platforms lately.

Statistics from VNCERT/CC’s center to receive feedbacks and reports about spam calls and messages reveal that there are suspicious subjects sending messages to recruit collaborators via popular social networks like iMessage, Facebook, and Zalo with an attractive wage.

When a person interested in this ad deliver a response, those subjects will send a fake link of an e-commerce platform, asking that person to perform the first task of buying goods online via the platform in order to increase interactions for existing shops there. They are promised to receive back their money after two or three successful transactions, most of which are very costly. When the victim discovers that he or she cannot pour more money into these tasks, that victim realizes this job is merely a trick.

VNCERT/CC experts warn that whenever citizens sense their received message, email, or call is a fraudulent one, they should immediately report it to VNCERT/CC via a message to 5656 or the official website chongthurac.vn.

Price of Hanoi apartments forecast to increase

The price of Hanoi apartments is forecast to increase due to the shortage of supply, according to the latest assessment of the Vietnam Association of Realtors (VARS).

Most of the upcoming projects in Hanoi and Ho Chi Minh City are located in districts far from the city's downtown, where land reserves are still abundant for real estate development. Improved infrastructure will further drive up the prices of these projects in the future.

In the past two years, apartments in the districts of Cau Giay and Thanh Xuan were offered at around VND30-40 million (US$1,286-$1,715) per square meter. The price has now increased to VND45-60 million ($1,929-$2,572) per square meter.

Districts of Gia Lam, Hoai Duc, and Dong Anh are areas with more land reserves but real estate prices there also tend to increase to a level close to those in the metropolitan area. Specifically, the price of apartments has risen from VND18-20 million ($771-$857) per square meter some months ago to over VND30 million ($1,286) per square meter.

This report also showed that the demand for rental apartments in Hanoi and Ho Chi Minh City skyrocketed in the first quarter of 2022 compared to the same period of 2021. Meanwhile, the supply of apartments in the period dropped in the two cities, according to the real estate website.

In Hanoi, the supply of new apartments was estimated at 2,800 units, 38% less than the same period in 2021, mainly from ongoing projects. Most of the new projects have not started this quarter.

There are many reasons for the decline in the supply of apartments in Hanoi, including policies to tighten legal procedures, bank credit, and increasing depletion of land funds. 

Hanoi comes up with solutions to develop supporting industries

Hanoi this year plans to implement six solutions to develop supporting industries, with the target of increasing its development index by over 11% annually.

These solutions include connecting and assisting companies to become suppliers to domestic and foreign clients, as well as attracting foreign investment in this field.

The enterprises are also supported in the application of management systems that meet the requirements of global production chains, and in research, development, application, transfer, and innovation of technology in the trial production of components, spare parts, raw materials, and materials. 

Besides, Hanoi will support the participation of local and foreign businesses in supporting industry fairs, which will take place in the capital city this year as well as the transfer of advanced and modern technology transfer, and the purchase of copyrights, patents, and software.

The city also supports VND150 million (US$6,434) per unit participating in international fairs and up to 50% of investment costs for technology innovation projects.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes