Vinhomes Ocean Park 2 in Hung Yen Province. Hung Yen Urban Investment and Development Co issued two lots of bonds worth total VND7.2 trillion on March 16 with collateral of property rights arising from business cooperation contracts at Vinhomes Ocean Park 3 project. — Photo courtesy of Vinhomes

The corporate bond market is showing signs of recovery after a prolonged period of inactivity with a notable increase in both the number of issuers and value of issuance.

Data on the Ha Noi Stock Exchange showed as of March 24, eight companies issued bonds worth more than VND23.8 trillion (over US$1 billion), of which real estate firms dominated the market with total issued value of VND19 trillion, accounting for 80 per cent of total value.

This number was a significant increase compared to the value of VND500 billion in February and VND110 billion in January.

On March 16, two realty firms – Hung Yen Urban Investment and Development Co Ltd and Southern Star Urban Development and Trading Investment JSC – issued bond worth VND7.2 trillion and nearly VND4.7 trillion, respectively.

In the first half of March, four other real estate enterprises also issued bonds including Dream City Villas Real Estate Trading LLC (VND2.3 trillion), Nam An Investment and Trading JSC (VND4.7 trillion), Thu Do Import Export Trading and Investment JSC (VND40 billion) and Ha Thanh Trading and Production Investment JSC (VND45 billion).

Also in March, two consumer companies had successful bond issuances, of which Luxury Living Furniture Trading Co Ltd mobilised VND4.8 trillion and HDE Distribution JSC issued bonds worth VND40 billion.

The average interest rate of corporate bonds was around 12-13 per cent per annum. However, some businesses offered lower interest rate of 6-9 per cent per year for the initial period, followed by a floating rate.

Only Hung Yen Urban offered zero coupon for 12-month bonds (pay no interest but instead trades at a deep discount) with collateral of property rights arising from business cooperation contracts at Dai An urban area project (Vinhomes Ocean Park 3) between Vinhomes JSC (project's investor) and Hung Yen Urban Co.

Market analysts have predicted the corporate bond market will recover in the near future following the implementation of Decree 08 on private corporate bond placements, which came into effect on March 5. This decree will provide a legal framework to address the current bottlenecks in the corporate bond market, potentially increasing the success rate of issuances by deferring certain provisions such as professional investor regulations or extending distribution time.

VNDirect Securities Co estimates the maturity value of corporate bonds in 2023 to be around VND252 trillion, representing a 64 per cent year-on-year increase, with strong maturity pressure focusing in the second and third quarters. 

Traders at HCM City's biggest fashion market close due to losses

Many traders at An Dong Plaza in HCM City's District 5 have shut down their stalls after failing to reach an agreement with management on rent policies.

As many as 90 percent of 2,700 stalls in the plaza have closed since Wednesday morning after a meeting with the management board which told them that their proposal to get free rent for 2023 and a reduction of 30 percent for next year would need further consideration.

The board approved a discount of between 30-35 percent on rents this year but traders did not accept, saying that rents had already been raised by 35 percent previously.

According to the traders, they used to have good businesses before the Covid-19 pandemic with thousands of customers coming to the mall every day. However, the number of customers had sharply fallen after the pandemic.

Phuong Nghi who owns two footwear stalls at the mall said that she has never faced such slow sales since she started her business here in 2004. If the management board failed to reduce the rent, she and other traders could not continue their businesses due to losses.

The trader said that she used to sell more than 300 pairs of shoes and sandals a day before the Covid-19 pandemic, but now the number fell to between 30-40 pairs.

Another trader, Vu Duy Ha, who owns a clothes stall at the plaza said that he had not received a single customer in the past 10 days.

The traders said that they had made three earlier formal requests to the managers to give them free rent this year and a 30 percent discount in rents starting from 2024 onwards, adding that the discount must be provided on the rent price agreed to in 2016. However, their proposal had not been agreed upon.

A representative from the plaza management board refused to comment on the situation.

MoIT signs co-operation agreement with CMSC and VBF

The Ministry of Industry and Trade (MoIT) signed a regulation to coordinate with the Committee for Management of State Capital at Enterprises (CMSC) and the Việt Nam Bar Federation (VBF) in Hà Nội on Thurday.

Speaking at the ceremony, Minister of Industry and Trade Nguyễn Hồng Diên stated that the ministry had multi-sectoral state management functions in the economy, including many complex and sensitive fields.

In order to perform its functions and tasks, the ministry urgently needed the coordination and assistance of all levels and branches from the central to local levels, said the minister.

CMSC will be the direct management agency of State corporations, he said.

Appreciating the role of VBF, the minister emphasised that the federation was a professional socio-political organisation with very important functions and tasks.

MoIT and CMSC will coordinate more comprehensively and closely, especially in the fields of building, perfecting and implementing mechanisms, policies, legal regulations and projects under the management MoIT, CMSC and VBF.

The MoIT and CMSC will coordinate and direct enterprises in implementing production and business activities; and proposing solutions to solve the difficulties and problems of enterprises.

The two sides will also collect opinions from the VBF in the process of developing legal documents drafted by the Ministry of Industry and Trade.

In addition, the MoIT will consult VBF on urgent matters related to the common interests of people and businesses or under the direction of competent authorities.

Vietnamese tea export value to China skyrockets

The export value of Vietnamese tea to China in the initial two months of the year quadrupled from the same period last year, according to the General Department of Vietnam Customs.

Most notably, China imported 426 tonnes of tea from Vietnam in two months, representing a rise of 121% in volume and up to 411.2% in value.

The average tea export price in February alone surged by over 10% to more than US$1,641 per tonne.

China’s reopening of its border after the COVID-19 pandemic was the main factor which prompted tea exports to this huge market to grow strongly, reported the Ministry of Industry and Trade.

Meanwhile, two-month tea exports to Pakistan also enjoyed an upward trend, reaching 5,300 tonnes worth US$9.4 million, up 5.8% in volume year on year.

Although Taiwan (China) is Vietnam’s second largest tea consumer, tea exports to this market declined slightly over two months. statistics show Vietnam shipped 1,500 tonnes worth US$2.4 million to the market, down 8.1% in volume but up 3.8% in value year on year.

Statistics also indicate that while Vietnamese tea exports to Russia, Indonesia, and the United States endured sharp falls, exports to other markets such as Iraq, China, and Saudi Arabia increased significantly.

Overall, Vietnam exported 13,600 tonnes of tea worth US$22.6 million over two months, down 7.9% in volume and 3.1% in value compared to last year’s corresponding period, but the average export price of tea soared by 5.2% to more than US$1,643 per tonne.

Vietnam’s farm exports to China under close scrutiny

The Ministry of Agriculture and Rural Development has asked the relevant departments and agencies in Bac Ninh, Danang and HCMC to strengthen supervision over farm exports to China.

The Bureau of Import and Export Food Safety under the General Administration of Customs of China are conducting online inspections of five frozen fruit and fruit juice processing enterprises with shipments violating food safety regulations.

Fruit juice is not included in the list of 18 groups of items registered for export to China. Therefore, Vietnamese businesses have proactively registered directly on the China Import Food Enterprise Registration system.

Several of the 12 companies under investigation were found to have provided inaccurate information when registering with the Chinese side. They are trading companies, not manufacturing ones, and their shipments were warned for violating food safety regulations.

Therefore, the ministry required the companies exporting agricultural products outside the list of 18 products to China to submit registration dossiers to local management agencies and the Agro-Forestry-Fisheries Quality Control Department.

At the same time, relevant units need to promptly update the legal regulations on ensuring food safety and strictly supervise businesses in complying with regulations on food safety assurance in both Vietnam and China.

They are required to promptly detect and strictly handle any violations of food safety regulations in accordance with current regulations.

Coffee exports to Netherlands enjoy three-digit growth

Vietnam exported 7,420 tonnes of coffee worth US$18.77 million to the Netherlands in the first two months of the year, up 93.1% in volume and 105.7% in value year on year, according to the General Department of Vietnam Customs.

The average export price of Vietnamese coffee to the market also rose by 5.7% to US$2,517 per tonne year on year.

February alone witnessed the country ship 4,100 tonnes of coffee worth US$10.11 million to the Netherlands, up 110.3% in volume and 136.6% in value compared to February 2022.

Last year the major suppliers of coffee to the Netherlands were mainly from the intra-EU market, including Belgium, Germany, France, Finland, and Italy. Meanwhile, Dutch coffee imports from the non-EU market also enjoyed double-digit growth, with Vietnam becoming the second largest foreign supplier to this market.

Experts have advised Vietnamese enterprises to boost coffee exports to the Netherlands which is considered the gateway into the European market.

They also recommended that Vietnamese firms closely abide by the requirements set by Dutch and European importers in terms of product quality and gain greater insights into consumer demand, logistics services, and distribution systems to further penetrate these markets.

Hanoi orders 14 long-stalled projects be suspended

Hanoi Chairman Tran Sy Thanh has ordered relevant departments and Me Linh District to halt 14 long-delayed projects in the production, trading and service fields.

The decision was made after a review of privately-funded projects that require land, the local media reported.

The relevant departments and Me Linh District were told to put forward solutions to use land for replacements in line with prevailing regulations and report the result to the municipal government before April 30.

As for a project to build a hospital in Tien Phong Commune to serve high-income earners and offer free services to the poor, the Departments of Natural Resources-Environment and Planning-Investment were told to cancel the project due to long delays.

The city assigned the relevant departments and Me Linh to remove bottlenecks and pave the way for investors to speed up the construction of 46 other housing projects.

Four gas stations in HCMC apply for dissolution

Six gas stations in HCMC have suspended operations, with four in the process of conducting procedures for dissolution, according to the market surveillance agency in HCMC.

The four are the Go Vap Branch Gas Station in Go Vap District, Hoang Phong Station in District 7, Truong Thieu Sinh Quan in the outlying district of Cu Chi and Gas Station 178 in Binh Thanh District.

Among the six gas stations, Dong Saigon Gas Station in Thu Duc City is struggling financially.

As of March 23, the city had 15 fuel export-import firms and 549 gas stations, so fuel supplies for the domestic market remain stable. No fuel hoarding has been detected.

To ensure a sufficient fuel supply, the agency asked its market surveillance teams to keep an eye on the operation of gas stations and fuel trading firms in the city.

All options on the table as livestock firms take on losses

Livestock businesses in Vietnam are struggling with record low profits after a drop in both prices and demand.

Over the last few weeks, the price of live hogs in Vietnam has fallen, causing livestock groups to suffer losses. In the north, prices have fallen to lower than $2.15 per kg, a two-year low. In the central and southern regions, the price is around $2.20.

The cost of breeding pigs in household farmsteads is about $2.60 per kg, and around $2.15 for big husbandry companies that cover all farming stages from animal feed and seeding to slaughtering. Accordingly, farmers are suffering heavy losses, while big companies like C.P. Vietnam, Japfa Vietnam, CJ, Masan, and Dabaco cannot gain profits.

Towards the end of last year, many pig breeding enterprises reported losses or retreating profits over the same period. According to a February statement, local giant Dabaco saw a loss of more than $3.4 million in the fourth quarter of 2022, while it earned nearly $4.87 million in profit in the same period in 2021. The COVID-19 pandemic, the decline in live hog prices, and the fall in demand have greatly affected business.

Chilled meat giant Masan MeatLife reported a loss of more than $7.4 million in the last quarter of 2022, meaning a loss for the whole of the year of over $10 million. The company has not produced animal feed since the end of 2021, instead paying attention to meat branding.

Nguyen Cong Bac, director of Loc Phat BLLT Livestock JSC in the northern province of Son La, said that he sells 2,000-2,500 pigs every month and at current prices, the company loses as much as $65,000 per month. He said that he has never been in such a difficult situation before, despite working as a pig farmer for over 20 years.

Nguyen Duc Trong, vice chairman of the Vietnam Association of Farms and Agricultural Enterprises, recommended that farmers consider re-herding. “Farmers should strengthen links in a professional livestock chain and ensure biosecurity as well as stable product output,” he said.

Animal feed accounts for up to 70 per cent of input costs. When the selling price of hogs falls, farmers try to cut input costs. So, Trong suggested farmers should actively find domestic sources of animal feed to reduce costs.

According to the Ministry of Agriculture and Rural Development, in 2022, the output of live meat was about 7.05 million tonnes, including 474,300 tonnes of live beef, up 3.5 per cent on-year; 4.4 million tonnes of live hogs, up 5.9 per cent; and two million tonnes of poultry meat, up 4.5 per cent.

In addition, Vietnam spent about $1.5 billion importing meat, meat by-products, and related produce in 2022, up 9.1 per cent on-year.

Nguyen Xuan Duong, chairman of the Animal Husbandry Association of Vietnam, said that both domestic and imported food supplies increased, while the purchasing demand reported a small downtrend due to inflation. Increased consumption of chicken, seafood, and beef led to the sharp dip in the price of pigs.

At last week’s Vietnam Business Forum, the European Chamber of Commerce in Vietnam (EuroCham) highlighted to further utilise the EU-Vietnam Free Trade Agreement to help find new markets to overcome the current breeding woes.

Offshore wind farm project proposed in Can Gio

Japanese and local investors have asked the HCMC government for approval of an offshore wind power project with a capacity of 6,000 MW in the outlying coastal district of Can Gio, reported the local media.

The HCMC People’s Committee is seeking feedback from relevant agencies on the proposed project before it asks the Government to include this wind farm into the National Power Development Plan for the 2021-2030 period, with a vision to 2045.

The wind farm would be located 55 kilometers off the coast of Can Gio District on an area of 325,123 hectares.

The investors, including Asia Petroleum Energy Corporation, Tokyo Gas Corporation and Shizen Energy Corporation, also plan to build an onshore substation on eight hectares of land in Hiep Phuoc Industrial Park Phase 2.

The two-phase project is planned for operation by 2036 and it would be connected to the national grid to supply power for a hydrogen manufacturing facility.

A total of VND397,605 billion, including for site clearance, would be needed for the project, of which investors would contribute 30% and the rest would come from local banks.

Two other large-scale wind farm projects have been proposed in Can Gio District. If these two projects are included in the planning and approved for construction in the coming years, HCMC would have a huge source of renewable energy.

China to import farm produce via Mong Cai border gate

Chinese customs officials have recently approved the Mong Cai-Dongxing international border gate pair as an entry point for agricultural goods from Vietnam, according to the Ministry of Industry and Trade.

Farm trade will be facilitated through the Bac Luan 2 Bridge, one of the two bridges crossing the Ka Long River. It forms a 60-kilometer natural boundary between Quang Ninh Province and the Guangxi Zhuang Autonomous Region of China.

The Mong Cai-Dongxing border crossing pair could accommodate up to 200,000 tons of agricultural exports annually. It reopened on February 21 following a three-year hiatus due to the Covid-19 pandemic.

The pair of two border gates is now the second entry point for agricultural products from Vietnam and other regional nations entering the Chinese market, after the Huu Nghi (Friendship) International Border Gate in Lang Son Province.

The Tan Thanh Border Gate, part of the Huu Nghi International Border Gate, is also a major gateway for Vietnam-China farm trade.

Firms gearing up to boost exports

Businesses are sparing no effort to enhance export performance in the face of lingering headwinds in both the global and domestic markets.

For the first time, on March 19, a batch of nearly 20 tonnes of fresh sugarcane from the northern province of Hoa Binh left Vietnam heading to the US market, facilitated by the privately held Tien Ngan Trade Investment Co., Ltd.

Despite the modest value, the move heralds strong prospects for sugarcane and other agricultural items from Hoa Binh province.

Nguyen Le Diep, the company’s director, revealed that it took six months of negotiations to meet the partner’s strict technical standards.

Notably, accompanying the fresh sugarcane batch were 10 cane pressing machines, which hints at how the products will be consumed in the foreign market.

With a wealth of experience exporting hundreds of tonnes of fresh sugarcane to the EU, South Korea, and lately the US market, Tien Ngan Co., Ltd. is set to export 300-500 tonnes of fresh sugarcane this year.

The fresh export shipment came amidst a gloomy export order picture since late 2022, showing signs of a possible comeback of orders thanks to firms’ consistent strides.

Several key sectors are hopeful for the comeback of export orders starting from Q2 this year. On March 17, again for the first time, nearly 20 tonnes of durian from Can Tho city in the Mekong delta were exported to China through official channels.

Meanwhile, Lotus Cement and Commodities Trading Corporation JSC based in Ho Chi Minh City is expediting an order to export 55,000 tonnes of cement to Central America.

Lotus JSC’s vessel has taken cement products from the Thanh Thang Cement plant based in Ha Nam province, heading to Central American markets.

Lotus Corporation and Thanh Thang Cement's collaboration in fast-tracking the export shipment offers positive signals for a rebound in the Central American region this year.

Last year, the cement industry’s total capacity approximated 108 million tonnes, of which domestic consumption only made up 63 million tonnes, and the export volume accounted for nearly 31 million.

In 2023, cement businesses are diligently looking for customers to boost their export volumes.

Vietnam has been negatively affected by the global trade growth slowdown. In the first two months this year, the nation’s exports to the US shed nearly 20 per cent to $13 billion, with key sectors such as computers, machinery and equipment, clothing, footwear, seafood, wood, and wooden furniture all declining sharply.

Several key sectors, however, are hopeful for the comeback of export orders starting from Q2 this year.

It is encouraging that despite the forecast of a sharp decline in new electronics orders worldwide from the second half last year, the export of handsets and devices posted a slight increase of 5.2 per cent on-year in the first two months, reaching $9.21 billion. This is one of a few export groups still maintaining growth momentum.

Trade experts, however, gave a warning to local exporters that the de-globalisation trend is obstructing exports amidst ever-burgeoning safeguard measures applied by countries around and world.

Tran Thanh Hai, deputy general director of the Agency of Foreign Trade under the Ministry of Industry and Trade noted, “Developed nations are paying growing heed to issues like safety for their consumers, sustainable development, and combating climate change, driving them to institute new standards and regulations related to the supply chain, green materials, labour, and the environment that force export firms to seek compliance to uphold orders.”

Next era of e-commerce: Digital transformation with sustainable development

E-commerce in Vietnam has entered a new era, focusing on sustainable development and digital transformation to become a driver of the economy.

Vietnam's e-commerce topped the region in terms of growth rate in 2022, according to the latest report from Google, Temasek, and Bain & Company. Vietnam's compound annual growth rate was 28 per cent, higher than Singapore (17 per cent) and Thailand (15 per cent).

The scale of Vietnam's digital economy has now reached $23 billion and could hit nearly $50 billion in three years if the current growth rate is maintained, according to the report.

With rapid growth and far-reaching impacts on people's lives, the e-commerce industry is transforming in pursuit of sustainable growth based on technology and rapid digital transformation.

At the Forum Digital Transformation: Faster - Smarter - Greener, organised by VIR for the second year, Dang Anh Dung, deputy general director of Lazada Vietnam said that over the first ten years of the industry, players have been investing in infrastructure, services, and technologies. In the next era, e-commerce must develop, accelerating digital transformation and sustainable growth.

According to the Lazada's Consumer Behaviour and Research Report, in 2022, about 27 per cent of new businesses joined the e-commerce platform. Lazada's e-commerce ecosystem currently has more than 1 million sellers and brands, and in the fourth quarter of 2022, 75 per cent reported a positive outcome on Lazada.

Some local businesses that have successfully digitalised and grown sharply on the Lazada e-commerce platform in 2022 are Foodmap and Lep.

The Foodmap brand and Lazada carried out a number of agricultural product consumption campaigns, such as consuming three tonnes of lychees in a day and 20 tonnes of dragon fruit in a week. The Lep brand – a very hot fashion business – has grown 10-fold after two years of operating on Lazada, achieving the highest revenue in this industry on the platform.

Localities crack on with IP construction

Heavy investment into industrial park infrastructure is being made in the hopes of it becoming a significant source of revenue.

Last week the IPN5 facility was put into operation in the northern province of Hung Yen, with the total investment of $101 million and covering 192 hectares in the two districts of An Thi and Kim Dong. Tran Quoc Van, Chairman of Hung Yen People’s Committee, said, “This is a major provincial initiative that was executed swiftly, with the site cleared in just 15 months.”

The Hung Yen authorities anticipate that industrial park (IP) infrastructure like IPN5 will transform the land into a significant source of local income. Over a decade ago, the Red River Delta region specialised in wet rice cultivation. Now, however, it is attempting to increase investment and industrial growth. Although Hung Yen is merely 930 square kilometres, 16 IPs have already been planned.

In the first two months of this year, the industrial property segment has witnessed dynamic developments, with VSIP Nghe An investing in a 500ha IP for Tho Loc phase 1, and an IP in Hai Long-Thai Binh Economic Zone.

Dinh Thanh Phuong, head of business development at KCN Vietnam, said that the developer intends to construct additional parks in strategic locations such as Bac Ninh, Bac Giang, and Hai Duong provinces. “The recent reopening of China is creating advantageous circumstances for investors to travel freely and conduct surveys of possible locations for company growth. In response to the requirement to grow the size of logistics business units, the warehouse service market is becoming increasingly busy as well,” Phuong said.

However, the capital flows into IP infrastructure in Vietnam vary by region. Tran Thi Thanh Tam, director of Danang Department of Planning and Investment, said: “The majority of foreign-invested projects in Danang are focused on the industrial sector, while the overall investment capital for new projects has declined.”

In 2022, out of 43 newly licensed foreign-invested enterprises in Danang with the combined capital of more than $69 million, only three projects with the combined capital of more than $65 million entered IPs.

The building of new IPs in Danang is dipping. According to Tam, three IPs were authorised by Danang for planning to begin in 2019 but have not secured an investor – Hoa Cam IP phase 2, Hoa Ninh IP, and Hoa Nhon IP. All three were extensively bid on by a small group of infrastructure investors. However, the contractors failed to satisfy the dossier’s criteria, compelling the Danang authorities to postpone the certification round of investor selection. Presently, Danang has six IPs that are essentially occupied.

Numerous experts and property developers in Vietnam estimate that the average rate of investment attraction for a project in an IP is $4.6 million per leased hectare of industrial property. In addition, it is still extremely typical for projects to be delayed and land leasing to exceed demand, all of which negatively impact efficiency.

Nguyen Dinh Tho, director of the Institute of Strategy and Policy on Natural Resources and Environment, said that the strategic planning of IPs in Vietnam “lacks uniformity on the inter-regional and inter-provincial scale.” According to Tho, designs often fail to take into account the environment and ecology, transportation infrastructure, and tech and social infrastructure, in the interest of rational utilisation of resources and their own conservation.

The government is implementing preferential policies to enable successful investor attraction for industrial property without violating international obligations. In light of this, Tho said, many investors anticipate that comprehensive revision of Decree No.82/2018/ND-CP from 2018 on IP administration would address aforementioned deficiencies.

Foreign direct investment (FDI) in IPs and economic zones currently represents around 35-40 per cent of Vietnam’s newly registered FDI. According to the Ministry of Planning and Investment, it accounts for 70-80 per cent of the overall registered capital in Vietnam, if just the manufacturing and processing sector is included.

VN magnet for Italian investment

More than 6,000 Italian enterprises are doing business in Việt Nam and the Italian government has put Việt Nam on the list of 20 countries prioritised for trade and investment promotion until 2030, according to Dương Hải Hưng, ambassador of Việt Nam to Italy.

Hưng made the remarks at a workshop "Investing in Việt Nam: Trend and Opportunities for Italian companies" held by the Italian Chamber of Commerce on Thursday.

The Ambassador underlined Italian advantages in both traditional and novel industries, including automation and renewable energy, which are essential to Việt Nam's industrialisation and modernisation.

However, he believed that the potential of bilateral economic relations has yet to be fully unlocked, given that Italy is the 8th-largest economy in the world and a member of the G7 and G20.

As such, he called for the Italian Parliament's ratification of the EU-Việt Nam Investment Protection Agreement to ensure better protection of enterprises from both countries.

He also urged Italian enterprises to rely on the Việt Nam-Italy Joint Committee on Economic Cooperation for advice and support, which would help them gain entry into the Vietnamese market more easily.

Antonio Alessandro, ambassador of Italy to Việt Nam, remarked that Việt Nam now is more of a destination for value-added investment than for cheap labour manufacturing. The country has become more selective in choosing its foreign investors.

He also said bilateral trade is rising year by year, reaching US$6.2 billion in 2022. However, on the Italian side, the gap between imports and exports is widening, exposing the need for measures to boost Italian exports to Việt Nam. 

Lastly, the ambassador mentioned several sectors well-suited to Italian companies aiming to establish their presence in the country, including green energy, agriculture, and music.

Olderigo Fantacci, director of the Foreign Direct Investment Desk, Italian Trade Commission, highlighted three main factors that have brought Việt Nam into the spotlight: its high economic growth, integration into the global economy, and strategic position.

He said Việt Nam is growing not only in terms of GDP but also of GDP per capita. This rise in average income has turned Việt Nam into a lucrative consumer market for Italian manufacturers.

More importantly, the free trade agreement signed between Việt Nam and the European Union (EU) has made the country more open to Italian trade as the treaty has fully eliminated the customs duties applied to machinery and textile, and will phase out some others in the next few years.

The director also revealed that the main goal of Italian companies going abroad is not to reduce costs but to create integrated value chains, especially those involving Japanese and Korean partners.

Because of that, Việt Nam would likely become a destination of interest for Italian companies as the country has a strong cooperation with Japanese and Korean investors.

Bùi Phương Thảo, managing director of the Fidinam Company Ltd., highlighted three types of commercial presence in Việt Nam, namely company, representative office, and branch.

Legally, representative offices are not allowed to engage in profit-generating activities. Rather, they are limited to only market research and promotion activities. Branches, on the other hand, have the leeway to perform certain services, including construction and technical related services.

Most of the foreign-invested companies in Việt Nam are established as a limited liability company or joint stock company. These two types of companies are popular with foreign investors because stakeholders are responsible for debts and other liabilities of the company only to the extent of the capital contributed.

It is also worth noting that foreign investors will follow two steps to set up a foreign-owned company in the country. The first step requires the application for an Investment Registration Certificate (IRC) and the second involves an Enterprise Registration Certificate.

However, in some special cases, the legal procedures might be different. For example, foreign investors who establish medium- and small-size innovative start-ups are not required to obtain IRC.  

Alexandro Pedrironi, CEO of the Fidinam Asia Pacific, told Việt Nam News that the investment climate in Việt Nam has become more favourable in recent years. As such, the country is well-positioned to allow foreign companies to set up manufacturing sites and expand their presence in Southeast Asia. 

He said the trade agreement signed between Việt Nam and the EU has facilitated the commercial flows between the two countries. However, some efforts still need to be made to explain its benefits to more Italian companies.

He called for the simplification of regulations to make it easier for Italian companies to get entry into the country. He also highlighted the importance of facilities and infrastructure, which need to keep pace with their logistical needs. 

Bac Lieu proposes building expy

The government of Bac Lieu Province has written to the Ministry of Transport proposing developing a 58-kilometer-long expressway connecting the province with two other Mekong Delta provinces – Hau Giang and Soc Trang.

The Ha Tien-Rach Gia-Bac Lieu expressway will pass through Hau Giang with seven kilometers, Soc Trang with 15 kilometers and Bac Lieu with 36 kilometers, starting from the intersection with the Can Tho-Ca Mau expressway and ending at the sea dike in Bac Lieu Province.

The project is expected to cost over VND22.7 trillion and be executed in the 2023-2030 period, the local media reported.

The expressway would have four lanes and allow a maximum speed of 100 kilometers per hour.

The Bac Lieu government also proposed assigning the three provinces to be in charge of the respective sections of the expressway.

When in place, the expressway will help complete the traffic infrastructure system in the Mekong Delta, enhance regional connectivity and boost socio-economic development in the three provinces and the region as a whole.

The expressway will help reduce traffic on National Highway 1 and ensure traffic safety in the region.

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