BUSINESS IN BRIEF 24/9
Jewelry businesses, manufacturers thirst for capital
At a meeting to review the implementation of the governmental circulars in managing jewelry organized by the Ho Chi Minh City Jewelry Association on September 21, gold enterprises and manufacturers complained a shortage of capital for production.
Enterprises said that four years after implementation of the governmental decision No.24/2012, they hardly imported material for making jewelry while they could not ask for loans.
For instance, in the circular No.3 guiding to carry out the State Bank of Vietnam’s decision 24/2012, it is said that to ensure safety for credit institutions, jewelry enterprises only ask for fund when they receive approval from the governor of State Bank.
Moreover, enterprises hardly meet the regulation to ask for a bank loan.
By statistic of the Ho Chi Minh City Jewelry Association, tight provision of capital has brought over 70 percent of precious metal businesses to a virtual standstill. Worse, gold enterprises are facing difficulties in material for production; as a result, they had to collect from many sources without origin in the market.
A representative from the State Bank of Vietnam (SBV) in Ho Chi Minh City said that enterprises should follow available regulations on importing gold. SBV is studying about loan capital to create favorite condition to businesses which are thirst for capital.
So far, SBV in HCMC has granted license to 415 enterprises which satisfy the regulation of producing jewelry in the city.
Japanese firm pilots clean vegetable growing in Binh Dinh
Japan’s Kei joint stock company will invest 3 million yen (29,100 USD) in a clean vegetable project in central Binh Dinh province’s Nhon Hau Commune.
The company will use Japanese technology to produce clean vegetables, support domestic consumption and expand investment to export products to Japan.
Two ethnic labours will be sent to Japan to learn planting techniques for two months.
The company will also invite experts to help locals implement fresh plant models in Binh Dinh.
New customs renovation hopes to save millions of dollars each year
Many shipments have to go through one-week technical checks which have not proved effective.
Vietnam government is pushing for a series of rule amendments that are expected to simply customs check procedures to save businesses time and money.
Officials said at a meeting on September 21that customs check now takes around ten days for an import consignment and 12 days for exports, which has been reduced from 21 days last year but is still twice the region’s average.
Do Hoang Anh Tuan, vice minister of finance, said at the meeting that if the procedure can be shortened by just one day, businesses can save themselves US$200 each consignment, or US$800 million for the whole country each year.
Tuan said 36% of the shipments have to go through technical checks which take around seven days. The rate is three times of EU’s and 2.5 times of the average of Trans Pacific Partnership members.
But the big number of tests has not proved very helpful, he said.
“We’ve discovered few violations. Most of the shipments put through tests passed.”
A new regulation by the government aims to reduce the rate of shipments subject to technical tests to 15% by the end of the year.
The Ministry of Science and Technology has been asked to amend its laws regarding measurement rules and product quality to serve the purpose.
MoIT lists pre-qualified reliable exporters
The Ministry of Industry and Trade has announced the pre-qualification list of Reliable Exporters 2015.
The list of 311 reliable exporters was selected by agencies and organisations on the basis of the specified criteria of minimum export turnover, the reputation of doing business with foreign partners and the observance of corporate obligation to the state in the area of customs and taxation.
The exporters come from 22 key export sectors of Viet Nam, including coffee, textile and garments, rubber and tea, as well as electric wire, cable and cashew.
The textile and garment sector took the lead with the participation of 38 businesses, followed by rubber, coffee and tea with 32, 17 and 12 units, respectively.
On the list are well-known names, such as Viet Nam Intimex Joint Stock Corporation with export turnover of US$604 million, Binh Phuoc General Import and Export Company with $182 million, Nha Be Corporation with $651 million and Viet Tien Garment Corporation with $404 million, as well as Tea Kwang Vina Industrial JSC with $535 million and Chang Shin Viet Nam Co. Ltd with $467 million.
The programme “Reliable Exporters,” annually held by the Ministry of Industry and Trade (MoIT), was conducted from 2004. It is one of the trade promotion activities of the ministry to create favorable conditions for foreign partners to learn and promote trade with Vietnamese enterprises.
The programme aims to record the positive contributions of export enterprises for Viet Nam’s export growth and introduce and promote export enterprises in Viet Nam with foreign partners.
In 2015, Viet Nam made significant progress in exports, contributing to the country’s growth. Exports were estimated to reach $162.4 billion, an increase of 8.1 per cent compared with 2014.
The listed businesses will receive support from the MoIT, including free advertising of corporate image and products on the ministry’s website and magazines, free use of the Reliable Exporter logo made by the ministry and priority to take part in activities of the national trade promotion programme, market surveys, seminars, fairs and business forums organised by the ministry.
In addition, the businesses will enjoy a free monthly report on export commodities and the foreign market from the industry and trade information centre. They can also join online business training courses for free and get direct introduction on foreign customers who are interested in importing products.
The ministry will officially announce the list of Reliable Exporters 2015 next month.
Capital’s tallest apartment bloc breaks ground
The Viet Nam Construction and Import-Export Corporation 2 (Vinaconex 2) on September 22 began building Block B of the Kim Van-Kim Lu (Golden Silk) project in a new urban area of the capital, in Dai Kim Ward of Hoang Mai District.
Covering an area of 5,600sq.m, the building will have 45 floors, making it the city’s highest apartment building.
The first four floors will be reserved for a leasing office and a trade centre. With an investment of VND1 trillion (US$45 million), the construction is expected to be finished in the third quarter of 2018, providing 604 apartments ranging from 43sq.m to 100sq.m.
The apartments will be offered for sale in December this year, according to the project’s investor. The target customers will be middle-income earners.
At the ground breaking ceremony, Vinaconex 2 signed a credit contract worth VND800 billion with the Bank for Investment and Development of Viet Nam.
New pact on better business
The Viet Nam Chamber of Commerce and Industry (VCCI) and 21 municipal and provincial authorities signed an agreement in Ha Noi yesterday to jointly create a favourable business environment.
The agreement is designed to implement Government Resolution 35 on enterprise development until 2020 by simplifying administrative procedures, increasing dialogue between businesses and authorities, among others.
VCCI President Vu Tien Loc said the resolution, which went into effect in May 2016, is expected to produce more than 100,000 new companies within a year. At such speed, 150,000-200,000 new firms will debut each year and the goal of a million by 2020 will be within reach.
He also took the occasion to call on localities to launch start-up campaigns and pledge to assist enterprises in improving their competitiveness.
Speaking at the event, Deputy Prime Minister Vuong Dinh Hue, who is also head of the Central Steering Committee for Enterprise Reform and Development, said that with the signing, all 63 localities have reached a deal with the VCCI.
The Deputy PM made it clear that the Party and State appreciate businesses and businesspeople, adding that the amendments to the Law on Investment and the Enterprise Law, as well as other laws, are also meant to generate an environment conducive to business operations.
Hue suggested building an annual business development index which would include corporate revenues and workers’ income.
Since the resolution was issued, more than 9,000 new firms have been established per month. Ha Noi recorded 15,530 in the past eight months and expects to have at least 400,000 by 2020.
Early this year, the PM approved a project supporting start-up ecosystem and national renovation by 2025. The Government is preparing for proposed revisions to 15 laws regarding the business environment to be submitted to the legislature for consideration, as well as a bill to assist small- and medium-sized enterprises (SMEs), start-ups and start-up ecosystem.
Localities were asked to attract foreign direct investment, encourage trading households to register as businesses, provide more credit for SMEs, and establish venture funds at local and central levels.
Da Nang courting Japanese investors
Sixty per cent of Japanese investors face ongoing challenges with legal transparency, taxes, investment licence procedures and administrative reform when they invest in projects in the central region and Da Nang City.
Kana Miyazaki, deputy chief representative of the Japan External Trade Organisation (JETRO) in Ha Noi, reported these and other statistics yesterday during the annual dialogue between the Japanese Business Association in Da Nang (JBAD) and the city’s leadership.
Miyazaki said 60 per cent of Japanese investors in the central region and Da Nang still complain that unclear explanations and legal definitions and complicated investment licensing procedures and tax regulations remain major barriers to attracting Japanese investors to the city.
“A recent survey of JETRO revealed that 63 per cent of the Japanese firms based in Asia planned to expand their businesses in Viet Nam due to the development potential of the Asian market. Viet Nam is a favourite investment destination among Japanese investors, with its stable political situation and cheap labour costs,” Kana said.
“Central Viet Nam’s attractions include favourable investment conditions, cheap labour and fast recruitment of skilled workers,” she said.
Da Nang has smoothed the way for Japanese investors by setting up a Japanese Desk Da Nang team which will be available every Wednesday to support Japanese investors by explaining administrative procedures, investment licences, priority policies and other issues.
Kana said she hoped the city’s administration would support Japanese investors more actively, starting from the initial investment process.
The JETRO office in Ha Noi receives 12,000 visits from Japanese investors each year, asking for investment environment information about Viet Nam.
The number of Japanese projects in information technology, retail, hospitality industry and cuisine services has been drastically increasing, especially small- and medium-sized businesses with investment capital of US$5 million each, Kana said.
Vice chairman of Da Nang city’s People’s Committee, Ho Ky Minh, said investment projects funded by Japanese investors helped improve the city’s socio-economic development.
“Japan is the biggest investor in Da Nang, with 112 projects worth $397 million – 10 per cent of the accumulated foreign direct investment (FDI) projects in the city – creating 32,000 jobs for locals,” Minh said.
“But the city has yet to attract huge FDI projects, so dialogue will help us speed up policy reform to attract more foreign investment in coming years,” he said.
Minh said the city’s leadership wants to hear detailed opinions and requirements from Japanese investors regarding the investment environment, difficulties and barriers to doing business in Da Nang.
According to JBAD, the promised apartments, shopping areas and kindergarten projects in Industrial Zones (IZs) and Industrial Parks (IPs) have yet to be developed by the city.
General manager of Tokyo Keiki Precision Technology Inc, Michio Saruhasi, said the city should speed up construction connecting Nguyen Tat Thanh road with Da Nang city’s Hi-Tech Park.
“The delayed construction of the road limits us in employing workers. We can only contract 10 per cent of workers needed for our project right now,” Michio said.
He said slow completion of the road also causes more transport difficulties for businesses.
General director of Da Nang Nippon Seiki Company, Moriyuki Hosokawa, said the city should build more IT buildings for Japanese IT companies’ expansion projects.
“Da Nang should develop more IT parks with the best cyber security, infrastructure and high speed internet service. We also need the city’s Information and Communications Department to provide rapid internet repair service within one hour – not the usual seven hours,” Moriyuki said.
Da Nang University also proposes to increase enrollment in information technology training at the Technology College in 2016-20, to meet the demand for a skilled labour force for Japanese investors.
Director of the city’s investment promotion centre, Le Canh Duong, said 11 barriers raised by JBAD in a dialogue last year have been completely dismantled.
“We reduced the length of time needed to grant licences for foreign employees from two weeks to eight days. Some procedures has also been conducted online to facilitate things for Japanese businesses,” Duong said. “Also, the city’s Customs Department now offers automatic customs clearance procedures for Japanese investors.”
“Many Japanese investors agreed to build workshops to provide Japanese-style work places for companies in some industrial zones. Garbage collection and cleaning service is also done twice a week at Hoa Khanh Industrial Zone, as required of Japanese businenesses,” he said.
The city will reserve a 9ha complex for developing apartments, supermarkets and 2,000 sq.m of kindergarten projects to serve IZ and IP workers in the Lien Chieu district in 2017-20.
Da Nang will subsidise 50 per cent of van rental costs for investors transporting workers from the city centre to IZs and IPs. Bus routes are planned for 2020.
The city has developed an Information Park on 344ha of land in Hoa Vang District and an IT park on 55.6ha nearby, where space has been reserved for IT investors from Japan.
The city also plans to build an industrial park for small- and medium-sized businesses from Japan on 134ha.
Da Nang will begin construction of the Japan-Viet Nam Culture Centre in Ngu Hanh Son District and launch a new direct flight from Da Nang to Osaka in October.
Intermediary payment service providers told to enhance security
The State Bank of Viet Nam (SBV) has directed intermediary payment service providers to enhance safety and security in payment intermediation.
Under Document No 6942/NHNN-VP sent recently to the providers, SBV requires the providers to conduct an overall inspection; review business processes, technology infrastructure and human resources; and implement issued regulations and associated support services, such as online support operator service, to resolve complaints, ensuring compliance with regulations.
For categories that have not yet fully complied with regulations, the providers must propose a roadmap for implementation and overcoming challenges in 2016.
They also have to review and amend contents of service agreements, making certain to specify their responsibilities in providing intermediary payment services and the deadline for the receipt and settlement of customers’ complaints, liability and damage compensation plans for cases where there are risks or incidents of intermediary payment activity.
The providers must regularly monitor, supervise, evaluate and improve technical and business processes in intermediary payment. They are not allowed to cut back on processes and must regularly assess and upgrade the information technology system, seeing to it that the intermediary payment activities take place in a safe and smooth manner. The providers must also assess and classify risks in the intermediary payment activity and implement appropriate solutions to reduce risk, ensuring safety of assets for clients and organisations providing intermediary payment services.
Besides studying and applying advanced security technologies for customers undertaking large transactions, information technology solutions must be also applied to proactively identify and promptly warn customers about the risks of losing security and safety and to develop and rehearse scripts to respond to the information safety issues, according to the SBV.
The providers must report the results to the SBV’s Payment Department before October 30 this year.
Russian investment in Vietnam
Up to August this year, Russian businesses had invested in 111 projects with a registered capital of US$1.05 billion. With this result, Russia now ranks 23 out of 112 foreign countries and territories that have invested in Vietnam.
In the first eight months alone they invested in seven new projects with a registered capital of US$5.87 million.
Russian investment goes to 13 of Vietnam’s 18 economic sectors. Mining came first with seven projects valuing at US$581.2 million, accounting for 55% of its total investment, trailed by accommodations and food services (seven projects valuing at US$203.6 million) and manufacturing and processing industries (34 projects with a value of US$133.8 million).
Russian businesses have invested in 23 out of 63 provinces and cities nationwide. Offshore oil and gas production has attracted most of Russian investment with six projects with a registered capital of US$531.2 million.
Novaland takes over urban project from Daewon
Domestic property developer Novaland will replace the Republic of Korea (RoK)’ Daewon Cantavil to resume the construction of the long-delayed Da Phuoc International New Town project in the central city of Danang.
General director of Novaland Phan Thanh Huy told Vnexpress that the company will co-operate with Bac Nam 79 Construction JSC to develop the project. In addition, the project will be renamed The Sunrise Bay.
Huy added that the company will adjust the project’s design to suit the current market demand.
Thus, the project will include numerous villas, resorts, hotels, trade centres, schools, and a golf course. The construction is expected to complete in 2019.
“Being Novaland’s first project in central Vietnam, The Sunrise Bay will be the foundation to expand our operations in cities and provinces outside of Ho Chi Minh City,” Huy stated.
The construction of the Da Phuoc International New Town project was kicked off in February 2008 with the total investment capital of US$250 million, in Hai Chau district.
Being the first new international town built on land reclaimed from the sea, the 210-hectare project includes an international hotel and conference centre, a 60-storey office building, villas, 8,500 apartments, an 18-hole international standard golf course, as well as an amusement park, and shopping malls. Along the coast, there are pedestrian walks for travellers.
The major stages were expected to be constructed within 24-36 months after the start, with the rest finished within 10 years.
However, in reality, with the exception of land clearance, the construction has been immobile due to the investor’s financial difficulties.
Earlier in 2012, the project’s scale was downsized to 182 hectares, and the investor got the thumbs up from the Danang People’s Committee to remove the golf course.
Daewon Cantavil, a subsidiary of Daewon Co., Ltd which operates in textiles, hotels, trade, construction, and real estate in Vietnam, has been present in the country since 2004 through establishing Daewon-Thu Duc Housing Development Joint Venture Company.
Daewon-Thu Duc developed the 390-unit Cantavil An Phu Apartments in District 2 in Ho Chi Minh City with resounding success.
Besides, the company is launching the construction of its 36-storey international commercial-office-and-apartments complex named Cantavil Premier, also in District 2, and the Long Hai hotel and resort project in Tan Binh district.
The company has a long track record of cooperating with respectable Vietnamese partners in the development of other projects.
Founded in 1992, Novaland has been the rising star of the Ho Chi Minh City real estate scene. So far, it has developed more than 27 projects throughout the metropolis.
The company has maintained the construction progress of projects namely Sunrise Riverside, RichStar, The Sun Avenue, Golden Mansion, Orchard Parkview, and Botanica Premier.
Vietnam puts US-led mammoth trade deal on backburner, but so what?
Vietnam’s delay in ratifying the TPP speaks volumes of the delicate diplomatic ties it holds with both the US and China.
Vietnam’s decision to shelve the ratification of the Trans-Pacific Partnership (TPP), a free trade agreement whose 12 members comprise nearly 40% of the global economy, speaks volumes of the delicate diplomatic ties it holds with both the US and China, analysts say.
Lawmakers will not be voting on the US-led trade deal at the forthcoming session of the National Assembly — Vietnam’s legislature — next month as scheduled, the house speaker has said.
“The ratification of the TPP has to factor in the situations in other countries,” Nguyen Thi Kim Ngan, chairwoman of the National Assembly, told a recent meeting of the parliamentary Standing Committee.
Ngan said that the ratification of the trade deal would need further assessment and approval from the ruling Communist Party. Several other lawmakers have also weighed in, saying Vietnam should not forge ahead with a trade deal that other countries have shunned.
Le Hai Binh, the foreign ministry spokesman, said in a press briefing on September 22 that Vietnam is taking great strides in amending relevant laws to ensure full implementation of its commitments to the TPP.
Several analysts consider this delay an about-face in a country that has always exhibited steadfast determination to ratify the controversial agreement.
“It’s too bad,” Zachary Abuza, a Washington-based Southeast Asia analyst, said. “I think that it sends the wrong sign to investors. Vietnam got a good infusion of foreign direct investment because of it. Vietnam should be leading the way for investor confidence.”
When President Barack Obama was trying to reassure U.S. trading partners in Asia at the recent G20 summit in Hangzhou, China, that he would continue to battle tooth and claw for congressional approval of the TPP, it was already almost a done deal in Vietnam.
At a meeting with representatives from American businesses in late August, Vietnam’s Prime Minister Nguyen Xuan Phuc confirmed that the national legislature, where over 90% of lawmakers are Communist Party members, would sign off on the TPP at a plenary session in October.
But to many other observers, Vietnam’s hesitation in this regard should come as no surprise, given the country’s delicate diplomacy with the US and China, which both are vying for dominance in Asia and accuse each other of stoking tensions there.
“It seems to me that Vietnam is doing the same thing it always does regarding the US and China,” Dennis McCornac, a professor of economics at Loyola University in Baltimore (Maryland), said.
“Vietnam seems to want to make sure not to antagonize whomever becomes president of the US since both candidates oppose the TPP while at the same time it appeases China by not ratifying it. Just good politics,” he said.
Republican bigwigs on Capitol Hill have reiterated that the trade deal would not come up for a vote this year. Much to the chagrin of its advocates, presidential hopefuls Hillary Clinton and Donald Trump have also both expressed vehement opposition to a trade deal they equate to massive job losses in the country they are battling each other to run.
But on the other side of the Pacific, the Vietnamese media have touted the prospect of Vietnam opening the floodgates to increased foreign investment, particularly to American companies, after the TPP takes effect.
Media reports also croon that the deal would enable tariff-free access to the US for Vietnamese companies, particularly apparel, footwear and textile exporters. It would also pave the way for Vietnam’s overhaul of its much-cosseted yet inefficient public sector.
Vietnamese and American officials have indicated that the TPP is a strategic political instrument, not just a trade agreement, to counter Beijing’s rising influence. But the ambitious trade deal, after all, goes against the grain of Vietnam’s ideology.
One issue that has remained unexplored here is that Vietnam, along with the other 11 signatories, would have to respect patents of major pharmaceutical companies for between five and eight years. This could make it impossible for sick patients suffering from potentially fatal diseases like HIV or cancer in Vietnam to afford the drugs they need.
There are around 250,000 Vietnamese suffering from HIV/AIDS, and the country also logs around 150,000 new cases of cancer annually, more than half of which prove fatal, according to the World Health Organization.
Higher drug prices are not the only compromise Vietnam has agreed to make to join the TPP. One of the most glaring threats that the Vietnamese media have also glossed over is the investor state dispute settlement, an instrument which grants corporations the right to sue a foreign government.
On top of that, under the deal, Vietnam is required to amend its labor laws and allow workers to form independent trade unions, a real litmus test for a country where the Vietnam General Confederation of Labor is the only legal trade union representing all workers.
But the Vietnamese stance on this has shifted a bit in recent months. After eschewing several major ramifications of the TPP, the Vietnamese media have started to broach the threats of international lawsuits brought by the corporate sector.
Vietnamese officials have stated publicly that change is afoot regardless of the TPP. “With or without TPP, our goal is to improve our investment environment,” Tran Xuan Ha, a deputy finance minister, told Bloomberg in July. “With TPP, our corporate sector will need to be even more competitive to ensure it retains market share.”
The US-Vietnam relationship will endure the non-passage of the TPP, analysts say. “Vietnam has only made itself more attractive to US investment in trade,” Abuza said. “I expect that to continue. And our strategic relationship has never been better. Trust and confidence have grown immeasurably.”
Vietnam has overtaken Indonesia to become the top market for US companies in Southeast Asia, according to the ASEAN Business Outlook Survey released recently by the US Chamber of Commerce. According to the survey, 40% of US enterprises said that Vietnam was their priority market for future business expansion in the Association of Southeast Asian Nations (ASEAN).
The absence of the TPP would not push Vietnam closer to China, according to analysts. The South China Sea dispute will continue to play a larger role in Vietnamese-Sino relations, inevitably forcing Hanoi to ramp up alliances with the West and Washington and become less dependent on Beijing.
However, “China will still be an important factor and Vietnam will be the tightrope walker in the middle with China and the US holding each end,” McCornac said.
Given that Hillary Clinton has a good chance of getting elected, Vietnam-US ties may become closer despite her flip-flop on the TPP.
It was Clinton that ruffled China’s feathers at a regional forum in 2010 in Hanoi by claiming that the US has a “national interest” in freedom of navigation in the South China Sea, which Vietnam calls the East Sea.
“Clinton is a hawk and she will support Vietnam’s position on the islands so Vietnam will continue to depend on the US as an ally in the South China Sea dispute,” McCornac said.
In the event of the TPP dying, it could embolden hardliners in Vietnam, where the US intent has still raised some eyebrows. “I think that conservatives [in Vietnam] will see the US as being flaky, and not as committed to the region as it professes,” Abuza said.
But at the end of the day, underlying the TPP issue is Vietnam’s desire to bring fundamental political and economic reform, analysts say.
“It is my impression Vietnam is slowly becoming more open despite those in power,” McCornac said.
Ministry: TPP a chance for environmental protection
The Ministry of Natural Resources and Environment said implementing commitments to the Trans-Pacific Partnership (TPP) trade agreement would give Vietnam an opportunity to step up environmental protection.
Vietnam is expected to gain many economic, political and social benefits from the TPP, Deputy Minister of Natural Resources and Environment Vo Tuan Nhan said at a conference held in Hanoi last week to evaluate the impact of the TPP on Vietnam’s environment regulations.
However, Nhan noted that Vietnam would face a slew of challenges as it is the least developed economy among 12 TPP member states while the commitments to the agreement are more demanding than the other trade pacts Vietnam has signed.
Nhan said TPP is the first trade agreement to include environmental commitments which cover different fields under the management of different ministries such as biodiversity, invasive alien species, climate change, marine environment protection and environmental goods and services managed by the natural-environment ministry; fisheries and wildlife trafficking under the Ministry of Agriculture and Rural Development; and prevention of pollution from vessels overseen by the Ministry of Transport.
Nhan said TPP commitments aim at not only achieving extensive trade liberalization but also boosting environmental protection, sustainable development and the improvement of environmental regulations. The trade pact also specifies the establishment of a committee in charge of monitoring the implementation of the commitments and set up mechanisms for resolving environmental disputes.
The Ministry of Natural Resources and Environment has established a working group to implement Vietnam’s natural resource and environmental commitments to the TPP and the Vietnam-EU free trade agreement (EVFTA), with the Legal Department under the ministry responsible for relevant issues.
The department has reviewed the natural resource and environmental commitments to the TPP, assessed its impact on environment regulations and proposed amendments and supplements to make relevant legal documents compatible to those in the TPP and EVFTA.
Nhan said the full fulfillment of environmental commitments in the TPP is not only an obligation but also an opportunity for Vietnam to further strengthen environmental management and protection.
Vietnam and 11 other Pacific Rim countries signed the TPP in New Zealand in February this year and the deal is awaiting ratification by lawmakers of the 12 nations.
Startups hit all-time highs
The number of startups has hit all-time highs since the Enterprise Law took effect in early July last year, according to the Business Registration Management Agency under the Ministry of Planning and Investment.
Between July 1, 2015 and July 1, 2016, 105,975 firms conducted business establishment procedures, up 27.8% from a year earlier. Their chartered capital totaled VND4,600 trillion (US$206.3 billion), up a staggering 619% from the previous year.
Bui Anh Tuan, deputy head of the agency, told a review conference on the implementation of the enterprise and investment laws in Hanoi on September 20 that with around 9,000 newly-established enterprises a month, startups are expected to hit 100,000 this year. Tuan said that the Enterprise Law is a source of encouragement for people to set up businesses and that management agencies have supported firms to conduct paperwork more easily.
It takes 2.9 days to handle business establishment paperwork and nearly 86% of submitted documents are accepted. Results of 89% of files are given to firms on schedule.
In Danang City, an officer handles 670 business registration files while 40% of enterprises in Hanoi submit files online. Ha Tinh Province gives financial support of VND2-3 million to many firms to buy signboards and does not collect fees.
Tuan said nearly 178,000 companies informed the number of seals and their plans to manage these seals. Management agencies have yet to detect any fraud or disputes over the use of seals.
He said management agencies reported a 40% leap in workload compared to the time before July 1 last year.
In this year’s first half, there were over 285,000 business registration files and an officer had to deal with 551 files.
In HCM City, a staff must handle 1,712 files and the figure is 1,127 files in Hanoi.
Project to provide electricity for Ca Mau
The Southern Power Corporation (EVN SPC) launched a project to provide electricity to rural households in the southernmost province of Ca Mau on September 21.
The project will build more than 857 km of middle voltage lines, 1,847 km of low voltage lines and 1,207 transformer stations with a total capacity of 80,633kVA.
The first phase of the project will be carried out from now to the end of the year at a cost of VND40.8 billion (US$1.77 million).
The first phase aims to provide electricity to more than 1,388 households in 10 communes in U Minh and Thoi Binh districts.
Once completed, the rate of rural households in Ca Mau with access to electricity will be 98.6%.
The EVN SPC will also launch a project to supply electricity for 1,800 households in the Mekong Delta province of Hau Giang on September 22.
Deputy PM: Govt backs businesses
Deputy Prime Minister Vuong Dinh Hue has confirmed the Government’s resolve to provide support for businesses.
Hue reaffirmed the Government’s pro-business policy at an international conference in Hanoi on Tuesday on Vietnam’s startup ecosystem and Israel lessons. More than 200 leaders and representatives of ministries, agencies, research institutes, business associations, investment funds and organizations attended the event, which was organized by the Hanoi People’s Committee, the Israeli embassy and FPT Group.
Hue cited Article 51 of the 2013 Constitution as saying that the State encourages and creates conditions for firms and people to do business and invest, and for different economic sectors to grow sustainably and contribute to the country’s development.
The Government has issued a number of important policies, decisions and resolutions to back businesses, Hue said. One of them is Resolution 35/NQ-CP on support for businesses in 2016-2020 with an aim of having one million firms by 2020 compared to the current 500,000.
The Government will present a draft law on support for small and medium-enterprises at the National Assembly’s upcoming session.
“So, the pro-business policy is clear and the Government, ministries and agencies have shown their determination to stand by businesses,” Hue said, adding Vietnam needs to have proper institutions in place and that the business community should act to bring the policy into play.
Vietnam’s economy is in transition, so lessons from other countries with higher levels of development should be learned, Hue noted. As for startups, Vietnam needs to draw on experiences of Israel which has reaped great success in this field.
He hoped Hanoi would become one of the nation’s centers for startups in the coming years.
Nguyen Van Tu, director of the Hanoi Department of Planning and Investment, said the capital city currently has more than 200,000 businesses, contributing 40% of the city’s budget revenues, 67% of jobs and 38% of product output.
Hanoi expects that there will be about 200,000 startups in 2020. To obtain the target, Tu said the city will launch more business support programs in 2016-2020 and simplify business registration procedures.
At the conference, experts discussed startups in Vietnam and a proper legal framework for new businesses to grow as well as international lessons about how to develop a strong startup ecosystem and attract capital from investment funds for startups.
The Vietnam Innovative Startup Accelerator (VIISA) fund launched its website www.viisa.vn to look for technology startups in Southeast Asia for training and investment. The top 10 startups will get US$15,000 each or funding equivalent to 5% of their value during the training period as well as assistance for working offices and accounting and banking services.
Caravelle Saigon announces new general manager
Saigon’s landmark hotel Caravelle has named Michael Robinson as its new general manager in time for the second phase of the hotel’s enhancement project starting early next year.
The New Zealand native and former director of rooms at the property joined the Caravelle team in January 2016 after his most recent post with Park Hyatt Dubai in the UAE. This latest move will see him become the youngest general manager in the hotel’s history.
Robinson’s hospitality training includes a Bachelor’s Degree from the International College of Hotel Management in Adelaide, along with a Diploma in International Hotel Management from the Swiss Hotel Association and a Diplôme Culinaire d’Hôtelier from Le Cordon Bleu École de Cuisine. His passion for the industry started at a young age when he worked as a steward for a fine dining restaurant in New Zealand, followed shortly after by the beginning of his hotel career in 2008 as a management trainee in rooms division at the Hyatt Regency La Jolla, California. The following year when relocating to the Middle East, he joined Grand Hyatt Doha and became part of the pre-opening task force spearheading the launch of Hyatt properties in Russia and South Africa, before moving to Dubai in 2011.
“At Caravelle, we believe people are our most valuable asset. We are keen on training and developing young talents from within and are lucky to have Michael to take on this new challenge, especially at this crucial moment in the hotel’s development,” said John Gardner, general director of Chains Caravelle Hotel Joint Venture Company Limited, in a statement.
Packaging industry seeking more Govt support
The local packaging industry is in dire need of more policy support from the Government to unlock its growth potential and capitalize on opportunities from the free trade agreements Vietnam has signed, according to the Vietnam Packaging Association (Vinpas).
More opportunities are awaiting the industry given increasing demand of local consumers for packaged items.
Vietnam ranked 32nd in the world in terms of demand for food packaging last year, according to market research firm Euromonitor. The demand is forecast to grow 38% by 2020 while that of the world would expand by only 13%.
For packaging in the pharmaceutical industry, Vietnam is placed 30th globally with over US$4.11 billion worth of packaging consumed last year. The figure is expected to rise to nearly US$6.3 billion by 2020, up 52% compared to the world’s average growth of 25%.
Currently, more than 1,000 firms are operating in the packaging industry in Vietnam.
Despite the large number and strong growth of the sector, it is still considered a sub-sector in this country, Vinpas chairman Nguyen Ngoc Sang told the Daily.
In the list of business codes issued by the Ministry of Planning and Investment for sectors in Vietnam, producing packaging from wood is coded 1623, and belongs to the bamboo and wood production sector. Meanwhile, paper and carton packaging is coded 17021 while plastic packaging has a 22201 code.
“Packaging is not only made from wood, paper or plastic but metal, rubber and glass also, and how can authorities manage the production of glass packaging as it has no business code,” he said.
In the U.S. and other developed countries, packaging is classified as one of the top sectors. However, the position of the industry in Vietnam is different, Sang said, adding that this has caused difficulties for packaging firms because they cannot benefit from the Government’s policies.
“While seafood exports enjoy tax incentives, packaging firms get nothing but it is packaging that helps preserve seafood,” Sang said.
Over 250 firms to join textile-garment expo in November
More than 250 businesses at home and abroad will take part in the 16th Vietnam International Textile and Garment Industry Exhibition (VTG 2016) at the Saigon Exhibition and Convention Center in HCMC’s District 7 from November 23 to 26.
In addition to domestic firms, exhibitors from Thailand, Singapore, Japan, Hong Kong, Germany, Italy, South Korea, India, Indonesia, Bangladesh, Taiwan, and China will showcase their machinery, equipment and materials for the textile and garment sector at nearly 500 stalls of the exhibition, the organizers said at a news briefing on Tuesday.
Compared to last year, the stall area of VTG 2016 will increase by 80% as there will be more exhibits, including machines and equipment for weaving, automated fabric cutting, yarn spinning, dyeing, embroidery and knitting, chemicals, machinery for printing patterns on fabric, and garment accessories.
Pham Xuan Hong, chairman of the HCMC Association of Garment- Textile-Embroidery-Knitting (AGTEK), said enterprises in the sector have high demand for advanced technologies to raise their output to compete with imported products, so the exhibition will be an opportunity for them to find what they want.
VTG 2016 is considered a good opportunity for suppliers and manufacturers in the sector to meet.
The organizers said there will be conferences on the impact of free trade agreements on the domestic garment and textile industry, regulations on the origin of products, updates about the current situation and prospects of the country’s cotton and fiber supply chain, and advanced technologies for local firms to improve competitiveness.
VTG 2016 is organized by Vietnam National Trade Fair and Advertising Company (Vinexad), Taiwan’s ChanChao International Co Ltd, Hong Kong’s Yorkers Trade & Marketing Service Co Ltd and Paper Communication Exhibition Services, AGTEK and the Vietnam Cotton & Spinning Association (VCOSA).
VTG 2015 attracted around 12,000 visitors and saw many contracts signed.
Many firms ignorant of gold trading rules
Though a Government decree on gold trading has been in force for four years, many businesses have failed to observe provisions on labeling, invoicing and measurement.
At a conference on the implementation of Decree 24/2012/ND-CP held by the Saigon Jewelry Association in HCMC on September 21, Nguyen Van Dung, chairman of the association, said the Ministry of Science and Technology and the State Bank of Vietnam had also issued guidelines for the execution of this decree.
The association organized many conferences to help enterprises comply with those regulations but many of them have still faced trouble in the implementation process.
Law enforcement agencies recently have detected violations of measurement and quality standards by businesses.
Dung told the media on the sidelines of the conference that almost all gold trading enterprises in the city are small so they pay little attention to gold trading rules. In the coming time, the association will assist businesses to abide by the prevailing regulations.
Phan Van Dong, chief inspector at the HCMC Department of Science and Technology, told the conference that the department had investigated gold trading firms in the city. Of 67 units checked, 51 infringed labeling rules.
Labels must contain information about product names, producers, contents, weight, standards and symbols. However, many firms violate this regulation, saying labels are too small to cram all details onto them.
Dong said the acquisition of gold with unclear origin is against the existing regulations.