Many guesthouses in Hanoi have already closed at around 9 pm in the past week since they are full as people seek shelter from the heat wave.
Dang Thi Hoai from Hoang Mai District said they were saving up money to buy an apartment. They had planned on buying an air-conditioner but if they can bear the heat for the next month, they would have enough to move into a new apartment.
Hoai and her husband’s workplaces have air-conditioners and their children’ school also have air conditioning. However, it’s another matter when they go home.
“Last night, we went to the guest house nearby since 8 pm to rent a room for VND250,000 (USD11),” Hoai said.
When returning the room in the morning, she left a VND100,000 (USD4) deposit to reserve the room. Hoai said the prices were a bit high but they could deal with it for a few days or else they wouldn’t be able to sleep.
Tran Van Thai, the receptionist of a guest house on Dai Tu Street said he’d call it a good day if the 36-room guest house was half-full but they had always been full in the past week. All rooms are taken or booked since 9 pm. Guest houses often open 24/7 for walk-in guests. This time, their guests are usually families wanting to sleep overnight.
Thai said, “Either their houses don’t have air-conditioners or the air-conditioner was broken and the repairman failed to arrive.”
Duong Van Nga, a guest house owner on Dinh Cong Street, said all 20 rooms were taken since 8 pm last night. By noon the next day, two-thirds of the rooms were booked. A single costs VND130,000 (USD5.65) per night and a twin room costs VND180,000 while a dorm room costs VND250,000. Nga said two people often rented a single room while a twin room could accommodate three people to save cost.
Guest houses on Dinh Cong, Truong Dinh and Lang streets are also always full.
A limited-liability company is a legal entity established by its members through capital contributions to the company. Liability of members is restricted to the extent of their capital contributions.
Investment Capital Requirements
There is no minimum capital requirements for foreign investors intending to establish a LLC in Vietnam. Investors can be corporations or individuals. LLCs may be established by a single investor (single-member LLCs) or multiple investors (multiple member LLCs). Multiple member LLCs consist of at least two (2) stockholders, up to a maximum of 50 members. The regulations for single-member and multiple-member LLCs are mostly similar.
Depending on the ownership structure, LLCs established by foreign investors may take the form of either:
A 100% foreign-owned enterprise (where all members are foreign investors); or
A foreign-invested joint-venture enterprise between foreign investors and at least one domestic investor.
All charter capital has to be fully paid up within 90 days of establishing the LLC.
Management
The management structure of a LLC comprises of the members’ council, the chairman of the members’ council, the director or general director and a controller. A board of supervisors is also required where the LLC has more than 11 members. The Members’ Council is the highest decision- making body of the LLC and comprises of all capital contributing members.
Accounting/ Auditing requirements
Preparation of financial statements is mandatory for each company, and the balance sheet and profit and loss account of the company have to be filed with the Ministry of Finance, the local tax authorities, Department of Statistics and other local authorities subject to requirements by the law within ninety days from the end of the financial year.
All foreign-invested business entities must have their annual financial statements audited by an independent auditor operating in Vietnam. Banks, non-banking credit institutions and foreign banks’ branches are required to rotate audit firms after five consecutive years.
In addition, foreign invested enterprises and organizations incorporated and operating in Vietnam reporting in a foreign currency are also required to prepare an additional set of financial statements translated into VND to be submitted to the authorities. These translated financial statements must also be audited.
Advisor
GBS – one of the best business law firms in Vietnam with a network South East Asia, Middle East, Japan, HongKong, Malta and Poland – offers simple direct advice to start your operations in Vietnam. They provide the help you need to understand your options, obtain your business license and complete the registration of your own company.
Tens of thousands of Vietnamese social media users are flocking to self-professed free speech platform Minds to avoid tough internet controls in a new cybersecurity law, activists and the company told the Agence France-Presse (AFP).
The draconian law requires internet companies to scrub critical content and hand over user data if Vietnam’s Communist government demands it.
The bill, which comes into effect January 1, sparked outcry from activists who say it is a chokehold on free speech in a country where there is no independent press and where Facebook is a crucial lifeline for bloggers.
The world’s leading social media site has 53 million users in Vietnam, a country of 93 million.
Many activists are now turning to Minds, a US-based open-source platform, fearing Facebook could be complying with the new rules.
“We want to keep our independent voice and we also want to make a point to Facebook that we’re not going to accept any censorship,” Tran Vi, editor of the activist site The Vietnamese which is blocked in Vietnam, told AFP from Taiwan.
Some activists say they migrated to Minds after content removal and abuse from pro-government netizens on Facebook.
Two editors’ Facebook accounts were temporarily blocked and The Vietnamese Facebook page can no longer use the “instant article” tool to post stories.
Nguyen Chi Tuyen, an activist better known by his online handle Anh Chi, says he has moved to Minds as a secure alternative, though he will continue using Facebook and Twitter.
“It’s more anonymous and a secretive platform,” he said of Minds.
About 100,000 new active users have registered in Vietnam in less than a week, many posting on politics and current affairs, Minds founder and CEO Bill Ottman told AFP.
“This new cybersecurity law is scaring a lot of people for good reason,” he said from Connecticut.
“It’s certainly scary to think that you could not only be censored but have your private conversations given to a government that you don’t know what they’re going to use that for.”
The surge of new users from Vietnam now accounts for nearly 10% of Minds total user base of about 1.1 million.
Users are not required to register with personal data and all chats are encrypted.
Vietnam’s government last year announced a 10,000-strong cybersecurity army tasked with monitoring incendiary material online.
It says the new law is aimed at protecting internet users in Vietnam and tightening online security – not attacking free speech.
Facebook told AFP it is reviewing the law and says it considers government requests to take down information in line with its Community Standards — and pushes back when possible.
Vu Viet Ngoan, head of Economic Advisory Team of the Prime Minister, said that out of 20 e-commerce businesses operating in Vietnam last year, as many as 17 were foreign invested ones, which mainly received the investment capital from China.
Among Top 10 e-commerce businesses with the largest traffic in Vietnam, seven are foreign invested firms, of which Lazada and Shopee are wholly owned by China’s Alibaba and Singapore’s SEA Ltd, respectively.After receiving US$54 million Series C investment made by Chinese internet giant JD.com and South Korea’s STIC Investments, 40% of Tiki’s stake now belongs to the foreign investors, while Japanese investors are also holding 30% stake in FPT’s Sendo. Hanoi Times reports
According to Ngoan, Vietnamese start-ups in e-commerce, after a period of establishment, have to sell because of the fear for failure to compete.
Industry insiders said despite the fast growth of e-commerce, Vietnam is not an easy market to crack open, with many players running losses and some being forced to withdraw.
Many local shopping sites like Beyeu, Deca, and Lingo had to close after shouldering big losses after only a few years.
Big investment to gain market share
Having the ingredients for a thriving e-commerce economy thanks to a young population, rising disposable incomes, and growing internet and mobile adoption, the Vietnamese e-commerce market is expected to maintain an annual growth rate of 25% to reach US$10 billion in the next four years, according to the Ministry of Industry and Trade’s E-commerce Department.
However, the Vietnamese e-commerce market is still in an early stage of development, so it poses quite a few challenges to players such as high cash-on-delivery rates and lack of customer trust and logistics infrastructure. Meanwhile, e-commerce companies are spending aggressively to gain market share, intensifying the competition.
According to industry insiders, companies need to allocate enormous expenses for their e-commerce business from sales and marketing to warehousing and logistics, so it can easily eat up profits. Also, many platforms suffered losses from special discount offers and promotion campaigns to snag new customers.
E-commerce giants like Amazon and Alibaba only started generating profit after 10 years of operations. It is obvious that e-commerce companies in Vietnam will continue to incur losses in the coming time. Though the future is not rosy in all regards, it does not deter e-commerce companies from continuing their spending spree for new investment.
Meanwhile, Shopee is pumping money into promoting its platform with plenty of discounts, free nationwide shipping service, training for sellers, and other promotions. Thanks to its monetization efforts, Shopee has seen solid growth since its local debut in 2016.
On the other hand, Lazada is investing in the growth of its first mile, last mile, and fulfillment capabilities to keep up with the growth of e-commerce in Vietnam. In addition to developing automated sorting centers to speed up delivery, the company also cut commissions by 50% to lure in more online retailers.
Online retail makes up only 1% of the total retail market in Vietnam, compared with the 14% in the US and China. There is still a long way to go for the Vietnamese e-commerce market to reach its peak, so foreign companies like Alibaba, JD.com, and Sea have invested in the country early to get ahead of the curve.
Vietnam’s leading groups, including FPT, Vingroup, and Mobile World, have also jumped on the bandwagon with e-commerce marketplaces like Sendo.vn, 123mua.vn, Adayroi, and vuivui.com. Further, the shift from brick-and-mortar to omni channel retailing also prompted retailers such as AEON and Lotte to open online marketplaces.
The rout in Chinese stocks may be nearing an end as the central bank turns to more accommodative monetary tools, according to Shanghai Chongyang Investment Management, whose flagship hedge fund has returned 356 per cent since its launch in September 2008.
“While asset prices will face a ceiling given China’s tough regulation, risk prevention and deleveraging, a more flexible policy stance will put a floor under risk asset prices,” said president Wang Qing. “The market clearly is in its bottom range after earlier corrections.”
Bloomberg News reported, Chongyang is adding shares of thermal power and electrical equipment firms, consumer and financial companies as well as stocks with high dividend yields and strong cash flows, Wang wrote in emailed answers to questions.
The People’s Bank of China cut banks’ reserve requirement ratio last month as stocks tumbled amid concern over a trade dispute with the US, a weakening economy and a depreciating yuan. The Shanghai Composite Index has fallen 22 per cent from its January high to be one of the worst performing gauges worldwide. Chongyang manages about 20 billion yuan of mostly long-only A-share funds.
Among Wang’s other key points:
Foreign investors are likely to add shares as valuations are near a historical trough, while further downside in risk assets is normally limited when there’s adequate money supply, according to Wang
Some blue chips with relatively smaller market cap are under- or reasonably valued
ChiNext and small caps with high valuations may drop further amid the tight credit environment; unicorn listings and issuance of Chinese depositary receipts will lead to industry consolidations with less competitive firms being phased out
The yuan may continue to weaken against the dollar in the near term but depreciation will be modest, Wang says
Eric Miller is President of Rideau Potomac Strategy Group and a Fellow at the Canadian Global Affairs Institute.
In the fullness of time, the Quebec G7 Summit will likely be seen as the end point for the U.S.-led world order.
While President Trump’s tweets dominated the news coverage, the Trudeau government was already looking ahead, using the summit to put Canada’s trade diversification agenda into high gear.
As part of this process, it invited Prime Minister Nguyen Xuan Phuc of Vietnam to participate in an “Expanded G7.” Mr. Phuc’s visit came at a time of substantially deepening trade and political relations between our countries and built on Prime Minister Trudeau’s visit to Vietnam last November.
When many Canadians think of Vietnam, images of its 10,000-day war and the refugee crisis that followed come to mind. While the legacies of these events live on, today’s Vietnam, with a median age of 30.4 years, has a significant share of its population of 96 million that has known only peace.
And now the country is getting increasingly prosperous.
In recent decades, Vietnam has steadily integrated into the global economy, established a world-class manufacturing base and pursued increasingly market-oriented policies at home.
In 2018, Vietnam signed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which liberalized trade with Canada, Japan and a host of other countries.
CPTPP will accelerate Vietnam’s journey toward middle-income status while speeding up the outflow of global manufacturing from China to Vietnam. Output in sectors from furniture to footwear is already surging.
The transformation of Vietnam’s economy is in evidence on the streets of its cities and in its statistics. Since 2008, economic growth has never fallen below 5 per cent. It has been above 6 per cent for the last three years, and the Asian Development Bank is projecting that it will top 7 per cent in 2018.
In 2017, PricewaterhouseCoopers LLP reported that Vietnam is positioned to be the world’s fastest-growing economy between now and 2050, averaging 5.1 per cent annual growth. This trajectory would make Vietnam the world’s 20th largest economy.
Yet success is not guaranteed. The Vietnamese government is pursuing perhaps an even more important agenda for future prosperity: domestic economic reform. Key priorities include improving the ease of doing business, making the regulatory process more efficient and transparent, and streamlining the delivery of public services.
While the policy-making process is deliberative and often slow, real change is happening on the ground.
Usefully, the government benchmarks progress through tools such as the “Provincial Competitiveness Index,” which ranks the quality of economic governance for each of Vietnam’s 63 provinces and municipalities. Increasingly, promotion of leaders is based on whether they deliver results around this agenda.
Vietnam’s transformation offers tremendous opportunities. It is already Canada’s largest trading partner in Southeast Asia; exports to the country doubled in 2017.
With forthcoming preferential access under CPTPP, Canada is ideally positioned to provide Vietnam’s government with the tools of transformation while supplying the needs and wants of a growing middle class.
On a recent visit to Hanoi, my hotel offered a special promotion where one could sample “Canadian World-Class (Seafood) Specialities.” With abundant supplies and a reputation for quality, Canada has the required ingredients to effectively take on the United States and Australia as a preferred supplier of imported food.
Education is another area of opportunity. Vietnam is the fastest growing source of foreign students in Canada. The number of Vietnamese studying at Canadian universities and colleges has tripled to 15,000 over the past three years – and there is substantial room to grow.
One key advantage that Canada has in growing its trade linkages is a sizable Vietnamese diaspora, numbering 240,000. Many Vietnamese-Canadians are doing business with their country of origin. At a recent meeting in Hanoi, I met the head of an important Vietnamese investment fund, who, as it turns out, grew up in Toronto.
Canada-Vietnam relations are pragmatic but also strategic. Both are middle powers striving to preserve stability and a rules-based order in an increasingly uncertain world. In an age of trade conflict, it is fundamental that the like-minded work together.
Wayne Gretzky famously said that the path to success is to “skate where the puck is going, not where it has been.” With NAFTA in doubt and CPTPP coming online, a key place where the puck is going is to Vietnam. Let’s now lace up our skates, chase the puck and put it in the net. Canadians and Vietnamese alike will benefit.
Da Nang City has become a favorite destination for MICE (meetings, incentives, conferencing, exhibitions) tourists.
Ben Thanh Tourist and Saigontourist last May organized a conference and entertainment program for nearly 1,300 Oriflame workers at Sun World Da Nang Wonders.
Also in May, Furama Da Nang served two groups of 4,000 guests from World Team Builder. In April, TravelMart served 1,300 MICE tourists who came to Da Nang to attend a workshop, carry out team building activities, and visit famous tourist sites.
These big groups kicked off the 2018 MICE tourism season in Da Nang which will last until September.
Businesses and institutions choose to organize events in Da Nang because of the favorable weather conditions in the central region.
Nguyen Duc Quynh, deputy general director of Furama Resort, said Da Nang has beautiful beaches, landscapes, modern facilities and good transport system.
According to Nguyen Nhu Nam, deputy CEO of TravelMart, Da Nang has quality standard accommodations and conference centers for MICE tourists. The Ariyana Conference Center last year was chosen to organize the APEC 2017 Economic Leaders’ Week (AELW)
Hanoi, HCMC and Da Nang are the three biggest domestic MICE markets for his firms. Every year, TravelMart serves 7,000-8,000 MICE travelers.
Timothy Nicholas Quarm, CEO of Novotel Danang Premier Han River, said that many businesses choose Da Nang as the destination for MICE tourism. Most recently, three international companies decided to organize conferences and annual events at the hotel.
While Da Nang has great potential to attract MICE tourists, its capacity to serve the guests remains limited.
If many groups of tourists come at the same time, the city will lack accommodations. Ariyana is the only international conference center capable of containing over 1,000 guests, while conference rooms at hotels and resorts can contain 200-500 guests only.
Nguyen Thuy Thuan, director of Ben Thanh Tourism, Da Nang Branch, confirmed that a high number of foreign travelers come to Da Nang in summer, so it is difficult to book hotel rooms for MICE travelers.
Meanwhile, Quynh said it is a challenge to provide transport services to 2,000 travelers with 50 buses and 30 electric vehicles.
“We had to cover a lot of work to be sure that travelers could travel easily and come to meetings on time,” he said.
According to the Da Nang Tourism Department, in 2018, the city received 6.6 million travelers, a 19 percent increase over the same period last year.
Việt Nam earned US$4.15 billion from exports of wood and wooden products in the first six months of this year, marking an increase of 8.4 per cent compared with the same period last year.
A report from the Việt Nam Forestry Administration under the Ministry of Agriculture and Rural Development said that the United States, China, Japan and South Korea remained the four largest importers of wood and wooden products from Việt Nam, accounting for 78 per cent of the country’s total export value.
The country also spent nearly $1.1 billion importing wood, up 2 per cent year on year. Imports from the US, German and France rose during the first half of this year, while shipments from Cambodia and Malaysia fell.
According to the Vietnam Timber and Forest Product Association (Vifores), the drop in imports from Cambodia and Malaysia was due to the fact that Chinese businesses had increased purchases from neighbouring countries, including Cambodia and Malaysia. At the same time, Cambodia, Laos and Myanmar had tightened exports of timber due to a ban on shipments of logs and sawn timber from plantation forests.
Vifores said China had increased purchases of raw materials from neighboring countries due to a lack of material in the country. In addition, due to the impacts of trade with the US, several Chinese enterprises planned to invest in Việt Nam’s timber industry to take advantage of cheap labour and preferential policies.
At the end of 2016, Chinese enterprises snapped up materials from timber plantations in the Central Highlands and southeastern region, causing concerns over a lack of raw materials among domestic firms.
Although there are no detailed statistics, in southern Bình Dương Province where 600 enterprises are operating in the wood processing industry, one-third are from China and Taiwan.
This move is understandable as Chinese products are subject to high anti-dumping duties in the US, which spends $30 billion per year on wooden products from China.
Pressure on raw material supplies, changes in US trade policy, and an investment shift in the wood industry from China had affected and would continue to impact Việt Nam, said Vifores.
Nguyen Quoc Tri, general director of the Việt Nam Forestry Administration, said more than 1,500 enterprises had signed commitments to consume raw materials of clear origin and would not violate regulations of importing countries.
Việt Nam plans to focus on investment in large-scale timber plantations, certification and affiliations with local forest growers to supply raw materials for the domestic processing industry.
Teenagers are the most likely to get involved in car accidents. In fact, they are three times more likely to be involved in a fatal crash than older adults. If your teenager just got their license, make sure that they are driving safely.
Here are some tips by Hogan Injury for preventing teenage car accidents.
Encourage Safe Driving
Only let them drive the car if they promise to put on their seat-belt before driving. In addition, prohibit the use of their cell phone while driving. Distracted driving is one of the main causes of vehicle accidents, and many teens will want to text or check social media while driving. One idea is to limit the data and texts on their phone plan, which will cause them to be more careful about using up their data.
Prohibit Alcohol
If your teenager wants to use your car or a car you got them, make it a condition that they don’t drink, ever. Underage drinking is not safe anyways.
Limit Driving With Other Passengers
According to the Insurance Institute for Highway Safety, when a teen is driving, each additional passenger increases the chance of an accident. This is because friends can distract your teenager. In addition, they are more likely to try to act “cool” by driving recklessly if they have friends in the car. Limit your teen’s ability to drive with friends until they can prove that they are a safe driver.
Teach Them Safe Driving Skills
Make sure your teenager has enough practice before they get their license. In addition, let them practice with you in various driving situations, such as at night, in the rain, or in the snow. This will make sure that they know how to drive safely in all weather conditions.
If your teenager gets into an accident, make sure to contact Hogan Injury for legal help right away.
They are delighted to share the findings of this investigation in their new report: Promising practice: government schools in Vietnam.
Vietnam’s government schools have garnered a great deal of global attention since its strong performance in both the 2012 and 2015 PISA student tests. devdiscourse.com reports
In light of this, Education Development Trust partnered with the Vietnam Institute of Educational Sciences to unearth the factors associated with this success.
They are delighted to share the findings of this investigation in their new report: Promising practice: government schools in Vietnam.
The presentation will cover five features of the Vietnamese school system that have contributed to its strong results.
“Vietnam’s PISA results have shown the world that quality and equity in education can rapidly improve; this report reveals what lies behind this success, not just in terms of the policies and practices that Vietnam has prioritized, but also by showing how these have been sequenced and successfully implemented.” Andreas Schleicher, Director for the Directorate of Education and Skills, OECD.
Education transforms lives and is at the heart of UNESCO’s mission to build peace, eradicate poverty and drive sustainable development.
UNESCO believes that education is a human right for all throughout life and that access must be matched by quality.
The Organization is the only United Nations agency with a mandate to cover all aspects of education.
In 2016, millennials composed a third of the workforce in the US, making it the largest generation in the labor force today. With ages ranging from 21 to 36 in 2017, millennials are starting to take on leadership roles, as well.
According to a report by Hogan Injury, so much has been said about this generation, especially by the ones that came before it, in terms of work ethics, values, and belief system. Millennials grew up at a time of 24-hour news, exposing them to events from all over the world, and as they entered the new millennium, they witnessed the 9/11 tragedy; and then later on, were taken to the information age and technological revolutions. All these contribute to this generation’s different worldview and multifaceted set of beliefs.
Indeed, it can pose a great a challenge for organizations, which are still predominantly led by baby boomers, to manage such a complex group of individuals. In dealing with millennial workers, one must understand this generation and how they are different or even similar to the others.
And, If you want tips to empower you mobile workers, check right here
Mentorship
Millennials appreciate regular feedback, and this comes from their need for constant growth and learning. They feel more valued when they get feedback from their superior – whether positive or negative. Since they grew up with high expectations from older generations, millennials also want praise and encouragement for them to have a sense of progress and importance; but above all, millennials prefer managers who are transparent and dependable and whose practices are fair and ethical.
Working with Teams
While millennials have a good sense of their individuality, they work well in groups. Evidence has shown that millennials believe that business decisions are better made when there is a variety of input provided by individuals. However, the study also showed that this belief is not at all unique in millennials as Gen X employees equally believe the same.
Work-Life Balance
Millennials value work-life balance for they know that it is beneficial to their mental health. Across all generations, mental health must be top priority in the workplace. A survey suggests that millennials felt more stressed and under pressure than their baby boomer counterparts, and this is due to factors such as low pay rates and high entry-level workloads.
Being Challenged and Embracing Change
Being the most educated generation to date, millennials are always up for challenges and are ready to take on changes within the organization, provided that they are shown transparency and inclusion in the decision-making.
Integrity and Ethics of the Business
A survey conducted on millennials showed that they put much value on how businesses put their employees first, as well as their solid foundation of trust and integrity. Employee satisfaction and fair treatment ranked number one among values that millennials look for in a business, while ethics, trust, integrity, and honesty came in close second. The Department of Labor implements more than 180 labor laws, covering various workplace activities for millions of employers and workers. These labor laws cover employees’ wages and hours, compensation and benefits, workplace safety, among others. Millennials are particular with the ethical and legal practices of organizations they associate with, so they put prime consideration on this aspect.
Social Responsibility
In valuing an organization, millennials look for authenticity and meaning. They go for companies that hold the same values as they do, and rally around the causes they feel strongly for. A study found that millennials look for reputation-related attributes in businesses when looking for jobs. These attributes include caring about employees, environmental sustainability, community relations, and ethical products and services.
As millennials continue to saturate the workforce, as well as the consumer market, businesses must be more adept in the millennial belief system and workplace behavior. Any organization can benefit from knowing their employees well and creating an environment that best suits their employees’ strengths and potentials. Good employees make good leaders, and millennials will soon take the majority of the business leadership seats. It is then optimal to master the art of dealing with the millennial worker.
If you observe unethical practices at work, contact us at Hogan Injury for expert legal advice.
None of the content on Hoganinjury.com is legal advice nor is it a replacement for advice from a certified lawyer. Please consult a legal professional for further information.
Although US-China trade tension could impair growth in Southeast Asia, the region is siphoning output away from China, where rising wages have driven up costs
Despite economists’ warnings that the escalating trade tensions between the world’s two largest economies could indirectly hurt growth in Southeast Asia, the region is still seen as a destination for foreign companies shifting production away from China, where rising wages have increased manufacturing costs. SCMP reported
US President Donald Trump’s intention to impose 25 per cent tariffs on US$34 billion of Chinese products on July 6, sparking a promise from China to retaliate on the same day with equivalent action on its US imports, has increased the climate of uncertainty and stock market volatility that has driven some foreign businesses away from China to Vietnam.
Newly granted registered capital in Vietnam. First half year 2018 – Source Vietnam’s MPI. Graphic: SCMP
“This is an acceleration of a trend that has been ongoing,” said Adam McCarty, chief economist at Mekong Economics in Hanoi. “The [US-China] trade war has given it a little kick in the last few months, causing people to re-adjust their country risk strategies now that trade actions are ramping up.”
Foreign companies from Japan, South Korea, Hong Kong and mainland China are flocking to Vietnam, largely to diversify their investments, McCarty said. That is especially true in manufactured goods, where Vietnam’s cheaper costs make it more desirable than China.
Vietnam’s economy has been growing at a record pace, driven largely by inflows of foreign direct investment. Growth surged 7.08 per cent in the first half of 2018, the biggest increase since 2011.
First-half FDI rose 8.4 per cent from a year earlier, building on last year’s record 10-year high, according to Vietnam’s Ministry of Planning and Development.
Hong Kong firms are among the big investors in Vietnam who aim to diversify away from China.
Last month, Man Wah Holdings, a Hong Kong furniture maker with factories exclusively in the mainland, bought a Vietnam sofa manufacturing and export company for US$68 million.
Hung Hing Printing Group, another Hong Kong company, had produced products solely in China, but is expanding into Vietnam with a new printing and packaging facility in Hanoi.
Taiwan firms could quit mainland over US-China trade war
That move is part of Hung Hing’s joint venture with Dream International, a leading toy producer that works with big brands such as Hasbro, Mattel and Disney.
More than 70 per cent of Hung Hing’s business comes from exports, primarily to the US and Europe.
A company representative told the South China Morning Post that diversification will help it better serve its large overseas customer base. The representative dismissed the idea that the move was related to avoiding the consequences of US-China trade tensions.
“We would never think of something like that,” the representative said. “We are in no way getting away from China. It is our bread-and-butter business.”
A company statement showed that Hung Hing also bought another manufacturing facility in the mainland in March, and expanded its plant in Heshan in the southern province of Guangdong.
Analysts said that even without the trade war, a developed system of free trade agreements involving Asean, or the Association of Southeast Asian Nations, and its members will make moving to the region even more attractive for companies looking to diversify away from China.
The Asean consumer market is large and growing rapidly. The combined household expenditures of Asean countries came to around US$1.5 trillion in 2017, according to World Bank data. The combined GDP of Indonesia, Malaysia, Philippines, Thailand and Vietnam is expected to increase 5.3 per cent this year.
The threat of trade war tariffs and increasing volatility give companies eager to take advantage of Asean’s growing markets one more reason to move away from China as tensions rise.
“Companies that are moving now may have had plans to move in several years’ time, but are deciding to move in 2018 instead,” said Max Brown, who heads Dezan Shira’s Business Intelligence Unit on Asean.
Vietnam is not immune to the risks posed by escalating trade tensions, analysts warned.
“A trade war that doesn’t include Vietnam could be generally positive for the country, pushing business to Vietnam, some of which is happening already,” McCarty said.
“But the negative is when Vietnam gets lumped in with China, as it has in US anti-dumping actions against Vietnamese steel, and could potentially extend to other goods.”
In May, the US slapped heavy tariffs on steel products from Vietnam that originated in China, ruling the goods circumvented tariffs the US had imposed on Chinese steel in 2015 and 2016.
As the trade war fallout accelerates a broader trend of investment in Southeast Asian countries, the change will have implications for the global supply chain.
Nations such as Malaysia and Indonesia, for example, build heavy machinery parts and goods for items that Chinese exports to the US.
“People are already looking at Asean as a cost centre for lower-end manufacturing that is currently manufactured in China and any additional risk that gets considered along with other issues of rising costs,” Brown said.
While tariffs may not be the only catalyst for relocating production to Vietnam, “wages, the cost of land and the increase in competition are other factors”, the Dezan Shira manager said.
“If tariffs are added to your goods, then that may be the final straw.”
Russia’s Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor) on Wednesday said over 21,000 people have been infected with the Dengue fever since the beginning of 2018.
The Russian health watchdog added that four people have died from the disease.
“Since the beginning of the year, 21,500 cases of the Dengue fever have been registered in Vietnam.
“During the first six months of 2018 four cases of the disease in Vietnam resulted in deaths,’’ the statement said.
The watchdog pointed out that within last several years some cases of the Dengue fever had been registered in Russia among people, who visited Vietnam, Thailand, Indonesia, India as well as Hong Kong and the Maldives.
In 2016, 145 cases of the Dengue fever were registered in Russia, 196 cases in 2017, while in the first six months of 2018 a total of 113 cases were registered in the country.
The Dengue fever is a viral disease transmitted by mosquitoes found in many areas in the world, including in the countries of Southeast Asia.
Symptoms might include headache, vomiting, skin rash and low blood pressure among others.
It is mostly non-fatal; however complications could lead to the death of a patient.
Vietnam’s economy grew 7.1 per cent in the first half of 2018, mainly driven by industry, construction and services – particularly wholesale and retail, transport, banking and finance, education and healthcare. Industry and construction expanded 9.07 per cent, while services rose 6.9 per cent.
While growth slowed to 6.8 per cent in 2Q18 owing to high base effects, high transport and energy infrastructure investments will still remain key growth drivers in the second half of 2018, said UOB economist Manop Udomkerdmongkol in a note. Business Times reports.
Industrial production will likely be boosted by continued opening of new multinational enterprises in export-oriented manufacturing and processing industries. In the first four months of 2018, these industries attracted foreign direct investments (FDI) worth US$4.5 billion, accounting for 55.6 per cent of total FDI.
UOB believes that exports and tourism will benefit from a broad-based global recovery, and private consumption should be supported by rising household income and an expansion in private credit.
But the economy is still vulnerable to economic risks amid rising global protectionism and escalating trade tensions between the US and China – Vietnam’s two largest trading partners.
The strong growth eases pressure on the government to add more stimuli to achieve its annual growth target of 6.7 per cent. Hence, another policy rate cut may not be on the cards, even as other Asian central banks have started to pursue monetary policy normalisation by raising policy rates gradually.
Vietnam has seen heated debate over taxes recently. With public expenditure rising more quickly than GDP growth, the Ministry of Finance has come under some pressure to raise tax revenues.
But its proposal last year to raise the value added tax (VAT) from 10 per cent to 12 per cent from 2019 met with strong opposition. In January 2018, the government said it would make this hike a little more gradual, raising it to 11 per cent from 2019 and then to 12 per cent by 2020. Asean Business reports
By May however, the Finance Minister said that it would not raise the VAT after all, keeping it at 10 per cent. This was after the government had proposed a property tax in April.
Here are the key tax rates:
Corporate Tax: 20% standard rate
Vietnam imposes a standard corporate tax rate of 20 per cent on a company’s profits, including the profits of its affiliates and branches. Taxable revenue includes income from the sale of goods, provision of services, leasing or sale of assets, joint venture operations and more.
A company is generally considered to be resident if it is incorporated in Vietnam. Residents are taxed on worldwide income, while non-residents are taxed only on Vietnamese-source income.
Enterprises operating in the oil and gas, and natural resources sectors are levied higher tax rates, ranging from 32 per cent to 50 per cent, depending on particular projects.
Incentives for investment
The government offers preferential corporate income tax rates to encourage investment in specific projects or sectors.
A 10 per cent rate for enterprises in sectors including education and training, occupational training, healthcare, culture, sports, environment, social housing, forestry, agriculture, fishing, salt production and publishing. This is subject to conditions.
A 10 per cent rate for a 15-year period may be offered for projects including:
New investment projects in economic zones, high-tech zones and locations with challenging socio-economic conditions
New investment projects engaged in research and technological development, cultivation of high-tech enterprises, investment in key infrastructure projects such as water plants, power plants, bridges, railways, airports, seaports and others
Large scale manufacturing projects, with investment capital of more than 12 trillion Vietnamese dong
A 17 per cent rate for a 10-year period may be offered for projects including:
New investment projects based in areas with difficult socio-economic conditions.
New investment projects engaged in producing high-qualified steel or energy-saving products, manufacturing machinery and equipment for agriculture, forestry, aquaculture, salt production, irrigation equipment and so on.
Other tax exemptions and reductions are offered on certain conditions too, such as a tax holiday of up to four years and a 50 per cent tax reduction for up to nine subsequent years.
Indirect Tax: 10% VAT
Vietnam currently levies a standard value added tax (VAT) of 10 per cent on most common goods and services, and a special sales tax of 5 per cent to 150 per cent on certain types of goods and services.
Reduced rates of 5 per cent and 0 per cent VAT apply to specific categories of goods, such as medical equipment and instruments, fresh foodstuffs and scientific and technical services (5 per cent), and the exports of goods and services (0 per cent).
Withholding Tax
Dividends: No tax is imposed generally on dividends remitted overseas. But if they are paid to an individual, a 5 per cent withholding tax is levied.
Interest: Interest paid to a non-resident is subject to a 5 per cent withholding tax.
Royalties: Royalties paid to a non-resident are subject to a 10 per cent withholding tax.
Vietnam’s personal income tax rates follow a progressive schedule that ranges from 5 to 35 per cent, depending on the individual’s yearly income. The top marginal rate of 35 per cent applies to chargeable income above 960 million Vietnamese dong.
Vietnamese residents are taxed on their worldwide income, while non-residents are taxed only on Vietnam-sourced income. An individual is considered resident if he spends 183 days or more within a 12-month period in Vietnam, maintains a residence in Vietnam, or has leased a residence in Vietnam for 183 days or more within a tax year and can prove residence elsewhere.
What’s taxable under the personal income tax regime? All employment income, including employment benefits in both cash and kind. Dividends, interest (except interest on bank deposits, life insurance and government bonds), capital gains from securities trading, and various other types of income such as that from franchising, inheritance and prizes are also taxable.
To get advice on starting a business and taxes in Vietnam, you may contact GBS – a business and legal services firm in Vietnam via email: info@gbs.com.vn. Hotline, Viber, WhatsApp at: +84903189033 or visit the website: https://gbs.com.vn
