The 2-million-USD deal between Hanoi and CNN -the US television network from 2017 – 2018 has spurred international tourist arrivals to the capital city over the past year.
TV commercials aired by CNN have been introducing the best of the 1,000-year-old capital to people around the world since early 2017, sparking an interest in the city among foreigners.
Last year, CNN broadcasted two TV promotional videos – “Hanoi – Heart of Vietnam” and “Hanoi – Cradle of Heritage” on its cable television network and online platforms across Asia-Pacific, North America, Europe, the Middle East and South Asia. Both videos feature Australian travel writer and blogger Phoebe Lee exploring the city’s most popular attractions.
Audience can experience the charms of Hanoi through the lens of local photographers on CNN’s #MyHanoi series and also see the capital city from a different point of view on the network’s Hanoi POV programme.
In 2018, “Hanoi – Heart of Vietnam” and “Hanoi – Cradle of Heritage” will continue to be aired by CNN alongside the newly-released ad “Hanoi – History, Culture, People.”
These promotional clips have had an impact on the public. A recent survey by the UK’s research consultancy, BDRC Continental, showed 62 percent of CNN viewers remember the promotional videos about Hanoi. Among them, 94 percent said they developed an interest in Hanoi as a holiday destination. The survey also found that 17 percent of the respondents who regularly watched CNN would be likely to travel to Hanoi, higher than non-regular viewers.
Hanoi has been welcoming an increasing number of holidaymakers. In 2017, international tourist arrivals to the city were estimated at 4.95 million, up 23 percent from the previous year and 15 percent higher than its yearly target. The number included 3.53 million accommodated visitors, a year-on-year increase of 22 percent.
In the first half of this year, the capital received more than 3 million foreign arrivals, including more than 2.2 million accommodated tourists, up 26 percent and 27 percent, respectively, year-on-year.
Hanoi has also been well-received by overseas travel firms and magazines. The online marketplace and hospitality service Airbnb has named the city among the world’s top 10 intriguing travel destinations in 2018 while the city made it to the list of the world’s top 13 destinations for international travellers in March based on a poll by readers of the US-based Business Insider magazine.
With average temperatures ranging from 18 to 23 degrees Celsius and colourful flowers blooming, Hanoi is a good place for visitors to spend time roaming around the old quarter, experiencing open-air eateries, and hearing the noise of whizzing motorbikes, Business Insider said. Hoan Kiem Lake provides a peaceful respite from the frenzy, as do numerous Buddhist temples and pagodas, it added.
Earlier this year, Hanoi also secured 12th place on the TripAdvisor list of the world’s top 25 destinations.
In June, the capital city claimed the Best Marketing Campaign Award for its innovative marketing campaign on CNN between 2017 and 2018 at the 8th Tourism Promotion Organisation for Asia-Pacific Cities Forum held in Ho Chi Minh City.
The local Department of Tourism has proposed the city to expand the deal with CNN to 2019 – 2021
Vietnam International Bank plans to mobilize VND4.5 trillion ($200 million) in Tier 2 capital in 2018 by issuing inconvertible bonds.
According to a report by VNexpress, this was announced by the creditor in a document sent to shareholders for a vote last week.
The document says the issuance is aimed to help the bank (VIB) attain the capital adequacy ratio (CAR) required under Basel II regulations from January 1, 2019.
As of April 30 this year, the bank’s CAR was 12.25 percent, down against 13.07 percent last year.
VIB stated that it expected the issuance would help increase the return on equity rate for the bank and its shareholders.
The inconvertible bonds must have no warrants attached and are not guaranteed by assets, VIB said in the document, noting that the bonds will be issued to the domestic market via both private and public offerings, and to overseas market only through public offerings.
The bonds can be listed on domestic and overseas bourses. The maturity ranges from five to 10 years.
Voting for the capital plan runs until July 24.
VIB has 1,495 shareholders. Commonwealth Bank of Australia – the only foreign strategic shareholder – now holds a 20-percent stake. Last year, VIB listed 564 million shares on the listed Public Company Market (UpCom).
The creditor reaped VND1.12 trillion ($48.33 million) in after-tax profit in 2017, doubling the figure achieved in 2016. The bank’s non-performing loan ratio dropped from 2.58 percent in 2016 to 2.49 percent in 2017.
VIB’s earnings per share (EPS) touched VND2,002 ($0.086) in 2017, a five-year high and close to a 78-percent hike on-year.
VIB is one of the 10 commercial banks selected by the State Bank of Vietnam to pilot the application of Basel II standards. Vietnam, under an action plan issued last year, set the target of having 12-15 commercial banks meet Basel II standards by 2020.
Basel II is a set of international banking regulations put forth by the Basel Committee on Bank Supervision, which leveled the international regulatory playing field with uniform rules and guidelines.
Basel II provides guidelines for the calculation of minimum regulatory capital ratios and confirms the definition of regulatory capital and an 8-percent minimum coefficient for regulatory capital over risk-weighted assets.
Basel II divides the eligible regulatory capital of a bank into three tiers. The higher the tier, the less subordinated securities a bank is allowed to include in it. Each tier must hold a certain minimum percentage of total regulatory capital and is used as a numerator in the calculation of regulatory capital ratios.
The competition among Airbnb hosts is getting fierce and demanding a lot of effort but bringing only a few million dong of profit per month
According to Tuoi Tre News, many Airbnb hosts in Vietnam who rushed to rent properties only to list them on the peer-to-peer lodging marketplace have had to swallow a bitter pill as they prove less competitive than those who do so with their own houses.
Airbnb, founded in 2008, is an American home rental platform based in San Francisco that lets people list, find, and rent short-term lodging in 65,000 cities and more than 191 countries across the globe.
The company does not own any properties. It acts as an intermediary between those who want to rent out space and those who are looking for space to rent.
As Airbnb continues to revolutionize in the accommodation-sharing market, many Vietnamese have attempted to join the competition in the Southeast Asian country.
According to incomplete data, about 35 percent of the accommodation-sharing hosts in Vietnam manage over two listings, or properties available for rent, a high rate compared to other foreign countries.
A foreign visitor stays at an Airbnb accommodation in District 1, Ho Chi Minh City. Photo: Tuoi Tre
Some win, others suffer
But unlike the foreign markets where most of the listed places on Airbnb are legally possessed by the hosts, a large number of Vietnamese have cashed in on the service with properties they rent, not own.
Thuy, a resident in Ho Chi Minh City’s District 2, partnered with friends to rent and refurbish several apartments on Pasteur Street in District 1, and listed them on Airbnb.
“My initial investment of about VND800 million [US$35,200] did not get bigger but smaller after one year, which effectively means I incurred losses,” Thuy told Tuoi Tre (Youth) newspaper.
Thuy said that she would stop listing on Airbnb to retain the remaining capital.
Tinh, a host with two accommodations located on District 1’s Pham Ngu Lao Street, shared with Tuoi Tre that he has just transferred his properties and completely withdrawn from Airbnb to focus on his main job at an international bank.
“Initially, when my intention was to make better use of my spare rooms, everything was easy to manage but when I started renting another apartment [to list on Airbnb], things got complicated, costing me a lot of time for management,” Tinh said.
The situation is similar to when Vietnamese people took out bank loans to buy cars to drive for Uber or Grab, only to suffer losses as the competition became more intense.
Meanwhile, those who simply rent out space available in their houses still enjoy good business results from the tech-based lodging marketplace.
Hien, an Airbnb host in District 7, said that her tenants often prefer long-term booking.
“My guests are mainly Japanese. We usually hold cultural exchange activities on weekends,” Hien said.
Fierce competition
According to Kenneth Atkinson, chairman of the advisory firm Grant Thornton, the use of vacant space for rent on Airbnb used to be seen as a profit-making model thanks to the eagerness of individuals.
They managed to handle many problems, from finding new customers to replying to tenants’ messages, to maintain high customer ratings.
However, as the competition in Vietnam is getting fiercer, Airbnb hosts must exert more efforts to keep their business running, even though it can bring in only a few million dong of profit per month, Atkinson underlined. (VND1 million = $48)
In 2017, the total number of three- and five-star hotel rooms in Vietnam rose to 101,400, up ten percent from the previous year, while more than 10,000 rooms in Hanoi and Ho Chi Minh City were made available on Airbnb in the same year.
Hosts who jumped into the Airbnb game without paying much attention to such factors as occupancy rates or rental rates could be the first to face consequences, according to the Grant Thornton chairman.
In the meantime, Michael Robinson, general manager of Caravelle Saigon Hotel, assessed that online travel agents would have to ‘keep an eye’ on the development of Airbnb in Vietnam.
People who plan their trips online may prefer Airbnb to an online travel agent when it comes to hotel booking, as the former, which allows people to rent an apartment or only a spare room, is more suitable for families, especially those with children, Robinson said.
“This is not to mention the quality of Airbnb services in Vietnam has been quite good,” Robinson said.
Though 24-hour gyms are common in many Western countries, the trend of hitting the gym after hours is spreading fast through the busy young workforce in Ho Chi Minh City.
For these professionals, who spend their days behind a desk, night-time workouts are a much-needed health boost.
Southeast Asians are no strangers to working out at odd hours, but for going to the gym in the dead of night is still a novelty for many Vietnamese.
One 24/7 gym in District 3 is often crowded after 8:30 pm, when many of its younger members are just arriving after a long day at the office.
“Our place is most crowded during 6:00 pm – 9:00 pm. People still come after that, but it’s mostly the young,” said Dinh Duc Huy, the gym’s manager and head trainer.
He added that about 40 percent of night gym goers at his place are 18-24 years old and 30 percent are 25-34 years of age. The rest are in an older age bracket.
According to Huy, the number of gym members buying packages for the late-night shifts is low, with more or less 10 members showing up nightly after 10:00 pm.
“But they are the most consistent in their schedule. They still make it here, even on weekends,” he emphasized.
Their busy work schedule is what leads them to come at such unusual hours, he said.
“Due to their tight daily work schedule, they are only able to make time [for gym workouts] after 10:00 pm. Instead of burying themselves in their phones until 1:00 am or 2:00 am, they choose to spend two hours in the gym,” Huy elaborated.
Late-night workouts help to release stress. Photo: Tuoi Tre
Relaxation, appetite, moods
According to Nguyen Thi Thien An, an office worker who starts her workout at 7:00 pm five days a week, going to the night gym is a priceless convenience.
“If I work out in the morning, I’m worn out for the whole working day. I’m more stress-free after a whole eight hours at work so I often find myself in the gym,” An said.
Her original purpose for visiting the gym was weight loss, but now she is seeing benefits in her stress levels and ability to relax.
“It even helps my appetite and raises my general mood,” she remarked.
Sharing the same opinion, Nguyen Thu Huong feels that late-night gym workouts help her release her energy and get rid of any toxic substances she may have consumed during the day.
“I’m totally spent after a whole day at work, so my body is really pushed to the limits during these workouts. But I always feel so refreshed,” she explained.
“Others have also noticed I’m often in high spirits.”
Going to the gym is effective whatever the time of the day. Photo: Tuoi Tre
Sleeplessness?
Huy, the head trainer, acknowledged that the general public might feel that night-time is a strange time to head to the gym, but that the time of day a workout takes place does not matter.
“Many people are under the impression that it can mess with your biological clock. However, if you can maintain a proper diet and rest, it won’t have a negative effect,” he explained.
Nguyen Quoc Huy, a gym coach, noted that the major difference between day and night workouts is the effect on the biological clock.
“After 8:00 pm, the body is ready to enter a resting period, so sleeplessness might occur to those new to the experience,” he said.
“In fact, it can take your body two hours before it cools down enough for sleep.”
Sleeplessness may occur to some, but this can be easily dealt with. Photo: Tuoi Tre
He also proposed an easy tip for this situation: “Use protein and eat some rice afterward to stimulate the serotonin hormone which can act as a catalyst for better sleep.”
In his experience, working out regularly while sticking to the tips above can get the body used to the biological ‘jet lag’ within at least one week, and sleeplessness will be a thing of the past.
“It takes an average of 21 days for the body to adapt to biological changes,” he explained.
“Gym goers who do late-night workouts are even more energetic in the daytime than their counterparts, as their body is filled with power accumulated during the day,” he further explained.
We know record numbers of foreigners are coming to visit Vietnam, so how about Vietnamese going abroad?
There are droves of Vietnamese going overseas with significant increases in the number of trips abroad each year.
The tour and travel industry uses the term “outbound” to describe travel to foreign countries and “inbound” to describe foreigners visiting from abroad, so let’s look at Vietnam’s outbound travel market.
The Middle and Affluent Class (referred to as MAC) in Vietnam is the fastest-growing in Southeast Asia and with that growth comes a thirst for houses, luxury goods, and, naturally, international travel.
The MAC is defined as those earning VND15 million per month (US$714) or more, projected to be one-third of the population by the year 2020.
Nearly 60 percent of the population in Vietnam is under 35 years of age with many of that group better educated and earning higher incomes than previous generations.
As inbound tourism booms, the standard of living in Vietnam rises, and so does the cost of domestic travel, to the point where international trips these days cost the same or even less in some cases. It’s possible to travel by airplane from Ho Chi Minh City to Kuala Lumpur, Malaysia, or Manila, the Philippines for less than it costs to go to Hanoi.
Similarly, trips from Hanoi or Ho Chi Minh City to Da Nang or Hue are just about the same price as some short package trips to Thailand. Just as one example, six different airlines fly routes between cities in Vietnam and Thailand so the tough competition keeps prices low.
Airlines flying out of Tan Son Nhat International Airport in Ho Chi Minh City serve over 40 international destinations alone with new routes being added all the time. The situation at Noi Bai International Airport in Hanoi is similar.
Vietnamese living near borders can easily take advantage of low-cost bus travel with tours to favorite destinations and opportunities to combine such trips with business.
Travelling overseas is becoming less of a hassle all the time as holders of Vietnamese passports now enjoy visa-free access to 49 countries, including the other nine ASEAN member countries.
Dramatic increase in overseas trips by Vietnamese travellers
Where are Vietnamese travellers going?
China is right at the top of the list, welcoming almost two million Vietnamese visitors last year. Many people from the north take short bus trips to enjoy nearby destinations in China and to import goods back into Vietnam.
Multiple airlines serve many destinations in mainland China from Hanoi, Ho Chi Minh City, and other cities in Vietnam. Add to that Macau, Hong Kong, and several locations in Taiwan and the entire area has many options for travel directly from Vietnam.
Thanks to its proximity to Vietnam, Cambodia is the second most popular destination for outbound Vietnamese travellers. Phnom Penh is small compared to most Asian capital cities, with plenty of gorgeous Buddhist temples and shopping options easily reached by bus in a few hours from Ho Chi Minh City and by airplane from both Hanoi and Ho Chi Minh City. Siem Reap, home to Angkor Wat, voted the top tourist site in the world in 2017 by TripAdvisor, is served by airlines from several cities in Vietnam.
Bangkok is one of the top mega-city destinations in the world with visitors from Vietnam seeking its great temples, sites, cuisine, infrastructure, and world-class shopping. Beach destinations such as Pattaya and Phuket are also popular with Koh Samui recently moving onto the top attractions list.
Neighbour Laos shares Vietnam’s longest border at over 2,000 kilometers with six overland border crossings between the two countries. That makes Laos an easy place to visit for Vietnamese wishing to explore the sights, do business, or both. Several flights are offered between Hanoi, Ho Chi Minh City and the Lao capital Vientiane, as well as Pakse and the ancient capital city Luang Prabang.
So it makes sense that the most frequented destinations from Vietnam are those that are nearby, popular, and relatively inexpensive.
From there it gets most interesting because rounding out the top 10 overseas destinations most frequented by Vietnamese are these six countries:Singapore
– Japan
– Malaysia
– South Korea (officially called the Republic of Korea)
– United States
– Germany
All the above are more distant, most require visas for Vietnamese visitors, and they are relatively expensive, but surprisingly Vietnamese made over 1.5 million total trips to those six countries last year alone.
Singapore and Malaysia are also ASEAN member countries, so Vietnamese passport holders need no visa to visit either. Both are world-class destinations with plenty of sights to see, shopping, dining, and entertainment and offer a glimpse into what the future will be like in a highly-developed Vietnam.
A record number of 531,000 Vietnamese visited Singapore last year with an estimated 300,000 visiting Malaysia. Medical tourism from Vietnam to both destinations is becoming increasingly popular.
Japan and South Korea are both very unique for the foreign visitor, boasting rich culture and histories, great food, and efficient infrastructures. Both countries are Olympic hosts (South Korea in 2018 and Japan in 2020) and have relaxed their visa requirements during recent years to encourage more tourism.
The Japanese Tourism Authority opened a representative office in Hanoi in 2017 to better handle the large number of Vietnamese visitors, estimated at over 300,000 last year.
Vietnam catapulted into 8th position on the list of countries sending tourists to South Korea with a record-breaking performance of over 300,000 travellers in 2017.
The Vietnamese community in Germany is well over 100,000 so there are pockets of authentic Vietnamese culture and food to be found on a visit. Germany also offers a new cultural experience for Vietnamese, many of whom are already familiar with French influence from colonial times.
The U.S. is home to millions of Americans of Vietnamese descent and Vietnamese immigrants, making it an attractive destination for tourists and those wishing to be reunited with family and friends who’ve settled there. The U.S. has lots of appeal for tourism because it’s so large and varied.
Vietnamese visitors take a picture at Cloud Forest in Gardens by the Bay, Singapore. Photo: Tuoi Tre
Which new outbound destinations for Vietnamese are gaining popularity?
Other destinations moving onto the Vietnamese outbound tourism radar include Taiwan, Bali, Dubai, and Bhutan (the country that flaunts its “Gross National Happiness” as being more important than Gross Domestic Product).
Within the visa-free ASEAN member countries the Philippines is near for Vietnamese travellers, has thousands of beaches and islands, and is about the same price as Vietnam for the tourist.
Bali is just the tip of the iceberg in Indonesia, which has over 17,000 islands, hundreds of sub-cultures, and is reasonably priced.
No doubt as the MAC population increases dramatically there will be more options for the overseas Vietnamese traveller, so watch this space in the coming years.
The Vietnam Institute for Economic and Policy Research (VEPR) has cautioned that the ongoing trade war between the U.S and China is changing the dynamics of trading in the world, and would eventually hit Vietnam more than in its exports sector.
Pham Sy Thanh, head of VEPR’s Chinese Economic Studies Program, said: “When a large economy decides to protect itself, other economies will start to imitate.” Retail News reported.
Global trade growth last year reached 4.7 percent, but this year’s estimate of 3.1 to 5.3 percent shows that even top economists are uncertain about how the trading picture will turn out after this trade war, he said.
If this continues, multilateral relationships will be replaced by bilateral ones, which will be a disadvantage for a developing country like Vietnam, because stronger countries will have more resources and power to negotiate, he said.
Another consequence of the trade war on Vietnam is that it will be profoundly affected as global production chains shift.
As the lack of workforce is no longer a big problem thanks to the fourth industrial revolution, “smaller countries will lose their advantage in just a few years,” he said, adding that technology giants, such as Foxconn, are now investing more in manufacturing in its own country, the U.S.
When large corporations no longer see the attractiveness of developing countries, their capital will flow back to the big countries, and the abundance of labor will no longer be perks for developing countries such as Vietnam, Thanh said.
The U.S. has announced that it would slap a 10 percent tariff on $200 billion worth of Chinese export goods as soon as September. This announcement came after it slapped a 25 percent duty on about $34 billion worth of Chinese goods earlier this month.
China had retaliated “immediately” with a similar action, the country’s foreign ministry had said in response to the first move by the U.S.
As many as five million workers in Vietnam are at high risk of losing their jobs by 2020 because of the boom in artificial intelligence, which may replace laborers with robots, according to a recent study by the International Labor Organization (ILO).
The quality of Vietnamese human resources stood at only 3.79 out of 10 points, ranking the country 11th out of 12 countries surveyed in Asia, said Tran Anh Tuan, deputy director of the HCMC Center of Forecasting Manpower Needs and Labor Market Information, as quoted in Thanh Nien newspaper.
The country also had a low competitiveness index, earning 4.3 out of 10 points and being placed 56th among 133 countries, while only 20.3% of the workers had adequate qualifications in 2015. Moreover, Vietnamese laborers lack the necessary skills in foreign languages, information technology, teamwork and communication, besides responsibility.
In the next 20 years, more than half of the workers in five Southeast Asian countries, including Vietnam, may lose their jobs, with those in the textile-garment sector being the most vulnerable.
The ILO’s study shows that most of the workers in the apparel sector are from Indonesia, Vietnam and Cambodia, with 64%, 86% and 88% of them respectively likely to lose their jobs to automation.
Many domestic enterprises, such as Viet Thang Jean Co., Ltd, (VitaJean), have invested heavily in modern technologies and equipment, thus reducing the number of workers. VitaJean expects to replace 60-80% of its employees with machines.
According to Pham Van Viet, general director of VitaJean, the number of workers may be cut to 450 from the current 1,800. The company will complete installing automatic production lines by next year, enabling it to reduce the prices of products by 20% and recover the investment within five years.
Gas stove manufacturer Namilux has also automated its production lines. The application of advanced technology will help enterprises reduce the number of laborers to one-third, one-fourth or even one-tenth of their current payrolls, Namilux General Director Nguyen Manh Dung said.
Despite high costs, it is necessary for enterprises to automate their production lines to raise their competitiveness and avoid lagging behind rivals or going bankrupt, he added.
Do Quynh Chi, director of the Research Center for Labor Relations, cited data from the ILO to warn that 86% of Vietnamese workers in the textile-garment, footwear and electronics sectors will be replaced with robots by 2050.
According to Vu Quang Tho, head of the Institute for Workers and Trade Unions under the Vietnam General Confederation of Labor, the trend of using modern equipment and technology rather than workers is aimed at generating higher profits.
As for solutions to support the workers, Tho called for the improvement of manpower skills so that they can operate modern equipment. In addition, the Government should issue effective welfare policies for workers.
He also stated that enterprises, especially foreign-invested ones, must commit to hiring a certain number of local workers and providing them with the training needed to run modern machines before they are permitted to do business in the country.
Nguyen Dinh Hoa, dean of the Faculty of Labor Relations and Trade Unions of Ton Duc Thang University, stressed that the number of local enterprises replacing workers with robots remained small. However, the trend is unavoidable, so it is crucial to provide training for workers.
The Vietnamese e-commerce market is one of the leading ones in the region for investment. According to Nielsen, the annual growth of the e-commerce market is 22 per cent and is expected to hit $10 billion in annual revenue by 2022 from the current $4 billion. Thus, the Vietnamese e-commerce market has received great attention from new investors.
It has drawn in a large number of players to become a highly-contested segment with low profit margins while expenditures for sales, logistics, and promotion programmes are too large.
The make-or-break factor is financial capacity, as players are expected to suffer heavy losses to maintain their market share until the retail market ripens and profit starts to roll in.
The domestic e-commerce market is ruled over by big names like Adayroi, Lazada, Tiki, Shopee or Sendo. These firms are backed by foreign e-commerce firms as well as firms having great financial potential.
According to Nielsen, the annual growth of the e-commerce market is 22 per cent and is expected to hit $10 billion in annual revenue by 2022 from the current $4 billion. The Vietnamese e-commerce market shows great potential for development and receives great attention from new investors.
However, in order to gain market share, these firms have to burn massive amounts of money on sales and promotion programmes to lure in passengers, which is the major reason behind their massive losses. Lazada is the e-commerce platform with the largest loss, followed by Tiki and Shopee.
Notably, Lazada reported a loss of VND1 trillion ($43.39 million) in 2015-2016, increasing its accumulated losses to VND2.7 trillion ($117.1 million) by the end of 2016. In the context of fierce competition, Lazada’s losses in 2017 alone are estimated at VND1 trillion ($43.39 million) and its accumulated loss may increase to VND4 trillion ($173.56 million) by the end of 2017.
After seven years, Tiki has accumulated nearly VND600 billion ($26.43 million) in losses, including VND308 billion ($13.56 million) in 2016 and VND284 billion ($12.5 billion) in 2017.
Tiki reported a revenue of VND62.4 billion ($2.7 million) in 2016, up six times against 2015. However, the e-commerce platform took losses of nearly VND179 billion ($7.9 million) in the same year due to overly high sales expenses. Accordingly, sales expenses in 2016 were over VND222.5 billion ($9.8 million), tripling against 2015.
In fact, Tiki JSC only reported revenue from services and e-commerce trading recorded by its subsidiary Tiki Trading. In 2016, the subsidiary’s revenue hit VND817 billion ($36 million) with the gross margin of 9 per cent. Despite this, Tiki Trading suffered a loss of VND41 billion ($1.8 million) as sales expenses exceeded the business’ profit.
Shopee was officially launched in August 2016, however, by the end of the same year, the firm reported a loss of VND164 billion ($7.1 million), which increased to VND600 billion ($26.03 million) in 2017, twice as much as the loss of Tiki.
E-commerce players stocking up on ammunition
Vietnam’s e-commerce platforms are still receiving heavy investment to develop despite big losses.
Earlier this year, Tiki received $54 million in Series C investment made by Chinese internet giant JD.com and South Korea’s STIC Investments. The additional capital is expected to help Tiki to consolidate its market presence.
According to DealStreetAsia.com, Tiki plans to collect an additional $50-100 million in capital in 2019, including JD.com’s contribution.
Regarding Lazada, in March, Chinese tech giant Alibaba Group announced that it will invest an additional $2 billion in the platform, two years after it acquired a controlling stake in the Singapore-headquartered e-commerce site.
Thus, Lazada Vietnam will receive a massive capital boost to increase its activities.
The latest move brings Alibaba’s total investment in the online shopping platform to $4 billion. This is part of the company’s efforts to “accelerate the region’s e-commerce development,” as stated by Alibaba.
Shopee’s parent company, Sea Limited announced a great capital expansion in Shopee to provide ammunition in the prolonged war in Vietnam. In the first six months of this year, SEA poured an additional $50 million into Shopee.
Shopee aims to continually enhance its platform and become the region’s e-commerce destination of choice.
Along with these names, Sendo e-commerce platform, which is backed by FPT, mobilised VND400 billion in 2015-2016. Along with the financial support from FPT, Sendo will receive investment capital from SBI Holdings, Econtext Asia, and Beenos Asia.
HANOI, July 16 — Rescuers were searching for three Vietnamese fishermen who went missing after a fishing ship collided with a cargo ship in Vietnam’s northern Quang Ninh province, provincial authorities said on Monday – Reported by Xinhua
The fishing ship, registered in northern Hai Phong city, collided with an identified cargo ship near Co To island in Quang Ninh early Sunday, which threw seven fishermen into the sea.
Four fishermen were rescued and brought onshore for medical treatment.
The ongoing search on Monday was hampered by strong winds and high waves, authorities said.
France won the World Cup for the second time in spectacular style on Sunday as a 4-2 victory over Croatia in one of the most entertaining and action-packed finals for decades ended the battling outsiders’ dreams of a first title – Reuters reports.
Kylian Mbappe and France put on a thrilling show in winning the World Cup title. Photo: India TV News
After an early own goal by Mario Mandzukic France’s big guns delivered on the biggest stage of all as Antoine Griezmann – with a penalty awarded after a VAR review – Paul Pogba and teenage tyro Kylian Mbappe hit the target.
Ivan Perisic and Mandzukic replied for Croatia, who ended beaten but unbowed after making much of the running in their first appearance in the final.
It was the highest-scoring decider since England beat West Germany 4-2 after extra-time in 1966 and the most goals in normal time since Brazil defeated Sweden 5-2 60 years ago.
There were as many goals in 90 action-packed Moscow minutes as in the last four finals combined, and three of those went to extra time.
The game featured the first final own goal and the first VAR-decided spot-kick — one Croatia were furious about and which was arguably the turning-point of the game.
But the only statistic France really care about is that the result makes them world champions for the second time following their triumph on home soil in 1998.
Having lost the 2006 final on penalties to Italy, it also meant there was no repeat of two years ago when they were beaten in the European Championship final by Portugal in Paris.
Didier Deschamps, captain of the 1998 France side, became the third man to lift the World Cup as player and coach after Brazil’s Mario Zagallo and Germany’s Franz Beckenbauer.
“This is not about me, it’s about everyone around me and the players,” Deschamps said having been carried shoulder-high by them during a post-match downpour.
“It’s a young team who are on the top of the world. Some are champions at the age of 19, but my greatest source of pride is they had the right state of mind.
France coach Didier Deschamps became only the third man to win the World Cup as a player and a coach. Photo: India TV News
“Today we did not do everything right but have those mental and psychological qualities which were decisive – and we did score four goals.
“It hurt so much to lose the Euro two years ago, but it made us learn too and we worked so hard for 55 days here. Maybe if we were Euro champions we would not have been world champions today.”
OWN GOAL
Croatia started full of energy but went behind in the 18th minute when a Griezmann free kick skidded in off the head of Mandzukic, who scored the extra-time winner against England in the semi-final.
It was the fourth successive knockout game in which Croatia conceded first but again they found a way back as Perisic, who got the equalizer against England, smashed in a low shot 10 minutes later.
Then came the moment which will keep the VAR debate at the top of the sport’s agenda.
Perisic flapped an arm at a corner and after Argentine referee Nestor Pitana conducted a protracted VAR review he awarded the 28th penalty of the tournament, another record.
Ignoring Croatian protests, Griezmann stroked the ball home in the 38th minute for his fourth goal of Russia 2018.
That made it the highest-scoring first half since 1974, when West Germany led the Netherlands 2-1 – also the final score – but this time there was much more to come.
Croatia were on top again after the break but France went 3-1 up on the hour as Mbappe and Griezmann combined to set up Pogba on the edge of the box. The midfielder’s right-foot shot was blocked but he coolly curved the rebound in with his left.
Six minutes later Lucas Hernandez tore down the left to set up Mbappe to drill home a low shot as the 19-year-old young player of the tournament claimed his fourth goal in Russia and became the first teenager to score in a final since Pele in 1958.
After three successive extra-time knockout games the chances of Croatia coming back again looked impossible but they were thrown a lifeline by Lloris, who tried to dribble round Mandzukic only for the striker to block the ball and send it into the unguarded net.
Croatia, beaten by the French in the 1998 semi-finals in their first World Cup appearance, continued to press but their energy was sapped and France held out.
Croatia’s shirtless fans saluted their players as torrential rain lashed down on the presentation ceremony and coach Zlatko Dalic had few regrets.
“We are sad but proud at the same time,” he said. “We played well but the penalty knocked the wind out of us and after that it was very difficult. We have been dignified in our victories and we must be in defeat as well.”
Reporting by Mitch Phillips, editing by Ken Ferris and Ed Osmond
The Vietnamese government should create “digital chances” for enterprises to engage with the Fourth Industrial Revolution (Industry 4.0), representatives of enterprises and experts, told Prime Minister Nguyen Xuan Phuc at the Industry 4.0 Summit and Expo 2018 in Hanoi.
The summit discussed the “Vision and Development Strategy in the Fourth Industrial Revolution”, connecting political leaders with experts in information technology.
It also reviewed the role of policymakers in formulating a proactive approach to Industry 4.0 and international co-operation, as well as proposing solutions and options to optimise breakthrough technologies in all socio-economic fields in the country.
Industry 4.0 Summit and Expo 2018 follows from the Smart Industry Word 2017 conference and exhibition, which attracted over 2,000 local and international delegates from manufacturing, energy, IT and telecommunications sectors.
Other recommendations brought to the table by business representatives during the reception with PM Phuc include that the government cuts the red tape and builds special policies for IT enterprises.
If applied, they argued, these measures should create favourable conditions for enterprises to launch new technologies.
They also suggested that the Government helps in enhancing the quality of human resources, particularly high-quality personnel in the field of IT.
Speaking at the meeting, head of the Party Central Committee’s Economic Commission Nguyen Van Binh declared Vietnam’s special focus on developing IT, and that Vietnam will consider the building of specific policies following the model of a “legal framework 4.0” to create optimal conditions for enterprises and people to take advantage of technological productions in the future.
PM Phuc stressed the fact that Vietnam has jumped 12 notches on the Global Innovation Index for 2017 and two for 2018 but also acknowledged that the country is still weak in the stage of implementation, requiring more drastic measures to enhance the speed of IT application, especially among science and technology officials and enterprises.
Highlighting the significance of the Industry 4.0 Summit and Expo 2018, PM Phuc expressed his hope that the delegations will give answers to the question of how Vietnam can become successful in the Fourth Industrial Revolution and also clarify some of the Industry 4.0-related concepts.
Activity in the luxury real estate market is surging in Vietnam, mirroring a booming economy that posted a 7.38% year-over-year increase in GDP in the first quarter of 2018—the country’s strongest in a decade.
In Hanoi, plots in Starlake City, a multimillion-dollar planned community of luxurious villas and landed homes featuring a lake, international schools and office towers, sold out in a matter of days.
In Ho Chi Minh City, luxury real estate developers are upping their game with projects like the Serenity Sky Villas, featuring penthouses asking 60.84 billion Vietnamese dong (US$2.64 million), with private elevators, designer lighting and furnishings—each with its own swimming pool on the balcony. Nearby, the premium tower of the Feliz en Vista residences—a 34-floor mix of garden villas, penthouse duplexes and sky mansions—boasts five-star facilities such as a VIP lounge, cigar bar, saltwater swimming pools, hot spring Jacuzzis, outdoor movie theaters and a treetop adventure walk bridge.
An interior view of a Serenity Sky Villas home Savills
“For the last three or four years, we’ve seen an increase in development activity, with new launches in the premium and luxury end of the market,” said Stephen Wyatt, head of Jones Lang LaSalle, or JLL, Vietnam. He points out that a change in foreign ownership legislation in 2015 gave international buyers the ability to acquire a long-term lease and buy property in Vietnam more easily. Now, foreigners are allowed to buy for a renewable term of 50 years, and for reasons other than personal use. In addition, developers can sell up to 30% of units in a condominium building and 10% of landed property in a residential compound to foreigners. Before, the allowance was a single unit.
In addition to the major cities of Hanoi and Ho Chi Minh City, luxury real estate activity is heating up in the coastal cities of Danang and Nha Trang, beach towns like Ho Tram, as well as Phu Quoc island.
“It’s an emerging market for luxury real estate, but it has a young, dynamic entrepreneurial population of 95 million whose wealth is growing rapidly,” Mr. Wyatt said. In fact, the country’s “middle and affluent class” is expected to double by 2020, according to The Boston Consulting Group, which will create additional demand for resale and leasing.
This has not gone unnoticed by investors. May was an especially big month for the Ho Chi Minh City Stock Exchange. Vinhomes, the largest residential property developer in Vietnam, raised VND 31.1 trillion (US$1.35 billion) in an initial equity offering—the largest the country has ever seen.
Vinhomes, which owns approximately half of the country’s high-end luxury condos, noted in a statement that the volume of its contracted sales is expected to reach VND 105 trillion (US$4.6 billion) by the end of this year, and jump again to VND 175.2 trillion (US$$7.6 billion) in 2019. Indeed, a recent Savills report revealed a 9% annual increase in apartment prices from 2013 to 2017, with average prices across the broader market expected to continue rising.
Some of the grand Vinhomes developments in progress include the Berjaya Vietnam Financial Center, a mixed-use project in Ho Chi Minh City comprising of a premium office building, five-star hotel, serviced residences, and a shopping mall across 16.4 acres.
A Perfect Storm for Developers
According to Matthew Powell, director of Savills Hanoi (which manages roughly 10,000 units in the capital city), more developers are actively trying to enter the high-end property market in the country.
Better still, “significant” demand is attracting developers, both domestic and international, Mr. Powell said.
Helping the cause is the fact that they benefit from regulations that leave them less dependent on loans. In Vietnam, property can be pre-sold once the foundations—like infrastructure, street lights and landscaping—are completed.
Despite the country’s status as an emerging market, the standards and expectations for luxury real estate are quickly improving as developers adjust, learn and adapt to international tastes.
High-caliber property design and services are “already here and quickly improving,” Mr. Powell said, with a rise in concierge-type property management and resort-like communities with grand amenities. “They skipped the awkward part and went straight to the top end of the scale.”
A Value-Add for Buyers and Investors
Sunny Hoang, associate director of International Residential Sales at Savills in Ho Chi Minh City, attributes skyrocketing demand to a low price point for luxury, as compared to other Southeast Asian cities like Bangkok and Singapore, where premium apartments cost significantly more.
In Ho Chi Minh City, it can cost upward of VND115.3 million per square meter (US$5,000) for a luxury apartment close to vibrant city life and within a central business district, but elsewhere in Asia, like Hong Kong, it costs four times more.
Domestic demand drives the majority of the market, but for real-estate buyers in Taiwan, Hong Kong, Korea and China who are keen on premium product, Vietnam is emerging as a better destination than in their own countries. “We’re seeing a lot of demand for luxury—higher than supply—so the next three to five years should be very good compared to other countries in Asia,” Ms. Hoang says.
For investors, the return on investment is equally attractive. Because luxury apartments are in very limited supply, they correspond with higher capital returns, which have been increasing by double digits annually. She adds that opportunities are particularly good in District 1, Ho Chi Minh City’s central business district, and at properties with views of the Saigon River or close to the forthcoming metro public transit line, expected to be completed in 2022.
The Rise of Coastal Homes
A tourism boom in coastal Vietnam is another contributor to the rise of Vietnam’s luxury residential market. Danang, along with other coastal cities like Phu Quoc, Ho Tram and Quang Nam, are experiencing a growing market for vacation and second homes, due to world-class golf courses, tourist hotspots and a solid infrastructure. For instance, hilltop three-bedroom villas at the Banyan Tree Lang Co Residences, which cost VND29.5 billion (US$1.28 million) and are within striking distance of the Danang airport, boast panoramic ocean views and a private pool, and are decorated with locally inspired furnishings.
“High-end coastal properties began springing up in 2006,” said David Blackhall, managing director of Real Estate at Vinacapital. “We invested in development around golf courses and coasts, and we thought we’d be selling a lot of product to foreigners, but more than 90% have been to Vietnamese buyers because they have an affinity with owning real estate and now have access to modern, well-designed, top-end residential products.”
Mr. Blackhall noted that certain regulations on foreign ownership, particularly when it comes to reselling property, are still unclear, but the number of overseas buyers should continue to grow over the next decade as mass transit systems in Hanoi and Ho Chi Minh City, and new airports in Phu Quoc and Danang, are completed.
“If you look at Vietnam from a geographical perspective, it’s in the center of Southeast Asia, there are lots of recreational opportunities like golf courses and casinos under development, as well as an enormously long coastline—and coastline views sell,” he says.
Beautiful beach in Nam Du island cuongvnd / Getty Images
Outlook: Significant Growth
As the economy continues to grow, developers anticipate more expats seeking high-quality housing, and to close that gap, are launching more luxury projects to match the expectations of foreign buyers and investors.
In fact, CBRE, the world’s largest commercial real estate services and investment firm, reported that the total supply of luxury apartments for sale in Ho Chi Minh City sits at approximately 4,000 units. Meanwhile, the population of the largest city in the country is pushing past 10 million.
The upward trend is already visible in the improved quality of new launches and rapidly increasing property prices, with square-foot prices in central business district areas approaching VND 12.84 million (US$557), up from an average of VND 9.64 million (US$418) just two years ago.
“Vietnam is still behind Bangkok and tier two and three cities in China, but the general feeling is it will catch up within the next five or 10 years,” Mr. Wyatt said, adding that JLL forecasts up to 10% annual growth in residential real estate values in major cities this year, with more gains on the way.
Making money — both for itself and, on occasion, even for customers — is no longer enough for the asset management industry.
Being seen to do the right thing for society seems to have equal status, hence the scramble by fund managers to signal devotion to the all-conquering creed of environmental, social and corporate governance-based investment.
Arguably, though, some of the fund managers that have done most to improve the lot of humanity have not been trying to participate in this orgy of ESG.
After all, what, within the power of a fund manager, could be more beneficial than pouring money into the poorest countries with functional stock markets, helping lower their companies’ cost of capital and spurring economic growth where it is most needed?
Frontier funds (and their investors) do precisely this, pumping money into the likes of Nigeria, Kenya, Senegal and Ivory Coast — the mainstream emerging markets equity index ignores sub-Saharan Africa except South Africa — as well as Bangladesh, Vietnam and Sri Lanka.
This feel-good story has also felt good for investors since 2010, producing three times the returns of the mainstream EM index as assets have tripled to about $20bn.
Yet it is in jeopardy. Last month’s annual index review by MSCI, the US group that controls the dominant frontier index, led to cries of “oblivion”, “existential crisis” and the potential “twilight” of the index.
The cause of the angst was MSCI’s decision to promote Argentina from frontier to EM status next year and earmark Kuwait for a possible upgrade in 2020. Assuming Kuwait gets the nod, the frontier index, which has already been stripped of the United Arab Emirates, Qatar, Pakistan, Ukraine and Bulgaria since 2014, would lose 38.4 per cent of its market capitalisation.
Vietnam would become an outsized 25 per cent of the frontier firmament, based on current prices. If it too was promoted, as many observers think is likely, the index would be left with just 45.5 per cent of its current market cap, and even less of its liquidity, given that no countries are being groomed for entry.
“This probably makes the MSCI FM index ever more irrelevant,” pushing it “closer to oblivion,” said Hasnain Malik, head of equity research at Exotix Capital, an investment bank that focuses on emerging markets.
In one sense, MSCI’s actions are understandable. Its rules state that if a bourse boasts an adequate number of large and liquid stocks it should be included in either its emerging or developed market indices. Promoted countries are simply being rewarded for meeting these requirements.
What is lacking, though, is any sign of a master plan from MSCI. Its approach treats the frontier basket as a nursery for future EMs. This is fine in itself but is indifferent as to whether the resulting index is a worthwhile or usable benchmark, either for active or passive managers.
The frontier index has always been an oddity. Alongside the nations mentioned above, it includes middle-income countries such as Slovenia, Estonia and Bahrain, which just happen to have small stock markets.
Yet this slightly random combination has its attractions, such as a higher dividend yield (3.9 per cent), return on equity (13.8 per cent) and consensus earnings growth forecast than either developed or emerging equities, as well as low correlation to other indices, according to data from Andrew Howell, frontier market strategist at Citi.
These attributes partly stem from the fact that frontier markets are under-owned by international investors, which is likely to become more marked still if the frontier concept withers on the vine.
Maybe the solution is for fund managers and their overseers to have the courage to invest more off-benchmark, and for investors to give them the freedom to do so.
Perhaps then more capital will flow “downhill” to poorer countries, as economic theory suggests it should, whether or not a mid-sized New York company decides to keep its frontier index in good working order.
Though Vietnamese shares bounced back strongly in the last two sessions of last week, analysts and brokerage firms remained skeptical that the stock market had actually overcome a difficult period and begun its consolidation.
The benchmark VN Index on the HCMC Stock Exchange finished last week at 909.72 points, marking a two-day increase of 1.85 per cent, but it fell a total of 0.85 per cent after one week.
The HNX Index on the Hanoi Stock Exchange ended Friday at 102.51 points after rallying a total of 4 per cent in two sessions. The northern market index notched weekly growth of 1.8 per cent.
According to analysts, the latest two-day rally did not guarantee short-term growth of the stock market even though some positive signals have appeared in key industries such as banks, securities and real estate.
Manager Dương Văn Chung at MB Securities Company told tinnhanhchungkhoan.vn that most investors and specialists had the same idea that the market had consolidated after it had fallen sharply in the past three months, thus, they thought the market would move in a positive direction this week.
“Based on analysing the market regarding its technical and fundamental factors, I think the latest two-day increase was just a technical recovery and the stock market is not likely to have sustainable growth at the moment,” Chung said.
The benchmark VN Index may rise to a maximum 929 points in the first two sessions this week and then move sideways in the rest of the week, he forecast. “If the VN Index beats the 884-point level on its way down, the market downtrend will continue.”
According to Dương Hoàng Linh, a senior analyst at Sacombank Securities Company, last week’s strong gains were normal as such gains often happen during the downtrend of the stock market after the indices have declined for a long time thanks to depressed investor sentiment.
“It is difficult to hope for positive growth next week as fundamental elements such as cash flow, macroeconomic conditions, global tensions and foreign trading have shown little support for the market’s growth,” he said.
Macroeconomic factors, especially the trade tension between the US and China, would likely damage investor confidence in the stock market, especially domestic ones, Viet Capital Securities Company (VCSC) Head of Brokerage Châu Thiên Trúc Quỳnh said.
“Foreign investors have kept net-selling while domestic investors tend to stand by and take careful watch over the flow of foreign capital. Some of the domestic investors are still worried and pessimistic about the market’s short-term development.”
Trading liquidity remained modest last week with an average of nearly 158.5 million shares being traded in each session, worth VND3.16 trillion (US$140.4 million).
The trading figures were down 18.3 per cent in volume and 27 per cent in value compared to the previous trading week. That indicated investor confidence in local stocks had been declining, according to analysts.
Financial-banking stocks played the important role in driving up the market during the final two sessions of last week.
Bank stocks led to the market’s upward turn, including Vietcombank (VCB), Vietinbank (CTG), Bank for Investment and Development of Vietnam (BID), VPBank (VPB) and MBBank (MBB).
Those bank stocks gained a total of 4.6 per cent, 3.7 per cent, 2.2 per cent, 4 per cent and 3 per cent, respectively.
Analysts have said financial-banking companies, especially banks, may achieve high growth in their earnings for the second quarter and the first six months of the year.
Bank stocks are among the groups of companies that have positive prospects in the short term after some of them reportedly revealed “big” earnings for the second quarter, Quỳnh at VCSC said.
FPT Securities Company (FPTS) said in its report that there had been less negative news from the world’s markets while banks had led the indices up in the last two sessions.
“Friday’s session may be the first signal that reflects investors’ expectations in listed firms’ earnings reports for the first half of 2018. Banks will be in focus next week for investors,” it said.
Incorporation in Vietnam is generally considered a lengthy and bureaucratic process.
Step 1: Check the proposed company name; obtain a business registration certificate as well as a tax registration certificate from the local business registration office under the Department of Planning and Investment
The first step in the incorporation of a Vietnamese entity is to submit the relevant documents in accordance with Government Decree 43/2010/ND-CP (15 April 2010) on enterprise registration, as amended by Government Decree 05/2013/ND-CP (9 January 2013) (“Decree 43”). Provided the application file for enterprise registration fully satisfies the conditions for issuance of an enterprise registration certificate, information about that file shall be transferred to the database of the Department General of Taxation (Ministry of Finance). The Department General of Taxation will then create a unique enterprise code number and transfer it to the national database within two working days from the date of receipt of information from the national database of information. The provincial business registration office will then issue it to the enterprise. This code number is both the business registration code number and the tax code number of that enterprise (Article 8 of Decree 43).
Agency: Department of Planning & Investment
Time: 14 days
Cost: VND 200,000
Step 2) Make a company seal
The company obtains a company seal from a seal maker.
Agency: Sealmaker
Time: 8 days
Cost: VND 165,000 – VND 370,000 for bronze seal
Step 3) Registration of the seal-sample at the Police Department
In Vietnam, most business transaction documents must be signed and stamped in order to be considered valid and legal. When registering the seal at the police division, the company representative also has to lodge a copy of the enterprise’s Business and Tax Registration Certificate and also present his or her identity card.
Agency: Local Police Office
Time: 1 day
Cost: VND 50,000
Step 4) Open a bank account
It is worth noting that the minimum deposit to open an account differs by bank. To open the account, applicant will require a bank- issued application form, the company seal, the company’s business registration certificate, and the resolution of the management board on the authorised signatures.
Agency: Bank
Time: 1 day
Cost: No charge
Step 5) Publish the registration contents on the National Business Registration Portal (NBRP)
Under Decree No. 05/2013/NĐ-CP dated 09/01/2013, enterprises are required to post their registration contents on the National Business Registration Portal (NBRP)within 30 working days since the date of the establishment or the amendment registration.
They are also required to pay a publication fee of VND 300,000 as per Circular No. 106/2013/TT-BTC of the Ministry of Finance dated August 9, 2013.
Agency: National Business Registration Portal (NBRP)
Time: 5 days
Cost: VND 300,000
Step 6) Pay business license tax
The business license tax is paid to the tax authority where the enterprise registers its tax reports or through designated commercial banks. This is an annual tax and is paid in the first month of the enterprise’s operating year and in the month it obtains its tax registration certificate and tax code. Companies established during the first 6 months of the year are required to pay the entire annual business license tax and 50% if established in the second half of the year.
Agency: Tax office or commercial bank
Time: 1 day
Cost: VND 1,000,000
Step 7) Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self-printed VAT invoices
All companies are required to use self-printed VAT invoices from 1 January 2011. As such, a newly established enterprise is required to order its VAT Invoice Books from a publisher and register the circulation of its VAT Invoices with the Municipal Taxation Department.
To register for self-printing, the company founders must submit a standard-form along with (a) a sample of the company’s self-printed invoice, including all statutory details; (b) a map showing the location of the company’s office or copy of the lease contract if the premises are leased, certified by the ward commune people’s committee; (c) the general director’s identification card; (d) a copy of the business registration certificate; and (e) and the tax registration certificate as well as a copy.
Agency: Municipal Taxation Department
Time: 10 days
Cost: about VND 200,000 per book
Step 8) Register with the local labour office to declare use of labour (Municipal Department for Labour, Invalids and Social Affairs).
Within 30 days of starting operations, the employer must register all employees and their qualifications with the Labour Office.
Agency: Municipal Department for Labour
Time: 1 day
Cost: no charge
Step 9) Register employees with the Social Insurance Fund for the payment of health insurance and social insurance.
All employees who have contracts for 3 months or longer must be registered with the Social Insurance Fund. The employer must complete a form provided by the Hanoi Social Insurance along with the following information: the employee name and date of birth, salary (as stated in the labour contract), the social insurance book serial number (for employees already issued with those books), a certified copy of the company’s business registration certificate, and a copy of each labour contract.
The Social Insurance Office will issue an insurance registration book for each new employee that was not issued such book by the previous employer within 30 days of receipt of the application. Health insurance certificates are issued during the first month of the year.
Agency: Social Insurance Fund
Time: 1 day, simultaneous with previous procedure
Cost: no charge
Step 10) Registration for trade union with Vietnam General Confederation of Labour
The employer must register with the local trade union or industry trade union (as defined below) no later than 6 months from the date it starts operations.
The term “trade union” includes (a) provincial or municipal-level confederations of labour under the Vietnam General Confederation of Labour; (b) central-level industry trade unions; (c) trade unions of corporations under the Vietnam General Confederation of Labour; (d) confederations of labour of districts, towns, and provincial cities; (e) local-level industry trade unions, (f) trade unions of processing zones, industrial zones, and high-tech zones; (f) trade unions of corporations; and (g) superior trade unions of other establishments. These trade unions are responsible for establishing a trade union for the company, according to the provisions of the Labour Code, the Law on Trade Unions, and the Charter of the Trade Union of Vietnam, to represent and protect the lawful and legitimate rights and interests of the employees and the labor collective.
If a company trade union is not established within 6 months, the superior trade union shall appoint a provisional executive committee of the trade union.
Agency: Confederation of Labour
Time: 7 days
Cost: no charge
Advisory services
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