For months, Mai Linh has been blaming the foreign ride-hailing firms for falling revenue.
Major Vietnamese taxi company Mai Linh on Monday launched its own motorbike hailing app in its latest attempt to claw back customers from Uber and Grab, the ride-hailing firms from the U.S. and Malaysia that have been outshining local cab firms.
The app, Taxi Mai Linh, is now available in Ho Chi Minh City, Hanoi and Da Nang, and has around 5,500 drivers.
Ho Huy, Mai Linh’s chairman, said what makes his company’s new service different from Uber and Grab is that the fare is kept constant at VND11,000 (48 cents) for the first two kilometers and then drops to VND3,800 per kilometer from the third kilometer onwards.
Uber and Grab charge their passengers similar rates but raise fares during rush hours and bad weather.
He also said the company will run a campaign to encourage traditional xe om drivers to join its team in an effort to avoid fights between them and tech-savvy drivers, something that both Grab and Uber have experienced.
So far, the strategy seems to be working, and many Uber and Grab drivers have shown up at Mai Linh’s door to switch sides.
“I applied because I heard Mai Linh is offering a better deal for its drivers,” said Cuong, who has worked as a GrabBike driver for over a year.
“My income has fallen because Grab now deducts up to 20 percent of the fares that drivers receive from passengers instead of 15 percent as before, and more and more people are working as GrabBike drivers, which means more competition,” he said.
Uber takes a cut of 25 percent from its drivers.
Mai Linh’s drivers will not have to hand over any of their earnings for the first two months, after which time the company will take a 15 percent share.
Mai Linh reported that it lost 6,000 employees in the first half of this year, or 20 percent of its total drivers.
Its business results did not read much better during the same period, with revenue falling more than 5 percent on-year to VND1.72 trillion ($75.8 million).
In all, Mai Linh suffered a loss of VND47.5 billion from its taxi business, twice as much as last year, the company said.
Its rival Vinasun, the biggest taxi firm in Vietnam, lost 10,000 employees in the first nine month, and its revenue in that period only reached 58 percent of the company’s annual target.
They have both pointed the finger at Uber and Grab, saying the two foreign firms enjoy preferential policies as they are classed as transport software providers which, unlike traditional taxis, are not accountable for passenger and traffic safety.
In its latest attempt to battle Uber and Grab, Vinasun has rolled out a hailing service via Facebook Messenger.
The World Travel Awards – the most prestigious awards program in the world’s travel industry – will take place in Vietnam’s Phu Quoc Island District next month.
World Travel Awards has confirmed that both Grand Final Gala Ceremony 2017 and World Spa Awards will take place on the evening of December 10 at the JW Marriott Phu Quoc Emerald Bay Resort & Spa on the pristine island of Phu Quoc – a lush, hidden paradise off the southern coast of Vietnam.
“Having taken the decision to combine both the World Travel Awards Grand Final Gala Ceremony and World Spa Awards Gala Ceremony, it is a pleasure to confirm they will both take place in early December at the incredible JW Marriott Phu Quoc Emerald Bay Resort & Spa,” World Travel Awards President Graham Cooke said.
The event will bring together many representatives from the top hotel chains and groups, resorts and spas in the region and in the world to attend the prestigious “24th World Travel Awards” and “3rd World Spa Awards”.
The decision to combine World Travel Awards Grand Final Gala Ceremony and World Spa Awards Gala Ceremony will give nominees and delegates a heightened exposure on the night, as well as increasing the networking opportunities on offer.
The event will be a showcase of both the best of Vietnamese hospitality and the global spa and wellness industry so that this is an opportunity not only for global travel industry activists to cooperate with each other but also for Vietnam to promote its image on a global scale and brig the beauty and friendliness of Vietnam to an even greater audience.
This is the second time Vietnam has been selected to host the important event of the world’s tourism industry.
Established in 1993 to acknowledge, reward and celebrate excellence across all sectors of the tourism industry, the World Travel Awards brand is recognized globally as the ultimate hallmark of quality, with winners setting the benchmark to which all others aspire.
Each year World Travel Awards covers the globe with a series of regional gala ceremonies staged to recognize and celebrate individual and collective successes within each key geographical region.
World Travel Awards Gala Ceremonies are widely regarded as the best networking opportunities in the travel industry, attended by government and industry leaders, luminaries, and international print and broadcast media.
World Spa Awards is a dynamic awards program, launched in 2015, and is designed to drive up standards within spa and wellness tourism by rewarding the organizations that are the leaders in the field.
The Singapore-based automotive group, Jardine Cycle and Carriage (JC&C), has made additional purchases of Vinamilk’s shares after its maiden US$616.6 million investment on November 10.
JC&C group now has an aggregate interest in nearly 145.6 million Vinamilk shares, representing approximately 10.0 per cent of Vinamilk’s issued share capital.
This has increased its ownership in Viet Nam’s largest dairy producer to 10 per cent.
According to the group’s announcement on Friday, Platinum Victory Pte Ltd, a wholly-owned subsidiary of JC&C, has made further on-market purchases to acquire an additional of nearly 16.5 million shares from Vinamilk, representing approximately 1.1 per cent of the issued share capital of Vinamilk.
Following the acquisition, the JC&C group now has an aggregate interest in nearly 145.6 million Vinamilk shares, representing approximately 10.0 per cent of Vinamilk’s issued share capital.
On November 10, JC&C beat other bidders to purchase a 3.33 per cent stake in Vinamilk from the State Capital Investment Corporation (SCIC) at an open auction on the HCM Stock Exchange. It also acquired another 2.2 per cent stake via order-matching transactions to bring its holding to up to 5.53 per cent.
Currently, JC&C is the third-largest shareholder of Vinamilk, after SCIC with 36 per cent and Singapore’s food and beverages company Fraser&Neave, with 18.74 per cent.
Foreign investors hold a combined 56.44 per cent of Vinamilk. The firm’s market capitalisation reached VNĐ265.88 trillion ($11.71 billion) on Friday morning, rising 7.45 per cent from the $10.9 billion value on November 10 when the automotive major made the first investment in Vinamilk.
JC&C, a subsidiary of Jardine Matheson, has been present in Việt Nam for over a decade. It now owns a 25.1 per cent stake in automobile producer, Thaco, and nearly 23 per cent in the Refrigeration Electrical Engineering Corporation (REE Corp).
In addition to operating in real estate, hotel and financial services, Jardine Matheson, the parent company of JC&C, also holds shares of many franchise brands in Viet Nam such as KFC and Pizza Hut.
From December 1 this year Vietnamese who can show a minimum income of VND10 million (US$440) a month can gamble in casinos.
Circular No 102/2017, issued by the Ministry of Finance in early August to guide Decree No 03/2017 on casino businesses, lifts the ban on Vietnamese entering casinos that is in place now. Only foreigners are currently allowed into the country’s casinos.
Once the ban is lifted, to enter people must also prove they are over 21 years old.
As for the income, they have to show it is taxable at level 3 or higher or have certified copies of a lease agreement showing they receive rent of at least VND10 million a month or a bank statement showing interest income of that sum.
Since 1992 the Government has been acknowledging that casinos would help attract tourists and bring revenues.
This resulted in the first casino appearing in 1994 in the beach resort of Do Son in Hai Phong.
Now there are eight casinos and more than 50 electronic gambling facilities nation-wide.
The new circular is expected to encourage the opening of casinos around the country, especially in special administrative-economic zones like Van Don in Quang Ninh Province, Bac Van Phong in Khanh Hoa and Phu Quoc in Kien Giang.
In Van Don, the province people’s committee has licensed real estate developer Sun Group to build a US$2 billion luxury resort-amusement complex with a casino on 2,500 hectares in the special economic zone.
Both Quang Ninh and Kien Giang provinces want the Government to choose casinos in their locality to trial entry for Vietnamese.
Other provinces, including those without special economic zones, also want a piece of the action.
The Thua Thien-Hue Province People’s Committee has sought permission to increase the charter capital of the Lang Co Laguna Project from US$874 million to US$2 billion and open a casino.
The new circular has attracted some public criticism, with people saying the regulations limiting entry based on income cannot be enforced since it is difficult to prove income.
To gain entry, a person has to be paying income tax at level 3 or higher, but in Vietnam 70% of payers are assessed at level 1.
Others said the daily maximum gambling limit of VND1 million is too low to attract high income earners and help the Government achieve its revenue target.
Meanwhile, the existing casinos are operating at just a third of their capacity and claim to be losing money.
The Hoang Gia International Construction Investment Joint Stock Company said its casino business made a gross loss of VND35.8 billion last year and a net loss of VND101 billion in the first nine months of this year.
Analysts blame this on the rapidly growing competition, with more and more casinos fighting for fewer gamblers from overseas, most of them from China and Taiwan.
Vietnamese gamblers usually cross the border into Cambodia, where many casinos target them.
The Government’s decision to lift the ban is expected could not have come sooner for the casinos.
Exporters fret as foreign currency loans set to dry up
The circular that allows the extension of foreign currency lending to enterprises involved in export activities will expire in a month.
Economists are concerned this could affect borrowers.
Last November the State Bank of Vietnam (SBV) issued a circular amending and supplementing some articles in an earlier circular guiding lending in foreign currencies.
This allowed enterprises with short-term foreign currency requirements for their production and export activities to continue borrowing in foreign currencies until the end of 2017.
Interest rates for foreign currency loans are only around half the on dong loans.
They are currently at 2.8%-6%.
Interest rates for non-priority đồng lending stand at 6.8%-9% for short-term loans and 9.3%-11% for long- and medium-term loans.
Exporters are understandably worried they would lose this big advantage from next month.
Analysts fear there will be a double whammy for exporters. Firstly, their costs will shoot up, hitting their bottom line. Secondly, demand for dong loans will go up sharply, pushing up loan interest rates even higher, particularly at banks that have liquidity issues.
The situation is predicted to become quite dire since growth in foreign currency lending is on an upward trend.
In the first nine months of this year credit growth was 12.9% compared to 5.4% a year earlier.
Export enterprises pointed out that if they have to borrow in dong to finance their operation costs would rise significantly, affecting the competitiveness of their goods.
They wanted the central bank not to have a one-size-fits-all policy since export enterprises’ business strategies are very different from those of other businesses.
But economists justified the SBV’s policy saying the increasing demand for credit means dollarisation of the economy is a real threat and could undermine the Government’s anti-dollarisation efforts.
To preclude this, it is necessary to switch completely from lending and borrowing the greenback to buying and selling it.
Others said, however, that to do this there should be flexibility in exchange rates and businesses must be allowed to freely buy foreign exchange when they require.
Moody’s upgrades VN banking outlook
Moody’s Investors Service has upgraded the outlook for Vietnam’s banking system to “positive” for the next 12-18 months from “stable”.
According to a statement from the credit rating agency, the Vietnamese banking system’s positive outlook reflects strong economic prospects, with the banks’ operating environment benefiting from robust economic growth, based on ongoing improvements to infrastructure, favourable demographics and the Government’s continued focus on reform to support foreign direct investment.
But it also warned Vietnam of rising asset risks as the nation boosts credit growth to drive the economy.
Rapid credit growth will continue to erode capital buffers and capitalisation will deteriorate as the banks struggle to replenish capital against rapid loan growth, it warned further.
Manchester United icon Ryan Giggs has said he cherishes a dream that Vietnam will make it to the FIFA World Cup 2030, as he signed a contract with a young football academy in the country on Monday.
The former Wales international will be Director of Football at PVF Football Academy, run by Vietnamese conglomerate Vingroup, for two years pursuant to the contract.
The contract was signed during the opening ceremony of the PVF’s training center in the northern province of Hung Yen on Monday.
Former Manchester United player Paul Scholes speaks at a press conference in Hung Yen, northern Vietnam, on November 20, 2017. Photo: Tuoi Tre
Giggs is honored to take the directorial post at PVF, he said, adding that the academy’s property and facilities are comparable to world’s top training centers.
The former superstar, who made 672 appearances and scored 114 goals for Manchester United, the only club in his entire career, will be in charge of supervising PVF players in terms of technique, physique and nutrition.
Giggs said his 25 years of experience with Manchester United and two years as a young talent trainer will help him fulfill his job at PVF.
Former Manchester United player Ryan Giggs gives autographs to fans in Hung Yen, northern Vietnam, on November 20, 2017. Photo: Tuoi Tre
He added that he will be in Vietnam for a couple of times a year to directly work with coaches, experts and players on several issues, including the training plans for Vietnamese football talents.
Giggs said what he has experienced first-hand in Vietnam has enabled him to reveal his dream that the Southeast Asian country will be able to play at World Cup 2030.
Paul Scholes, another Manchester United legend, has also been appointed a technical consultant for PVF.
Players are seen at the PVF training center in Hung Yen, northern Vietnam. Photo: Tuoi Tre
Speaking after Giggs’ speech, Scholes expressed his belief that PVF will succeed in training great and potential players for Vietnam’s football in the future.
The former English international underlined the importance of dreaming and believing and encouraged PVF players to believe that they may be able to make it to the FIFA World Cup 2030.
Following the opening of the Hung Yen training center, PVF also organized a four-team international tournament, comprised of under-15 sides from Stoke City in England, Australia’s Central Coast Mariners, South Korea’s Busan IPark and the PVF team.
Giggs and Scholes joined the audience in the first game between Stoke City and PVF.
Cinema lovers in Ho Chi Minh City are now treated to six days of free screenings of Korean blockbusters as part of the Ho Chi Minh City-Gyeongju World Culture Expo 2017.
Running from November 17 to 22, the movie fest is packed with blockbusters ranging in genres from action, horror to comedy and family movies.
All 12 selected films, including eight from South Korea and four from Vietnam, were produced between 2015 and 2017.
They will be screened at the BHD Star cinemas, on the third and fourth floor of the Bitexco Financial Tower in downtown District 1.
The film festival is aimed at broadening the understanding of Korean and Vietnamese movies and fostering cultural exchange through the participation of directors, actors and film industry personnel.
A scene from Korean movie ‘Co Ba Sai Gon’ (The Tailor), to be screened in Ho Chi Minh City this week.
In Vietnam, Korean movies have been gaining popularity, evidenced by the dominance of South Korea-owned multiplex cinema chains CJ CGV and Lotte Cinema, which together account for more than 73 percent of the local cinema market, according to a 2016 report by KDB Daewoo.
Joining the week-long event is Kim Dong-ho, co-founder and chairman of the organizing committee of the Busan International Film Festival, among directors of the Korean blockbusters to be screened.
The Korean-Vietnamese Film Festival will also include a free workshop on filmmaking with a smartphone, aimed at aspiring young filmmakers in Vietnam who want to foster their passion on a budget.
Participants will be taught basic skills in shooting a movie by the South Korean directors themselves, and by the end of the workshop will be given a chance to produce short movies, the best of which are set to be shown for public viewing on Tuesday night.
The Ho Chi Minh City-Gyeongju World Culture Expo 2017, co-hosted by two local governments, run for 23 days from November 11 to December 3.
This year’s expo is the third of its kind to be held overseas – following ones in Angkor Wat, Cambodia in 2006, and Istanbul, Turkey in 2013 – since the event’s inception in 1998.
The event in Ho Chi Minh City features 30 programs that combine the traditional cultures of the two countries with information and communication technology, and bring to light the values of the world’s historical and cultural heritage in Gyeongju and Vietnam under the theme of “The Exhibition on Civilization Exchanges through Old Sea.”
The programs include an opening ceremony, a parade, a variety of performances, a special exhibition on the two countries’ cultural exchanges and an event involving Koreans in the Southeast Asian country.
Preferential treatments including tax and land use incentives are a key factor in the Vietnamese government’s bid to attract foreign investment; however, domestic enterprises are beginning to voice their complaints.
Foreign companies in Vietnam are enjoying massive tax and other incentives, giving them an advantage over already less-competitive domestic businesses.
For example, Samsung, which is operating in Vietnam through various entities, topped the Vietnamese finance ministry’s list of 100 foreign companies with the biggest tax reductions in 2016.
All of Samsung’s various subsidiaries in Vietnam collectively had their taxes reduced by nearly US$1 billion last year. Of these, Samsung Electronics Vietnam Thai Nguyen alone enjoyed total tax incentives worth VND10.36 trillion ($456.39 million), according to finance ministry data.
A finance ministry official said that these incentives are legally granted as per Vietnam’s policy of attracting foreign investment and boosting productivity.
The incentives are available to any company meeting specific criteria, but the problem is that very few Vietnamese companies qualify, the official added.
While the tax reductions foreign companies can enjoy can total as much as 91.9 percent of their corporate income tax bill, Vietnamese companies and state enterprises can be entitled to a mere 17.8 percent and 4.8 percent reduction respectively, according to the same finance ministry official.
Another expert from the finance ministry said that besides reductions in corporate income tax, some foreign businesses are also given incentives in import and value-added taxes.
“For a few foreign businesses, the total amount of tax reductions they have enjoyed since beginning operations in Vietnam is larger than their total investment in the country,” he added.
Unfairness
Firms that benefit from the preferential treatment in Vietnam say they are doing nothing wrong.
A Samsung Electronics Vietnam representative told Tuoi Tre (Youth) newspaper that Samsung is receiving the same tax breaks as other foreign tech companies in the country.
The incentives include a corporate income tax exemption for the first four years of operations, and a preferential tax rate of five percent over the next nine years. From the 14th year of operations onward, the tax rate will be set at ten percent.
However, experts believe that the current preferential treatment of foreign companies is weakening the competitive edge of local enterprises, both private and state-run.
Lawyer Bui Quang Tin, who is regarded as an economic expert, said that Vietnamese companies are being treated unfairly.
“Offering incentives to attract foreign investment is the right policy, but the other side of the coin is that local businesses will become less competitive,” he said.
Tin suggested that the government review the policy to ensure fairness between domestic and foreign enterprises.
“We should focus on enabling domestic companies to grow, rather than only on attracting foreign investment,” he said.
Dinh The Hien, another economist, echoed Tin’s view that there is unfairness between foreign and domestic businesses when it comes to tax incentives.
Hien recommended that the government give fewer preferential treatments to foreign companies, so all companies, domestic or foreign, can compete equally.
“Tax incentives should be given to companies based on their field of investment rather than whether they are domestic or foreign,” he added.
Ho Chi Minh City has joined hands with military-run mobile network operator Viettel to turn the southern metropolis into a ‘smart city.’
The municipal People’s Committee on Friday evening signed a cooperative agreement with the telecoms group regarding the establishment of a smart city in 2017-20, with a vision toward 2025.
Viettel executives underlined several obstacles the southern hub has been facing in its development, including traffic congestion, environmental pollution, and limited infrastructural development resources.
The military-run firm asserted the necessity of creating a centralized monitoring center to resolve the issues.
The center will consist of several units in charge of different tasks, namely supervising traffic and fighting crime, receiving and analyzing emergency information such as firefighting and search and rescue missions, monitoring and ensuring information safety, managing media information, and answering citizens’ inquiries regarding public services.
The centralized facility will access data from local camera systems to manage traffic situations and ensure order and security.
Regarding emergency requests, a unit will operate in a manner similar to the 911 service in the United States, with the ability to locate callers, access surveillance camera footage, and send rescue teams in a prompt manner.
Press and media information will also be monitored closely to prevent an information crisis.
According to Tong Viet Trung, deputy general director of Viettel, the centralized monitoring center will be helpful for local authorities thanks to its sufficient and accurate database.
All information kept at the center will be protected with maximum security measures, Trung added.
Chairman of the Ho Chi Minh City administration Nguyen Thanh Phong stated that the smart city project had been approved by the municipal Party Committee and People’s Council.
A meeting will be convened on November 25 to discuss a detailed plan, Chairman Phong continued.
The official considered the handshake between the city and Viettel a significant millstone, which will play an important part in achieving sustainable development.
Authorities have asked social media retailers to pay up, but enforcement remains a challenge in a cash-driven country.
Dinh Thu Huyen’s broadcasts of everyday life, including feeding chickens and working in allotments, have helped her attract nearly 50,000 Facebook followers in Vietnam.
The web broadcasts have also earned her hundreds of millions dong a year from selling the products she cultivates online. However, she has never paid any tax.
Vietnam levies a 0.5 percent income tax and a 1 percent value added tax on sales of more than VND100 million ($4,400) per year. But the government is failing to collect taxes from many online traders as they mainly use cash transactions that are difficult to track.
However, local tax authorities have recently stepped up efforts to collect taxes from online businesses that use Facebook and other social media sites such as Instagram and YouTube.
District tax departments in Ho Chi Minh City have sent out tax demands to nearly 13,500 Facebook retailers in a move to target tax avoidance by online businesses.
In a similar move, the Hanoi Department of Taxation has sent text messages to 13,422 Facebook accounts that use the social media network as a retail platform.
The retailers have been urged to go to the department’s website to register their businesses and declare tax, Vien Viet Hung, the department’s deputy director, said.
To minimize tax losses, the Ministry of Finance is considering a plan to impose value added tax and income tax on sales with a value of VND1 million ($44) upwards, or multiple sales of a lesser value.
But the plan has not worried Huyen. “Tax authorities have not contacted me. Most of my customers pay in cash, so I don’t think they will be able to evaluate my sales and tax them.”
Many other online retailers on Facebook have the same attitude as Huyen. They don’t think tax authorities will be able to control their sales because they only promote fashion products via Facebook. The items bought usually change hands offline and payments are usually made in cash. Even goods shipped to the recipients can be sent either through the postal system or by private courier.
“I post photos and clips of my products on Facebook, but all transactions are conducted outside the platform,” said Nguyen Huy Dung, who has been selling watches online for several years. “How can tax authorities claim that my sales are large enough to be taxed?”
Many online retailers do not even register their businesses with local authorities.
Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultant Association, said Vietnam’s tax policy for online businesses is incomplete and therefore not compulsory. This poses a challenge for tax authorities when most transactions are still in cash.
Some experts have raised concerns that many online retailers use anonymous accounts for transactions, making it hard for tax authorities to regulate activities.
Many online retailers have said they would pay tax, but want a reasonable policy in place first.
Nguyen Thi Nhung, who sells cosmetics online, said: “It’s not fair if online retailers do not pay tax when brick and mortar businesses have to pay a raft of taxes and fees.”
“However, authorities should consider specific policies for retailers like me who conduct our business online,” she said.
Stressing the necessity of collecting taxes from online retailers, economist Nguyen Minh Phong said the state should complete tax and business regulations, facilitating tax collection to increase state budget revenues and ensure justice for all kinds of businesses.
Lucrative market
Vietnam’s young population – almost 60 percent are under 35 – is drawn to Facebook and the country has become one of the leaders globally in terms of penetration of social networks, Bloomberg quoted Monica Peart, senior forecasting director at EMarketer Inc, as saying.
The Vietnamese spend more time on the social network than users in most other Southeast Asian countries and are much more apt to use it as a platform to start a business, said Joe Nguyen, ComScore Inc.’s senior vice president of Asia Pacific.
“We haven’t seen this scale in other places,” he said. “Vietnamese are very entrepreneurial. Everyone wants to try to sell something.”
Online sales in Vietnam have expanded rapidly in recent years, currently accounting for 3.39 percent of the country’s retail market. The total retail market grew 10.2 percent last year to $118 billion, mainly fuelled by a growing middle-class with expanding disposable incomes and an increasing number of internet users.
The World Bank forecasts that Vietnam’s $200 billion economy is likely to grow to a trillion dollars by 2035. More than half of its population, compared with only 11 percent today, is expected to join the ranks of the global middle class with consumption of $15 a day or more by that time.
According to one estimate, about 30 percent of the population will be buying goods and services over the internet in 2020, with each shopper spending an average of $350 per year.
Just three years ago, Vietnam was ranked the smallest e-commerce market in Southeast Asia in terms of sales. Now its online retail is gaining momentum, with more than half of the country’s 95 million people increasingly turning to online shopping.
According to Internet World Stats, Vietnam is currently ranked 14th in the world in terms of number of internet users.
The move came about five years after the start of a banking crisis that Vietnamese authorities still have not fully resolved.
The National Assembly, Vietnam’s legislature, on Monday gave authorities the ability to declare troubled banks bankrupt, through an amendment to a law on the operation of credit organizations, the government website said.
Approval of a bill establishing the right to declare bankruptcies came about five years after the start of a banking crisis that Vietnamese authorities still have not fully resolved.
State Bank of Vietnam Governor Le Minh Hung said recently that bad debts and potential bad debts amounted to 8.61 percent of total credit at the end of September. The level of non-performing loans in September 2012 was 17.21 percent.
Under the law’s new provision, which takes effect on January 15, the first step for dealing with a troubled bank would be to put it under the “special control” of the central bank.
The government could then consider a merger, transfer of the bank to other investors or a break-up before the financial institution would be allowed to file for bankruptcy as a last resort.
Any bankruptcy declaration would have to be approved by the government.
Nguyen Minh Phong, an economist at Hanoi Institute for Socio-Economic Development Studies, said the option of allowing a bank to declare bankruptcy was useful for the central bank.
But bankruptcy would unlikely to be declared in practice, Phong said, as authorities would only take this step as the last resort when banks fail to improve.
On October 31, Moody’s Investors Service changed its outlook for Vietnam’s banking sector for the next 12-18 months to positive, from stable.
Statistics show the trend is being driven by the popularity of K-Pop and Korean soap operas in Southeast Asia.
Vietnamese women now account for more foreign brides in South Korea than any other country for the first time, according to new data on multicultural marriages.
Statistics Korea said in a report last week that Vietnamese women accounted for 28 percent of foreign brides in the country last year, followed by 27 percent from China and 4.3 percent from the Philippines. The report recorded 21,709 multicultural marriages in 2016, down 3.4 percent from 2015.
According to the report, in the past Chinese women always ranked first in terms of the number of foreign brides in South Korea, but their number dropped to 5,838 last year while the number of Vietnamese brides grew to 6,054.
Vietnamese women, many from poor rural families, have been marrying South Korean men for years hoping for better lives in the more developed nation. However, it hasn’t been a fairytale ending for all of them, despite the fact that reports of suicides and fatal beatings have fallen.
Statistics Korea said the marriage trend has been driven by the popularity of K-Pop and Korean soap operas in Southeast Asia.
“Favorable impressions of Korea lead to Vietnamese women applying for jobs in Korean companies and coming to study in Korea,” it said, as cited by the Chosun Ilbo.
The newspaper interviewed employees of Lotte Mart and Samsung in Vietnam who said that the Korean businesses had painted a positive image of their country.
“A lot of our Vietnamese staff want to learn Korean and experience Korean culture,” a Samsung worker told the newspaper.
The electronics giant currently has six factories in Vietnam and employs 136,700 workers. Products from its factories are exported to 52 countries around the world.
South Korea is currently Vietnam’s biggest foreign investor.
According to the Korea Trade Investment Promotion Agency, South Korean firms invested more than $50 billion in Vietnam between 1988 and 2016, making up more than 30 percent of total foreign investment with over 6,000 projects.
The strong inflow of investment has coincided with a cultural wave that has seen local fans fainting at the sight of Korean stars. K-Pop fever hit Vietnam in the early 2000s when Korean TV shows and pop songs achieved an unusually high level of popularity, long before Psy’s “Gangnam Style” took the world by storm.
Although there have been signs of waning interest, South Korea’s largest multiplex cinema chain CGV is dominating the movie industry in Vietnam and is unlikely to let that happen quickly.
Vietnam is the third largest market in Southeast Asia and one of the fastest-growing economies in the world. Low costs and regulations that encourage foreign investment are only some of the key elements that attract foreign entrepreneurs. In this article, we present you the top 11 reasons why you should invest in Vietnam.
#1 Strategic location
Located in the center of ASEAN, Vietnam has a strategic location. It is close to other major markets in Asia, the most notable neighbor of them being China.
Its long coastline, direct access to the South China Sea and proximity to the world’s main shipping routes give perfect conditions for trading.
Two major cities in Vietnam are Hanoi and Ho Chi Minh City. Hanoi, the capital, is located in the north and has extremely convenient trading opportunities. Ho Chi Minh City, the largest by population, is situated in the south and is the industrial mecca of Vietnam.
For more information about the advantages of different regions in the country, read our previous article on how to choose your business location in Vietnam.
#2 Doing business is getting easier every year
Vietnam has made numerous amendments to their regulations to make investing in Vietnam more transparent.
In terms of ease of doing business, Vietnam ranked 82 out of 190 countries in 2016. Compared to the previous year, the ranking improved by 9 positions.
This rise was the result of improvements in some processes of doing business. For example, the government made the procedures of getting electricity and paying taxes easier, according to the World Bank report.
Based on their economic models, Trading Economics predicts Vietnam to rank 60 by 2020. Hence, the future prospects of ease of doing business in Vietnam are very promising.
#3 Trade agreements
Another indication of openness to the global economy are the numerous trade agreements Vietnam has signed to make the market more liberal.
Some of the memberships and agreements:
Member of ASEAN and ASEAN Free Trade Area (AFTA)
Member of World Trade Organisation (WTO)
Bilateral Trade Agreement (BTA) with the US
Free Trade Agreement with the European Union (comes into effect in 2018)
All these treaties show that Vietnam is eager to promote the country’s economic growth and will continue its commitment towards trading with other countries.
#4 Stable GDP growth
Over the last few decades, Vietnam’s economic growth has been one of the fastest in the world. This rapid development started due to economic reforms launched in 1986 and the rise has been continuous ever since.
According to the World Bank, the GDP rate in Vietnam has experienced a stable growth, averaging 6.46 % a year since 2000.
#5 Openness to foreign investment
Geographical advantages and growing economy are not the only attractive features for investors. Vietnam has always been welcoming to foreign direct investment (FDI) and encourages it by constantly renewing regulations and providing FDI incentives.
The government of Vietnam offers several incentives to foreign investors who invest in certain geographical areas or sectors of special interest. For example, in high-tech or healthcare businesses. These tax benefits include:
Lower corporate income tax rate or exemption from the tax
Exemption from import duty, e.g on raw materials
Reduction of or exemption from land rental or land use tax
In July 2015, Vietnam also implemented Decree 60/2015 which allows foreign investors to invest in more areas than before.
Vietnam recorded $24.4 billion as foreign direct investment in 2016, according to the government. Giants like Samsung, Nestle, and LG are among the largest investors contributing to this number.
#6 Vietnam is the next China?
According to the World Bank, the economic growth of Vietnam has raised the country from one of the world’s poorest into a lower middle-income country over the past three decades. If the economic rise of nearly 7% a year will continue, Vietnam’s economic development could be compared to what Chinese economy experienced a decade ago, as predicted by economic analysts.
Rising labor costs in China increase the prices of products as well, giving Vietnam a good opportunity to become the next hub for producing labor-intensive goods. Industries that used to flourish in China are now moving to Vietnam.
For example, Vietnam is becoming the hotspot of manufacturing instead of China. In addition to top manufacturing sectors such as textile and clothing, Vietnam’s manufacturing is also taking a more high-tech direction.
#7 Growing population
With over 95 million residents, Vietnam ranks as the 14th largest population in the world. By 2030, the population will grow to 105 million, as forecasted by Worldometers.
Together with a growing population, the middle class of Vietnam is increasing faster than of any other Southeast Asian nation.
Steadily increasing economy means bigger income which, in turn, will result in growing middle class. A market research firm Nielsen estimates the middle class in Vietnam to grow to 44 million residents by 2020 and to 95 million by 2030. This will support consumerism making Vietnam a profitable target for foreign investors.
Source: Vietnam Grocery Report 2013 – Nielsen
#8 Young demographics
Unlike in China where the population is aging rapidly, the demographics of Vietnam is young.
According to Worldometers, the median age in Vietnam is 30.8 years in contrast to 37.3 years in China. Nielsen has also estimated that 60% of Vietnamese are under the age of 35.
The workforce is young and large and shows no sign of decrease. In addition, the country also invests more money in education than other developing countries. Thus, besides being vigorous, the labor force in Vietnam is skilled as well.
#9 Relatively low setup costs
In contrast to many other countries, there are no minimum capital requirements for most business lines in Vietnam. You can start a business without having a great amount of charter capital in your back pocket. Just make sure you have enough funds to cover the planned expenses of your company set up and you are good to go.
However, note that the amount of capital you stated must be fully paid in within 90 days of the date of your company registration.
If you would like to know more about capital stipulations, see our article about minimum capital requirements in Vietnam.
#10 Competitive labor costs
Despite the yearly increase of minimum wage, Vietnam is still a country with low labor costs. Wages in Vietnam remain less than half of what the wages are in China.
The rise of wages in China has forced manufacturers to look for a market with lower labor costs. Vietnam with its low minimum wage and growing economy is a great low-cost alternative to China.
#11 Vietnam is much bigger than people realize
There are more people living in Vietnam than in most of the large countries in Europe. Vietnam’s population has already surpassed the following European countries:
Country
Population
Vietnam
95,311,829
Germany
80,636,124
U.K
65,511,098
France
64,938,716
Italy
59,797,978
Source: Worldometers
Growing solvent population together with a booming economy hide bigger investment opportunities in Vietnam than most people would realize at first.
Conclusion
These were the 11 main reasons why to invest in Vietnam. In addition to the upsides, there can also be risks, as when investing in any other country. However, as you can see from this article, the tremendous growth potential of Vietnam certainly outweighs these risks.
This article was originally published on www.emerhub.com
Author: Kerli Pärnapuu
To many people in Ho Chi Minh City, ‘ca phe sua da’ (milky iced coffee) is simply a way of life.
Driving along the street as early as 6:00 am, one can easily spot people young and old sitting by the roadside with a ca phe sua da glass in hand.
The famous and classic drink has long been part of the daily routine of the people of Saigon, the old name of Ho Chi Minh City many still prefer now.
Be they college undergrads, office workers or blue-collar employees, young people in the vibrant city love kicking off their day with a glass of milky iced coffee.
Taste it and one will never forget it. Photo: Tam Bui – Trung Nguyen
The drink has the power to ignite the brain, wake up neurons key to mental activity, relax stiff muscles after a long night’s sleep and dripping fresh energy into a new work day.
The best place for ca phe sua da should not be a fancy restaurant but a streetside (often makeshift) coffee corner with low tables and tiny plastic or folding wooden stools.
Warm air and the echoing noise of traffic intensify the taste, like the special effects of a Hollywood blockbuster.
With prices anywhere from 50 cents to less than a dollar, one can buy a ca phe sua da from any coffee vendor, mobile cart, roadside table-and-chair, or takeaway stall on just about any corner of the bustling city.
A man reads a newspaper next to a glass of ca phe sua da in Ho Chi Minh City. Photo: Tam Bui – Trung Nguyen
What sets it apart, though, is its taste and recipe.
Ca phe sua da has a sweet taste unlike that of a hot chocolate, and definitely is not so strong as black coffee.
Some have compared the Saigonese specialty to the world-renowned Baileys Irish Cream, an Irish whiskey and cream-based liquor.
But the aromatic flavor actually varies based on the proportion of milk and coffee.
Try making it and enjoy the taste. Photo: Tam Bui – Trung Nguyen
It takes only one coffee filter, pronounced ‘fin’ in the local language, which costs as little as US$1.5-3, freshly ground roast coffee at $8-15 per kg, sweetened condensed milk at $0.88/can, and boiling water (jeez, DIY!).
To make it, fill ¼ of a small cup with sweetened condensed milk, then place the filter over that cup.
Put three tablespoons of ground coffee into the filter, then pour boiling water in for brewing. Be sure to adjust the filter so that coffee can actually drip out. The recommended time for a drip is 3-5 minutes.
Once the coffee has completely covered the milk, stir the mixture well with a long spoon. Then, pour the brew into a longer glass filled with cubed, chipped or shaved ice before serving.
Young people chat while enjoying ca phe sua da in Ho Chi Minh City. Photo: Tam Bui – Trung Nguyen
There is another term popular amongst locals, especially sweet-toothed fellows. It is bac siu da.
This refers to a somewhat upside down ca phe sua da, where the sweet condensed milk outweighs the actual coffee. It is often referred to as iced coffee milk.
Whatever the level of sweetness, the drink has successfully ‘dripped’ into the daily appetite and life of a large proportion of the Ho Chi Minh City population, now hovering around 8.5 million.
For ca phe sua da lovers, a sit-down by themselves or with companions is a daily norm.
Two men play chess at a roadside coffee shop in Ho Chi Minh City. Photo: Tam Bui – Trung Nguyen
A roadside coffee cart is the ideal place for gatherings amongst college students discussing school work, the elderly gathering to tell ‘tales of the old days’ or simply some good old-fashioned people-watching.
Businesspeople even take their work there considering the low cost, easy parking and laid-back atmosphere of most outlets.
They might focus on their own work, carry out simple transactions or meet up with partners and do customer service.
The morning is not the only time when people order their iced milky coffee, however. To recharge their batteries after a tense morning shift, many also turn to the drink in the afternoon.
They may stroll out of their workplaces for a ca phe sua da under shades or in air-con, where their minds will be put to rest while the powerful sugary liquid penetrates their every fiber.
Some may not even really need the caffeine boost, but continue to drink the famous drink out of habit. For them it is ‘mission impossible’ trying to work without a fresh ca phe sua da sitting next to the mouse.
Truth be told, many people di ca phe (go for a coffee) whenever the moment calls.
A 7th grader suddenly moves to a Vietnamese school in Hanoi, but she doesn’t know how to read or write the language.
I first got a taste of Vietnamese education in 7th grade and was totally unprepared.
Before then I was a happily set, high-achieving student in Warsaw, Poland. A daughter of Vietnamese immigrants who called Polish her first language, English her second and the ‘mother tongue’ her third.
As a teenager back then I could just about keep up with a simple conversation in Vietnamese, sometimes with the aid of a dictionary. Reading and writing were out of the question.
But I didn’t know how limited my vocabulary was until that one winter day in Hanoi when I picked up a textbook for first graders in attempt to learn all those confusing accents. I knew maybe half of the words in that book.
After two months of learning my a, á, à, â, ă, ạ, ã… with a primary school tutor, I hit the second term of 7th grade at a local school. My mother didn’t want to send me to an international school. Living in Vietnam meant having to adapt.
I wasn’t (yet) an official student because the bureaucrats said I had all the required subjects for entry under my belt except for, well, Vietnamese. As ridiculous as it sounds, our neighbor was the school principal, so I just enrolled anyway.
The paperwork was the adults’ job. The teenage me had other things to worry about, such as Vietnamese literature, grammar, history, biology, geography, physics, civic education and math. Only English was easy.
I remember the shock on my teacher’s face when I told her I had never studied Vietnamese history as an excuse for not sitting a surprise test she threw on the first day of school after the Lunar New Year holiday.
During my 11 years in the land of Chopin’s mazurki, I took pride in going to a school named after Maria Sklodowska-Curie and rooting for Polish diva Edyta Gorniak at the Eurovision Song Contest.
My idea of Vietnam, on the other hand, didn’t go beyond the Vietnam War and the French occupation. My parents rarely spoke of it. When they did, it was mostly about their academic achievements despite the bombings and evacuations.
So it was hard, and not just because I didn’t know the words. Four years later in high school another history teacher chose to cut short the lesson on Chinese history because “everybody already knew it” from TV series I had never watched before.
Sometimes I asked or wrote something that would be so outright dumb for a native speaker to say that the teachers who didn’t know my background would scold or make fun of me in front of the class.
I didn’t hold a grudge against them. I mean, how likely is it for the average Vietnamese teacher to have ever taught an overseas Vietnamese student? Now I know that nobody deserves that kind of public humiliation; it took its toll on my self confidence. But that was pretty much the norm back then – a method believed to set an example for other students and compel the strugglers to try harder.
If anything, these incidents taught me that teachers are not some kind of deities who are always right, and neither are textbooks, especially after I noticed differences in how the Protestant Reformation had been interpreted in Vietnamese and Polish.
But on the other hand, it was also easy because understanding the meaning of all the words wasn’t actually that necessary to get decent grades. All I had to do was memorize key structures and ideas presented in example essays. As much as I hated it, the idealist me came to the conclusion that Vietnam didn’t teach literature at all, and I had to learn to be pragmatic. The same approach worked for virtually every subject.
Still, without help from teachers during my first year in Vietnam, I wouldn’t have ended up getting hoc sinh gioi (excellent student) status. The school’s best literature teacher agreed to tutor me extra hours and knew how to laugh off my silly mistakes.
I use the story about one of my mistakes now as an ice-breaker with new acquaintances. But another, lesser known story deserves more attention.
It was a typically hot and humid afternoon at the start of summer in Hanoi. I was writing yet another literature essay in my teacher’s tiny house where you couldn’t even fit a car. By some miracle, that essay turned out to be surprisingly good. It was a huge confidence boost as the year-end exams were approaching.
When exam day arrived, I was caught by surprise as the essay question was exactly the same one I had answered for my teacher. I was given a 7 out of 10 for my essay, the highest grade I’d ever got for a literature exam in Vietnam.
A week later, I was asked to recite a poem in class. I knew if off by heart and scored a perfect 10, which brought my overall average up to 6.5 – the minimum required to achieve ‘excellent student’ status.
I was happy. I knew I had worked really hard to go from being illiterate to a good student within six months. But whether I truly deserved that grade was another question that lingered on.
Now, as I write this essay, I realize what I had received back in 7th grade was akin to personalized learning – what is considered by today’s reformists as the future of education. Students under this system are taught according to their individual needs rather than based on a pre-defined curriculum.
Within the traditional grading system, where a student’s performance is represented by a single number, any “preferential treatment” tends to be demonized as being unfair, without due consideration of other chronic inequalities linked to privilege and other matters out of a student’s control.
Looking back, I see that it never mattered whether the actual quality of my work warranted that grade. What mattered was that my teachers made sure I could see I was progressing, for which I am forever grateful.
With its landmark registration made and international recognition given in 1994, Vietnam’s national domain .vn has seen remarkable growth over the past several years.
In 1993, Tran Ba Thai, one of the pioneers of the Internet in Vietnam, along with his group at NetNam, which became the country’s first Internet services provider, worked closely with Professor Rob Hurle and his associates from the Australian National University, a national research university in Canberra, to conduct experiments to connect computers in Vietnam and Australia through landline phone lines.
The experiments were a success, delivering the earliest experiences of the Internet to Vietnamese users, who could then use their own email boxes, though with the Australian domain .au. as Vietnam’s domain .vn had not yet been registered.
While working with agencies in the Philippines, Prof. Hurle learned that the .ph domain had been registered by an individual user, who wanted the government to buy it from him for a huge sum.
Foreseeing a similar predicament in Vietnam, he advised Thai to register for the .vn domain.
Without a direct communication channel to register for the domain at the Asia Pacific Network Information Center (APNIC), an organization that manages the assignment of Internet number recourses in Asia, Thai and Professor Tran Van Dac, then head of the Technology Development Department under the Ministry of Science, Technology and Environment, collectively approved the application and authorized Prof. Hurle to work with APNIC.
The approval was said to be a ‘courageous act,’ as the introduction of the Internet remained disputed and was even considered illegal at that time.
With the Australian professor’s assistance, the registration was a milestone.
“After securing the national domain, we established the first email server with the .vn domain now directly connected to the global grid, officially adopting it on the country’s pilot network,” Thai, the former NetNam director, recalled.
Despite the Internet not being officially recognized and licensed in Vietnam until late 1997, the Southeast Asian country had enjoyed the ownership and international recognition of the .vn domain since 1994.
The new domain came after the Australian .au domain had been ‘borrowed’ for a short time thanks to the scientists’ dedication.
The acquisition of the new domain is to this day considered a national resource by experts and leaders of government agencies.
Between 1994 and 1995, Internet users in the country could all switch to or register for second-level domains under the national .vn domain.
The Institute of Information Technology, under the current Vietnam Academy of Science and Technology, was initially in charge of the .vn domain.
NetNam, a group of scientists from the institute, was tasked with overseeing the domain until 1997.
Following the official launch of the Internet in Vietnam in 1997, the domain’s management was handed over to the National Administration of Posts (now the Vietnam Posts and Telecommunications Group).
The national Internet address is currently under the supervision of the Vietnam Internet Network Information Center (VNNIC), founded in 2000 under the Ministry of Information and Communications.
The National Server Center stationed in the central city of Da Nang. Courtesy of VNNIC
.vn subdomains
According to the latest update published on VNNIC, 418,534 .vn subdomains are currently maintained on the Internet.
More than 100 new registrations for subdomains in the Vietnamese language are now recorded each month, compared to merely a few dozen back in 1997.
Since 2000, the VNNIC has been tasked with establishing, overseeing and exploiting two key infrastructures of the country’s Internet, namely the National Domain Name System (DNS) and Vietnam National Internet eXchange (VNIX).
In the event of technical glitches that shut down the DNS for just a few seconds, access to Internet services adopting the .vn domain such as websites and emails will disappear without warning.
Nguyen Hong Thang, VNNIC deputy director, revealed that Vietnam’s server system carrying the national domain currently comprises seven server clusters.
Five of them are installed in Hanoi, Ho Chi Minh City and Da Nang.
The remaining two are placed abroad with over 70 spots in major cities across five continents which see the highest density of Vietnamese expats and the most frequent access to the .vn domain.
According to the VNNIC, the .vn domain encountered difficulties competing with its foreign counterparts between 2000 and 2005.
The percentage of websites adopting the .vn domain out of the entire .vn domain space accounts for over 50 percent, with the most common ones including gov.vn (81.31 percent), edu.vn (74.48 percent) and org.vn (68.92 percent).
The ratio of the .vn domain against foreign domains in Vietnam is currently 50-50.
For years since 2011, the .vn domain has always had the highest number of registrations across the Association of Southeast Asian Nations (ASEAN) and been listed among Asia’s Top 10.
Inside the National Server Center located in Hanoi. Courtesy of VNNIC
The national domain
.vn is the top level domain for Vietnam. Second-level domains are of equal value and meant to identify Internet addresses for servers registered in Vietnam.
The second-level domain, beneath the .vn, consists of those that are categorized and those that are not categorized into sectors, as follows:
– com.vn and – biz.vn: intended for commercial organizations and individuals
– edu.vn: for organizations and individuals operating in the education and training sector
– gov.vn: for state organizations and agencies at central and local levels
– net.vn: for organizations and individuals operating in the Internet-related sector
– org.vn: for organizations and agencies functioning in politics, culture and social issues
– int.vn: for international organizations operating in Vietnam
– ac.vn: research fields
– pro.vn: highly specialized areas
– info.vn: production, distribution and provision of information
– health.vn: medical, pharmaceutical fields
– name.vn: meant for individual Internet users
Other domain names are stipulated by the Ministry of Information and Communications.
