While the ongoing pandemic is taking a severe human and economic toll worldwide, economic recovery in Vietnam has restarted in earnest, with support from a variety of government policies. Last week, the Vietnamese Government released Resolution No. 68/NQ-CP relating to cutting or simplifying at least 20 per cent of the current regulations on business through 2025.
The past week spotlight
Gov’t to cut, simplify at least 20 per cent regulations on business
Gov’t to cut, simplify at least 20 per cent regulations on business. Illustration Photo
The Vietnamese Government will cut or simplify at least 20 per cent of the current regulations on business through 2025, according to Resolution No. 68/NQ-CP released on Wednesday.
In 2020, the Government targets to launch a statistics system to control business regulations and improve capacity of staff in charge of calculating compliance costs and evaluating the business regulations.
Ministries and Governmental bodies are assigned to adopt and implement annual plans on reduction and simplification of business-related regulations in order to rule out the regulations that hinder business operations.
Let’s look at some other related financial and business news during the past week:
1. PM permits re-opening of sub-border gates with China
The Prime Minister has allowed the re-opening of sub-border gates and border crossings to resume trading activities between Viet Nam and China, according to the Ministry of Industry and Trade.
The permission has been issued according to the proposals from the ministry and people’s committees of Lang Son and Quang Ninh provinces on restoring those activities to get back to normal at border gates between the two countries.
The National Assembly Standing Committee has agreed to stage a vote on adoption of two hallmark bilateral trade and investment agreements between Vietnam and the EU, taking both sides closer to enshrining the new basis for far tighter trade and investment ties.
3. Singapore becomes biggest investor in Vietnam during Jan-April
Singapore rose to become the biggest foreign investor in Vietnam in the first four months of 2020 with 5.07 billion USD, accounting for 41 percent of the total.
Foreign investors poured 12.33 billion USD in total into Vietnam during January-April, a year-on-year decrease of 15.5 percent due to the impact of the COVID-19 pandemic. The period saw 984 new foreign-invested projects licensed with a total registered capital of 6.78 billion USD, down 9.1 percent in term of number of projects but up 26.9 percent in value year-on-year.
4. Vietnam further cuts policy rates to mitigate coronavirus impact
Vietnam cut its policy rates for a second time in two months on Wednesday as it seeks to boost growth amid the coronavirus pandemic.
The State Bank of Vietnam reduced the refinancing rate from 5 percent to 4.5 percent and the discount rate cut from 3.5 percent to 3 percent. The dong deposit rate cap for terms of one to six months has been reduced from 4.75 percent to 4.25 percent.
5. No new airlines until aviation market recovers: VN Transport Ministry
Viet Nam will temporarily halt the consideration of new airlines until the aviation market has recovered from the COVID-19 pandemic, according to Minister of Transport Nguyen Van The.
Priority would be given to recovering the aviation market, resuming flights and removing the difficulties of exiting carriers while the foundation of new carriers would only be considered after the market recovered, The said.
To guarantee the transparent and unified implementation of the country’s investment incentive policy, the Vietnamese government is trying to resolve an impasse around the transitional treatment of tax incentives for projects manufacturing prioritised supporting industry products.
7. MPI Minister: Opportunities for breakthrough growth
Minister of Planning and Investment Nguyen Chi Dung advised the government to implement numerous solutions quickly to enable businesses to seize valuable opportunities for economic recovery and sustaining growth.
[…] These difficulties include the double challenges of a shortage of input materials and limited output markets for consumption and exporting, especially for sectors participating deep in global supply chains. The minister also predicted that more mergers and acquisitions deals could take place in the time coming, and local companies could be acquired at a very cheap price.
9. Trade defence instruments important to Vietnam’s open economy
Strengthening the application of trade defence instruments would be necessary for Vietnam, which was among countries with the highest economic openness level, according to the Ministry of Industry and Trade.
Viet Nam established free trade relations with 55 countries through the signing of 14 free trade agreements (FTAs), 13 of which were already in force, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
10. VN support industry finds it hard to attract foreign investment
Vietnam's support industry is struggling to attract foreign investment as multinational companies look for alternative options during the COVID-19 pandemic.
That was the message from the Vietnam Association of Support Industry (VASI) who said most of their members are small-scale and they fall short when it comes to meeting demands of companies looking to move to Vietnam.
Mazars Vietnam together with MoF, Smart Train and ACCA Vietnam will be hosting a webinar named “How to apply IFRS and tips for successful conversion”. This webinar is designed with the purpose of helping a wide range of entities in IFRS conversion.
The business landscape in the last year has changed, with many being moved out of their comfort zones and regularities. As businesses focus on re-calibrating and driving new possibilities, human capital remains equally, if not more, important.
The COVID-19 pandemic is a constantly evolving global health crisis that is creating a huge range of challenges for individuals and businesses around the world. As governments take unprecedented action to prevent the spread of the virus, businesses are facing an ever-more complex environment to operate within.
The Covid-19 outbreak has caused major disruption around the world and our Mazars accross the globe have responded with agility and resilience. In these troubled times, we want to be closer than ever to our clients and support them with relevant advice and insights.