In the first month of 2021, there were several new regulations and policies recently published that came into effect, creating positive conditions for enterprises to boost their operations, product scales, and import-export quantity. Furthermore, with preferable incentives to be applied, a number of foreign investments to Vietnam is expected to rise high in 2021.
It is noticeable that an amended Law on Investment was taken effect on January 1, brought out notable guidelines for enterprises to do business in Vietnam.
The biggest news coming out the past week was Foxconn investing 270 million USD in Bac Giang, Vietnam to produce Macbooks and Ipads, thus continuing the global supply chain shift to Vietnam.
The past week spotlight
Foxconn invests in 270-million USD laptop plant in Bac Giang
Foxconn Singapore PTE Ltd will build a 270-million USD plant to produce laptops and tablets at Quang Chau industrial park in the northern province of Bac Giang.
The company was among four projects of Singaporean and Hong Kong investors with total capital of nearly 570 million USD awarded investment certificates at a ceremony on January 18.
Let’s look at some other related financial and business news during the past week:
1. Amended investment law eases pathway to carrying out big business in Vietnam
Together with the Law on Enterprises, the new Law on Investment took effect on January 1, with the latter aiming at creating a favourable legal framework to support and promote investment activities and economic development, while also making sure that previous overlaps and inconsistencies are reduced.
The new Law on Investment 2020 officially came into effect at the beginning of this month, as Vietnam is currently part of 14 bi- and multilateral free trade agreements, each with their own commitments to open markets. However, the new law, in addition to the important task of simplifying administrative procedures on investment and business to minimise costs for investors, must also meet requirements of state management, especially when it comes to foreign investment.
2. Decree 145 guiding provisions of Labor code 2019 on labor conditions and labor relation
On 14 December 2020, the Government promulgated Decree No. 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code regarding labor conditions and labor relation (“Decree 145”). Such Decree provides for labor management, labor contract, labor outsourcing, dialogue at workplace, salary, working hour & rest hour, labor discipline & material liability, female employees & gender equality, domestic worker and labor dispute.
3. Agricultural exports set to join more global value chains as new FTAs take effect
Minister of Industry and Trade Tran Tuan Anh, who is also Chairman of the Vietnam - US Trade and Investment Framework Agreement (TIFA) Council, has held phone talks with US Trade Representative (USTR) Robert Lighthizer to discuss bilateral economic and trade issues.
4. Amend Decree 64: Must notify the locality when coming to charity
The Ministry of Finance has just completed a draft decree related to the mobilisation and distribution of charitable donations, in which it is proposed that organisations and individuals must make public and transparent these revenues.
5. Two more Vietnamese dairy producers licensed to export to China
Two more Vietnamese dairy producers have been granted with transaction codes for exporting their products to China by the Chinese General Administration of Customs, said the Ministry of Industry and Trade’s Asia-Africa Market Department on January 11.
Kolon Industries, an industrial materials producer of the Republic of Korea (RoK), on January 12 said it will expand its tire cord plant in Vietnam to increase exports from the Southeast Asian country, the Yonhap News Agency reported.
9. EU investors to pour $1 billion into logistics center in Phu My
Many big investors from the EU have expressed a willingness to invest $1 billion in a logistics center in Phu My. he Ba Ria – Vung Tau provincial People’s Committee has sent a report to the Government Office about the Cai Mep Ha Logistics Center project in Phu My.
On 18 June 2021, the Ministry of Finance issued Circular 45/2021/TT-BTC (“Circular 45”) providing guidance on the implementation of Article 41 of Decree 126/2020/ND-CP (“Decree 126”) dated 19 October 2020 of the Government on the application of the Advance Pricing Agreement (“APA”) on tax administration for companies having transactions with their related parties.