News Bulletin 54 - Week 2 March, 2021

As the biggest city and commercial hub of Vietnam, Ho Chi Minh City usually attracts a big chunk of foreign direct investments into the country. During this past week, the city announced that it targets up to us$5.4 billion foreign direct investments into Ho Chi Minh City for 2021. The government itself plans to improve infrastructure and streamline administrative procedures to facilitate investments.

In regulatory news, the government announced that it is looking for ways to tax ecommerce sellers based outside Vietnam that are operating inside the country.  The new Law on Tax Management No.38/2019/QH14 targets overseas e-commerce businesses operating in Vietnam by requiring these businesses to register, declare and pay taxes in Vietnam.

The past week spotlight

Another support package to accelerate business rebound

With the gradual recovery in the confidence of the business community in the first two months of the year, continued support for enterprises is needed to help them stay afloat and weather the storm.

However, PM Phuc noted that despite the economy gradually bouncing back and businesses recovering, further support from the government is extremely necessary.

Since the second quarter of 2020, the government has been deploying drastic measures to support businesses. For example, the State Bank of Vietnam unveiled a package worth VND180 trillion ($7.82 billion) for enterprises and households, in the form of debt payment deferrals and preferential loans.

See full details here

Let’s look at some other related financial and business news during the past week:

1. HCM City mulls ways to attract global investors, targets $5.4b FDI

HCM City has set itself an FDI target of US$5.4 billion this year and would focus on improving infrastructure and streamlining administrative procedures to achieve it, a city investment official said.

See full details here

2. Hai Duong to build $84 million industrial park

An Phat High-Tech Industrial Park No. 1, with a total planned funding of VND1,947 billion ($84.2 million), was granted an investment registration certificate on Friday.

An Phat High-Tech Industrial Park No. 1, a member of An Phat Holdings (APH), will be the developer of the industrial park.

See full details here

3. VN hopes to tax overseas sellers on e-commerce platforms

The Vietnamese tax watchdog hopes to tax sellers based in foreign countries but operating e-commerce businesses in Việt Nam.

See full details here

4. More stimulus to allure capital into science and technology investment

New policy moves are expected to encourage more firms to embrace science and technology investment while also supporting firms through tax incentives.

See full details here

5. 35 pct of businesses lay off workers due to pandemic

Thirty five percent of businesses had to let staff go after being hit by the effects of the Covid-19 pandemic, which disrupted supply chains, a survey has found.

The dwindling number of workers was one of the four major difficulties businesses faced during the pandemic, the others being difficulties in approaching customers and disruptions in cash flows and supply chains, the survey, done by the Vietnam Chamber of Commerce and Industry (VCCI) and the World Bank, said.

See full details here

6. VN-Index surges as foreign net selling value falls

Vietnam’s benchmark VN-Index surged 1 percent to 1,181.73 points Thursday as foreign investors’ net selling value narrowed.

The index stayed in the green throughout the day, mostly in the 1,180 range. It ended with a 11.65-point gain, the first double-digit increase in the last eight sessions.

See full details here

7. Malaysian firm to buy stake in five solar farms in Vietnam

A subsidiary of Malaysia’s largest power utility, Tenaga Nasional Berhad, plans to acquire a 39 percent stake in five Vietnamese solar power projects from Singapore’s Sunseap Group.

The farms were built last December in southern Vietnam and have a total capacity of 21.6 MW.

See full details here

8. WB, Green Climate Fund help Vietnam spur energy efficiency investments

The World Bank (WB), acting on behalf of the Green Climate Fund (GCF), has signed a 11.3-million-USD grant with the State Bank of Vietnam to support the development of a commercial financing market for industrial energy efficiency investments.

See full details here

9. Investors association wants foreign execs to run Vietnam’s main stock exchange

Vietnam Association of Financial Investors has called for replacing the Ho Chi Minh Stock Exchange’s managers with foreigners to deal with its chronic overload.

The bourse (HoSE) has been unable to cope with the daily transaction volume for three months now, and the blame for this lies with the poor management, the association (VAFI) said in a letter to the Ministry of Finance.

See full details here

10. Vietnam continues to be key overseas production base of global giants

The country needs to well prepare for conditions to compete with its rivals in attracting foreign investment.

South Korea’s LG Electronics Inc. announced that a Vietnamese factory in the northern province of Hai Phong and one in Nanjing (China) are two major sites in its automotive electronics productions abroad.

See full details here