News Bulletin 19 - Week 4 June, 2020
Despite the continual challenges caused by Covid-19 to the country’s economy, Vietnam continues to receive encouraging news about foreign direct investments during the first two quarters of the year. Vietnam expects 2020’s GDP growth to be 4-5%. The opening of the domestic market as committed in the EU – Vietnam Free Trade Agreement (EVFTA) has also contributed to the strong penetration of foreign businesses to the domestic market recently.
Last week, Minister of Industry and Trade Tran Tuan Anh has signed Circular 11/2020/TT-BCT about rules of origin in the European Union – Viet Nam Free Trade Agreement (EVFTA) which would be an important legal basis for granting certificates of origin for goods exported to the EU to enjoy preferential tarifss provided by the trade deal.
The past week spotlight
Circular about origin rules in EVFTA issued
The circular about rules of origin in the European Union - Viet Nam Free Trade Agreement was issued. Photo by tapchicongthuong.vn
Minister of Industry and Trade Tran Tuan Anh has signed Circular 11/2020/TT-BCT about rules of origin in the European Union – Viet Nam Free Trade Agreement (EVFTA).
The circular would come into force on August 1, also the day the trade deal would take effect.
With five chapters and 42 articles, the circular would be an important legal basis for granting certificates of origin (C/O) for goods exported to the EU to enjoy preferential tariffs provided by the trade deal.
Let’s look at some other related financial and business news during the past week:
1. Coronavirus made Vietnam shut its borders. Now it's allowing flights from Japan for the first time
A planeful of Japanese business travelers landed in Vietnam on June 25, marking the first flight between the two countries since they imposed border restrictions in a bid to stop the spread of coronavirus.
Vietnam almost completely sealed off its borders to foreign nationals in March, while Japan currently bans residents of more than 100 countries and regions -- including Vietnam.
2. Finance ministry says public investment funds borrowed from abroad must be disbursed quicker
Loans borrowed from abroad for public investment must be disbursed quicker if Vietnam is to recover economically from the impacts of the coronavirus pandemic, according to the Ministry of Finance. Deputy Minister of Finance Tran Xuan Ha told a conference on Thursday that disbursing public investment funds and loans from abroad for public investment, in particular, remained key issues as huge sums must be spent in the second half of this year.
3. After years of negotiations, Vietnam finally sells lychees to Japan
Vietnam has exported fresh lychees to Japan for the first time after five years of negotiations and preparations to meet quality standards.
The first batch of three tons arrived in Japan by air on June 20, and another six tons are on their way by sea, the Vietnam Trade Office in that country said in a statement on Monday.
The fruits are being sold at supermarkets for 498 yen ($4.6) for 200 grams.
4. VEPR urges tax policies for FDI to be revised to prevent tax avoidance and evasion
Vietnam needs to revise tax and land policies for foreign direct investment (FDI) companies to ensure a level playing field for businesses.
[…] There are many channels of tax evasion and avoidance, including transfer mispricing, strategic location of intellectual properties, international debt shifting, tax treaty shopping, tax deferral, and corporate inversions.
5. Hanoi receives 36 proposals for investment cooperation worth $26b
The capital city of Hanoi as of Monday received 36 proposals for memorandums (MoU) of understanding for investment cooperation, which were estimated to be worth more than US$26 billion in total. The proposed MoUs were expected to be signed at the upcoming investment promotion conference themed “Hanoi 2020 – Investment Cooperation and Development” scheduled for June 26.
Among them, 23 proposals were from domestic companies and 13 from foreign enterprises and organisations.
6. Ministry to ask government to fund part of Hanoi – China border expressway
The Ministry of Planning and Investment wants the government to provide 39.4 percent of the cost of an expressway to the China border.
If it agrees, the government will provide VND3 trillion ($129 million) out of the VND7.6 trillion ($328 million) cost of the 43-kilometer Huu Nghi – Chi Lang Expressway in the northern province of Lang Son, which is expected to ease travel between Hanoi and the border.
7. Foxconn says Vietnam is biggest manufacturing hub in Southeast Asia
Key Apple supplier, Taiwan’s Foxconn, has said for the first time that Vietnam is its largest manufacturing hub in Southeast Asia.
Foxconn invested 6 billion New Taiwan dollars ($203 million) in Vietnam in 2018 and 2019, and NT$11 billion ($372 million) in India in the same period, said by Young Liu, its chairman.
8. No chance of resuming international flights in July: experts
Vietnamese carriers’ plans to resume international flights next month will come to naught, given fresh Covid-19 outbreaks in Asia and other factors, experts say. "In this current situation, the reopening of international commercial flights from July 1 as planned by Vietnamese carriers in which passengers are not subject to the 14-day quarantine is unfeasible," Luong Hoai Nam, member of the Tourism Advisory Board (TAB), told VnExpress.
9. PM approves suspension of Bac Van Phong SEZ plan
PM Nguyen Xuan Phuc has approved the suspension of a master plan to develop the Bac Van Phong special economic zone in Khanh Hoa Province until the National Assembly agrees to pass the law on special administrative and economic zones.
10. Vietnam delays hike in public sector wages
Vietnamese lawmakers have postponed the 7.4 percent wage hike for civil servants scheduled for July over Covid-19 pressures on the budget.
They have also asked the government to fix another date for the hike depending on the socio-economic situation.
Under the approved hike, monthly base wages of civil servants and public employees would go up from VND1.49 million ($64) to VND1.6 million ($69).
Want to know more?
Our Tax and Legal updates newsletter
Mazars Host & Co-host events
Co-hosted Seminar - October 2020
On 23 October 2020, Le & Associates, together with Mazars Vietnam, VCCI, HAWEE and Business Chambers will be hosting a seminar on the topic "HR Forum: Moving forward to the next normal" with the participation of leading experts in HR, business and advisory.
Co-hosted Webinar - September 2020
On 1 September 2020, Mazars in Vietnam will be joining a webinar on the topic "Ba Ria-Vung Tau: The Next Industrial and Logistics Hub in South Vietnam" hosted by Savills Vietnam and Phu My 3 Industrial Park.
Mazars Webinar - August 2020
On 5 August 2020, Mazars in Vietnam will be hosting a webinar on the topic "Investments and supply chain pivot to Asean countries" with the participation of Mazars representatives from Singapore, Vietnam, Thailand, Malaysia, Indonesia and the Philippines.