News Bulletin 21 - Week 2 July, 2020
As a result of its economic resilience and success in bringing the novel coronavirus pandemic under control, many investors are considering Vietnam as a safe investment destination after the Covid-19 pandemic. During the past week, the Vietnamese National Assembly has adopted the new Law on Investment, with new rules in favour of foreign investment, including from the US, which is expected to surge in Vietnam in the time to come.
The past week spotlight
Amended law alters funding landscape
The new Law on Investment required a rework to fit the investment environment of a rapidly-growing nation, Photo: Le Toan
The Vietnamese National Assembly has adopted the new Law on Investment, with new rules in favour of foreign investment, including from the US, which is expected to surge in Vietnam in the time to come.
The Law on Investment 2014 will be replaced after being in effect for five years, during which time it has helped to shape the current positive investment environment. On June 17, the Vietnamese National Assembly passed the new Law on Investment No.61/2020/QH14, effective from January 1 next year.
The new Law on Investment maintains the fundamental principle that domestic and foreign investors can continue to carry out investment in industries and trades which are not prohibited. In that connection, the new Law on Investment reduces to 22 the conditional sectors. For the conditional sectors, investors are required to meet specific statutory conditions.
Let’s look at some other related financial and business news during the past week:
1. Government report-information system to be launched next month
A government report information system will be launched on August 15, heard a meeting chaired by Minister and Chairman of the Government’s Office Mai Tien Dung and held in Hanoi on July 8.
The system is in service of the Government and Prime Minister’s administration directions. It will also serve as a communication channel to promote connection within the State administrative agencies.
2. Fitch Ratings says Vietnam outperforms among Asia’s frontier sovereigns
According to Fitch Ratings, Vietnam is positioned to stand out among Asia’s frontier and emerging markets this year as a result of its economic resilience and success in bringing the novel coronavirus pandemic under control.
3. Bank accounts of local advertisers to be drained for Facebook and Google tax arrears
Dozens of thousands of local advertisers of Facebook and Google are on edge since the Law on Tax Administration has come into force on July 1. Under the new tax law, banks are allowed to deduct taxes for cross-border service suppliers on their earnings from Vietnam following Clause 27 of the Law on Tax Administration.
4. Eased regulations set up EVFTA agriculture benefits
Though Vietnam’s agricultural sector will receive attention from the forthcoming EU-Vietnam Free Trade Agreement, it needs to overcome some challenges to enjoy optimum preferential treatment. […] In the time to come, Vietnamese rice products will see mostly duty-free tariff quotas as soon as EVFTA is implemented.
5. M&A set for a bustling second half
M&A deal-making will probably increase at a steady pace in the second half of 2020, led by the upcoming mega deal of Vietnam’s leading brewer Sabeco.
6. State audit on the right track to realise Moscow Declaration
Deputy Auditor General of the State Audit Office of Vietnam (SAV), Nguyen Tuan Anh, talks about his office’s contributions in strengthening independent external oversight on the achievement of nationally agreed goals.
7. Vietnam activates new wave of reform to lure foreign investors
Preferential tariffs and incentives for land access are not enough to woo investors looking to move operations out of China, experts say.
In recent months, there has been much information about the departure of foreign investors from China in the movement to restructure global supply chains. These investors are expected to head for India and Southeast Asian countries, including Vietnam.
8. Vietnam’s labor market: opportunities as well as challenges
The ASEAN Economic Community (AEC) and FTAs have brought more job opportunities to workers but also challenges as Vietnamese workers will have to compete with international staff in the home market.
A study of ILO International Labor Organization) and ADB (Asian Development Bank) found that AEC would help Vietnam’s GDP grow by 14.5 percent more by 2025 and the number of jobs increase by 10.5 percent.
9. Thai firm buys two wind power farms in Vietnam
Gulf Energy Development PLC of Thailand has announced the purchase of two wind power farms worth US$200 million in Viet Nam. The move aims to take advantage of low building costs and a quick return on investment.
10. Nearly 7 million USD of public investment disbursed in six months
Disbursement of public investment in the first six months of 2020 amounted to nearly 156 trillion VND (6.73 million USD), fulfilling 33.1 percent of the plan set by the National Assembly and the Prime Minister, higher than the 28.56 percent recorded in the same period last year, according to the Ministry of Planning and Investment.
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