News Bulletin 22 - Week 3 July, 2020
The new wave of foreign investment continues on post Covid-19 during the first half of the year. Regarding foreign investment attraction, last week, the Law on Investment, Law on Enterprises, and Law on Public-Private Partnership (PPP) investment were revised to contribute to completing the legal framework, creating transparency and a harmonious legal framework for trading and business in Vietnam.
The past week spotlight
Ministry of Planning and Investment introduces three new laws
The three new laws will provide a more harmonious legal framework for investment and business
The revised Law on Investment, Law on Enterprises, and Law on Public-Private Partnership (PPP) investment will contribute to completing the legal framework and creating transparency and a harmonious legal framework for trading and business in Vietnam.
The revised law clarifies the principles and conditions of applying incentives, with the incentives dependent on the efficiency of project implementation.
The prime minister will be allowed to provide special incentives to lure foreign investment inflows coming from the relocation of production facilities to the ASEAN, including Vietnam. However, the added incentives are not permitted to exceed the highest incentives laid out in the existing regulation by more than 50 per cent.
Let’s look at some other related financial and business news during the past week:
1. Oxford Economics forecast Vietnam’s GDP to grow 2.3 percent in 2020
Vietnam’s effective containment of COVID-19 should allow it to make a quicker rebound than most other economies in the region and its GDP growth can be around 2.3% this year, Sian Fenner, an economist from Oxford Economics wrote in a July 14 report.
2. ASEAN-wide tax race for FDI a road leading into the abyss
ASEAN countries should stop offering aggressive tax incentives in order to attract foreign funds, as it could create an unfair business climate among enterprises and lead to an acute state budget deficit.
3. Vietnam begins coal import from US
Vietnam has received its first coal shipment from the U.S., paving the way for further imports amid rising demand to produce electricity.
Over 21,700 tons arrived this month in the northern province of Quang Ninh from California, state-owned coal mining company Vinacomin said in a statement on Wednesday.
4. Hundreds of millions of USD poured into startups despite Covid-19
Contrary to all predictions, Vietnam’s startups continue to receiving investment capital, though Covid-19 has caused investors to become more cautious.
Investors from South Korea, Japan and Vietnam have confirmed investment of $8 million in OnPoint. With the latest investment deal, the total capital the startup has received is an 8-figure number.
5. Vietnam ranks second in Southeast Asia for M&A transactions
The country has risen to the second place in terms of mergers and acquisitions (M&A) transactions with total domestic investment of US$872 million, the majority of which was driven by US$651 million worth of investment from Vinhomes, received from KKR Group, the second largest investment deal to date.
6. Vietnam struggles to have 5,000 science and tech firms this year
Vietnam would have difficulty achieving the goal of having 5,000 science and technology enterprises this year under the 2011-20 science and technology development strategy.
7. Vietnam tightens corporate bond regulations
The Vietnamese government has issued a new decree that effectively limits companies to no more than two bond issuances a year.
They may now only issue bonds six months after the previous issue is completed, and an issuance must be completed within 90 days from the date of public announcement of the issue, the recently issued decree, which comes into effect from September 1, stipulates.
8. Vietnam's electronics exports face difficulties due to COVID-19
The electronics industry in the last six months of the year is forecasted to be still greatly affected by the COVID-19 pandemic, which reduces demand in the US and European markets.
9. Trade Ministry proposes opening fuel market to foreign retailers
The Ministry of Industry and Trade has sent the Government a draft decree amending and supplementing certain articles of Decree 83/2014 on petrol and oil trading, proposing allowing foreign investors to enter the country’s fuel retail market.
10. HCM City seeks developers for nearly 300 PPP projects
HCM City is expected to reconsider projects under the public-private partnership investment form meant to combat flooding and land subsidence and resettle people living along canals when new regulations for PPP come into effect.
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