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BUSINESS IN BRIEF 4/1
Tet
shipments for Vietnamese abroad on the rise
Businesses
are busy shipping their special commodities for Vietnamese nationals residing
overseas as the traditional lunar New Year (Tet) festival is drawing near.
The
Big C supermarket announced on January 2 that it is exporting four containers
of Tet specialties to French Groupe Casino-invested supermarket chains in
Tran Thanh
Phu, director of Tan Dong Co. Ltd., said that the company has exported
approximately 2 tonnes of Chung cake and other specialty rice cakes to the
European market in addition to significant quantities of frozen and dried
food.
Other
Hanoi-based companies are also actively promoting Vietnamese goods to foreign
markets. For example, Huong Canh Co. Ltd. has exported two containers of
pickled onions to Japan while Vinamit Joint Stock Company is preparing to
ship 20 tonnes of dried farm produce to the US, Canada and China, alongside
new products such as dried lotus, soya beans and black beans.
Many
supermarkets and businesses in
Do Kim
Dung who is in charge of purchasing frozen and fresh products for Metro Trade
Office said that Metro Cash & Carry Vietnam, Metro Trade Office in
Last
year, Metro Cash & Carry Vietnam directly purchased farm produce valued
at over US$6 million from
The
figure is down 4.45 percent from the 2013 estimate but it is still a tough
task for the city considering a slew of new policies that can affect
collection of taxes and fees, according to Director of the municipal
Department of Finance Dao Thi Huong Lan.
Speaking
at a conference on January 2 on measures to carry out tasks in the New Year,
Lan cited the amended Law on Corporate Income Tax as an example. Under the
law, corporate income tax is revised down to 22 percent from the previous 25
percent. The value-added tax (VAT) has also been cut, and automobile
registration fee is reduced from 15 percent to 10 percent.
Chairman
of the municipal People’s Committee Le Hoang Quan urged departments, agencies
and districts to devise their concrete plan so as to achieve the targets set
for the year.
He
noted that while the quota for State budget collection is lower than that of
2013, caution is needed and all possible economic developments should be
taken into account.
The
city mayor also required sectors and local administrations to come up with
ways to stimulate production while promoting trade both at home and overseas
markets.
Attention
will continue to be paid to health care, education-training, culture,
science-technology and social welfare, he said.
Last
year,
This
year, the city aims for a GDP growth of 9.5-10 percent and a 10 percent
increase in export turnover. The rate of poor households according to the new
poverty line of US$760 a year is projected at 6.8 percent.
Gov’t
intensifies crackdown on trade fraud
The
government has asked relevant ministries and localities to adopt tougher
measures to combat smuggling and trade frauds during the coming lunar New
Year (Tet) holiday.
The
government office on January 2 announced Deputy Prime Minister Nguyen Xuan
Phuc’s conclusions at a recent meeting that smuggling and trade frauds are
complex in the lead up to the Tet holiday, and opportunists make full use of
legal loopholes and lax management to corner the market, injuring production
and damaging people’s health.
Phuc
asked designated agencies to work closely together to prevent smuggling and
related activities in hotspots such as border areas and big cities.
He
stressed the need to keep a close watch on the production, transportation and
trading of goods to nip any market law violations in the bud.
It is
also essential to strictly deal with violations and impose heavy punishment
on officials who are found attempting to cover up such violations, he added.
The
Deputy PM suggested increasing capacity for market management officers, and
honouring those who uncover and assist the government to bring smuggling and
trade frauds to light.
Restrictions
on foreign currency tightened
The
State Bank of Vietnam (SBV) has issued regulations on restricting the use of
foreign currency in the country.
Under
Circular 32/2013/TT-NHNN, in the territory of Vietnam, except for cases
allowed, all transactions, payments, quotations, advertisements, pricing,
prices in contracts, agreements and similar forms (including conversion or
adjustment of prices of goods and services, the value of contracts and
agreements) of residents and non-residents will not be allowed to be
conducted using foreign currency.
Currently,
Circular 16 also specifies those cases in which foreign currency exchanges
are allowed in Vietnam and in which banks, non-bank credit institutions and
branches of foreign banks licensed to do business and provide foreign
exchange services are allowed to perform transactions, payments, quotations,
advertisements, pricing, prices in contracts, agreements in foreign exchange
within the scope of business and foreign exchange services permitted by the
State Bank of Vietnam (SBV) in accordance with the law.
Other
cases that allow foreign exchange transactions will be considered and
approved by the SBV Governor based upon actual situations and the necessities
arising with each case.
The
Circular will take effect on February 10, 2014.
The
central bank recently confirmed that it will seek to maintain the dollar/dong
exchange rate to within 2 per cent of current value next year. This follows
the dong being depreciated by 1 per cent in 2013.
The
central bank weakened the dong by 1 per cent against the US dollar in June
last year, in what it said was a move to accurately reflect supply and demand
on foreign currencies.
No
gov't back up for foreign loans
The
Vietnamese Government will not be responsible for foreign loans that it has
not guaranteed, according to a new prime ministerial decree.
The
decree will come into effect on February 15, 2014.
Borrowers
impacted by the new decree include enterprises that have been established and
are operating under the Enterprise Law, credit institutions and foreign bank
branches operating under the Law on Credit Institutions, or co-operatives and
co-operative associations operating under the Law on Co-operatives.
The
decree requires the State Bank of
Their
findings will be the basis for the Prime Minister to approve ceilings for
enterprises' foreign loans and repayments.
In
case the market requires increases in capital mobilisation, surpassing the
limit for enterprises' self loans and repayments, requests should be
submitted to the Prime Minister for a final decision.
The
borrowers also have to report their capital withdrawals and payments of
foreign loans, and repaying signed by themselves, as requested.
Ministries
and SBV will be responsible for keeping track of cash flows related to
foreign loans and carrying out regular inspections, examinations and
supervision.
Individuals
and organisations violating the decree's regulations will be liable for
administrative penalties or could be held criminally responsible.
Manufacturing
output rises at fastest pace, says HSBC
The
Meanwhile,
purchasing activity rose at the fastest pace in the series history. The rate
of input cost inflation accelerated slightly, but manufacturers lowered their
output prices in an attempt to support growth of new business, said the
report.
The
headline seasonally adjusted PMI – a composite indicator designed to provide
a single-figure snapshot of operating conditions in the manufacturing economy
– posted 51.8 in December, up from 50.3 in November. The reading signalled a
fourth successive monthly improvement in operating conditions, and the
second-strongest in the history of the series.
New
orders increased for the third time in the past four months during December
as panellists reported improving client demand. Moreover, new business rose
at a pace that was only slightly slower than October’s series record. On the
other hand, new export orders decreased for a second consecutive month.
Growth
of new orders led firms to raise their production. Stocks of finished goods
fell solidly as firms delivered products to customers. The depletion of
post-production inventories was the strongest in seven months.
HSBS
said rising workloads had a positive impact on employment in December, with
the rate of job creation picking up to the strongest in three months.
Meanwhile, the rate of expansion of purchasing activity hit a record high as
panellists reported a greater need for inputs in response to rising client
demand.
Input
prices increased further in December, with some panellists linking inflation
to a scarcity of raw materials. In contrast, manufacturers lowered their
output prices for the first time in three months. According to panellists,
attempts to encourage new business had been behind the fall in charges, while
competitive pressures were also mentioned.
HSBC
Asia Economist Trinh Nguyen said the manufacturing sector continues to punch
its weight in stabilizing growth in
“The
rise of the new orders sub-index is a sign of gradually rising domestic
demand, albeit slowly. The new export orders index improved slightly but
external demand was still a drag. We expect demand for employment and
quantity of purchases to offset sluggish growth in other sectors. We expect
2014 to be a slightly better year, with the manufacturing sector providing an
anchor,” she predicted.
Of the
total, US$14.3 billion came from newly registered projects, up 70.5%, and
US$7.3 billion was worth of additional capital from 472 operational projects,
up 30.8%.
FDI
businesses also disbursed US$11.5 billion in 2013, representing a 9.9% rise
over 2012.
The
manufacturing and processing industries topped the FDI list, with 605 newly
licensed projects and combined new and additional capital of US$16.64
billion, or 76.9% of the total value.
Thai
Nguyen province in the north was
Thanh
Hoa province in the north-central region came in second, with US$2.92
billion, and
FDI
businesses raked in US$88.5 billion from exports (including crude oil), a
22.4% year-on-year improvement, and making up 66.9% of the country’s total
export value.
These
businesses also enjoyed a trade surplus of nearly US$14 billion last year.
The
Ministry of Industry and Trade has updated the public on its latest
international cooperation efforts and progress in ongoing trade agreement
negotiations.
It has
completed the final draft on international economic integration outlook
towards 2020, including the “trade and services” and “investment” chapters of
the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) as well
as the necessary preparations for signing the ASEAN-India Free Trade
Agreement.
The
Ministry announced plans to begin bilateral free trade agreement negotiations
with the
American
Chamber of Commerce (Amcham) in Vietnam Managing Director Adam Sitkoff told
Tuoi Tre news wire many American businesses have been involved in all 19
Trans-Pacific Partnership (TPP) Agreement negotiations.
Vietnamese
Ambassador to the US Nguyen Quoc Cuong admitted American business interests
are proportionately over-represented in TPP negotiations.
He
warned
Tender
law offers value for contractors’ money
The
National Assembly has adopted the Law on Tendering or the Law on Public
Procurement, which is expected to encourage a more competitive environment
for government bid packages. Le Net and Thai Huynh Ngoc Kim Ngan at LNT &
Partners take some highlights on the document, passed on November 26, on
Vietnam Investment Review.
The
Law on Tendering will come into effect on July 1, 2014. Notable changes
include the repealing of Section 1, Chapter VI of the Law on Construction
(N°16/2003/QH11) and Article 2 of the Law Amending and Supplementing a Number
of Articles of the Law relating to Capital Construction Investment
(N°38/2009/QH12). With these changes, the new law will resolve the overlaps
between the Law on Tendering and other laws such as the Law on Construction.
Aimed
at addressing certain loopholes and issues related to the current legal
framework on procurement, the new Law on Tendering was intended to provide
new provisions to clarify these issues. It devotes a separate chapter to each
of the following subjects:
Selection
via online or e-procurement mechanisms to help simplify the bidding process
and implement legislative information disclosure requirements for better
transparency throughout the bidding process and project implementation;
Several
options, including application of modified criteria (specifically on cost and
contractor qualifications), in the evaluation of bidding dossiers by bidding
organisers; and
Involvement
of foreign contractors being made subject to two new conditions; namely, that
they must (i) work in partnership with a Vietnamese company or sub-contract a
local company; and (ii) employ only foreign workers when there are no
qualified Vietnamese workers available for the project.
As
such, the amended provisions are also designed to support local contractors
participating in international projects. In addition, the Law on Tendering
also includes many new terms and some new principles that aim to actively
enhance competitiveness, decentralise public procurement and promote
anti-corruption measures. It also introduces a new scope of application for
official development assistance (ODA) projects. It is expected that the
implementing regulations will rein in ODA projects to a more efficient level.
Ideally, the regulations aim to determine the steps towards controlling
procurement activities, ensuring fairness between the parties, and limiting
corruption.
There
are two examples where the Law on Tendering has proven its efficiency.
Total
estimated costs and the procedure for bidding supplements
During
the process of implementing the winning package, contractors often apply to
adjust costs of the project scale related to the bid cost adjustment. Actual
evidence shows that many projects are won by bids that are deliberately
lower, but which later apply for an adjustment in the scale of investment
leading to increased levels of investment. Therefore, this new regulation is
intended to overcome this issue, through the appointment of sub-contractors
via bidding. As a result, this regulation should contribute to restricting
wastage of the state budget.
Responsibility
of competent persons in bidding and direct appointment of contractor
Regarding
the determination of competent persons, the regulation as described in
Article 4(3) is a step forward. This allows quick decisions to be made on
small packages. To avoid the downside of this regulation, the responsibility
of the authorised individual is clearly defined. As a result, this restricts
the abuse of power by an authorised individual, closes a loophole and creates
a healthier bidding environment.
However,
apart from progress on this issue, there remain a number of practical issues
that should be supplemented and rectified in the decrees implementing the
law.
Broad
definition of state capital
The
provisions of the applicable object are always a matter of controversy and
present an interesting point. This law provides that procurement activities
include “implementation of investment projects developed by organisations
other than those specified in points a and b of this paragraph may use state
capital, capital of state-owned enterprises, 30 per cent or more or less than
30 per cent but more than 500 billion VMD in total investment of the project
be approved”.
Article
4(44), closely outlines the definition of “state capital”. The law defines
state capital to include both equity and loan capital for the purposes of
this provision, including capital of State-owned enterprises or loans that
are guaranteed by the state or secured against state assets. Due to this
broad definition, most private public partnership projects (PPP) may fall
into the scope of this application, because most public infrastructure
projects may require state guarantees.
Consequently,
the status of state capital under this law poses a great challenge to the
current legal framework. As a result, different types of “State capital”
outside the traditional meaning of “state capital” will be restricted. The
broad application of this law may further delay the implementation of many
projects to organise tendering, such as joint ventures between foreign
investors and state owned enterprises, or PPP projects in which the State
participates.
Time
is not the only concern with the Law on Tendering. Quality is also an issue
because it could be compromised by cost. Assessment methodology bids as
described in Article 38 (1) of the Law on Tendering introduced lowest cost
methods. This method is commonly used in a number of developing countries.
However, in theory, businesses cannot simultaneously meet the multiple
requirements of better quality and cheaper prices. Regrettably, the new law
still follows the “cheap price” approach, which may turn out to be expensive
in the long run because of low product quality.
The
low price approach may also be paralysed by price adjustment provisions in
the granting of the project. We understand that an adjustment in prices is
“unavoidable” because the country’s macro-economy is still unstable. However,
the particular price may be flexible, but the total price should be fixed,
since all the risks, such as the escalating price of materials and labour
costs, should be taken into account in the bidding price from the start. In
reality, the adjustment of prices has led to the situation where the prices
of all projects have been driven up to levels higher than the bids with many
contractors intentionally delaying the construction process to have the
prices adjusted.
Managing
direct appointment of contractors
The
method for the direct appointment of contractors should reflect real world
practices but at the same time, promote openness, transparency and prevention
of corruption in the bidding process. This is a significant change from the
former Law on Tendering in that it now prescribes fixed price, cost
evaluation and technical and cost methods.
The
consideration should also be made when adding provisions that ensure
objectivity, transparency, efficiency and limiting of corruption to the
lowest price method. For that purpose, the law provides that the direct
appointment should be adopted in simple or small-scale cases. However, what
packages should be deemed as simple or small-scale? The current regulations
are quite unclear, leading to several interpretations and different applications.
Therefore, this should be further considered when applied in reality.
In
addition, this new regulation resolves situations where projects win the bid
but fail to meet their deadline because contractors lack capacity (only
winning the bid on the basis of lowest price alone). The weight given to the
lowest bid as a decisive factor and failing to take into account other
factors, is a main cause for faulty and low quality projects. This new
regulations also prove that selection of contractors should not only be based
on the “lowest bid” but also take into account contractor capacity,
qualifications and experience, and sources of supply. However, the
regulations on evaluating contractors should further focus on contractor
capacity because “quality of the project as the first and foremost priority”.
Overall,
there are many positive improvements in the new Law on Tendering, and an
intention to enhance investment efficiency and reduce corruption.-
Despite
the economic situation, companies and traditional village-based producers are
making all efforts to meet the usual surge in demand during Tet (the Lunar
New Year) and improve quality and design, a
Le
Ngoc Dao, deputy director of the Department of Industry and Trade, said at a
seminar on new Vietnamese products and special features for Tet, "With
higher quality, Vietnamese products have met the increasing demand of
consumers and gradually competed with imports."
Around
20 firms like Vissan, Pham Nguyen Bakery, An Giang Fruit-Vegetables and
Foodstuff Joint Stock Company, Sai Gon Food, Phu Le Wine JS Company, and Hanh
Phuc Fish Sauce Company displayed many new products they plan to produce for
Tet.
They
assured adequate supply besides promotions to meet customers' needs during
the country's biggest festival.
Phan
Van Dung of Vissan, one of the country's biggest meat processing firms, said
production for Tet had begun as long ago as June to ensure enough supply so
that prices remain stable until after the festival.
"Along
with supermarket chain Co.opmart, his company would slash meat prices on the
last two days before Tet – which falls on January 31 this year – to enable
poor people to buy since prices spike at traditional markets on those
days," he said.
Le
Thanh Truc of Phu Le Wine JSC, said local specialities like traditional wine
are very popular during Tet.
The
company would unveil many new designs for gifts during the New Year, she
said, adding that it plans to increase supply 10-fold to avoid a shortage
like last year.
Sai
Gon Food also plans to increase supply this year after a shortage last Tet,
Le Thi Thanh Lam, the company's deputy general director, said.
Tran
Thai Ha, managing director of the Binh Duong branch of Huu Nghi Food JSC,
said the company would supply 5,000 tonnes of confectionery in the south
during Tet, expecting sales to increase by two or three times.
Nguyen
Thanh Nhan, deputy general director of Sai Gon Co.op – which owns Co.opmart –
said: "Demand is expected to increase by 10-20 per cent over last
Tet."
Sai
Gon Co.op's supply of essential goods during the New Year will increase two –
or three-fold over the normal time.
It
will organise 150 mobile sales trips to rural areas and industrial parks and
hopes to sell goods worth more than VND20 billion (almost US$1million).
Apart
from selling essential goods at 10 per cent less than market prices under the
city's price stabilisation programme, Sai Gon Co.op will also cut prices of
other products by 10-50 per cent in co-operation with suppliers just ahead of
Tet.
Domestically
made products would continue to dominate the market due to their reasonable
prices, Nhan said.
Dao
said since supply would be ample, prices would not increase suddenly during
Tet.
In any
case, the department would monitor markets and severely punish hoarders and
black-marketers, she said.
The
conference was held in
VN,
Japanese IT firms ink strategic pact
FPT
Software,
Inked
on Sunday in the central city of
It
will also offer new employment opportunities for Vietnamese students studying
information technology, telecom electronics and
Under
the agreement, FPT Software will recruit a significant number of employees
every year for joint projects between the two companies. In the 2014-16
period, the company's office in
Established
in 1988, FPT Software is a division of FPT Corporation, a leading information
and communication technology group in
Through
years of development, FPT Software has become the country's top supplier of
software outsourcing, with almost 5,000 employees in
In
2012, it was listed among the top 100 global service suppliers by
In
September, the company was named one of the 500 largest software suppliers in
the world by the
GE
turbines to power wind farm
GE
Power and Water, a unit of GE, signed a contract with Cong Ly
Construction-Trade-Tourism Ltd (Cong Ly Ltd.) last Saturday to provide 52
wind turbines for phase two of the project.
The
signing ceremony was witnessed by US Secretary of State John Kerry during his
recent visit to
The
turbines, which have total output of 83.2 MW, will start commercial
operations in October next year.
"We
are delighted that Phase One of the Bac Lieu wind farm has been completed and
connected to the national grid," said To Hoai Dan, Chairman of Cong Ly
Company Ltd.
"This
paved the way for Phase Two, which will continue to improve the social and
economic conditions of the province by creating hundreds of jobs requiring
technical and industrial skills, while contributing more power to the
national grid.
"We
also hope this project will help attract further investment into
GE
provides technological support for a variety of power generation projects
throughout the country. With an installed base of more than 2,000 megawatts,
GE equipment today supplies approximately 10 per cent of
In
2009, GE increased its investment in the future of
The
facility has created over 600 local jobs and exported thousands of units of
generator systems and wind turbine components that contribute to global
energy solutions.
Nguyen
My Lan, CEO of GE in Viet Nam said: "As a part of our
‘company-to-country' strategy, the Bac Lieu project is a clear demonstration
of our commitment to supporting the development of local partners as well as
contributing to the renewable energy development in Viet Nam.
"With
the huge potential of
SSC
to tighten stock market monitoring
The
State Securities Commission (SSC) said the restructuring and supervision of
the stock market would be improved next year to ensure the market's
transparency and efficiency in operating.
Minister
of Finance Dinh Tien Dung said at SSC's meeting last week that the commission
should focus on solutions to expand the scale of operations and improve the
market's quality, according to Vneconomy newspaper.
SSC's
statistics showed that the stock market maintained growth during 2013,
reflected through increases in the benchmark indices.
The
VN-Index on the HCM City Exchange rose 22 per cent, in comparison with the
end of last year, while the HNX-Index in the northern bourse was 13 per cent
higher. The increases in benchmark indices placed
Also,
the market capitalisation reached VND964 trillion (US$45.9 billion), an
increase of VND199 trillion ($9.47 billion), equivalent to 31 per cent of the
country's gross domestic product (GDP).
Meanwhile,
the average trading value reached VND2.578 trillion ($123.190 million) each
session, representing an increase of 31 per cent over last year, mainly
thanks to the transactions of Government bonds, which witnessed a rise of 90
per cent to VND1.257 trillion ($59.85 million) per session.
The
stock market also attracted many foreign investors, with registered accounts
rising about 55 per cent.
Dung
said enacting the restructuring of the stock market, which was approved by
the Prime Minister, must be quickened, focus on enhancing its quality,
financial capacity and management capacity.
In
addition, the management and supervision of the market must be improved, as
the stock market becomes more developed and sophisticated, to ensure
transparency and a market that remains healthy.
Pham
Hong Son from SSC also said that the commission would determine how to
eliminate weak securities companies through acquisitions, mergers or
dissolutions.
More
than 60 per cent of securities companies reported losses this year, which is
slightly less than last year.
Nghi
Son still faces hardship
Despite
having completed their financial arrangements with banks, investors in the $9
billion Nghi Son oil refinery and petrochemical complex in the central
province of Thanh Hoa have been tied up in legal paperwork, delaying
implementation of the giant project.
An
anonymous source familiar with the case said the joint venture between
Without
the MoJ’s legal opinion, the banks would not disburse their pledged loans for
the project. A legal opinion issued by the MoJ would mean the Vietnamese
government has taken on the role as guarantor for any risks incurred by the
project.
The
MoJ explained that it had not yet provided a legal opinion to certify the
legality of the project documents, because the ministry would only certify 15
documents while the joint venture had asked for the ministry’s legal opinions
on 150 documents. Many of these documents are contracts and agreements with
other partners of the joint venture that the MoJ refused to provide a legal
opinion on.
The
MoJ normally only provides legal opinions on infrastructure projects under
the build-operate-transfer (BOT) investment model, in accordance with the
governmental Decree 108/2009/ND-CP guiding the implementation of BOT,
build-transfer-operate and build-transfer investment models.
However,
as the Nghi Son oil refinery and petrochemical complex is a vital national
project which has received the Vietnamese government’s guarantee, the MoJ
agreed to provide legal opinions to the project.
But
the ministry confirmed that it would provide legal opinions to 15 documents
previously clearly defined. For other documents, it is only willing to
provide legal consultancy to the joint venture.
The
Nghi Son complex, which received an investment certificate in 2008, would
have an annual refining capacity of 10 million tonnes of crude oil. The Japan
Bank for International Co-operation and the Export-Import Bank of
This
is the second oil refinery to be built in
In
January, the joint venture signed an engineering, procurement and
construction contract with a consortium led by
Sacombank
spends $4 mln on new e-banking services
Ho Chi
Minh City-based Sacombank launched on December 16 a $4 million new internet
banking system as a partnership with Infosys, an Indian multinational
provider of business consulting, IT, software engineering and outsourcing
services.
In
addition to providing all e-banking services, the new system can help the
users manage their activities and act as a reminder.
The
Vietnamese major lender is running a promotional programme until January 2014
for existing and newly registered customers of the system at www.isacombank.com.vn.
Firms
welcome tax revisions
The
business community may celebrate upcoming new changes to corporate income tax
policy.
The
Ministry of Finance recently posted its draft circular guiding the
implementation of the Law on Corporate Income Tax (CIT) which amends and
supplements a number of articles on its website for public comment.
“One
notable change likely to have an impact on fast moving consumer goods
companies and the structure of their promotional campaigns is that they are
no longer required to include give-aways or gifts in their revenue
calculations. The costs are treated as a capped A&P expenditure,” said
Thomas McClelland, tax partner of Deloitte
Currently,
give-aways or gifts are valued at market price and included as taxable
revenue.
McClelland
added that businesses had welcomed the reintroduction of tax incentives for
expanding investment, which were removed in 2009.
Businesses
qualify for incentives for expanding investment under three conditions
including increasing fixed assets and increasing design capacity.
Expansion
plans in certain locations or industries can choose between incentives for
the remainder of the investment license or tax exemptions.
Notably,
there is no reduced tax rate for investment expansion.
One point
likely to disappoint some companies is that only businesses that qualified
for incentives prior to January 1, 2014 or new projects opened after that
date can qualify. New projects before January 1 are not eligible, said
McClelland.
Another
new point under the draft is interest deductibility. For some time, companies
have been unhappy that interest on loans for investment was not included as a
deductible outlay. Several appeals have been made to change this, for example
in the EuroCham Whitebook 2014.
The
draft law stipulates that interest on loans for investment is deductible but
only by adding it to the cost base of the investment, meaning the deduction
only occurs if the capital is sold at some point in the future. This is
unlikely to fully appease companies.
On the
same note as deductible expenses, McClelland explained that provisions in the
draft, resembling those in the VAT law, require evidence of payment through a
bank for purchases exceeding VND20 million (around $1,000). This is part of
the government’s desire for
Mo
Market transaction mired in long dispute
The
long dispute between two main partners on the massive upgrade of Mo Market
shopping centre in
The
conflict has continuously simmered between the centre’s developer - the
Vinaconex Trading Development Joint Stock Company (VTDC) and VPCapital who
had bought into five podium storeys of more than 21,000 square metres at a
price of $30.6 million back in 2010.
Conflicts
between two sides, mainly focusing on construction quality, payment
schedules, appraisal dossiers and hand-over procedures have raged for most of
the life of the project’s construction.
According
to Thai Quoc Minh, chairman cum general director of VPCapital, the developer
is now two months behind schedule on construction, delaying the operation of
the site.
VTDC’s
authorised legal representative lawyer Nguyen Thanh Son however claimed that
the comapny had not violated the contract and VP Capital had not concluded
its obligations in order to be handed over the property.
Minh
retorted that VTDC’s incompetence had cost millions of dollars to the VP
Capital, including heavy implications for loan interest repayment totalling
more than VND170 billion ($8 million) after the hand-over deadline was
missed.
Despite
this, Minh promised that he would work closely with VTDC to find a solution
in order to put the centre into operation as soon as possible.
The
conflicts come to the boil last week when the two sides were preparing
documents for an approaching court case.
VP
Capital said it regretted going to court, but other investors had forced
their hand.
With
the total investment of more than VND1,500 billion ($71.4 million), Mo Market
Shopping Centre will consist of one 15-floor block and another 25-storey
building, connected via a five storey podium.
Deep
sea ports to be developed
The
Viet Nam Maritime Administration has proposed that the Government build and
develop deep sea ports to international standards for large-tonnage ships
from now until 2020.
Following
the proposal, development will be concentrated on the country's international
gateway ports in the
The
Van Phong Port in the central region, which officials anticipate will be an
entry port, will also become a national general port.
"Such
deep sea ports have been established throughout the country, such as SP-PSA,
CMIT, SP-SSA in Ba Ria – Vung Tau province, which allow access to 100,000
dead weight tonnage (DWT) ships," Chief of the Viet Nam Maritime
Administration, Nguyen Nhat, told Giao Thong (Transport) newspaper.
"Many
large shipping companies throughout the world, including
He
added that the country's seaport system still had many shortcomings, such as
a lack of comprehensive development and management of infrastructure of
seaports, ineffective development and exploitation of the potential of
seaports.
To
tackle the shortcomings, the Ministry of Transport has reviewed the plan to
develop the country's seaport system by 2020, with orientation toward 2030 to
submit for the Prime Minister's approval.
According
to the Portcoast Consultant Corporation under the Ministry of Transport,
which is in charge of the review, total fund for investment in the
development of Viet Nam's seaport system by 2020 is estimated to reach VND200
trillion to 280 trillion (US$9.5 billion - 13 billion).
The
amount of capital needed for investment in public infrastructure of seaports
will account for 45 per cent of the total, worth about VND 90 – 120 trillion ($4.2
billion – 5.7 billion). The remaining money will be spent on the development
of wharf infrastructure facilities.
"The
Government should lay emphasis on applying public-private partnership (PPP)
to developing large-scale ports and wharf areas. Organisations and
enterprises from all economic sectors should create favourable conditions for
investment in the country's seaport system," a representative of the
corporation told Giao Thong (Transport) newspaper.
It is
estimated that cargo transported through the country's seaport systems will
reach 400 – 410 million tonnes in 2015, and increase to 640-680 million
tonnes by 2020, according to the corporation.
Agriculture
sector eyes global integration
At the
meeting, Agriculture Minister Cao Duc Phat said the sector has been the
bedrock of the economy, even when economic conditions were not favorable. In
2012, agriculture provided an estimated US$27.5 billion in export revenues to
the economy.
Since
entering WTO in 2006, Phat said farmers had become used to market rules, but
are still vulnerable to changing conditions and economic shocks due to
low-scale production, shifts in agricultural labourers to non-agriculture
sectors and dwindling land resources.
The
Ministry estimates that about 70 per cent of the population works in
agriculture and nearly 10 million small households participate in the sector.
According
to Phat, the Ministry is working on a draft project on positioning the global
integration effort of the agriculture sector until 2020, with a vision
onwards to 2030.
Priority
will be given to supporting small-holders and integrate technology into
production, link farmers with businesses and improve
public-private-partnership models, he said.
US
Ambassador in Viet Nam David Shear said Vietnamese agriculture could employ
more people in higher-skilled jobs, while exporting higher-value agricultural
commodities and play an even larger role in ensuring global food security.
Shear
noted that the ongoing Trans-Pacific Partnership trade negotiations would
increase
It was
noted that the successful completion of TPP, as well as other agreements
"This
further integration will open the door to investment in more modern equipment
and technology, helping to modernise the agricultural sector and make it more
efficient," Shear said.
Luong
Hoang Thai, director general of the Multilateral Trade Department of the
Industry and Trade Ministry, said challenges would include further reducing
tariffs in agriculture and completely eliminating them by 2015, improving
transparency of government agencies, while supporting businesses and
associations by providing more access to information.
Further,
Nguyen Lan Huong, a representative from Food and Agriculture Organisation in
New
The
Viet Nam-Netherlands Inter-governmental Committee on climate change
adaptation and water management has made public a plan to develop
The
committee convened its third meeting in Ha Noi yesterday in the presence of
Deputy Prime Minister Vu Van Ninh.
The
Mekong Delta plan, which was grounded on the Netherlands Delta plan and has
benefited from the close cooperation between the Governments of Viet Nam and
the Netherlands, sets a long-term vision together with proposals for the
Mekong Delta to adapt to climate change, manage its water resources and
prosper sustainably in the coming years.
At the
meeting, both countries evaluated the process of implementing the strategic
partnership agreement signed in 2010, covering university and higher
education partnerships, water management and climate change adaptation.
A
high-level roundtable conference discussing joint coordination with
international donors to aid the Mekong Delta's development was held, which
included representatives from the committee, the World Bank and the Asian
Development Bank.
On the
sidelines of the meeting, the Delft University of Technology of the
The
centre will offer services, including applicable research in water resources
and flood risk management, consultation in related thematic fields to
contribute to forming a master plan, feasibility studies, knowledge transfers
and capacity building.
At the
signing ceremony, Professor Dr. Nguyen Quang Kim, Rector of WRU, said that
with the support of the
Professor
Dirk Jan van den Berg, president of
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Sáu, 3 tháng 1, 2014
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