Reduced tax rate

At the annual Vietnam Business Forum (VBF) held in Hanoi in March, foreign businesses discussed the USD deposit interest rate of zero per cent, and called for it to be removed. However, an economic expert told VIR that the State Bank of Vietnam (SBV) has to implement the government’s anti-dollarisation policy, including the regulation on the ceiling interest rate for USD deposits, so it cannot be abolished at this time. “The regulation of a zero per cent deposit interest rate in USD has contributed to reducing lending rates, helping businesses lower their production costs. At the same time, deposit interest rates in VND helped the SBV maintain exchange rate stability and support businesses with foreign currency revenue,” said the expert. Patience favoured before action on USD deposit interest rates, illustration photo Regarding the proposal of foreign businesses at the VBF, he said that an ordinary citizen with a savings amount of about $5,000 or more, when deposited … [Read more...] about Patience favoured before action on USD deposit interest rates

As foreign direct investment (FDI) business representatives and analysts gathered at an investment forum Wednesday morning, Deputy CEO of Deloitte Vietnam Phan Duc Hoang said that the new global minimum corporate tax was designed to block multinationals from tax avoidance. Starting next year Vietnam is set to apply a 15% tax on profits from multinationals with total revenues of at least EUR750 million ($819 million) in two of the preceding four years. Hoang said if a South Korea-based company that has a factory in Vietnam is paying taxes for less than 15% of its profits, it will be taxed in South Korea to ensure the 15% level is achieved. If South Korea does not also implement the extra tax on the company, other countries that have approved the new global minimum corporate tax, such as Indonesia and Thailand, will have the rights to impose the tax, he added. For this reason, Do Thien Anh Tuan from the4 Fulbright School of Public Policy and Management, forecast that Vietnam will … [Read more...] about Don’t rely on tax incentives for FDI: analysts

The CEO and Regional Head, Client Coverage, Americas, Standard Chartered, shared his view on Vietnam's significance for US businesses and why Vietnam is potential for foreign investors. Vietnam has gone from being a frontier economy in ASEAN to a flourishing, cost-effective industrial nation. Firms and investors looking for new markets to grow, source, or manufacture their products – especially in Asia – should consider Vietnam’s long-term potential and stay updated on its opportunities. Steven Cranwell, CEO and Regional Head, Client Coverage, Americas, Standard Chartered. Photo: Standard Chartered In recent years, Vietnam has benefited from the trade tensions between the US and China. With US companies adopting a ‘China plus one’ approach to their supply chains, the percentage of exports from Vietnam to the US has risen by approximately nine percent between 2018 and 2021. It is, however, important to note that Vietnam has been an alternative to China … [Read more...] about The significance of Vietnam for US businesses and why they should take notice: Standard Chartered

Vietnam has benefited from the trade tensions between the United States and China. With US companies adopting a China-plus-one approach to their supply chains, the percentage of exports from Vietnam to the US has risen by approximately nine per cent between 2018 and 2021. Steven Cranwell, CEO and Regional Head, Client Coverage, Americas It is, however, important to note that Vietnam was an alternative to China for general manufacturing in Asia long before the pandemic, and its long-term prospects remain bright. Despite the uncertainty of global economic conditions, many remain confident in Vietnam’s outlook. The country’s business-friendly atmosphere, its strategic location as a gateway to other fast-growing markets, the plentiful supply of skilled labour, and the competitive costs and incentives are compelling propositions for companies looking to expand their manufacturing in the region. While Vietnam has yet to host an Apple plant, the country is already home to … [Read more...] about The significance of Vietnam for US businesses and why they should take notice

Vietnam's economic growth continues to be affected by the challenging global economic environment. Vietnam's GDP growth is estimated to expand by 3.32% year-on-year in the first quarter of 2023, the second lowest economic expansion rate during the 2011-2023 period. Dinh Vu Port, Haiphong. Photo: Chien Cong/The Hanoi Times Director of the General Statistics Office Nguyen Thi Huong announced the figure at a press conference today [March 29]. According to Huong, Vietnam's economic performance in 1Q2023 was affected by ongoing complex and volatile changes in the global economy, including persistently high global inflation, slow recovery, and reduced consumption demand from major trading partners. "Of particular concern was the instability of some banks in the U.S. and Europe, which negatively impacted market confidence in the banking system. In addition, central banks continued to raise interest rates and tighten monetary policies, further complicating the … [Read more...] about Vietnam’s GDP growth expands by 3.32% in Q1

A press conference was held by the General Statistics Office (GSO) on Wednesday. Viet Nam’s gross domestic product (GDP) expanded by 3.32 per cent in the first quarter of 2023. — VNS Photo Linh Anh Viet Nam’s gross domestic product (GDP) expanded 3.32 per cent in the first quarter of 2023, the General Statistics Office (GSO) said yesterday. The expansion is nearly the lowest in 13 years, with Q1 of 2020, which recorded growth of 3.21 per cent. Speaking at a press conference, officials from the GSO said that the agro-forestry-fishery sector expanded by 2.52 per cent and contributed 8.85 per cent to the GDP growth. The industry and construction sector contracted by 0.4 per cent, leading to a 4.76 per cent decline in the growth, and the service sector increased by 6.79 per cent to contribute to 95.91 per cent of the overall expansion. In the agro-forestry-fishery sector, agriculture saw a year-on-year increase of 2.43 per cent in added value, forestry 3.66 per cent, and … [Read more...] about Viet Nam’s economy grew 3.32% in Q1, near the 13-year quarterly lowest

In 2008, the US investment bank Bear Stearns, on the verge of collapse, had to be rescued by J.P. Morgan. This marked the beginning of the global financial crisis of 2008, which sent the global economy into a deep recession and caused significant economic damage, including massive employment losses. Patrick Lenain, senior associate at the Council on Economic Policies Today, several banks are once again in trouble. As of March 22, four large banks were in distress. Silicon Valley Bank (SVB), a $212 billion US bank specialising in tech startups, collapsed when it was unable to meet deposit withdrawal requests and had to be taken over by federal regulators. A few days later, Signature Bank, another midsized US bank with assets of $110 billion, also suffered a severe liquidity crisis and was seized by federal regulators. This was followed by First Republic Bank with assets of $205 billion, which was hit by rating downgrades and a tumbling share price and had to be … [Read more...] about Developments for Vietnam to watch in midst of bank crisis

A bank employee handles cash. The corporate bond market has flourished with an estimated annual issuance value of over VND500 trillion (US$21.9 billion) in 2021. — VNA/VNS Photo The State Bank of Viet Nam has unveiled a preliminary revision to Circular 16, requesting public input on proposed modifications that would permit credit institutions to procure corporate bonds as a means of boosting liquidity in the corporate bond market. The revision corresponds to Decree 08 of the Government, which went into effect on March 5 and aims to address bottlenecks in the corporate bond market. Circular No. 16/2021/TT-NHNN, issued on November 10, 2021, delineated principles for the acquisition and sale of corporate bonds by credit institutions. The preliminary revision aims to clarify and expound on various components of Circular 16 to avoid ambiguities and gaps. The notable changes include more specific regulations for banks in investing in corporate bonds, such as banks’ responsibility … [Read more...] about SBV’s draft regulations encourage banks to support corporate bond market

This year, difficulties from within the economy will continue to affect the retail industry and demand is expected to continue to decline. How does AEON Vietnam think 2023 will shape up in general? Furusawa Yasuyuki, general director of AEON Vietnam Although there are many difficulties, I think the economic growth rate in 2023 will remain at a stable level, reaching the growth target set by the Vietnamese government. However, recently, rising raw material prices have significantly affected the lives of consumers. This will also be one of the factors affecting consumption trends in 2023. Besides that, due to the influence of inflation in Europe and the US, the number of export orders from Vietnam decreased sharply. Some businesses are forced to cut labour and reduce working hours, greatly affecting the economy and the lives of workers - as well as the consumers. I think, within in the first half of this year, there will still be many difficulties and those may take … [Read more...] about Bringing the standards and quality of Japanese retail brands to Vietnam

The Ministry of Planning and Investment (MPI) is urging a project steering committee to accelerate the transition of traditional industrial parks (IPs) to an ecological model as part of a nationwide eco-IP intervention initiative. Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said, “The project has contributed to the replication of the eco-IP model in Vietnam, in line with the National Green Growth Strategy for 2021-2030, Vietnam’s commitment to the United Nations’ Sustainable Development Goals, and the net-zero emissions commitment to 2050.” Private sector urged to enter eco-IP arena, illustration photo. Developing eco-IPs is inevitable as many countries are applying the carbon tax mechanism on imported goods, the deputy minister added. “Meanwhile, many tenants in IPs are manufacturers for export, and they need a green certificate to export products. Thus, relevant parties continue to spread technical and financial support to many IPs at different … [Read more...] about Private sector urged to enter eco-IP arena