Tax incentives

Local automobile businesses are dependent on major foreign car manufacturers and their core technologies, a sticking point for true progress, photo Le Toan Vietnam has received praise for its control of the pandemic, which has also contributed to its prestige among South Korean businesses. “Vietnam’s auto parts sector has reached an export scale of $5 billion and an import volume of $4 billion, thus attracting many South Korean businesses during the past three years,” said Lee Jong Seob, president of the Korea Trade-Investment Promotion Agency (Kotra) in Southeast Asia-Oceania and general director of its branch in Hanoi. Seob came to Vietnam under a special entry programme nine months ago. According to Seob, Vietnam’s auto part exports are in the high growth group. In 2020, these exports grew by 48.6 per cent but “have not yet entered a stable period”, Seob pointed out, adding that “the development of the auto-business in Vietnam is based on the understanding of the government’s policymakers, promoting a business strategy that is consistent with the reality of Vietnam.” Lagging behind In mid-April, VinFast – a subsidiary of Vingroup – announced that it would sell three electric car models in the US market in 2022. Previously, VinFast introduced the Sedan Lux A 2.0 and SUV models. The Lux SA 2.0 participated in the international exhibition of the Paris Motor Show, one of the largest auto events in the world, and received an enthusiastic reception from the international public. Vietnam may already be on the map of the world’s auto industry, but there is still a lot to do to gain a firm foothold in the global market, such as the right policies to develop the production of auxiliary automobile products. A panorama of Vietnam’s auto industry was faithfully described by Pham Tuan Anh, deputy director of the Ministry of Industry and Trade’s (MoIT) Industry Agency at a seminar hosted by the ministry’s Trade Promotion Agency and Kotra that took place last …

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EVFTA is a door for Vietnamese goods to gain a foothold in the EU market Advantages for textiles, seafood Circular 11/2020/TT-BCT of the Ministry of Industry and Trade (MoIT) regulates the EVFTA rules regarding goods of pure and non-pure origin. Pure origin goods are those made with raw materials from a member country of the agreement. Goods of non-pure origin can only enjoy tariff preferences if they meet some basic specified criteria including material allowance and processing stages. According to the Agency of Foreign Trade under the MoIT, the EVFTA rules of origin are based on the rules of origin of the Generalized System of Preferences (GSP) and they allow a number of Vietnam’s major exports to the EU to have combined origin. For example, Vietnamese textiles and garment exporters are allowed to use combined materials from the Republic of Korea and Japan (which have FTAs with the EU). They also allow the combined use of raw squid and octopus from ASEAN countries to produce processed export products to the EU. According to the MoIT, from August 1, 2020 to April 4, 2021, authorized agencies and organizations issued more than 127,296 certificates of origin (C/Os) with turnover of more than US$4.78 billion. The high value of certified exported goods to the EU reflects a growing level of adaptation by domestic enterprises to the rules of the EVFTA. Proactive approach to raw material supplies However, many Vietnamese firms still encounter challenges in adapting to the new agreement. At present, some 60 percent of raw materials for production and exports of textile and garment products are imported from China and are not entitled to tariff preferences. Regarding seafood products, the agreement requires higher environmental commitments related to fishing, which could increase production costs and product prices. However, these pressures will also encourage domestic enterprises to improve their production capacity, deep processing, and supply …

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Ben Cat Industrial Park in the southern province of Binh Duong. The sudden increase in lease enquiries for land, ready built factories, and warehousing has been accompanied by price escalations in industrial parks (IPs) near major cities. — VNA/VNS Photo Ngoc Ha Industrial property continues to be a hot segment for Viet Nam’s real estate market with mounting enquiries as manufacturers seek to mitigate risk and diversify supply chains, according to Savills Viet Nam. The sudden increase in lease enquiries for land, ready built factories, and warehousing has been accompanied by price escalations in industrial parks (IPs) near major cities. Average occupancy levels increasing significantly since 2018, resulting in a growing supply gap and a clear need for additional development in key industrial provinces. In 2020, Binh Duong was almost fully occupied at 99 per cent and Dong Nai moved up to 94 per cent. Average occupancies were 88 per cent in HCM City, 84 per cent in Long An and 79 per cent in Ba Ria-Vung Tau. In northern areas average occupancies were up to 90 per cent in Ha Noi, 95 per cent in Bac Ninh, 89 per cent in Hung Yen, 82 per cent in Hai Duong and 73 per cent in Hai Phong. Meanwhile, lease prices were up 13.1 per cent year on year to US$129 per sq.m in Ha Noi, 3.2 per cent year on year to $96 per sq.m in Hai Phong, and 9.2 per cent to $95 per sq.m in Bac Ninh. This price surged by 6.4 per cent to $83 per sq.m in Hung Yen and 15.1 per cent to $76 in Hai Duong. In Thanh Hoa Province, the very competitive land lease cost of $40–$50 per sq.m supported, in 2020, significant investment of US$349 million in total registered FDI, to rank 20th of the 60 provinces for FDI, Savills Viet Nam said. Of which, Foxconn moving into Thanh Hoa has ramped up appeal for electronic component manufacturing, especially supporting suppliers to Foxconn. The appeal of competitive land lease prices and lower cost of local labour is further enhanced by very appealing tax …

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