Vietnam’s Ministry of Health (MoH) issued Circular No. 01/2018/TT-BYT (Circular 01) on January 18, 2018, regarding regulations on labeling of pharmaceutical products. The Circular 01 will replace current regulation Circular No. 06/2016/TT-BYT (Circular 06) and will be in effect from June 1, 2018.
Vietnam has issued Decree 09/2018/ND-CP (Decree 09) regarding conditions on the establishment of retail outlets by a foreign-invested enterprise (FIEs). Effective as of 15 January 2018, the decree aims to provide a more transparent framework for foreign investors in the retail sector.
Surrounded by major economic hubs, ports, national highways, and an international border, Bac Giang province in northeastern Vietnam is situated at the crossroads of major trade routes. It is located adjacent to the key economic triangle Hanoi – Hai Phong – Quang Ninh, 110 km from the Huu Nghi Border Gate with China, 100 km from Hai Phong seaport, and 40 km from Noi Bai international airport. With its growing gross regional domestic product (GRDP), income per capita, trade, and favorable location, the province has started to emerge as an investment destination.
Vietnam’s Ministry of Industry and Trade issued Decree No.08/2018/ND-CP (Decree 08) with immediate effect on 15 January 2018, amending several decrees related to business conditions in various areas including franchising, to reduce administrative procedures. With respect to franchising, the Decree 08 amended Article 5, reducing the number of conditions on foreign franchisors to only one, namely, the business to be franchised must be operating for at least one year prior to franchising.
In 2018, Vietnam along with several ASEAN countries will see a rise in their minimum wages to support the rising costs of living. The region’s growth in the past few years has been largely attributed to the manufacturing industry, driven by low labor costs. As more investors adopt the “China Plus One” strategy, understanding the rise in wages will be crucial for maintaining the delicate balance between labor costs and productivity in Vietnam and its neighboring countries.
By: Dezan Shira & Associates
Editor: Bao Chi Huynh
The alcoholic beverage market in Vietnam is experiencing a fierce competition between local and international players, especially in the beer industry. The market has witnessed a continuous growth in recent years in terms of production and consumption. Major drivers of growth are economy, young population, the rise in disposable income, and drinking culture prevalent in Vietnam.
Vietnam’s General Department of Taxation had issued Official Letter 5339/TCT-TT in November 2017 directing local tax offices to create a tax audit plan for 2018. Taxation is a major component of the state budget revenues and as the country’s budget deficit increases, taxpayers and enterprises will continue to face increased scrutiny from tax authorities trying to meet their revenue targets.
According to Vietnam’s General Department of Taxation, around 3,000 firms have started to use e-invoice for its transactions, an increase from only 656 firms in 2016. The Ministry of Finance is also drafting a new circular on e-invoice to make it compulsory for enterprises and State-owned firms to use e-invoices from July 1, 2018. E-invoices not only allow firms and tax authorities to save costs and reduce administrative burden but also helps in controlling billing frauds.
Vietnam, usually associated with the CLMV group (Cambodia-Laos-Myanmar-Vietnam), has started to differentiate itself from its peers in terms of FDI flows, manufacturing clusters, low-cost production, and an emerging middle class with increased income.
Foreign investors considering the Vietnamese market are often drawn by its competitive costs. Vietnam’s low wages have traditionally provided these cost savings; however, the country has also quietly developed one of the most competitive tax regimes throughout Southeast Asia. Vietnam’s tax incentives are a standout feature of the tax regime and are applied to a variety of industries and projects throughout the country.