Regulatory body urges seafood firms to register online
Vietnam’s National Agro Forestry Finishes Quality Assurance Department (NAFIQAD) has encouraged local and seafood producers to apply for e-certificates though the national single window registration system. The single window regulations are on the websites of the Vietnam National Single Window, the General Customs Department and NAFIQAD. Seafood producers can contact the regulatory body’s local representatives to received instructions on how to apply for e-certification.
The move is especially important as seafood business will need to prepare for e-signatures and e-certification of product packages that will be exported to South Korea and China from March 1. In addition, NAFIQAD will stop receiving complaints and appeals over wrong information in paper certification for products sent to China and South Korea. Officials have said that local seafood businesses have been unwilling to use the new e-system but should get used to them as NAFIQAD will stop receiving paper registration in the near term.
By: Dezan Shira & Associates
Editor: Edward Barbour-Lacey
Once an investor has set up their trading company within Vietnam, it is important that their workers gain a strong understanding of the country’s import and export regulations and procedures. Below we lay out the key takeaways that companies must be aware of before starting their trading activities in Vietnam.
By: Maxfield Brown
Following the withdrawal of the United States from the Tran-Pacific Partnership (TPP), the spotlight has shifted quickly to the future of foreign investment in members such as Vietnam – the party once projected to be the agreement’s greatest beneficiary. While TPP’s failure has and will continue to put a damper on investment and trade between Vietnam and members of the partnership, this does little to change Vietnam’s competitive advantage and may actually help the country over the long term.
Environment tax on fuel causes concern for businesses
The Ministry of Finance (MoF) has proposed to impose an environmental protection tax on fuel. The draft law would see almost tripling of the tax.
The ministry has proposed:
- Tax of US$0.17-0.35 (VND 4,000-8,000) per liter of gasoline, compared to the current US$0.04-0.17 (VND 1,000-4,000).
- Tax of US$0.13-0.26 (VND 3,000-6,000) per liter of jet fuel.
- Tax of US$0.06-0.35 (VND 1,500-4,000) per liter of diesel.
- Tax of US$0.13-0.08 (VND 3000-2,000) per liter of kerosene.
- Tax of US$0.04-0.17 (VND 900-4,000) per kg of heavy fuel oil.
- Tax of US$0.04-0.17 (VND 900-4,000) per kg of lubricant.
While the tax rates are tentative, the specific rates will be decided by the National Assembly. The Vietnam Chamber of Commerce and Industry (VCCI) has argued that the proposed tax rates would hurt businesses and the economy as fuel is important for transport, agriculture and seafood sectors. Sources say that fuel makes up around 25-45 percent of costs in vehicles and around 39.5 percent in airlines. The Ministry of Justice also asked the MoF to consider the proposal as it would directly affect businesses. This was followed up by the Ministry of Foreign Affairs asking if the proposed changes were necessary.
By Alexander Chipman Koty
Established in 1998, Hanoi’s Hoa Lac High-tech Park (HHTP) was Vietnam’s first high-tech park and is currently the country’s largest. While Vietnam has over 190 industrial parks and plans to increase this number to 500 by 2020, HHTP is one of only three national-level high-tech parks, alongside Saigon High-tech Park and Danang High-tech Park. The HHTP was created with the intention to become Vietnam’s leading high-tech industry cluster for manufacturing, research and development, and innovation.
Due to start-up difficulties and incomplete infrastructure, the park initially struggled to attract high profile investors. However, Vietnam has rapidly industrialized since the park’s establishment, becoming a leading recipient of foreign direct investment and an increasingly prominent electronics manufacturer. As a result, the HHTP has become equipped with higher quality infrastructure, and is beginning to fulfill its promise as a tech hub. While Ho Chi Minh City has pulled ahead as Vietnam’s most popular area for investment, Hanoi can be particularly advantageous for operations with supply chains in China due to the city’s proximity to the border.
Online shopping to witness a surge
Vietnam’s rising internet population is predicted to boost online shopping in the near future, according to a new KPMG report. Currently 18 percent of consumers purchase goods from online retailers such as Amazon, Lazada, and Nhommua, with 10 percent preferring to buy from a retail shop’s website. Only three percent of buyers prefer a manufacturer or brand’s website. As per the report, the top reason for consumers to shop online is the convenience of shopping, followed closely by the ability to compare prices and availability of better deals. While considering a purchase, 9.9 percent of buyers refer to online reviews and feedback.
The report also highlights the significance of offline channels, with 11.5 percent of buyers seeking recommendations from friends and family before making a purchase, while online channels such as social media, online shops, and online reviews were preferred by 8.3 percent, 8.2 percent, and eight percent of buyers, respectively. In light of this, the report stresses the importance of companies providing privacy protection and better online security to gain consumer’s trust. In fact, one of the report’s findings indicates that 26.5 percent of buyers regard consumer information protection of utmost importance. To increase product awareness, sellers are also recommended to focus on social media channels and providing online reviews for their products. The research sample consisted of buyers aged 15 to 70 years, having made at least one purchase in the last 12 months, and within the top 65 percent of income earners in the country.
By Dezan Shira & Associates
Editor: Maxfield Vandel Brown
Since January 2017, a range of policies have come into effect for foreigners and foreign firms. The introduced changes impact international tourism companies, foreign advertisement firms, trade offices, foreign crew on ships, and visa processing.
Passport and visa fees
According to Circular No.219/2016/TT-BTC, the stipulated fee for a single-entry visa for foreigners will be US$25 (VND 570,000) for a single individual, while the price of a multiple-entry visa for a duration of three to 12 months ranges from US$50 to US$155 (VND 1.14 million to VND 3.55 million). Exemptions will be applicable for guests (including spouses and children) invited by the government.
Fees for overseas diplomatic missions
As per Circular No.264/2016/TT-BTC, the naturalization process will cost US$250 (VND 5.7 million) per person. Charges for restoring nationality will be the same as registering for retaining ones nationality, namely US$200 (VND 4.57 million). Fees for issuing new passports are fixed at US$70 (VND 1.6 million) while charges for extending diplomatic and public passports are US$30 (VND 684,210).
Government invited guests, employees, and technical staff (including spouses and children) of foreign diplomatic and consular representative missions are exempt from the fees.
Antibiotics import norms to be tightened
The Ministry of Agriculture and Rural Development recently issued regulations to tighten import of antibiotics to prevent their use in the breeding of sea animals. However, a list of 57 government approved antibiotic substances can be imported to produce veterinary medicines, which are certified or legally permitted in Vietnam. Importers applying for licenses are required to furnish details of previous shipments and cannot sell to veterinary medicine dealers, breeders, and farmers, but only to licensed veterinary medicine manufacturers.
The stricter food safety norms come after Vietnamese seafood exports (heading mostly for Japan and EU) were returned last year due to chemical contamination and high antibiotic residue levels. To control the overuse of certain antibiotics, Vietnam’s Veterinary Department has ceased issuing import licenses, imposing a temporary suspension of operations for six firms involved in antibiotics trading.
By Dezan Shira & Associates
Editor: Maxfield Vandel Brown
All foreign enterprises seeking to staff operations in Vietnam will find the process regulated by the Vietnamese Labor Code of 2012 (Law No. 10/2012/QH13) and guided by several circulars which have clarified aspects of this legislation. Covering hiring, probationary periods, termination of contracts, and post-employment benefits, the nature of contracts should be studied closely to ascertain the most effective means of onboarding workers as well as ensuring the compliance requirements associated with these contracts.
Unemployment rate steady but graduates maintain difficulties
Vietnam’s unemployment rate reached 2.3 percent in 2016; however, numbers for people holding bachelor’s or master’s degrees are less positive. The Ministry of Labor, Invalids and Social Affairs said in a report that it was looking to develop the labor market. Approximately 1.6 million Vietnamese were hired in 2016, a year-on-year increase of one percent. Of those, 126,000 went abroad as guest workers, up 9.6 percent compared to 2015. The unemployment rate in urban areas stood higher than the one in rural areas, as 3.18 percent of urban citizens were without a job, compared to 1.86 percent of rural citizens.
There is a shortage in the creation of jobs. In the third quarter of 2016, there were 202,000 college or higher graduates that were unemployed. The government also indicated that it wants to develop stricter laws for Vietnamese employees working overseas.