Nov. 15 – On November 10, the Vietnamese National Assembly approved VND59.3 trillion (US$2.83 billion) in salary increases starting from May 1, 2012.

Under the recent resolution, minimum salaries for state employees will be increased to VND1.05 million (US$51) per month. The current minimum wage for state employees is VND830,000 (US$40), established by Decree No. 22/2011/ND-CP dated April 04, 2011 with an implementation date of May 1, 2011 and it is still in force. Continue Reading

Nov. 7 – Following amendments more than five years ago to two major laws regarding investment activities in Vietnam – namely the “Competition Law” and the “Law on Investment” – the country’s mergers and acquisitions (M&A) market has increased from US$299 million in 2006 to US$1.7 billion in 2010. Furthermore, M&A activities for the first nine months of 2011 have reached over US$2.6 billion, doubling the value seen in the same period last year. M&A transactions are also expected to continue to see strong growth in the foreseeable future.

“M&A in Vietnam will flourish in the last quarter of 2011 and the following years, with an annual growth rate of 30 percent to 40 percent,” said The Competition Management Department (under the Ministry of Industry and Trade) at the Vietnam M&A Forum 2011 held in Ho Chi Minh City on June 9, 2011. Continue Reading

Germany now Vietnam’s largest EU trading partner

Nov. 3 – In 2010, bilateral trade between Vietnam and Germany reached US$4.1 billion, showing substantial development since the two countries set up diplomatic agreements on September 23, 1975. The mutual understanding between Vietnam and Germany has been further strengthened through maintaining trustworthy partnerships and a political consultation mechanism between the two Foreign Ministries that was established in 2008. Moreover, the two countries have signed a number of agreements to form a legal foundation for bilateral economic cooperation such as the Agreements on Double Taxation Avoidance, Investment Encouragement and Protection, Maritime Shipping and Aviation.

As German Chancellor Angela Merkel has recently pointed out in her official visit to Vietnam for the Vietnam-Germany Economic Forum, German entrepreneurs consider Vietnam as fertile ground to do business, particularly in the high-tech industry as well as in education and environment. She also expressed her good impressions on Vietnam’s socioeconomic achievements, particularly in the last 10 years, and affirmed that Ho Chi Minh City was the most dynamic economic center in Vietnam. Thus, Germany would like to establish additional cooperative relations with Vietnam in general and HCM City in particular. She also identified some key issues to enhance Vietnamese investment environment. Continue Reading

Oct. 31 – The United States, currently locked in discussions with Vietnam over the nine country Trans-Pacific Partnership (TPP), has had proposals to include new rules concerning state-owned enterprises rebuffed by Hanoi.

The United States believes that SOEs often reap additional benefits directly from the State which amount to unfair subsidies and protectionism. Washington wants a strong and definable regulatory position in place in the Vietnam agreement as it is expected to become the working model for future trade talks with China, which has over 20,000 state-owned enterprises, many of them multinationals in their own right. Continue Reading

By Lorenzo Martelli

Oct. 28 – Good news for labor-intensive firms in Vietnam. Decision 54/2011/QD-TT inked by the Prime Minister last week agrees to extend corporate income tax payments in 2011 for labor-intensive companies as well as “co-operatives lawfully established and operating which have revenue from the production or processing of agricultural, wood, seafood, garment, footwear, or electronic products, or from development, construction, and installation of infrastructure works.”

In order to benefit from the tax payment deferral, labor-intensive enterprises are required to employ at least 300 workers, not counting workers with contracts of three months or less. The right to delay payment for 2011 corporate income taxes for one year takes effect from the due date this year. Continue Reading

Oct. 26 – Investor interest in Hanoi’s residential property has increased in recent years. With an average population growth rate of 5 percent a year coupled with a considerable area of vacant land, housing prices in Hanoi have been pushed up to levels that are higher than they should be. Selling prices of upmarket houses remain high while prices of average houses climbed 8.5 percent.

“The population in the next 15-20 years will grow constantly with middle-class people and medium-sized enterprises having the fastest growth rates,” according to Mr. Vu Xuan Thien, deputy director of the Housing and Real Estate Management Department. Continue Reading

By Lorenzo Martelli

Oct. 19 – Vietnam is gradually moving away from its traditional focus areas of industrial production such as textiles, food processing, rice and coffee to attracting investment in new sectors like electronic and high-tech manufacturing, research and development.

Manufacturers are seeking alternatives along with rising labor costs in Thailand and China – Vietnam’s labor costs are 35 percent to 45 percent cheaper than those in China’s second and third-tier cities and 20 percent to 35 percent lower than Thailand’s. Moreover, preliminary findings of the 2010 Vietnam Industry Investor Survey, released a couple of weeks ago, showed that the main factors that made Vietnam an attractive country for FDI are “political stability, market and low-cost labor.” Continue Reading

Oct. 17 – The new issue of Vietnam Briefing Magazine, titled Vietnam’s International Taxation Agreements, is out now.

As Vietnam increasingly finds itself on the receiving end of foreign investment and becomes progressively integrated into the global economy, the pace of changes to trade and tax policies can be difficult to keep up with. However, understanding the state’s policy objectives, and understanding the wider context of its trade policy and how it affects one’s investments, can make the difference between an investment and a lucrative investment.

In this issue, we will first look at the broader context of global trade and the growing salience of free trade agreements (FTAs) between Vietnam and its trade partners. We will examine the effects of current FTAs on Vietnam’s exports, the advantages and disadvantages thus far, as well as the response of Vietnamese enterprises to the policies of the FTAs in effect. Also, an in-depth look at key bilateral and regional trade agreements will reveal some telling trends. Continue Reading

Oct. 11 – The Vietnamese Ministry of Planning and Investment (MPI) is currently working on a new strategy to boost the attractiveness of the country in terms of foreign direct investment (FDI) inflows. A significant shift in FDI’s role in the country will be the main issue the new strategy is aiming at and the socio-economic development plan will have a long term prospect covering the 2011-2020 period. Continue Reading

Vietnam determined to improve the quality of foreign direct investment

Oct. 7 – Over the last few years, Vietnam has emerged as an important destination to invest in for foreign companies. In 2009, the government issued a resolution titled Decision 129/2009/QD-TTg (“Decision”) aimed at attracting and managing FDI. The Decision’s goal was to build and complete a system of comprehensive, specific and uniform mechanisms and policies on land, finance, investment capital, human resources, science and technology to promote investment in, and ensure the achievement of the set targets for, natural resource and environmental protection and sustainable development. However the Decision didn’t reach the goal. Continue Reading