Economy & Trade

New Issue of Vietnam Briefing Magazine Now Online

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Vietnam Briefing MagazineNov. 25 – The latest issue of Vietnam Briefing is now online and available for download (complimentary subscription required). To access the magazine, please click on the cover image at right.

In this issue, we focus on establishing a business in Vietnam, from the corporate and personal income tax regime, to the various registration procedures foreign investors must go through to establish a legal entity in the country. We also take a look at the business environment in Vietnam including what locations provide tax incentives for investment

Vietnam to Release Personal Tax Numbers By Early Next Year

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Nov. 25 – Vietnam's tax department will release the personal tax numbers of three million people by early next year when the Law on Personal Income Tax is implemented beginning January 1.

In the first three months of 2009, 15 million people are expected to register for tax numbers, not including organizations and other people who already have the numbers.

The public is instructed to bring a photocopy of your identity card or passport to register.Tax official, Tran Ngoc Van, told The Vietnam News Agency that the new law will regulate all tax levels for those eligible to pay tax, as well as dependants, such as children, parents, and wives and husbands, who are also required to get their own personal tax numbers.

Vietnam, Venezuela Agree to US$200 Million Joint Fund

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Nov. 24 – Vietnam and Venezuela have agreed to work together through a US$200 million joint fund in addition to 15 cooperation projects.

The Vietnam president, Nguyen Minh Triet was in Venezuala for two-day visit.“We won’t lack resources. While right now there’s a worldwide crisis of funds, a credit crisis, we’re creating funds and banks and finance mechanisms,” Chavez told AFP.

The first project using the joint fund will be for an energy-saving light bulb factory to produce 74 million bulbs annually. The factory is currently under construction in western Venezuela.

Vietnam Forecasts US$19.9 Billion Trade Deficit in 2009

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Nov. 24 – A government trade report said that Vietnam’s trade deficit is forecast to reach US$19.9 billion by 2009 as imports and exports slow.

Currently, the country's trade deficit is expected to amount to US$19 billion.The government has been trying to cap the trade deficit by increasing exports and discouraging the import of luxury goods.

In 2009, export growth is expected to slow to 18 percent from 2008's estimated 32 percent. On the other hand, import growth is expected to slow to 15 percent from 31.8 percent.

Vietnam Fostering SME Growth

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Nov. 21 – Vietnam is doing its share in encouraging the growth of small and medium-sized enterprises by providing access to capital and better production facilities.

The government has simplified regulations for business registration and international cooperation on SME development. This should lead the SME industry to improve its competitiveness and stimulate human resources development.

Vietnamese Prime Minister Rejects Korean Steel Project in Van Phong

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Nov. 19 – Vietnam's Prime Minister Nguyen Tan Dung has denied the construction of a Korean steel mill by the Posco Group in Dam Mon in Van Phong bay, Khanh Hoa province.

The Prime Minister said the Posco steel mill would clash with the development of the approved Van Phong international container port, in addition to the project not passing the strict requirements for ecological environment protection.

According to Nahn Dan News, PM Dung said that priority should be given to the Van Phong entrepot project and environmental protection for ensuring sustainable development.

If implemented, the Posco

Vietnam Opens Floating Port at Su Tu Vang Oilfield

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Nov. 19 – Vietnam has opened a floating port on its continental shelf, off the central province of Binh Thuan, to export crude oil from Lot 15-1 of the Su Tu Vang oilfield.

The port has a capacity for ships of up to 150,000 DWT. The safe area between the floating port of the Su Tu Vang oilfield and other works is two nautical miles beginnning from the far edge of the works or the anchoring spot of floating means, reports the Nahn Dan News.

Vietnamese Banks Continue Lowering Interest Rates

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Nov. 18 – Local banks in Vietnam are continuing efforts to lower lending interest rates for long and medium-term loans.

In the past two months alone, the Bank for Investment and Development of Vietnam (BIDV) has lowered lending interest rates seven times by up to 1 percent.

Already the maximum lending interest rate on short-term loans in Vietnam dong is down by 15 percent a year, reports Nhan Dan.

In addition, companies engaged in the business of oil products, steel, cement, fertilizer and drugs industries, small and medium-sized enterprises are qualified for even a lower lending interest rate of 14 percent annually.

Vietnam’s National Assembly Approves Three New Laws

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Nov. 17 – Vietnam's National Assembly has approved three laws for new tax rates on consumption, health insurance and civil judgements.

The decision also came with the ruling that will extend the tenure of People’s Councils and People’s Committees.

The Special Consumption Tax Law is applicable starting April 1, 2009 excluding the new taxes on alcohol, including beer that will apply beginning January 1, 2010.

The new law calls for a tax decrease for alcohol, including that for draught, canned and bottled beer, from 50 percent to 45 percent within 2010 and 2012. Come 2013, tax for alcohol will return to 50 percent. The law also allows tobacco products to be taxed at 65 percent.

Vietnam’s Fast-Food Industry Continues to Attract Foreign Investment

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Nov. 12 – Despite the global crisis, Vietnam remains a profitable investment for Western fast-food chains.

Many Vietnamese are still willing to spend more on fast food restaurants even if it is around 2 to 4 times more expensive than the regular rice or noodle shop.

Western fast food chains tend to introduce menu items that cater to local tastes to increase sales.

According to market research company AC Nielsen, only 8 percent of Vietnamese eat at a foreign fast food restaurant one to three times a month. The company says that because of Vietnam’s population, comprising of 65 percent under the age of 25, it still remains a profitable destination for Western food chains.

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