Vietnam News Brief: Private Car Services, New Visa Regulations, and Industry Liberalizations
This edition of Vietnam Regulatory Brief examines a new car hailing service, eased visa restrictions, and new industry liberalizations in Vietnam.
Government approves private car hailing service
The Vietnamese government recently approved a transportation service for private vehicles. GrabCar, which is a transport aggregator using registered private vehicles will launch its service in five cities in December. The transport service will start operating in the capital Hanoi, Da Nang, Ho Chi Minh City as well as in Quang Ninh and Khanh Hoa provinces.
News reports define the mobile application GrabCar as an “application of information technology in supporting the management and connection of commercial passenger transportation by contract.” The government stated that GrabCar would have to provide a report listing all its registered private vehicles to ensure that the authorities can check on taxes and compliance with legal requirements. The app will be the first authorized peep-to-peer app for cars in the Vietnam. End users of the app stand to gain from the lower fares due to approval for the app. Dezan Shira & Associates believe that the approval may be indicative of a change in the attitude of the government towards disruptive innovators in the transport sector.
GrabCar will operate via GrabTaxi’s app, which is one of Asia’s leading taxi operators. The GrabTaxi service in Vietnam started in February 2014 and a good record of accomplishment has ensured approval for GrabCar, which is the parent company’s flagship service.
Government announces new visa regulations
The Vietnamese Ministry of Finance recently announced new visa regulations and changes in associated stamping fees. The new regulations will reduce the Vietnam Visa stamping fee from 23 November. Foreigners from countries not on the Vietnam Visa Exemption list will pay a lower visa fees. The government reduced the fee for both single and multiple entry visas as well. The new stamping fee for single entry for one/three months is now US $25. The stamping fee for multiple entry will be categorized into three bands. For under three months, the fee is US $50, for three-six months the fee is US $95 and for six-twelve months, the fee is US $135. Citizens from countries that are on the Vietnam Visa Exemption list Vietnam can gain re-entry within 30 days for a fee of US $5. In addition, Travel Cards will be available for Chinese tourists travelling in Vietnam border provinces for US $10.
Local experts believe that the new regulations will enable businesses to gain easier access to Vietnam’s markets. The move will reduce the logistical concerns that businesses face when sending their personnel to Vietnam. The regulatory change and the reduction in visa stamping charges will also imply a lower cost of operation for corporations. Earlier, travelers from countries on the Vietnam Visa Exemption list would require at least 30 days before re-entry to Vietnam or pay US $45 stamping fee with a new application in order to gain re-entry in less than 30 days. The government believes that the new regulations will create a more favorable perception of Vietnam for expatriates and foreign corporations.
Vietnam prepared to liberalize over twenty industries
Vietnam will liberalize its service sector in the coming months. The government will relax regulations on foreign investments in over 20 industries. The comprehensive details of the regulatory reforms are currently unavailable. However, the specifics of a few reforms have been announced, including reforms in the financial, retail, cinema and meat production sector.
For instance, a law mandates the screening of Vietnamese movies in the country’s movie theaters if the government deems it necessary. The government is set to either repeal or amend the law. Meanwhile, the liberalization will allows foreign groups to buy a stake of up to 20 percent in local banks. Foreign groups were only allowed to buy a maximum of 15 percent in local banks before the reforms. In addition, Vietnam will also remove constraints on leasing and subleasing properties, thus making it more convenient for businesses to establish on-the-ground operations in Vietnam. News reports indicate that Vietnam also plans to gradually phase out tariffs on meat products.
Local experts believe that the regulatory changes will restore the waning business confidence in Vietnam. Foreign companies are expected to benefit from the regulatory changes. Japanese corporations in particular have welcomed the new regulations in the financial sector. Mizuho Financial Group – a large Japanese enterprise – recently stated that the regulations would enable them to expand their operations in Vietnam. The recent changes, to liberalize more than 20 industries were made to ensure a freer and fairer market. The reforms are linked to the recent Pacific Trade Deal also known as the Trans-Pacific Partnership (TPP).
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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