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SEIKO IDEAS CORPORATION
Vietnam Business Review
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Vol 50, December 24th 2014
BUSINESS REVIEW VIETNAM
www.seiko-ideas.com
Bustling Christmas atmosphere in Vietnam
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Vietnam Business Review
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INSIDE THIS ISSUE
Highlights
SBV to support high-tech agriculture
Vietnam tire market set to grow at over 8% during 2014-2019: report
Rouble depreciation affects Vietnamese market
Mobile devices market set for holiday pickings
Economy
CPI declines in both major cities
Low inflation leaves room for interest rate
Banks & Finance
Lending rises by 11.8% on track to hit annual target
Credit expected to rise in 2015 with help from agriculture sector
BIDV – Hiroshima Shinkin ink MoU
Stock market capitalization tops $55b
Investment
HCMC posts 94% FDI surge
Samsung could double-down on Vietnam by 2017
Japanese oil company signs MoU with eye on refinery
Enterprises
Firms join first Vietbuild Home expo in HCMC
Awards honour SMEs and brand name developers
Market & Prices
City ensures supply of Tet goods
HCMC office space market remains stable: CBRE report
Legal Updates
Reducing import duty rates on some vehicles from Jan 1, 2015
Law on amendments to tax Laws
Regarding tax on differences resulted from the market price – based
capital contribution
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ECONOMY
CPI declines in both major
cities
VNS - CPIs fell in the country's two
largest cities in Dec, according to
the statistics departments of Hanoi
and HCMC.
The HCMC Statistics Dept reported
that the city's CPI in Dec decreased
by 0.36% compared with the rates
in Nov due to the sinking retail
selling prices of petroleum and gas.
However, the city's CPI still
represented a rise of 4.13% over the
same period last year.
5 out of the 11 baskets of goods,
which contribute to the calculation
of the capital's CPI data, saw a
decline in prices this month. Among
those goods, transport recorded
the strongest decrease at 3.54%. It
was followed by housing, water,
electricity & construction materials
(0.95%). Culture and entertainment
(0.22%), beverage and tobacco
(0.18%) and goods and other
services (0.06%).
Following the CPI downtrend, gold
prices in Dec plunged by 0.56%
over the previous month, while the
US dollar saw a month-on-month
decrease of 0.53%.
Meanwhile, the Hanoi Statistics
Dept also reported a drop of 0.23%
in the city's CPI for Dec against the
previous month. However, an
annual rise of 1.55% was recorded.
Only 2 baskets of goods posted a
monthly decrease. These were
transport, down by 2.56%, and
housing, declining by 1.38%.
Meanwhile, the remaining goods
recorded a rise in prices, including
posts and telecommunications
(0.68%), apparel and footwear
(0.54%) and culture, entertainment
and tourism (0.42%).
Low inflation leaves room for
interest rate
VNS - Inflation is expected to dip
lower next year, which could give
the central bank room to cutback
loan interest rates, according to the
Ministry of Planning and Investment
(MPI). Initially, the inflation rate was
projected to be 4% next year.
MPI said any price adjustments,
whether in case of products or
services in domains such as
healthcare, education, power and
petrol, must be carefully considered
to prevent any significant impact.
Similarly, any decision to adjust the
price of oil should be critically
deliberated upon, as well.
This followed the Electricity of Viet
Nam's proposal to raise power
tariffs by an average of 9.5%,
beginning this month.
According to the ministry, the input-
output analysis (I/O) revealed that
a 9.5% increase in power price
would raise the production cost by
0.55%. It would also cause the end-
consumption of households to
decline by 0.58% and GDP growth
rate to decrease by 0.45%.
In addition, cutting the loan interest
rate by 1% would increase the GDP
growth rate by 0.45% and cause
the inflation rate to decline by
0.76%.
An expert said that the loan interest
rates of Vietnam remain high,
putting immense pressure on
businesses. If loan interest rates are
not lowered, then it would be
difficult for the economy to attain
stable growth in medium and long
term.
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BANKS & FINANCE
Lending rises by 11.8% on track
to hit annual target
VNS - The total payment means by
December 19 rose by 15.65%, while
credit rose by 11.8% against late
last year, announced the State
Bank of VN (SBV).
These increases helped the banking
industry to meet its targets set
earlier this year, SBV disclosed
during the regular meeting held
yesterday. Moreover, deposits
during Dec still increased by 15.5%
despite the deposit interest rate cut
of 1.5-2 percentage points against
the same period last year. Of the
total deposits, the Vietnamese
dong deposits surged by 16.31%.
SBV Monetary Policy Department
Deputy Director Do Thi Nhung
announced that credit rose by
11.8% by Dec-19. Moreover, the
growth rate for the entire year is
estimated to reach approximately
13%. This value meets the 12-14%
annual credit growth target.
SBV disclosed that lending this year
had been positively oriented
towards production and trading,
especially in the five prioritised
industries of agriculture, exports,
supporting industries and SMEs, as
well as Hi-tech businesses.
SBV Credit Department Director
Nguyen Tien Dong revealed that
lending to the high-tech agriculture
and rural development industry by
the end of this year was estimated
to rise by 16%, while lending to SMEs
would surge by 14%.
The lending interest rate this year
has declined by approximately two
percentage points, which brings
the rate to the level attained during
the 2005-06 period.
Commercial banks have also cut
rates for previous loans. Currently,
loans with lending interest rates of
more than 15% and 13% account
for roughly 3.9% and 10.65% of loans
offered, respectively. These values
are lower compared with the 6.3%
and 19.72% recorded in Dec last
year.
SBV also officially targets a credit
growth rate of 13-15% for next year
in accordance with Govt's targets
for GDP growth, inflation control
and capital demand and supply.
VN Asset Management Company
Deputy General Director Doan Van
Thang announced during the
meeting that the company had
bought VND123 trillion ($5.774b) of
non-performing loans (NPLs) by
Dec-23, of which, VND4 trillion
($187.79m) had been resolved.
However, Thang shared that more
comprehensive measures and
closer co-ordination between
relevant agencies must be
adopted to better handle the NPLs
without the use of the state's
budget capital.
Credit expected to rise in 2015
with help from agriculture
sector
VNS - Credit growth next year is
targeted to reach 13–15%, State
Bank of Viet Nam's Credit
Department Director Nguyen Tien
Dong told.
Dong shared that the government
will encourage enterprises in the
agricultural and rural development
sector to increase their production
and expand their businesses to help
reach the target.
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BANKS & FINANCE
The lending demand in the sector is
expected to gain the highest
growth of 15% next year, he
disclosed.
The economic recovery next year is
forecast to remain slow due to the
lack of significant change seen in
lending demand. Experts advised
that apart from the support to be
obtained from the agricultural and
rural development industry, the
commercial banks will also have to
boost medium- and long-term
lending for the supporting and
engineering industries to meet the
annual growth target.
Many banks, such as Oceanbank,
TP Bank, Techcombank and VP
Bank, have thus far introduced
preferential lending packages,
which target supporting and
engineering firms.
The central bank has also oriented
commercial banks to boost
medium- and long-term lending. It
highlighted the immense
importance of sustainable
investment in the production and
business of firms, especially the
small- and medium-sized ones.
Tran Hoang Ngan, a member of the
National Assembly's Economic
Committee, also shared that it is
necessary to meet the medium-
and long-term loan requirements of
firms. This is said to be important for
the recovery of the business
community.
Firms disclosed that they continue
to face difficulties in accessing
medium- and long-term loans.
Vinavico Chairman Mai Hong Bang
revealed that many banks offered
short-term loans to his company.
However, his business needs
medium- and long-term loans to
invest in mining equipment.
SBV's Dong said that the central
bank had recently issued Circular
36 to boost medium- and long-term
lending. This circular states that
medium- and long-term loans must
account for some 36–37% of
commercial banks' total
outstanding loans
Stock market capitalization
tops $55b
Biz Hub - The Bank for Investment
and Development of VN has signed
a Memorandum of Understanding
with Japan's bank Hiroshima Shinkin
to support Japanese businesses
operating in VN.
The local bank will be the first
partner in VN and is expected to
provide banking products and
services to small- and medium-sized
enterprises that are customers of
the Japanese bank.
They will include payment accounts,
credit, wage payments,
consultancy on the trade and
investment environment in Viet
Nam, taxation, and recruitment.
The foreign bank plans to organise
a business mission to visit Viet Nam
in the coming March to explore
investment opportunities.
Stock market capitalization
tops $55b
VNS - The stock market's
capitalisation was worth about
$55b as of November 30.
The capitalisation value in the first
11 months increased 19% over the
same period last year, accounting
for 33% of GDP.
According to the State Securities
Commission, there are currently 841
listed companies and those that
have registered to list shares; almost
800 unlisted companies; 43 fund
management companies; and 83
securities firms.
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INVESTMENT
HCMC posts 94% FDI surge
VNS - Foreign direct investment
(FDI) into HCM City as of December
15 has reached US$3.21 billion, an
increase of 94 per cent compared
with the same period last year,
according to figures from HCM City
Department of Planning and
Investment.
The figure includes registered
capital of $2.84 billion for 414 new
FDI projects, nearly triple last year's
figure. Most of the investment was
in the manufacturing and real
estate sectors.
In addition, 133 operational
projects have received added
capital totalling $371.2 million, 53.5
per cent of the figure in 2013.
Samsung could double-down
on Vietnam by 2017
Thanh Nien News - Samsung has
offered to raise its investment in
Vietnam to US$20 billion in 2017 if
their existing business here goes
smoothly, according to a new
government report.
The South Korean giant has
become Vietnam’s biggest foreign
investor with over $12.6 billion in
registered capital.
According to a report prepared by
the Ministry of Investment and
Planning, the giant is considering a
major role in Vietnam's
infrastructure projects.
The company has signed an MOU
with the Ministry of Industry and
Trade about building a 1,200-
megawatt thermal power plant in
the central province of Ha Tinh.
It is expected to release a final
feasibility study on the $2.45 billion
project next year.
Samsung has also expressed
interest in the planned Long Thanh
Airport in Dong Nai Province,
according to a recent story
published in Thoi Bao Kinh Te Saigon
Online.
The government approved the
airport project over concerns about
its $7.8 billion price tag and plans to
use public funds to cover half the
cost and raise the rest through
government bonds and ODA loans.
Samsung said it wants to
participate in the construction of
terminals in addition to providing
ground services and operating
duty-free shops at the airport. At
present, the state-owned Airports
Corporation of Vietnam exercises
exclusive oversight for ground
services and stores at other airports.
Samsung is also negotiating with
the military-run Viettel, a dominant
telecommunication firm in Vietnam,
to develop a smart management
system for local bus and healthcare
services.
The company also plans to raise
$2.6-2.8 billion to turn a 300 hectare
lot in the south central province of
Khanh Hoa into one of the world's
ten biggest shipyards.
The ministry’s report asked the
government to order the Ministry of
Transport, the Ministry of Industry
and Trade and various provincial
governments to consider
Samsung’s offer.
The report said all the projects are
“suitable” for Vietnam’s
development plan.
Samsung invested $5.4 billion in
Vietnam this year--a sum equivalent
to 31 percent of all foreign direct
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INVESTMENT
investment during the first 11
months of the year.
In November, it secured a license
to invest $3 billion in its handset
business in the northern province of
Thai Nguyen.
The company received approval
for a $1.4 billion electronics factory
in Ho Chi Minh City’s hi-tech park in
September and a $1 billion screen
factory in the northern province of
Bac Ninh in June.
Japanese oil company signs
MoU with eye on refinery
VNS - A memorandum of
understanding was signed between
JX Nippon Oil & Energy Corp and
the Viet Nam National Petroleum
Group (Petrolimex) late last week in
Ha Noi.
The agreement paved the way for
co-operation between the two
parties in Viet Nam's oil sector, Dau
Tu (Investment) newspaper
reported.
JX Nippon Oil & Energy Corp,
Japan's largest oil firm, was
reportedly looking at the Nam Van
Phong oil refining petrochemical
complex project and the petrol
and oil retail market.
Nguyen Van Khanh, a
representative from Petrolimex, was
quoted by the newspaper as
saying a month ago that JX Nippon
Oil and Energy Corp could become
a major partner of Petrolimex in the
Nam Van Phong project, and that
the negotiations were expected to
be concluded this year.
The Nam Van Phong refinery
project in the central Khanh Hoa
Province got a nod from the
government in 2008. It has an
estimated capital of US$4.4 billion
to $4.8 billion. Petrolimex was
assigned to set up the project and
call for investments.
The construction of the project was
initially scheduled to start in 2011,
and it was to become operational
at the end of 2013. However, the
project missed the deadline and
the total estimated capital was
hiked to $8 billion.
Currently, only the ongoing Nghi
Son oil refinery has foreign partners.
The government allowed foreign
partners to set up distribution only
after the plant was put into
operation, with the condition that
the minimum capital contribution
from the Vietnamese side was 51
per cent.
According to the newspaper,
Petrolimex could issue additional
shares to its foreign partner to
reduce the State's stake.
Petrolimex, with a charter capital of
VND10.7 trillion ($504.7 million),
operates under a joint stock
company model after launching an
IPO in July 2011, with the State
holding a 94.99 per cent stake.
Petrolimex's market share in the
petrol and oil market ranges
between 48 per cent and 55 per
cent.
In August, Reuters reported that JX
Nippon Oil & Energy Corp was
looking at building refineries and
petrol stations in Indonesia and Viet
Nam, seeing the two markets as the
most promising locations for
investment amid declining fuel
consumption at home.
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ENTERPRISES
Firms join first Vietbuild Home
expo in HCMC
VNS - Around 270 local and foreign
companies will showcase their
newest products and services at
Vietbuild Home 2014, to be held at
the Saigon Exhibition and
Convention Centre from December
27 to 31.
Focusing on interior and exterior
products and home appliances,
Vietbuild Home, the first of its kind in
HCM City, will feature nearly 900
booths displaying a wide range of
products including movable
partitions, metal ceilings, doors and
windows and accessories, paints,
handicrafts, wallpapers, bathroom
equipment, electronics, cooling
devices and wooden furniture.
Nguyen Dinh Hung, chairman of
the Vietbuild Construction
International Exhibition Organising
Corporation, said 20 per cent of
exhibitors were foreign firms from
Thailand, South Korea, Singapore,
the US, Malaysia, Japan, Italy and
Germany.
Demand for interior and exterior
furnishing items usually increased at
the year-end as people renovated
their houses to welcome Tet, said
Pham Van Bien, head of the event's
organisation board. Therefore, the
event provided a well-timed
opportunity for companies to
market their products and
consumers to seek home decor
goods.
Awards honour SMEs and
brand name developers
VOV - A presentation ceremony for
the biennial Vietnam National
Trademark Council (VNTC) awards
was held December 23 in Hanoi.
On hand to present the 63 awards
was Do Thang Hao, deputy minister
of the Ministry of Industry and Trade
(MoIT).
In his address, Hao remarked that
small and medium sized businesses
(SMEs) have been the foundation
for Vietnam’s economic
development and a major force
underpinning social stability.
He explained that the aim of the
awards programme is to promote
brand name and trademark
development of Vietnamese
businesses.
The honourees were selected
based on the soundness of their
operations and performances and
their commitment to the three
values of innovation, creativity and
entrepreneurship.
Hao stressed the importance of
expanding markets and increasing
the quality of products in the
context of the country’s deepening
regional and global integration.
A wide variety of business support
consultancies, conferences,
seminars, and training courses were
launched by the MoIT over the past
year to help raise business
awareness of the importance of
improving marketing capacity and
protecting product trademarks,
Hao said.
Hao praised the VNTC, the Ministry
of Industry and Trade (MoIT), and
the honourees for their initiatives
and dedication to promoting
Vietnam’s international image,
including the National Trademark
Programme and elevating the
Made-in-Vietnam trademark.
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MARKET & PRICE
City ensures supply of Tet
goods
VNS - Enterprises in HCMC have
completed plans to prepare goods
for the Tet holiday, which falls next
year on February 19.
Van Duc Muoi, general director of
Vissan Limited Company, which
processes and trades fresh and
frozen meat and meat-related
foods, told Viet Nam News that the
company had prepared 46,000
pigs, 2,000 cows and 4,000 tonnes
of processed food to serve
customers, 10% higher than the
previous Tet.
"There will be no price shock during
Tet," he said, adding that "we will
slash prices sharply on days near Tet
to stimulate consumption".
Many poultry and egg providers like
Ba Huan and Vinh Thanh Dat plan
to increase supply by 10-15% for Tet.
As for confectionery products, most
producers plan to increase supply
and offer many kinds at a wide
price range to meet varying tastes
and budgets of customers.
The Bien Hoa Confectionery
Corporation (Bibica) plans to supply
1,350 tonnes of confectionery and
chocolate for Tet, up 20% over the
previous year.
The Kinh Do Confectionery Joint
Stock Company has said it plans to
supply 5,000 tonnes of
confectionery for Tet, 500 tonnes
higher than last year's holiday
period.
Le Thi Thanh Lam, deputy general
director of Saigon Food Company,
said the company would supply the
market 550 tonnes of food, a year-
on-year increase of 5-10%.
Supermarkets have also increased
supply of essential goods to meet
demand in the run-up to Tet and
after Tet.
Saigon Co.op has increased supply
of essential goods by two to three
times compared to normal months
to ensure adequate supply during
the holiday. About 90,000 tonnes of
goods are expected to be supplied
via its chain in three months before,
during and after Tet, which is 15%
higher than last year's Tet.
Besides essential items sold at 10%
lower than the market price under
the city's price stabilisation
programme, Saigon Co.op, in
collaboration with suppliers, will
slash prices by 10-50% on thousands
of other items.
It also plans to organise at least 141
mobile sales trips to the city's
remote districts as well as industrial
parks and export processing zones
to serve buyers.
Similarity, Big C supermarket chain,
which expects a 15% increase in
demand, carried out purchasing
measures to ensure supply and
stable prices.
Besides preparing abundant
sources of confectionery, fruits,
home decor items, the supermarket
will have about 420 tonnes of fresh
meat to serve customers during the
holiday.
This year, it launched 17 kinds of gift
baskets and boxes at prices from
VND59,900 to VND1.7 million (from
$2.85 to $80).
Until the end of February, it is
offering a discount of up to 50% on
nearly 4,000 Tet products.
South Korean supermarket chain
Lotte Mart if also introducing
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MARKET & PRICE
various kinds of Tet gift baskets to
meet customers' demand.
It expects sales to go up by 25% for
gift baskets and 60% for meat, eggs,
banh chung (square glutinous rice
cakes), banh tet (cylindrical
glutinous rice cakes) and fruits and
vegetables.
Retailers plan to increase the
number of cashiers and other
activities to ensure convenience
and safety for customers during the
peak purchasing season.
HCMC office space market
remains stable: CBRE report
VNN - In the fourth quarter the HCM
City office buildings market has
remained stable with limited new
supply in grades A and B in both
the central business districts and
elsewhere, according to property
consultant CBRE.
The Government's success in
reducing inflation (and lending
rates), cutting back spending,
attracting foreign direct investment
and achieving reasonable GDP
growth of 5.6% have improved
market conditions, which in turn
have improved the confidence
and outlook of both established
businesses and new investors.
This demand in the market
combined with limited supply has
helped to stabilise rents and reduce
vacancy rates. In the fourth quarter
rents for both grades A and B have
been quite stable (0.1 percentage
points down from the previous
quarter).
In terms of vacancy rates, grade B
performed slightly better than
grade A as they declined by 3 and
1.8 percentage points from a year
earlier.
Net absorption in the quarter
improved significantly for both
grades A and B – by 59.8 pps and
31.7 pps – which the latter
continuing to perform better than
the former.
The five most active sectors were
banking, finance, insurance, drugs,
manufacturing and IT/technology
even as relocation for cost reasons
ceased to be a major driver.
Expansion and new leasing are
expected to drive the office market
next year given the economy is
improving and Viet Nam returns to
the radar screen of investors.
For small- to average-sized
occupiers, the market does still
provide some viable options, but for
occupiers seeking quality,
international standard, and
managed buildings in the central
business districts, limited new supply
will come from large scale, mixed-
use projects and from those
developed partly for owner
occupation.
The notable projects coming online
in 2015 include Vietcombank,
Viettel, and SSG.
So while construction can be seen
across the central business district,
the reality is that for large tenants
planning an occupancy solution,
the market will remain tight until the
end of 2014.
As a result rent levels will remain
stable at least until Q1 2015 when
the next wave of supply comes
online.
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LEGAL UPDATES
Reducing import duty rates on
some vehicles from Jan 1, 2015
VLO - Circular No. 173/2014/TT-
BTC dated November 14, 2014 of
the Ministry of Finance on adjusting
preferential import duty rates
applicable to some commodities in
the preferential import tariff issued
together with Circular
No. 164/2013/TT-BTC dated
November 15, 2013 of the Minister
of Finance to perform WTO
commitments in 2015.
The commodities on which import
duty rates are reduced in
accordance with this Circular (the
number in bracket is the previous
import duty rate) include:
- Fish of all kinds, HS 0303.19.00: 18%
(19%)
- Motor-homes, HS 8703.23.40: 64%
(67%)
- Motor cars of a cylinder capacity
exceeding 2,500 cc, HS 8703.23.94:
64% (67%)
- Four-wheel drive motor cars, HS
8703.24.51: 55% (59%)
- Motor cars of a cylinder capacity
exceeding 3,000 cc and other, HS
8703.24.59: 64% (67%)
- Motor-homes of a cylinder
capacity exceeding 3,000 cc, HS
8703.24.70: 64% (67%)
- Four-wheel drive motor cars, HS
8703.24.91: 55% (59%)
- Other motor cars, HS 8703.24.99:
64% (67%)
- Motor vehicles for the transport of
goods of G.V.W. not exceeding 5
tones, HS 8704.10.23: 56% (59%)
- Other motor cars, HS 8711.50.90:
40% (47%)
This Circular takes effect on January
1, 2015.
Law on amendments to tax
Laws
VLO - Law No. 71/2014/QH13 dated
November 26, 2014 of the National
Assembly on amendments to tax
Laws
This Law is to amend, supplement
05 taxes - related Laws, including:
1. Law on Enterprise Income Tax
No. 14/2008/QH12 , which has been
amended and supplemented by
Law No. 32/2013/QH13
2. Law on Personal Income Tax
No. 04/2007/QH12 , which has been
amended and supplemented by
Law No. 26/2012/QH13
3. Law on Value Added Tax
No. 13/2008/QH12 , which has been
amended and supplemented by
Law No.31/2013/QH13
4. Law on Royalty Taxes
No. 45/2009/QH12
5. Law on Tax Administration
No. 78/2006/QH11 , which has been
amended and supplemented by
Law No. 21/2012/QH13
Accordingly, there are some
notable changes such as: Annulling
the limit rate of 15% applicable to
such expenditures as for
advertisement, marketing,
reception, festivities, etc.; incomes
of the enterprises from farming,
breeding, processing of agriculture
and aquaculture products are
applicable to the tax rate of 15%;
Individual traders shall be
exempted from PIT if their incomes
are valued at VND 100 million or
less; In monthly and quarterly tax
declaration dossiers are not
required to enclose the Table of
purchase and sale invoices;
Interests on late payment of taxes
shall just apply the rate of
0.05%/day regardless of long or
short delayed time
This Law takes effect from January 1,
2015
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LEGAL UPDATES
1. To abolish some provisions on
exchange rate upon the
determination of revenue,
expenditure, taxed price, taxed
income, taxable income and tax
payment to State budget provided
at:
a) Article 8 and Clause 3 Article 9 of
Law on Enterprise Income Tax
No. 14/2008/QH12 , which has been
amended and supplemented by
Law No. 32/2013/QH13;
b) Clause 1 Article 6 of Law on
Personal Income Tax
No. 04/2007/QH12 , which has been
amended and supplemented by
Law No. 26/2012/QH13;
c) Clause 3 Article 7 of Law on
Value Added Tax
No. 13/2008/QH12 , which has been
amended and supplemented by
Law No. 31/2013/QH13;
d) Article 6 of Law in Excise Tax
No. 27/2008/QH12 ;
dd) Clause 3 Article 9 and Article 14
of Law on Import – Export Duties
No. 45/2005/QH11 ;
e) Clause 4 Article 86 of Customs
Law No. 54/2014/QH13 .
2. To abolish Point c Clause 1 Article
49 of Law on Tax Administration
No. 78/2006/QH11 , which has been
amended and supplemented by
Law No. 21/2012/QH13.
3. To abolish provisions related to
tax determination towards
individual traders specified in
Clause 1 Article 19, Clause 1 Article
20 and Clause 1 Article 21 of Law
on Personal Income Tax
No. 04/2007/QH12 , which has been
amended and supplemented by
Law No. 26/2012/QH13
Regarding tax on differences
resulted from the market price
– based capital contribution
VLO - Dispatch No. 16200/BTC-
TCT dated November 6, 2014 of the
Ministry of Finance on conducting
cost-accounting and the tax policy
for the activity of capital
contribution in enterprises.
The document is to guide the
determination of tax on capital
transfer in the case limited liability
companies adding capital and
new members with the condition
that the new members must pay an
amount of money (market price)
higher than par value of the
actually contributed capital
For example, a limited liability
company has two members (X and
Y) with the charter capital of VND
100 billion. The company is going to
increase the charter capital to VND
130 billion by adding new member
Z who shall contribute VND 30 billion.
However, the condition on which Z
must comply is that Z must
contribute VND 40 billion for
possessing the capital ratio
equivalent to only VND 30 billion.
Accordingly, the difference of VND
10 billion (40 – 30) shall be taxed or
exempted from capital transfer tax
under this Dispatch as follows:
- If the difference of VND 10 billion is
regarded as the common
possession of the enterprise, it shall
be accounted into the capital
account 4118 and shall not be
taxed
- In contrast, if it is regarded as
private possession and divided to X
and Y, each member receiving this
difference shall be liable to capital
transfer tax (if the member is an
individual) or account it into EIT –
liable income (if the member is an
organization)
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SBV to support high-tech
agriculture
VNS - SBV's An Giang branch will
give VND3 trillion ($142.8m) to high-
tech projects in agriculture in the
southern An Giang province.
Announcing this in a meeting here
on Dec-17, the bank's branch
director Le Trong Nghia said that
the fund will be available for the
owners of high-tech agricultural
projects, as approved by the
provincial leaders.
The borrowers will enjoy a maximum
interest rate of 7% on short-term
loans and 10.5% per year on
medium-term and long-term loans.
Priority will be given to owners who
are provided training in applying
advanced technology in
agriculture.
Phan Van Sau, secretary of the An
Giang provincial party committee,
lauded the contribution that the
bank has made to its agricultural
and rural development sector.
An Giang has focused on
developing 8 groups of farm
produce since 2012, including rice,
vegetables, fisheries and fruits. The
province has 22,200ha of large
fields for rice cultivation and 35ha
for planting medicinal herbs.
Farmers earn VND25 million ($1,190)
per ha of medicinal herbs and
more than VND200 million ($9,523)
per ha of banana trees.
Vietnam tire market set to
grow at over 8% during 2014-
2019: report
VIR - The Vietnamese tire market is
projected to have a compound
annual growth rate of more than
eight percent during 2014-2019, a
global market research firm said in
its latest report.
The tire market in Vietnam is
expected to be driven by
prominent factors including
growing automobile sales, a rising
automobile fleet, favorable
government policies and increasing
foreign investments in the
automotive sector, TechSci
Research said Friday, citing findings
from its “Vietnam Tire Market
Forecast & Opportunities, 2019.”
Vietnam is “emerging as a major
consumer of tire in Asia-Pacific on
account of significant rubber
resources and growing motorization
level,” the report stated.
The “Vietnam Tire Market Forecast
& Opportunities, 2019” has
evaluated the future growth
potential of the tire market in
Vietnam and provides statistics and
information on market structure,
exports and future growth potential,
according to TechSci Research.
“The report is intended to provide
cutting-edge market intelligence
and help decision makers in taking
sound investment evaluation…[It]
also identifies and analyzes the
emerging trends along with
essential drivers, challenges and
opportunities available in the tire
market in Vietnam,” the company
said in a press release.
Vietnam is the third largest rubber
producing nation worldwide,
TechSci said, citing the Association
of Natural Rubber Producing
Countries.
“This, in turn, provides considerable
opportunities to tire manufacturers
to increase production capacities
and establish new manufacturing
plants in Vietnam,” the report reads.
In 2013, the two-wheeler tire
segment dominated the
Vietnamese tire market with a
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majority share, followed by the
passenger car and commercial
vehicle & OTR tire segments,
according to the report.
OTR, or off the road, tires include
tires for construction vehicles such
as wheel loaders, backhoes,
graders, trenchers and large mining
trucks.
Vietnam mostly imports automobile
tires from countries such as Thailand,
Indonesia, China and Japan.
Thailand remained the largest
exporter of tires to Vietnam in 2013,
followed by Japan, China and
Indonesia.
These countries cumulatively
accounted for around 72% of the
total tire imports in Vietnam in the
same year.
Tires produced in Vietnam,
meanwhile, are shipped to
countries like the U.S., Malaysia,
Saudi Arabia and Brazil, among
others.
In Vietnam, HCMC, the Mekong
Delta city of Can Tho and Bien Hoa,
the capital city of the southern
province of Dong Nai, form a
dominating region for tire sales,
which makes up some 41% of the
total sales volume in the country,
according to Karan Chechi,
research director with TechSci
Research.
Bridgestone, Michelin and DRC are
the top tire brands in Vietnam, and
these “are expected to lead the
market during the forecast period
in spite of competition from other
players, due to their high quality
and brand availability”.
TechSci Research is a global market
research and consulting company
which provides research-based
consulting solutions to its customers
worldwide, spanning a range of
verticals.
The company has offices in
Canada, India and the UK.
Rouble depreciation affects
Vietnamese market
VNN - Analysts predicted that
imports from Russia will increase
sharply since Russia-made and
Russian-sourced products have
become cheaper.
Meanwhile, Vietnam’s travel
industry has suffered from a lower
number of Russian travelers.
Nguyen Lan Anh, the owner of a
food shop specializing in distributing
Russian products, said sales have
increased sharply in recent days
because most Russian products are
getting cheaper.
“One kilo of sunflower seed is now
priced at VND300,000 instead of
VND340,000, while one kilo of
almond chocolate is VND350,000
instead of VND390,000,” she said.
Hanh is pleased about the
prosperous business, saying that
demand for Russian dried food
would be higher from now to Tet.
“The cheap rouble has made
Russian products cheaper. This is
really good news for Vietnamese
consumers,” she said.
The owner of a wine shop has also
confirmed that Russian wine
products have been selling very
well. “The price has dropped from
VND900,000 to VND750,000 per
bottle,” he said.
“I sold 80 wine bottles in just four to
five days,” he added.
“Vietnamese merchants are getting
big benefits from the rouble
depreciation,” Lan Anh explained.
“In mid-2014, one US dollar was
converted for 35 roubles only, but
now we can get 80 rouble for just
one dollar.”
Meanwhile, the owner of the wine
shop said Vietnamese businesses
can make “double profits” if they
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buy Russian products in Russia and
make payments in US dollars.
“The product prices have not been
adjusted in Russia yet. Therefore,
you can expect a profit of 20-40
percent if buying products now.
And you will make a profit once
more when you sell products in
Vietnam,” he said.
Vietnamese now not only hunt for
Russian food and essential goods,
but also high-value products as
watches, cameras and electronics.
Both Russian and foreign-made
products available in the Russian
market have attracted Vietnamese.
An analyst noted that a laptop in
Russia can be bought at about
$380. As such, if counting on service
fees, a product would be priced at
around VND10 million, or VND3-4
million cheaper than products of
the same kinds available in the
domestic market.
However, while importers are
happy about the rouble
depreciation, travel firms are
worried about the sharp fall in the
number of Russian travelers.
Nguyen Duc Tan, managing
director of Anex Tour Vietnam,
noted that the number of Russian
travelers to Vietnam has decreased
since late September.
The travel firm expected to receive
11,500 Russian travelers a month
and 120,000 Russian this year.
“Previously, there were some 200
bookings a day, or about 400
travelers, but the figure has
decreased by 60 percent,” he said.
Mobile devices market set for
holiday pickings
VNS - Most mobile device agents
and stores in HCMC expect to
achieve high turnover in December
and in early 2015, thanks to several
holidays and festivals, according to
market observers.
The prediction was based on
business results that the companies
have achieved in recent weeks,
particularly after Apple's new
iPhone 6 and iPhone 6 Plus
handsets were put on sale in mid-
November in the country.
In November, at FPT's shops, the
two iPhones 6 brought the highest
turnover, followed by iphone 5s,
Samsung Galaxy Note 4 and
Samsung Galaxy Note 3.
Other popular smartphones include
Asus, Sony, Oppo and Nokia.
Turnover for Thegioididong.com
and dienmay.com increased by
10% & 15% compared to October &
2013 figures, respectively.
A representative of
thegioididong.com, who declined
to be named, said that his
company's turnover rose because
of iPhone 6 and 6 Plus and
Samsung Galaxy Note 4 Gold sold
well as sales from promotions (12-24
per cent discounts) on many
smartphones such as Samsung
Grand 2, Nokia Lumia 1520 and HTC
Butterfly S.
In addition to the products, some
products such as the new Nokia 535
and Oppo R5 have also attracted
customers because of their
convenient features and
reasonable prices.
As for the PC tablet market,
Nguyen Hong Linh from FPT said the
Asus Fonepad FE170 with full 3G
telephony functionality was one of
the bestsellers last month among
PC tablets selling for less than VND3
million.
Five out of 10 kinds of Samsung's
tablets, three types of Apple iPads,
and several kinds of Asus tablet PCs
were also big earners.
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SEIKO IDEAS CORPORATION
Our services Training (Languages & Soft skills)
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