On August 15, 2019, the Government issued Decree 69/2019 / ND-CP stipulating the use of public assets to pay investors when implementing construction investment projects in the form of Build – Transfer Contract (B-T Project). This Decree takes effect from October 1, 2019.
Accordingly, Article 5 of Decree 69/2019 / ND-CP stipulates the land fund used to pay investors to implement BT projects, specifically:
1. The land fund shall be paid to investors in the form of land allocation with land use levy payment or land rental with full one-off rental payment for the entire lease term in accordance with the land law.
2. The land fund to be paid to investors is land without land clearance or land which has been completed for site clearance, ensuring the following provisions:
a) Land is subject to land use plannings and plans approved by competent state agencies.
b) The land recovery for the land fund paid to the investors implementing BT projects must comply with the land law.
c) In case the land fund that has been used for site clearance has been paid to the investor to execute a BT project, the provincial-level People’s Committee shall report to the Prime Minister for consideration and decision before deciding on the owner. Investment project.
On that basis, the competent state agency shall select the land fund to be paid to the investor to ensure that the value of the land fund expected to be paid is equivalent to the value of the approved BT project, of which:
– When signing a BT contract, if the actual value of the land fund cannot be determined, the estimated equivalent land fund value determined at the time of signing the BT contract is equal to (=) the expected land area (x) with Land price according to new purpose of use on the Land Price List issued by the provincial People’s Committee (x) with the Land price adjustment coefficient to calculate land use levy or land rent issued by the provincial People’s Committee.
– When a competent state agency issues a decision on land allocation or land lease, the value of the paid land fund shall be determined in accordance with Article 6 of this Decree.
In summary, the issuance of Decree 69/2019 / ND-CP has created an important legal basis for the implementation of Build – Transfer Contracts, which is a premise to encourage the Investing in the nation’s infrastructure construction activities as well as promoting the development of the economy.
Most signed free trade agreements (FTA) have reflected that Vietnam always run deficit trend, however, in July 2019, this trend is changing into surplus thanks to CPTPP implementation.
This is considered as a highlight of export, import and trading relationships between 10 countries enterting into CPTPP, which has come into effect from the begin of the year.
The latest data of General Department of Customs compares export and import turnover, and trade deficit of Vietnam with other 10 countries of CPTPP in the first 7 months in 2018 and that in the first 7 months in 2019 as follows:
(Unit: USD millions)
| Country | Export | Import | Trade deficit | |||
| The first 7 months in 2018 | The first 7 months in 2019 | The first 7 months in 2018 | The first 7 months in 2019 | The first 7 months in 2018 | The first 7 months in 2019 | |
| 1. Japan | 10,435 | 11,445 | 10,574 | 10,627 | -139 | 818 |
| 2. Malaysia | 2,391 | 2,268 | 4,422 | 4,203 | -2,031 | -1,935 |
| 3. Canada | 1,667 | 2,212 | 542 | 558 | 1,125 | 1,654 |
| 4. Singapore | 1,859 | 1,942 | 2,888 | 2,399 | -1,029 | -457 |
| 5. Australia | 2,307 | 1,934 | 1,977 | 2,610 | 330 | -676 |
| 6. Mexico | 1,289 | 1,580 | 908 | 350 | 381 | 1,230 |
| 7. Chile | 507 | 544 | 186 | 176 | 321 | 368 |
| 8. New Zealand | 275 | 309 | 330 | 326 | -55 | -17 |
| 9. Peru | 154 | 188 | 35 | 47 | 119 | 141 |
| 10. Brunei | 6 | 34 | 18 | 81 | -12 | -47 |
| In total | 20,890 | 22,456 | 21,880 | 21,377 | -990 | 1,079 |
Increase of export, decrease of import
Export turnover of Vietnam in 10 other countries of CPTPP is quite good, accounting for 15.4% of total export turnover of Vietnam. Among 27 markets with over USD 1 billion export turnover, there are 6 markets coming from CPTPP
The growth rate of Vietnam’s export turnover to these markets is lower than the general growth rate (7.5% compared to 7.8%), but the increase is different from that of China (in 1991), or that in Thailand (in 1995), or that in Korea (in 2018) – at this time, exports fell or rose low, while imports increased, making trade deficit rise.
Total export increasing rate of these markets reached USD 156.5 million, among which, markets in Japan, Canada and Mexico are witnessed a quite good increase to USD 1,010 million, USD 546 million and USD 290 million, respectively.
The export of agricultural, forestry and fishery products to China in 7 months this year was difficult because China changed the import quota policy, while that in markets of 10 other countries of CPTPP reached a good level, of which Japan was ranked first, followed by Malaysia, Canada, Australia, Singapore, Mexico, New Zealand, Chile, Peru, Brunei, contributing to reduce the decline of export these producst from the Chinese market.
Import turnover of Vietnam in these markets is decreased by 2.3%, equivalent to USD 503 million, compared to the same period of the previous year. In particular, markets of Mexico, Singapore and Malaysia are witnessed a decrease of import turn over to Vietnam to USD 659 million, USD 490 million and USD 219 million, respectively, etc.
Shifting from deficit to surplus
Because Vietnam’s exports to 10 countries in CPTTP increased, while imports from here decreased, so if in the same period last year Vietnam was in a trade deficit position, then in 7 months of this year, trade surplus was quite good.
In these 10 markets, Vietnam is in a trade surplus with 5 markets and the trade surplus of each of these 5 markets are above USD 100 million, on which Canada is having the largest surplus, followed by Mexico, Japan, Chile and Peru. Notably, the trade surplus was higher than that in the same period last year, especially Japan has shifted its trade deficit to a big trade surplus.
The above developments are positive results of implementation of CPTPP. The results are more meaningful when they came out in the first months. Thus, one the one hand, Vietnamese enterprises have taken advantage opportunity of the market with reducing import tax rate to these countries. On the other hand, these are also markets that can contribute to capability of Vietnam in handling difficulties in exporting agricultural, forestry and fishery products to China.
Although Vietnam has achieved positive results, it is only the first step, therefore, we should not be subjective. Vietnam’s exports to some markets have been reduced (to USD 373 million with Australia, to USD 122 million with Malaysia); imports from some markets have been risen (i.e Australia, Canada, Peru, Brunei); trade deficit happened in some markets (such as Malaysia, Australia, Singapore, Brunei, New Zealand). Notably, Australia carried out trade surplus last year but now carries out trade deficit, while trade deficit with Brunei is increasing.
In addition, Vietnam’s export share is still low compared to the total imports of these markets. The growth rate of exports to these markets is lower than the general growth rate of the total export turnover of Vietnam, affecting the implementation of the general export growth plan, etc.
Source: http://cafef.vn/voi-cpttp-viet-nam-chuyen-tu-nhap-sieu-sang-xuat-sieu-20190821144831587.chn
FDI companies sector is witnessed a positive production volume, 91.1% of which are expected to increase or remain their volume while that of non-state companies and that of state companies are of 88.9% and 87.9%, respectively.
According to General Statistic Office, there are 91.9% companies optimistic that production volume will increase and remain stable in last 6 months compared to that of the first 6 months of 2019, among which, there are 58.6% of companies are expected to increase their production volume, 33.3% of companies are expected to remain their production volume while only 8.1% of companies forecast a decrease on their production volume.
This tendency of the first 6 months continues during the last 6 months in 2019. In particular, 93.1% of FDI companies, 91.6% of non-state companies and 90.6% of state companies are expected to increase or remain their production volume.
In relation to orders, 89.7% of companies forecast that their order volume will increase and remain in comparison with Quarter II (i.e there are 47.9% of companies are expected to increase their production while 41.8% of companies are expected to remain their production); there are 10.3% of companies forecast that their production volume will be reduced.
New orders are forecasted to be more positive in the last 6 months than that in the first 6 months. 91.9% of companies are expected to increase and remain their production volume (i.e 54.1% of companies forecast the increasing figure while 37.8% of companies forecast the remaining figure) while there are 8.1% of companies forecast their reducing production figure.
Sectors which are expected to gain more new orders in the last 6 months consist of production of electronic products, computers and optical products (62.3%); leather and related products production (61.2%); outfits production (58.5%); motor vehicle production (57.9%); medicines and pharmaceuticals production (57.3%); etc.
There are 6 coastal and marine economic sectors mainly developed in the Central region, which creating positives results.
The Central region is the sea front of Vietnam, accounting for 50% of sea front provinces of the country (14/28 provinces), with the length of the coastline of 1,900 km, accounting for 60% of that of the country, and is an important position in implementing the Strategy for sustainable marine economy according to Resolution No. 36-NQ/TW.
Marine and coastal economic sectors that the region is focusing on consist of: Marine tourism and service; construction of deep-water sea ports of international transshipment and specialized sea ports in association with industrial complexes; exploitation and processing of oil and gas; farming, exploitation and processing seafood, logistics service and fisheries infrastructure; coastal industry; renewable energy.
According to Ministry of Planning and Investment, tourism industry of the Central region is becoming smokeless industry and an engine for growth of the region. In 2018, the region attracted more than 54 million tourists, of which 11.9 million tourists are foreigners, and total revenue from tourism reached nearly VND 121,670 billion, which equivalent to 39.8% of the total foreign tourists, 32.6% of the total domestic tourists and 19.4% of total revenue from tourism of Vietnam.
By June 2019, there have been 209 FDI projects in 11 economic zones in the region with registered capital of USD 31.942 billion and realized capital of USD 24.156 billion; there have been 1005 domestic projects with registered capital of VND 587.615 trillion and realized capital of VND 258,981 trillion.
The total value of industrial production in the economic zones in the region in the first 6 months of 2019 was USD 8.213 billion; import and expert value reached USD 12.046 billion and payment for State budget reached VND 17.602 billion, etc.
However, Ministry of Planning and Investment also assesses that coastal economic development of the region facing with some difficulties. In particular, tourism business of the region is not carrying on effectively in corresponding to its potential. The infrastructure of the region is developing without same synchronicity, especially overload coastal streets, international airport in tourist center (i.e Hue and Danang) and lack of tourist ports.
Mobilized resources for developing tourism are restricted; tourism development links between localities in the region are ineffective; coordination between tourism and related industries is not tight; the lack of trained and high-quality laborers has not satisfied and kept pace with tourism development of the region.
Source: http://baochinhphu.vn/Kinh-te/Phat-trien-cac-mui-nhon-kinh-te-bien-mien-Trung/373156.vgp
Franchise has facilitated many foreign brands to break into Vietnam. In addition to franchise industry for food, beverage or education, franchising in goods retail industry is expected to popular in the future.
With more than 93 million people, Vietnam is considered as one of three most vibrant retailing markets in Asia – Pacific region (with China and Indonesia), at the yearly growth rate of nearly 12%. As forecasted, revenue in retailing industry of Vietnam may reach nearly USD 180 billion in 2020.
The trend of foreign brands breaking into Vietnam will continue to be increased, mainly by franchising. Until now, there have been hundreds of brands franchised. In 2017, there were 31 foreign companies registering franchising in Vietnam. These companies mainly come from the UK, the US, France, Taiwan, Hong Kong and Japan in fast food (F&B), education, consumers goods industries, etc.
With the open-door policy facilitating investment and business of foreign companies in Vietnam, the country always attracts foreign brands breaking into Vietnamese market. Accordingly, many new forms of business have been appeared in Vietnam, namely garments, children education, footwear and dining restaurants industries, etc.
Besides, investment in convenience stores is attracting investors. This is an opportunity for retailing brands breaking into Vietnamese market. In retailing sector, in addition to currents segments as commercial centers, supermarkets and hypermarkets, segment in convenience store is developing vibrantly with the participation of a number of foreign and domestic big companies. Until now, there are thousands of convenience stores operating within the country, mainly in Hanoi and Ho Chi Minh city.
However, according to Mr. Yun Ju Yong as CEO of Vietnam GS 25, there are no any retailing brands franchised on trend. At the moment, retailing industry is attracting many companies to building up, but there haven’t been any brands franchised. Meanwhile, GS25 is a retailer in South Korea operating about 14,000 convenience stores, 80% of which are franchised models.
As forecasted, franchising of convenience stores will be more vibrant in the future because of low investment costs but positive profits, thanks to investment management focused on only one franchise to attract consumers.
However, according to experts, franchising models in Vietnam are operating mainly by traditional management, rather than by digital application. Therefore, the control and adjustment of management costs will face difficulties. This is the main reason why many franchise models operated ineffectively and then leaved Vietnamese market
On 17/07/2019, the Ministry of Health issued Circular No. 17/2019/TT-BYT guiding the supervision and response to infectious diseases and epidemics issued by the Minister of Health. The Circular is effective from 01/09/2019.
Accordingly, in Article 6 of Circular No. 17/2019 / TT-BYT, there are provisions on monitoring contents, specifically:
1. For persons suffering from contagious diseases, carriers of infectious diseases, people suspected of being infected with contagious diseases, the supervising contents include:
a) Full name, age, gender, occupation, contact phone, living address, place of study and work; location and duration of illness and onset; disease development, symptoms, diagnosis and treatment process, health care and treatment facilities before getting sick; information on assays confirming appropriate pathogens; obstetric history, history of vaccination and immunological status, travel history at home and abroad, information on exposure history, exposure and epidemiological factors involved;
b) Economic, cultural and social conditions at the monitoring place
2. For infectious pathogens: strains, species, groups, types, subtypes, genes, genotypes, biological properties of drug resistance, changes in form, gene and mode of transmission.
3. For the transmission medium
a) Animals: quantities, relationships with humans and other characteristics required. Particularly for insects that need additional supervision: biological characteristics, species composition, monitoring indicators, chemical sensitivity;
b) Food: raw materials, sources, methods of processing, storage, transportation and distribution;
c) Environment: soil, water, air;
d) Other objects carrying infectious pathogens.
4. Based on infectious diseases and epidemics, objects of supervision and requirements of different types of supervision, the units responsible for supervision and selection of appropriate supervision contents.
And also according to Article 6 of Circular No. 17/2019 / TT-BYT, the monitoring process is carried out according to the following steps:
1. Collect data and information.
2. Data analysis, interpretation and evaluation of results.
3. Assess the risk, identify disease situation, infectious diseases.
4. Proposing intervention measures.
5. Report and share information.
Accordingly, the issuance of Circular No. 17/2019/TT-BYT is a legal basis to guide competent agencies to actively monitor and respond to infectious diseases and epidemics. This contributes to the complicated situation of infectious diseases and epidemics.
On 15/08/2019, Council of Justices of Supreme Court issued Resolution No. 05/2019/NQ-HĐTP coming into effect from 01/09/2019.
According to the Resolution, social insurance evasion committed before 01 January, 2018 shall not be prosecuted. The evasion, indeed, shall be dealt with as follows:
If the evasion is not sanctioned administratively and time limit for this administrative sanction does not pass, the evasion shall be administratively sanctionted.
If the evasion was sanctionted administratively, authorities shall force the violator to enforce the sanction.
If the violator cause damage to its labour, labour agency or other entity (“the victim”), the victim may claim for non-contractual liability.
According to Article 216 of Criminal Code, monetary penalty for social insurance evasion crime of enterprises ranges from VND 200,000,000 to VND 3,000,000,000.
The Resolution contributes to anticipation of enterprises in commercial and penal risks in relation to social insurance evasion.
On 26/06/2019, the Governor of the SBV issued of Circular No. 06/2019/TT-NHNN guiding the management of foreign exchange for foreign direct investment activities in Vietnam, replacing the Circular No. 19/2014/TT-NHNN dated 11/08/2014 of Governor of the SBV.
About the Circular No. 06/2019/TT-NHNN:
Circular 06/2019/TT-NHNN is issued to guide the contents related to foreign exchange management for foreign direct investment activities in Vietnam in accordance with the law on foreign management. Exchange at the Foreign Exchange Ordinance (amended and supplemented), Decree 70/2014 / ND-CP dated July 17, 2014 of the Government detailing the implementation of a number of articles of the Ordinance on Foreign Exchange (amended , amendments and supplements) and the law on investment in the 2014 Investment Law, specifically as follows:
The Circular specifies the concept of enterprises with foreign direct investment capital, serving as a basis for determining subjects to open direct investment capital accounts.
The Circular specifies the contents of revenue and expenditure on direct investment capital accounts in foreign currencies and direct investment capital accounts in Vietnam dong.
The Circular regulates the contents related to the payment of the value of investment capital transfer, investment projects including user accounts, valuation currencies, and payment transactions in transfer transactions.
In addition to the above contents, the Circular also specifies the responsibilities of authorized credit institutions, foreign direct investment enterprises and foreign investors in order to create a legal and advanced basis. responsibilities of concerned organizations and individuals in complying with regulations on foreign exchange management for foreign direct investment activities in Vietnam.
The values of Circular No. 06/2019 / TT-NHNN provide:
Strengthen foreign exchange management to ensure market stability, increase foreign exchange reserves, attract foreign currency from FDI.
Perfecting the legal framework for foreign exchange management, creating favorable conditions and ensuring legitimate interests for organizations and individuals engaged in foreign exchange activities, in line with practical requirements, contributing to promoting economic development.
Create a clear legal corridor in managing direct investment flows into and out of Vietnamese territory.
Encouraging remittances, attracting foreign currency into the banking system, limiting domestic foreign exchange use, contributing to stabilizing the foreign currency market.
On 15/08/2019, the Government issued Decree 69/2019/ND-CP regulating the use of public assets to pay investors when implementing construction investment projects in the form of build – transfer contract (BT contract). The Decree takes effect from October 1, 2019.
Some notable contents in the decree:
Types of public assets allowed to be used to pay Investors include (Clause 2 Article 1):
Land fund;
Land, houses and other assets associated with land of state agencies, public non-business units, units of the people’s armed forces, the Communist Party of Vietnam, political and social organizations, socio-political-professional organizations, social organizations, socio-professional organizations and other organizations established under the law on associations (agencies, organizations and units);
Infrastructure assets in service of national interests and public public interests;
Other types of public assets according to the Law on Management and Use of Public Assets.
The valuation of each type of public asset
Land fund: The value of the paid land fund is the land use levy or land rent paid in lump sum for the whole lease term (Clause 1, Article 6);
Land, houses and other assets attached to land of agencies, organizations and units: Value of land use rights and property values on land (Clause 1, Article 9);
Infrastructure assets: Value of exploitation rights of infrastructure assets (Clause 1 Article 11);
Other types of public assets: comply with regulations on management and use of public assets and other relevant regulations (Article 13).
For BT contracts signed before the effective date of this Decree, payment to investors shall continue to be performed according to the contents of the BT Contract signed or applied by law. related to implementation (Article 17).
The promulgation of Decree 69/2019 / ND-CP has created an important legal basis for the implementation of Build – Transfer contracts, which is a premise for foreign investors to participate in national construction investment activities as well as promoting the development of the economy.