Vietnam Economy Forum

[visom]

Your GDP can only grow so much with agriculture, services, and light manufacturing-based economy.

Without the massive manufacturing of electronic, automobiles, machineries; your GDP can't expand any further

Do you think Vietnam is taking too long to shift towards electronics? How is Vietnam's development pace compared to Taiwan or S. Korea?

 

[Viet]

Viet, do you think Vietnam's slowing growth rate is due to lack of government competence? Or government not putting in enough effort?

actually it is a lack of money. Many current infrastructure projects are financed by foreign money (ODA, loans, donation, etc...). I think this slow growth rate of 5-6 % will continue to last for several years.

 

[Viet]

Vietnam attracts US$12.63 billion FDI in eight months

Updated : 8/24/2013 11:12:29 AM VOV

(VOV) -Vietnam’s foreign investment capital over the past eight months totalled US$12.63 billion, an increase of 19.5% on 2012.

The Foreign Investment Agency (FIA) reports that as of August 20, almost 770 new projects were licensed representing registered capital of over US$7.4 billion, a year-on-year increase of 12.2%.

As many as 296 projects contributed an additional US$5.22 billion in capital, 31.7% higher than the previous period.

FIA says foreign investment was funneled into 18 industries, of which processing and manufacturing took the lead with 370 newly registered projects worth US$10.817 billion, accounting for 85% of total foreign investment capital.

The real estate sector ranked second with its more than US$588 million representing 4.7% of total foreign investment capital.

Japan is the largest of Vietnam’s 47 foreign investors with US$4.35 billion (34.5% of the total), followed by Singapore (US$3.78 billion, 29.9%) and Russia (US$1 billion, 8,1%).

 

[yue10]

Your GDP can only grow so much with agriculture, services, and light manufacturing-based economy.

Without the massive manufacturing of electronic, automobiles, machineries; your GDP can't expand any further

the service sector is the tertiary phase in economic progression after the industrial phase, i.e low cost advantaged manufacturing, service related industries account for nearly 70% of US GDP

(VOV) -Vietnam’s foreign investment capital over the past eight months totalled US$12.63 billion, an increase of 19.5% on 2012.

The Foreign Investment Agency (FIA) reports that as of August 20, almost 770 new projects were licensed representing registered capital of over US$7.4 billion, a year-on-year increase of 12.2%.

As many as 296 projects contributed an additional US$5.22 billion in capital, 31.7% higher than the previous period.

FIA says foreign investment was funneled into 18 industries, of which processing and manufacturing took the lead with 370 newly registered projects worth US$10.817 billion, accounting for 85% of total foreign investment capital.

The real estate sector ranked second with its more than US$588 million representing 4.7% of total foreign investment capital.

Japan is the largest of Vietnam’s 47 foreign investors with US$4.35 billion (34.5% of the total), followed by Singapore (US$3.78 billion, 29.9%) and Russia (US$1 billion, 8,1%).

all I see is a modern day slave country

 

[yue10]

Vietnam sees TPP trade talks finishing this year
Last Updated: Friday, July 26, 2013 06:00:00

Negotiations for the Trans-Pacific Partnership trade deal are very likely to be wrapped up by the end of 2013, Industry and Trade Minister Vu Huy Hoang has said following the 18th round of talks.

Negotiators are trying to narrow gaps, especially on “sensitive” issues like state-owned enterprises, public procurement, and the environment.

The 10-day 18th round ended in Malaysia the same day with “further strong progress” achieved, according to the office of the US trade representative.

The next round is scheduled to be held in Brunei in late August.

The pact is part of a US strategic shift under President Barack Obama to focus more economic resources on Asia and "balance China's rise."

Japan became the 12th member by joining the negotiations on July 23, along with Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.

Vietnam expects the TPP, whose member countries account for nearly 40 percent of the global economy and one-third of all world trade, to create more opportunities to boost exports and attract more foreign investment.

TPP aims to eliminate barriers to goods and services and address issues including the movement of electronic data, market access for financial firms, and copyright protection.

Tariffs on most goods traded between members will be phased out over 10 years, while other free trade and bilateral agreements allow open markets and cut taxes on a more limited range of goods.

News website Saigon Times quoted Herb Cochran, executive director of the American Chamber of Commerce in Vietnam, as saying trade between Vietnam and the US could rise by two and a half times from now to US$24.9 billion in 2020 if Vietnam signs the deal.

Exports of garments and footwear, Vietnam’s key items, are likely to see growth of nearly 50 percent by 2020, he said.

The status of market or non-market economy is among issues under discussion in bilateral talks between Vietnam and the US, and not in the TTP talks, Hoang said, indicating that Vietnam not being recognized widely as a market economy did not affect the negotiations.

The country has so far achieved recognition from seven other members of the TPP and 34 in all.

do Viets on PDF actually think TPP is a good idea like Viets on other forums or is it just another tool to enslave VN? do you guys miss the feeling of being subjugated or something?

 

[Viet]

all I see is a modern day slave country

all I see all of your posts are rubbish. You illiterate cannot know that thanks to FDI, VN´s economy is developing well. Is China different?


(pictures of Saigon)

 

[yue10]

that's nice pictures, what's the occupancy rate of Bitexco?

 

[yue10]

Foreign firms reject tax-evasion charges
Foreign firms have rejected speculation that they report losses to avoid paying tax even when they have money to expand their business, explaining the funds come from bank loans and customers. It has become very common among foreign firms in Vietnam to report losses.
For instance, QMI Industrial Vietnam Company has reported a loss of up to VND3.4 billion every year since 2004.

They added up to VND8.4 billion ($420,000) by 2009, accounting for 52.7 of its legal capital.

Explaining the company’s losses, deputy general director Yin-Cheng Chuang said it was due to interest on loans.

With its capital eroding, to avoid bankruptcy, the firms plans to hike its legal capital to $1 million.

This may sound like a reasonable explanation but some of the others do not sound so credible.

Sunglory Company, which manufactures clothes for export at a plant in Ho Chi Minh City’s Binh Tan District, incurred accumulated losses of VND6.5 billion ($325,000) by 2009 though its capital is only VND1.7 billion.

Asked why the company has not filed for bankruptcy and has indeed continued to expand despite the huge losses, deputy general director Hsiu-Ying Liao said: “Sunglory has run its business with money customers advanced, of about VND4.4 billion ($220,000).”

But the explanation does not wash since even that money has been used up.

Clover Vietnam Co has suffered accumulated losses of VND18.6 billion in the nearly two years since its establishment while its registered capital is only VND23 billion. It is not clear where it has been getting its operating capital from.

The company has not filed for bankruptcy because its parent company has reportedly pledged an infusion of funds and rescheduling of its debts by a year.

Orange Fashion Company has a chartered capital of VND30 billion, but in five years if operation it has run up total losses of VND53 billion.

Seog Deog Lee, a company spokesperson, said in its first two years (2005 and 2006), the company had revenues of nearly VND150 billion but had to spend much on renting facilities and nearly VND12 billion on administrative costs.

As result, it suffered a loss of VND3.5 billion, he said.

Though in 2007 the turnover soared to VND284 billion, it still made a loss of VND7.1 billion because the company had to move and had to spend on new assets, he said.

He said turnover kept rising in 2008 and 2009 too, but so did management costs, leading to more losses.

Tax agencies helpless

Though clearly most firms’ explanations lack credibility, tax agencies do not have enough staff or the capability to call their bluff.

Since their financial statements are attested by auditors and are ostensibly above board, tax officials cannot find evidence against them.

Moreover, because the market is governed by the law of supply and demand and firms are free to negotiate selling and buying prices, tax employees do not have the right to question such numbers.

A taxation official said one firm bought used machinery made in China but its books indicated a purchase price equal to that of brand new machinery made in Japan.

Tax authorities could not take any action because the firm had the purchase papers in order, he said.

vietnamnewstoday.com/nd5/detail/business-banking-insurance/foreign-firms-reject-taxevasion-charges/1225.004004.html

Vietnam to tackle tax evasion problem in FDI companiesBy Bich Diep | dtinews.vn | May 07, 2013 09:29 AM
The ministry of Planning and Investment has recently analysed the benefits and problems of 25 years of foreign direct investment.

One of the most pressing problems has been tax avoidance. Coca-cola was the most recent example. The soft drinks corporation has expanded since 1993 but Coca-Cola Vietnam has always reported huge losses.

Adidas Vietnam, which has invested since 1993 and currently employs 80,000 workers, earning VND22 trillion in revenue (USD1 million), still reports losses.

Talking with VTV1, deputy minister of Planning and Investment Bui Quang Vinh said transfer pricing is a common problem in any countries that have FDI companies.

Those companies have closed production processes because their raw materials come from the mother companies so it is difficult to check the input and output costs.

"It's the responsibility and a challenge for the finance and tax departments," Vinh said.

A plan to prevent transfer pricing was approved two years ago but Vinh said it needs co-operation from many state agencies. "We should be stricter with this problem but we shouldn't blow it out of proportion because Vietnam's business environment could be affected." he said.

After 25 years of attracting foreign investments, Vietnam has about 14,552 projects with total registered capital of USD210.5 billion. The contribution of the FDI companies to the GDP increased from 2% in 1992 to 18.97% in 2011. They also provided jobs for nearly six million people.

However, FDI projects also have some shortcomings such as low added value and lower capital disbursements.

Technologies that have been transferred to Vietnam remain not very advanced and most workers still have modest incomes. Moreover, tax evasion remains a common problems with FDI companies.

dtinews.vn/en/news/018/29009/vietnam-to-tackle-tax-evasion-problem-in-fdi-companies.html

Vietnam plans to cut car taxes to take on zero-tariff ASEAN imports
Japanese representatives said from now through 2018 the government needs to offer incentives, including tax cuts, to bump up demand and induce auto producers to stay.

thanhniennews.com/index/pages/20130613-vietnam-plans-to-cut-car-taxes-to-survive-zero-tariff-asean-imports.aspx

Many foreign firms under tax evasion question

VietNamNet Bridge - Before the questionable transfer pricing for tax evasion of some multinational corporations in Vietnam, a representative of the General Department of Taxation confirmed that it is no such thing as the tax authorities are powerless and they would conduct tax inspection at these companies.

At the workshop on the management of transfer pricing activities in Hanoi on December 11, Mr. Nguyen Quang Tien, a senior official from the General Department of Taxation, admitted that price transfer in Vietnam is popular.

"A lot of businesses are on our radar but we cannot make it public at this moment," Tien said.

Transfer pricing activities usually occur in the multinational corporations which have a network of subsidiaries located in different countries. In the markets of high taxation, subsidiaries tend to declare higher costs and higher prices in order to reduce profits and vice versa.

Particularly in the case of Coca Cola, recent information about this company’s signs of transfer pricing for tax evasion has appeared.

Coming to Vietnam in 1993, Coca Cola has continuously invested in production expansion; its revenue growth is always strong, but the tax agency said they have not collected any coin of taxes from the company.

Before Coca Cola’s report of losses over the years, Tien said the tax agency had identified signs of transfer pricing here. Tien confirmed that the agency has not inspected Coca Cola, not gives up with this firm.

Coca Cola experienced tax inspection once in 2006. However, according to Tien, that time the HCM City tax office only checked its revenues, receipts, not the transfer price.

Mr Tien added that not just Coca Cola but Pepsi and Metro are also targeted by the tax authorities.

"The general department had detected these cases but within its resources, the agency cannot carry out inspection immediately. A transfer pricing inspection may take 1, 2 years, and even longer in Australia. They has pursued a case for 13 years and still not succeed yet," Tien said.

The tax official also revealed the case of a big firm from Taiwan. "This company operates in the field of footwear, with revenue of VND22 trillion ($1 billion), employing 80,000 and even 100,000 Vietnamese workers, but we have not collected the taxes from the firm,” Tien said.

Talking to the media, Tien did not exclude the possibility that these firms have the help of audit firms. He said the tax authorities will tighten this and require auditing firms to bear higher responsibility for their works.

At this workshop, Mr. Michael Palmer, an expert on transfer pricing in Australia, said in his country and around the world, multinational corporations have the participation of the leading experts on price transfer from around the world to give advice on strategies to reduce taxes.

english.vietnamnet.vn/fms/business/54669/many-foreign-firms-under-tax-evasion-question.html

Honda Vietnam protests against $160 million tax arrears
Honda Vietnam has filed a petition to the government after being told to pay tax arrears of VND3.34 trillion ($160 million) by local customs agencies.

The tax arrears bill for Honda Vietnam’s imports over the past five years was issued after a recent scheduled examination jointly carried out by Hanoi and Vinh Phuc customs departments.

But the firm protested and provided clarifications highlighting misunderstandings taking root in the way some related regulations concerning separation level were previously and are currently understood.

The manufacturer expressed concerns over the long-term business operations should the issue remain unresolved.

Established in 1996, Honda Vietnam started manufacturing motorcycles in 1997 and automobiles in 2006 with the total turnover up to now of 10 million and 20,340 units respectively. The labor force now totals 100,000 people and the amount of tax contributed has reached VND20 trillion (USD970.8 million) so far.

Deputy Prime Minister Hoang Trung Hai has requested the Ministry of Finance to report on the case, said the Government Office.

The tax arrears collection will affect the business development of Honda Vietnam, newswire Vnexpress quoted Hiroshi Kitamura - Japanese Chargé D’Affaires in Vietnam who has sent a postal mail to the Ministry of Finance, General Department of Customs and Ministry of Industry and Commerce on the problem.

In the letter, Hiroshi said Honda Vietnam is facing difficulty because of the then and now understandings of tax treatment for imported spare parts for car assembly.

Mr. Hiroshi added that if the tax arrears are paid, it will negatively affect the development of business activities in Vietnam and the employment of Vietnamese workers.

It will also affect the confidence of foreign investors in Vietnam or those who are prepared for investing in the country, including Japanese companies.

Ford Vietnam last month was requested to pay VND32.5 billion (USD1.57 million) by Hai Phong Customs Department due to false tax declarations.

But the total tax amounts liable have been calculated at VND40.7 billion (USD1.97 million), nearly VND8.25 billion (USD400,485) of which has already been paid.

In addition, 155 customs declaration forms of car parts imported through Customs Department are being reviewed, 90 of which reveal components for assembling Focus, 35 for Escape, 6 for Mondeo, the remaining for Fiesta and Transit vehicles.

The additional tax collection is inevitable due to some current vague regulations, a senior customs officer told Vnexpress.

In reality, not only Ford Vietnam but also other famed automobile manufacturers namely Vinamotor, Vidamco and Toyota have run into trouble making customs declarations for automobile component imports.

Imported car components that are eligible for separation level criteria can enjoy a preferential tax rate of 0-27 percent.

Meanwhile, complete parts if detected will be imposed a tax rate of 80-82 percent which is the tax rate for importing a whole car.

Ford Vietnam now has 160 customs declaration forms which will be imposed car import tax rates rather than the preferential rates due to their failure to meet the requirement of separation level.

The tax arrears collection has been conducted since March when some consignment of automobile part imports of Ford Vietnam was inspected by Hai Duong Customs Department.

Several components failed to satisfy the required separation level in order to be eligible for the favorable tax rate of 0-27 percent.

dtinews.vn/en/news/018/16111/honda-vietnam-protests-against--160-million-tax-arrears.html


if you are not modern day slave what are you?

 

[EastSea]

vietnamnewstoday.com/nd5/detail/business-banking-insurance/foreign-firms-reject-taxevasion-charges/1225.004004.html


dtinews.vn/en/news/018/29009/vietnam-to-tackle-tax-evasion-problem-in-fdi-companies.html


thanhniennews.com/index/pages/20130613-vietnam-plans-to-cut-car-taxes-to-survive-zero-tariff-asean-imports.aspx


english.vietnamnet.vn/fms/business/54669/many-foreign-firms-under-tax-evasion-question.html


dtinews.vn/en/news/018/16111/honda-vietnam-protests-against--160-million-tax-arrears.html


if you are not modern day slave what are you?

How many FDI projects of Japan in China now ? Base on your logic, to day Chinese are slaves of Japan .

 

[yue10]

How many FDI projects of Japan in China now ? Base on your logic, to day Chinese are slaves of Japan .

before I saw your post I already knew what you were going to say, Viets are too predictable, the supposed advantages of FDI over debt capital include technology and know how spill over, better productivity and scale and therefore better tax collection, according to those articles you Viets have achieved nothing from FDI except for being the next hotspot for depressed wages, Korea and Japan never relied on wide scale FDI, no.1 most important was being an obedient eunuch to the American empire but no.2 was using debt financing and either blatantly knocking off foreign products or exploiting technology licensing

China has a completely different scale of population which it can leverage compared to little Vietnam and even then Chinese inbound FDI is only around 2% of GDP whereas Vietnam is hovering around 8-10% for the last decade, Viets are getting owned by foreigners and when it comes time for your companies to compete you will not have a chance

 

[visom]

before I saw your post I already knew what you were going to say, Viets are too predictable, the supposed advantages of FDI over debt capital include technology and know how spill over, better productivity and scale and therefore better tax collection, according to those articles you Viets have achieved nothing from FDI except for being the next hotspot for depressed wages, Korea and Japan never relied on wide scale FDI, no.1 most important was being an obedient eunuch to the American empire but no.2 was using debt financing and either blatantly knocking off foreign products or exploiting technology licensing

China has a completely different scale of population which it can leverage compared to little Vietnam and even then Chinese inbound FDI is only around 2% of GDP whereas Vietnam is hovering around 8-10% for the last decade, Viets are getting owned by foreigners and when it comes time for your companies to compete you will not have a chance

There's a stigma for your companies, it's called "Made in China". Once you lose your cheap labor advantages, your country's products will have no advantages over any other foreign company's.

 

[yue10]

There's a stigma for your companies, it's called "Made in China". Once you lose your cheap labor advantages, your country's products will have no advantages over any other foreign company's.

yes and 'Made in Japan' also use to have a stigma attached to it, Hyundai was also known for it's low income target segment in the beginning, you have to start from somewhere first entering the market and gradually increasing market share and capital accumulation then later on when you have built a base through which aggressive expansion can be undertaken then you can focus on quality and marketing

 

[vtnsx]

How many FDI projects of Japan in China now ? Base on your logic, to day Chinese are slaves of Japan .

China has been a slave to the world.

 

[Viet]

Japanese investors pour another US$166 mil into HCM City

Updated : 9/11/2013 11:24:48 AM VOV

(VOV) - The HCM City’s People’s Committee granted investment licenses to a number of new Japanese projects worth US$166 million in the city’s industrial parks (IPs), and export and processing zones (EPZs) on September 10.

They include one project from Unika Group in Hiep Phuoc IP for small and medium-sized (SMEs) and two other projects from Sai Gon Precision Co,Ltd in Linh Trung 2 EPZ and Nidec Tosok Akiba Vietnam in Tan Thuan EPZ.

Mayor Le Hoang Quan highlighted Sai Gon Precision Co, Ltd and Nidec Tosok Akiba Vietnam’s contribution to Vietnam’s investment in hi-tech application. In addition, the formulation of a project to build a Vietnam-Japan Industrial Area in Hiep Phuoc Industrial Park has marks an important step toward attracting more Japanese hi-tech investors in the near future.

At present, more than 100 Japanese businesses are operating in HCM City with a total capitalization of US$1.270 billion, mostly in the fields of mechanics, electricity and electronics.



Kumho Tire to invest US$10 mil to build a factory in Binh Duong

Updated : 9/11/2013 9:16:55 AM VOV

Kumho Tire, a subsidiary of Korea's Kumho Asiana Group, plans to invest around US$100 million in a factory in Binh Duong Province, Kumho Asiana Group chairman Park Sam-koo told the Korea Times last weekend.

He disclosed the plan on the sidelines of a business conference in Hanoi during a state visit by the Republic of Korea’s President Park Geun-hye.

This was the first time the group revealed its investment plan in Vietnam. The investment is expected to increase its Vietnamese plant's annual production from 3.3 million to 5 million tires.

"We are mulling over enlarging the facilities of our Vietnamese factory beginning next year. The amount to be spent is in the neighbourhood of US$100 million," Park said.

"We will strengthen our footing in Vietnam, where our affiliates in construction, airlines and express buses have operations."

Park regards Vietnam as a significant target market for Kumho and has been a strong proponent of cranking up the output of the country's Kumho Tire plant.

Experts said Park's decision made sense because boosting production in Vietnam would help meet rising demand for quality tires in China, just across the northern border.

 

[Viet]

Shiseido Vietnam builds US$30 million plant in Dong Nai

Updated : 9/10/2013 7:08:49 PM

(VOV) - Shiseido Vietnam began constructing its second Dong Nai province plant on September 10, a project boasting total investment capital of US$30 million.

The company has also poured funding into equipment upgrades that will fuel production expansion and the planned exploration of European export opportunities.

The second plant is scheduled to enter operation in 2015 with a production capacity triple that of its first plant and employing an additional 350 workers.

A representative from the Dong Nai Provincial Industrial Zone Management Board said Shiseido Vietnam’s expansion will encourage Japanese businesses to consider increasing their own investments in the province. Job generation will also assist the local industrialisation and modernisation process.

Shiseido Vietnam is a Japanese company specialising in cosmetics and skin and hair care product manufacturing.

In 2008, it spent nearly US$50 million on its first Dong Nai plant. It sells more than 22,000 products, exports to 11 Asian countries, and employs over 400 staff.



RoK firm invests US$1.5bln in Haiphong economic zone

Updated : 9/10/2013 3:23:59 PM

The Republic of Korea's LG Electronics (LGE) has been licenced to invest US$1.5 billion in a new manufacturing complex in the northern port city of Haiphong.

The project will be developed on a 10ha site in Trang Due Industrial Zone, a complex comprising industry, a township, recreation facilities and service parks on a total area of 600ha.

The project will be divided into two stages, with the first to be developed in four years with US$510 million, and the second over five years with US$990 million.

The committee hopes the project will help the zone attract more investors, particularly LGE partners and satellite parties; and create about 20,000 jobs.

LGE will take advantage of new tax incentives available from the middle of August. They include corporate income tax of only 10% in the first 15 years of operation.