VietNam Breaking News

Update latest news from Vietnam

Marketing competitive environment

City to ensure transparent, fair and competitive environment for property market

by vietnamnews.vn

A view of District 2, part of the newly established Thủ Đức City in HCM City. City authorities are reviewing all housing projects to create a “more transparent, fair and competitive business environment”. — Photo sggp.org.vn

HCM CITY — The chairman of the HCM City People Committee has pledged to review all housing projects in the city and work out solutions to create a “more transparent, fair and competitive business environment”.

Speaking at an annual meeting with the HCM City Real Estate Association (HoREA) last weekend (Feb 27), Nguyễn Thành Phong said the city would work with agencies to address delays in “the issuance of investment policy approval for developers and ownership certificates for homebuyers”.

Lê Hoàng Châu, chairman of HoREA, said over the past years, the association has submitted numerous petitions and proposals to the Government and local authorities to resolve problems related to investment and construction.

Businesses have frquently petitioned the People’s Committee to speed up procedures for investment approval for commercial housing projects, he added.

In 2020 alone, 61 commercial housing projects were delayed because the land they were allotted was a mix of plots with various purposes and uses, he said.

“A number of projects being built on public lands were halted and are being reviewed for compliance,” Châu added.

According to a report from the Department of Construction, procedures for investment approval of commercial housing projects take up to 247 working days, or 50 weeks, excluding 14 public holidays, which is too long.

The association has also urged city authorities to speed up the issuance of home ownership certificates for more than 30,402 housing units in 163 projects in the city.

“The Department of Natural Resources and Environment needs to work with the Department of Finance, the City Land Price Appraisal Council and other agencies to determine land-use fees for the housing projects to speed up the process,” he noted.

“Priority should be given to home-ownership certificates for homebuyers who have fulfilled their obligations under the housing purchase contract,” he added.

A number of apartment buildings have been built in violation of approved plans and designs in the city, delaying the issuance of land-use and home ownership certificates, according to the Department of Construction.

Many developers have even mortgaged their buildings to get loans for other projects, meaning buyers have been unable to get ownership certificates, it said.

New guidelines

Recently, city authorities issued guidelines to speed up the issuance of land-use and home ownership certificates to buyers to prevent disputes with housing developers.

They divided apartment projects into two categories related to collection of land-use fees and issuance of ownership certificates.

For apartments within a compound, the entire project area is identified as “residential land” and is subject to fees for issuance of certificates for land-use rights, house ownership and other land-related assets.

For those without compounds that come with public areas such as parks, schools, hospitals, and main roads connecting to public roads outside the apartment building, only the area of ​​land used for apartment construction is considered “residential land”.

For the public areas, the city will organise bids to select investors.

The construction of technical works such as electricity and water supply, drainage, lighting, and telecommunications systems must be done by the developer and handed over to the city. No land-use fees will be collected.

The Department of Natural Resources and Environment has been assigned to work with the departments of planning and architecture, construction, and other agencies to classify land areas in each project (both already completed and upcoming) subject to fees for issuance of ownership certificates.

The Department of Construction will be responsible for monitoring compliance with construction norms and penalising violators.

The city has ordered agencies to carefully review investors’ financial capacity before licensing projects. Investors found to have committed violations must be severely sanctioned.

There are 15,000 real estate firms operating in the city.

Experts attributed the challenges facing businesses to inconsistent regulations on housing and land investment. Hundreds of housing projects are under inspection for legal procedures, delaying their progress. — VNS

Good legal environment makes differences in competitiveness: Expert

by hanoitimes.vn

The Hanoitimes – Empirical data in Vietnam proved institutional reform have direct impacts on economic growth.

Vietnamese enterprises with higher law compliance cost than their Thai peers make less competitive products despite equaling them in productivity, according to Phan Duc Hieu, vice director of the Central Institute for Economic Management (CIEM).

“A good legal environment is key for competitiveness,” said Hieu at a workshop discussing market entry regulations in Vietnam on February 28.

There remain inefficient and unreasonable regulations restricting market entry for newcomers, Hieu stated, adding they are creating five types of costs for enterprises, including unofficial costs during the process of realizing administrative procedures; opportunity costs due to prolonged administrative process; investment costs to meet legal requirements; different taxes; and time.

“Even a small reform could make a significant impact on large scale,” Hieu asserted.

For example, a reduction of one hour for enterprises in realizing administrative procedures means a large amount of resources saved, given over 700,000 enterprises operating in the country.

The introduction of Law on Enterprises in 2000 led to a sharp increase in the number of enterprises. Data: CIEM Chart: Nguyen Tung.

“Empirical data in Vietnam proved institutional reforms have direct impacts on economic growth,” said Hieu.

According to Hieu, since the introduction of the first version of the Law on Enterprises in 2000, the number of business formations in the 2000 – 2005 period increased 4-fold compared to that of in 1990 – 1999, while the amount of registered capital added to the economy in 2000 – 2005 was 13 times higher than in 1990 – 1999.

Hieu expected the new Law on Enterprises, which is scheduled to come into force on January 1, 2021, would spur the development of the business community, thanks to a strong focus on lowering market entry regulations and creating greater freedom for enterprises to do businesses.

Data: Report evaluating corporate governance of Vietnamese public enterprises in 2019. Chart: Nguyen Tung.

To comply with the new legal framework, Hieu noted enterprises should pay more attention to corporate governance.

Hieu referred to a study on corporate governance of Vietnamese public companies in 2019 pointing out that those with higher score in this aspect would have high return on assets (ROA) and return on equity (ROE).

Dau Anh Tuan, director of the Legal Department under Vietnam Chamber of Commerce and Industry (VCCI), said there have not been significant improvements in corporate governance of Vietnamese businesses since the Law on Enterprises in 2014.

“This is the key aspect that would help Vietnamese enterprises to grow, which, unfortunately, leaves much to be desired,” Tuan said.

Vietnam needs a task force to promote business environment reform

by hanoitimes.vn

The Hanoitimes – The reform for the business environment is required to bring benefits for local businesses and people in the coming time.

Economist Nguyen Dinh Cung has proposed the Government to set up a task force to consel the Prime Minister on reforming and enhancing business environment.

He made the proposal at the workshop on “Reform for an Enabling Business Environment Better Competitiveness: Achievements, Lessons and Orientations for 2021-25” held in Hanoi recently.

An overview of the workshop on January 21 in Hanoi. Photo: Phi Nhat

“We lack a pioneer unit to promote reform, quality researches to support reform solutions, and resources and aids from donors,” Mr. Cung, who is a member of the Economic Advisory Group to Prime Minister Nguyen Xuan Phuc, said.

He said it is needed to create the best favorable conditions for private sector with all barriers removed, supporting them modernizing technologies, developing human resources and improving labor productivity.

“We must encourage the formation and development of large private economic groups, which have strong potentials and regional and international competitiveness. We will strive to have at least two millions of businesses contributing 60%-65% into GDP by 2030,” Mr. Cung said.

Speaking at the workshop, Ms. Nguyen Minh Thao, Head of the Department of Business Environment and Competitiveness Research under the CIEM said that Vietnam has achieved significant  results from reforming the business environment and enhancing national competitiveness in the 2014-2020 period. Specifically, more than 30 documents stipulating business conditions were issued and more than 50% of business conditions were adjusted by the end of 2019.

Being of the same mind, Mr. Cung said Vietnam had many experiences and lessons to map out effective policies and solutions on reforming institutions and improving the business environment .

Dr. Cung noted that the reform’s achievements could be reversed if the government, ministries, branches and relevant units fail to maintain determination and efforts in the  reform.

So far, there are still many unnecessary and unreasonable business conditions that may lead to the harassment and red tape of state management agencies, Ms. Thao said. Therefore, the government has issued Resolution No. 02 on improving the business environment and enhancing national competitiveness with four key solutions to overcome the issues.

The solutions emphasize enhancing coordination among government agencies and bodies. Strengthening the application of information technology and building a digital government towards digital transformation in state management is another measure; The solutions  include realizing sustainable development goals, which include investment in sustainable business, environmental protection, climate change adaptation and job creation for vulnerable groups.

The solutions also contemplate supporting businesses to restore their operations, overcome the negative impacts of the pandemic.

Vietnam should boost the completion of  e-government building to avoid physical contact in the  handling of administrative procedures as well as create the synchronization of the entire system that will effectively improve the business environment, according to Ms. Nguyen Thi Viet Anh, Deputy Director General of Business Registration Management Agency under the Ministry of Investment and Planning.

Mr. Dau Anh Tuan, Head of the Legal Department under the Vietnam Chamber of Commerce and Industry told Hanoitimes about Vietnam’s efforts to reform the business investment environment in the past and his recommendations in the coming time.

Mr. Dau Anh Tuan, Head of the Legal Department

How would you comment on Vietnam’s results from reforming the business investment environment in the past?

Vietnam has recorded significant changes in reforming the business environment in the 2015-2020 period. Vietnam’s business environment has been upgraded through the issuance of Resolutions 19 and 02 on business environment reform in terms of tax and customs procedures, specialized inspection, access to electricity which is deemed as the highlight in the past five years of administrative reform.

However, streamlining a number of business conditions is still not strong and drastic. Specialized inspections are still rampant. Judicial reform still faces many difficulties. Implementation of the Resolution No.02 in localities is still confused. The market entry index improved but need a breakthrough in the coming time.

Vietnam’s goal is to be among the top four ASEAN countries in terms of business environment, but it has not been fulfilled so far.

What is the reason for which Vietnam has not become one of the top four ASEAN countries in terms of business environment?

Through reviewing and learning from experience, Vietnam has made strong changes in recent years, but still needs further improvement in comparison with other countries. The process of reform requires persistence and should be conducted in phases with a synchronous process.

In recent years, some ministries have been very active in promoting the reform of administrative procedures. However, some others are still not interested in this process.

How could Vietnam reach its goal in the coming time?

The country needs a new approach, not only to remove difficulties but to create a favorable business environment. Institutional reform is the foundation for the development of businesses in the coming period. In the process of integration and fair competition, the advantage of administrative procedures should be in the interest of businesses so that they could compete with other countries.

Experiences from reforming the business environment showed the need for innovation from the lowest level as well as the role of the local government should be enhanced. The dynamism of the localities play a very important role. A number of new models suitable to practical needs are suggested such as centralized public administration center; the café business programs, and government-business dialogues.

Thank you for your time.

Stock market size reaches 88% of GDP

by vietnamnews.vn

An overview of the Aqua City project developed by Novaland in the southern province of Đồng Nai. Novaland is among companies whose capitalisation is valued at billions of dollars on the market. — Photo novaland.com.vn

HÀ NỘI — Việt Nam’s stock market reached approximately 87.68 per cent of the country’s Gross Domestic Product (GDP) as of the end of 2020, the highest rate reported so far.

The other two high rates recorded were in August 2018 at 84.57 per cent and March 2018 at 83.08 per cent.

Including the government bond market and corporate bond market, the value of Việt Nam’s entire stock market by the end of 2020 exceeded 110.64 per cent of GDP, this is also the highest rate ever recorded.

New cash flow continuously pouring into the market since the second half of 2020 has boosted liquidity. December 2020 and January 2021 were two months witnessing record matching value, of more than VNĐ250 trillion (US$10.8 billion) and more than VNĐ300 trillion on the Hồ Chí Minh City Stock Exchange (HoSE), respectively.

However, skyrocketing liquidity has far exceeded market forecasts, leading to frequent congestion in many sessions, causing a lot of trouble for investors and affecting the quality of the market.

The sudden increase in liquidity is unpredictable, causing undesired interruptions in trading, according to HoSE.

To tackle this issue, the State Securities Commission said it was speeding up the implementation of a new information technology system for the entire stock market, known as KRX.

The Vietnamese stock market has experienced a year of spectacular recovery from the bottom caused by the COVID-19 crisis, a trend that is in parallel with most of the major stock markets in the world. Since the bottom at the end of March 2020, the VN-Index has increased by nearly 50 per cent.

Billion-dollar companies

So far, the Vietnamese stock market recorded 38 companies whose value reaches billions of dollars. Vingroup is valued at $15.95 billion in market capitalisation. It is followed by the State-owned Vietcombank (VCB), with $15.82 billion. Third place belongs to Vinhomes (VHM) with $14.52 billion.

Other notable names include Vinamilk with $9.52 billion, Bank for Investment and Development of Vietnam (BID) with $7.62 billion, PetroVietnam Gas JSC (GAS) with $7.43 billion, the Airports Corporation of Việt Nam (ACV) with $7.03 billion, and Hoà Phát Group (HPG) with $6.56 billion.

The Masan family is no less competitive as there are also three representatives, Masan Group (MSN) with $4.61 billion, Masan Consumer Holdings (MCH) with $2.92 billion and Masan High-Tech Materials Corporation (MHT) with $1 billion.

Some unfamiliar names also appear in the billion-dollar business group, with surprises in value. Most notably ThaiHoldings (THD) valued at $3.06 billion, became the third largest real estate company in the market by market capitalisation after Vinhomes and Novaland, the latter of which is valued at $3.41 billion.

Another real estate company has also entered the group, namely Phát Đạt Real Estate Development Corporation (PDR), valued at $1.08 billion.

THD shares have risen 10 times since the end of November last year, now reaching VNĐ201,000. While PDR has also nearly tripled from August last year, standing at at VNĐ63,000. — VNS

Hanoi makes significant improvements in business environment: Expert

by hanoitimes.vn

The Hanoitimes – Hanoi has made strong efforts to reducing informal charges, create a fair business environment and improve provincial leadership in solving problems for enterprises, said an expert.

The fact that Hanoi has been ranked in the top 10 of the 2019 Provincial Competitiveness Index (CPI) in two consecutive years has demonstrated strong efforts by the local authorities in improving the city’s business environment, according to Nguyen Van, vice chairman of Hanoi Supporting Industries Business Association (HANSIBA).

Nguyen Van, vice chairman of Hanoi Supporting Industries Business Association (HANSIBA).

Among the 10 PCI sub-indices, Hanoi has the highest score in entry costs, which evaluates costs for joining the market of businesses, at 7.98 points out of 10, followed by labor quality to meet corporate needs and low time requirements for bureaucratic procedures and inspections.

Additionally, Hanoi has made strong efforts to reduce informal charges, create a fair business environment and improve local leadership in solving problems for enterprises, Van said.

During the Covid-19 outbreak, Hanoi’s authorities have successfully implemented instructions from the government and provided substantial support for the business community, with a view to realizing the dual target set up by Prime Minister Nguyen Xuan Phuc of both containing the pandemic and boosting economic recovery, Van continued.

Van referred to the investment capital of US$17.8 billion committed by domestic and foreign investors in 229 projects, which were announced at the “Hanoi 2020 – Investment and Development Cooperation” conference on June 27, as evidence that the city remains an attractive investment destination.

According to Van, the business community in Hanoi, including HANSIBA, expected the implementation of these projects would open up new investment and business opportunities in the city.

LODGIS HOSPITALITY’S LONG-TERM VISION AND INVESTMENT STRATEGY FOR VIET NAM’S TOURISM MARKET

by vietnamnews.vn

Lodgis Hospitality, the investment partnership between the leading global Private Equity Firm Warburg Pincus and Viet Nam’s leading investment manager, VinaCapital – is focused on Viet Nam’s tourism industry, with the strategic aim to support the development of Viet Nam as an international tourism destination by delivering a range of high-quality hospitality real estate developments and services.

Viet Nam – timeless charm

Viet Nam – a truly fascinating country, offers a 3,260 km coastline, connecting the North and South with white-sand beaches. Beyond its significant coast, the country boasts overlapping ranges of mountains, primeval forests, and world-famous caves. The destination is also known for its rich history, deep culture and arts, and unique street food cuisine.  More than its diverse natural landscape, Viet Nam also has vibrant cosmopolitan cities such as Ha Noi and HCM City, each with their own distinct ambience and rhythm. Ha Noi offers a traditional setting with heritage dating back 1,000 years. HCM City is a high energy urban and business centre with skyscrapers and a bustling streetscape. There are also the idyllic landscapes of the Vietnamese countryside and craft villages. These include bountiful fruit orchards across the Mekong Delta; narrow Hoi An streets adorned with bright red Bougainvillea trellises of ancient yellow houses; and the terraced paddy fields in Sapa.

Viet Nam and its timeless beauty

Viet Nam has become one of the top destinations in the Asia-Pacific region, attracting tourists from all over the world. The US-based Go Overseas website ranked Viet Nam 8th in its list of top 10 travel destinations for 2019, saying the nation is “filled with beauty at every turn”. As a home to eight UNESCO World Heritage sites, Viet Nam was also rated as one of the 10 most unique destinations in Southeast Asia in 2019 by The Quarterly Tourism Monitor, while Condé Nast Traveler ranked Viet Nam 9th out of 20 favourite destinations of 2020.

Factors that accelerate Vietnamese tourism into an economic juggernaut

Prior to 2020, global demand for travel and tourism was booming around the world, with growth of roughly 4 per cent per annum expected over the next decade (2019-2029). In addition, Viet Nam’s GDP growth, young population, and rapidly expanding middle class are factors driving tourism. According to World Bank statistics, between 2002 and 2018, GDP per capita in Viet Nam increased by 2.7 times, while real GDP grew by an estimated 7 per cent in 2019 – one of the fastest growth rates in the region. According to the International Monetary Fund (IMF), Viet Nam’s GDP per capita ranks 5th in ASEAN, reaching US$5,212 by 2025.

Demographic change with a population of 96.2 million in 2019 is expected to increase to 120 million by 2050. Moreover, the proportion of the young population under 35 is around 55.5% according to the Census Report 2019; while Viet Nam’s new middle class is expected to reach 26% of total population by 2026. All these factors will drive robust demand for tourism. Domestic tourism has experienced an excellent surge – a four-fold increase in the number of domestic traveler-trips, from 20.5 million in 2008 to 80 million in 2018. Generally speaking, in the 2015-2019 period, the tourism industry had a significant growth rate of 22.7%. According to the World Economic Forum’s 2019 Tourism Competitiveness Index (WEF), Viet Nam ranked 32nd globally (out of 120 countries) in terms of quantity and attractiveness of natural resources and culture, and 3rd in Southeast Asia (after Indonesia and Thailand).

The direct contribution of tourism to GDP is also increasing. If in 2015, tourism contributed 6.3% to the national GDP, the rate in 2019 was 9.2%. Tourism is gradually aiming to become a key economic sector according to the Politburo’s Resolution 08-NQ / TW dated January 16, 2017.

Despite the current situation of the COVID-19 pandemic, Viet Nam’s tourism has remained relatively resilient thanks to strong local demand and the Vietnamese Government’s leadership and success in limiting the number of cases, contact tracing and social distancing. Once international travel resumes, Viet Nam’s tourism will grow further, creating significant economic opportunities for Southeast Asia travel destinations.

By 2030, tourism is set to become a key industry, making Viet Nam one of the top 30 most competitive countries in the world in terms of tourism with an average growth rate of 11-12%/year, contributing 15-17% to GDP.

Lodgis Hospitality – Viet Nam’s leading fully-integrated hospitality investment platform with a proven track-record

Realising the enormous long-term potential of the tourism market in Viet Nam, in 2016, Warburg Pincus, VinaCapital and its co-founder Don Lam established Lodgis Hospitality with the vision to aggregate a portfolio of high-quality hospitality assets and build an institutional grade, fully-integrated lodging investment platform.

With its operating headquarters in HCM City as well as with offices in Singapore and Bangkok, Lodgis has a team of highly experienced and dedicated industry professionals with disciplines in investment, asset management, development, project management, design and operations. Through its wholly-owned hotel management company – Fusion Hotels and Resorts – the company provides management and design consultancy services across a suite of brands including Fusion Resorts, Fusion Suites, Fusion Originals, Maia, Hiive, Glow, Glow the Premium Collection and Glow Inn.

Today, Lodgis has amassed a portfolio of best-in-class hospitality assets across Viet Nam and Southeast Asia represented by more than 30 hotels, approximately 3,000 rooms under ownership and approximately 3,100 rooms managed. Leading luxury properties include one-of-a-kind hotels such as the Sofitel Legend Metropole Hanoi, Raffles Le Royal Phnom Penh, and Raffles Siem Reap.

Lodgis owns and manages one of Viet Nam’s leading, large-scale integrated resorts – Ho Tram Strip Complex – located outside of HCM City, which has the 5-star InterContinental Grand Ho Tram, Holiday Inn Resort, an international quality casino and Viet Nam’s number one ranked golf course.

Fusion Hotels and Resorts has representation in all of the leading cities and resort destinations in Viet Nam including HCM City, Da Nang, Cam Ranh, Phu Quoc, Quy Nhon, Vung Tau with many more flags under discussion. Glow has properties in Thailand’s most popular markets including Bangkok, Phuket, Pattaya, and Krabi.

Ho Tram Strip Complex has the 5-star InterContinental Grand Ho Tram, Holiday Inn Resort, an international quality casino and Viet Nam’s number one ranked golf course.

Among one of the most exciting projects at Lodgis is the planned launch and development of the Ixora Ho Tram by Fusion located at the Ho Tram Strip Complex, set along the beachfront. This exclusive beachfront development designed by leading international consultants will have 46 pool villas and 164 condotels. Ixora Ho Tram by Fusion will be part of the broader integrated Ho Tram Strip Complex, providing guests with a number of restaurant and entertainment options, whilst having a strong sense of privacy. Ho Tram is conveniently located an approximately 2-hour drive from HCM City. This location will benefit from the existing and upcoming infrastructure such as HCMC – Long Thanh – Dau Giay Expressway, Ben Luc – Long Thanh Expressway, Bien Hoa – Vung Tau Expressway, Dau Giay – Phan Thiet Expressway, Long Thanh International Airport, and Cai Mep Thi Vai Port. Ixora Ho Tram by Fusion is expected to offer appealing long-term investment potential.

In discussing our long-term Viet Nam investment strategy, Mr. Peter T. Meyer – CEO of Lodgis Hospitality – said: “Viet Nam is a beautiful country, ranking among the most exciting travel markets. With its natural beauty, interesting history, unique culture, appealing cuisine, and strong hospitality, it is a very attractive international destination. Given its great prospects, Viet Nam is central to our investment strategy. We hope to play our part in further developing Viet Nam into a world-class tourism destination.”