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Tag: Vietnam

  • HCMC real estate business group wants Airbnb-like services legalized

    HCMC real estate business group wants Airbnb-like services legalized

    The Ho Chi Minh City Real Estate Association has called for regulating accommodation-sharing services like Airbnb for better management and taxation.

    Such services have become popular in Vietnam in recent years as they help meet the large demand for low-cost accommodation from tourists and fetch homeowners an income from spare apartments and rooms, it said in a report

    HoREA pointed out that since this kind of business is still not regulated authorities are losing an opportunity to collect taxes and having difficulty managing it.

    There have even been cases of people using accommodation provided by such websites for criminal activities, it said.

    It called for modifying the law to allow homeowners to rent them as long as they register the business and pay taxes.

    There were 40,000 Airbnb listings in the country in January this year compared to 1,000 in 2015, according to tourism development consulting firm Outbox Consulting.

    HoREA also wanted restrictions on the number of days homeowners could rent out in a year and apartment management fees to be increased since it increases management work.

    The number of Airbnb units in Ho Chi Minh City as of the last quarter was 13,200, down 37 percent year-on-year due to the Covid-19 pandemic, according to data from market research firm AirDNA.

    In Hanoi, the figure was down 27 percent to 10,600.

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  • Vietnam to tax Netflix’s local revenues

    Vietnam to tax Netflix’s local revenues

    The General Department of Taxation has asked streaming giant Netflix to furnish details about its revenues in Vietnam since its entry in 2016 to assess its taxes.

    The country’s Cybersecurity Law requires all foreign businesses which have income from online activities in Vietnam to store its data in the country and submit their business figures to tax authorities for collection, Vu Manh Cuong, director of the inspection agency under the department of taxation, said at a press briefing Tuesday.

    “Netflix has been working with the Ministry of Finance and the General Department of Taxation to set up a representative office and servers in Vietnam to declare tax,” he added.

    Netflix was not immediately available to comment.

    Vietnamese authorities had earlier said that U.S.-based Netflix, which has around 300,000 subscribers in Vietnam and demand a monthly subscription of VND180,000-260,000 ($7.75-11.19), has never fulfilled any tax duty in the country.

    The country in recent years has been making efforts to collect taxes from internet giants such as Facebook, Google and Netflix.

    Its cybersecurity law, which came into effect this year, also requires foreign businesses to provide users’ data to the Ministry of Public Security if it asks in writing to facilitate investigation of any infringement of the new law.

    The law bans internet users from organizing, encouraging or training other people for anti-government purposes.

    Taxing Vietnamese for their online revenues is another priority of authorities.

    Cuong of the taxation department said that in Hanoi alone there are over 18,300 organizations and individuals making a total of VND1.46 trillion from online sales via Google, Facebook and YouTube, according to data from 45 commercial banks, Tax authorities have so far collected nearly VND14 billion from them, he said.

    He added that in the first eight months they also collected over VND93 billion from organizations and individuals making a total revenue of over VND5 trillion from online booking services such as Booking, Agoda and Airbnb.

    Other Southeast Asian countries have also been making moves to tax Netflix and other internet giants. Indonesia in July imposed a 10 percent value-added tax on sales by technology firms including Amazon, Netflix, Spotify and Google, while Singapore since January has required subscribers of Netflix and other overseas digital services to pay a 7 percent goods and services tax.

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  • Vietcombank profit plunges

    Vietcombank profit plunges

    The pretax profit of state-owned lender Vietcombank in the third quarter fell over 20 percent to VND4.9 trillion ($210.9 million) over pandemic impacts.

    The bank said that provision for bad debt, which rose 35 percent year-on-year to VND2.02 trillion, and lower net interest income were the main reasons for the profit slump.

    Although the bank remains the most profitable lender in the country, its bad debt increased 15 percent in the first nine months to nearly VND7.9 trillion.

    Rising bad debt has become a major concern for Vietnamese lenders this year as the Covid-19 pandemic crippled key industries. With businesses finding it very difficult or impossible to repay loans, banks are forced to increase their bad debt provisions.

    Banks have lowered deposit interest rates from 7 percent earlier this year to 5.8 percent after the State Bank of Vietnam cut policy rates four times, seeking to boost lending to revive the economy, which has posted decade-low growth in the second and third quarters.

    Vietcombank, the fourth-largest lender in Vietnam in terms of assets, also reported that its Q3 revenue fell to near 4 percent year-on-year to VND11.6 trillion.

    The research unit of top brokerage SSI Securities Corporation has recently forecast that the bank’s pretax profit is set to fall by over 13 percent year-on-year to VND20 trillion due to Covid-19 impacts.

    The State Bank of Vietnam in April ordered state-owned lenders to cut profits by 30-40 percent this year to lower lending rates and support economic recovery.

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  • Vietnam’s e-commerce market tipped to grow second half of the year

    Vietnam’s e-commerce market tipped to grow second half of the year

    In case the Covid-19 pandemic continues to pose major risks to the economy in the final quarter of 2020, Vietnam’s e-commerce market could be severely impacted, seeing a revenue loss of US$2.6 billion from the previous estimate to US$11 billion this year, according to a report from the Ministry of Industry and Trade (MoIT).

    Such a figure would indicate a revenue growth rate of 13% year-on-year, stated the MoIT.

    In a more positive scenario, the MoIT expected revenue from e-commerce activities to expand by 20% year-on-year in the fourth quarter, resulting in a combined revenue of US$12 billion for 2020.

    In 2019, revenue from online sales of business-to-consumer e-commerce, known as B2C e-commerce, stood at US$10.08 billion, accounting for 4.9% of total goods retail sales and services revenue, while the rate of the population shopping online reached 42%.

    This led to the e-commerce revenue projection of US$13.6 billion in 2020. However, the Covid-19 pandemic has dealt a major blow to the forecast. During the first four months of 2020, 57% of firms operating in the e-commerce market saw their revenue grow less than 30% year-on-year while 24% reported an increase of at least 51% in revenue.

    Revenue growth in e-commerce in the January – June period was estimated to decrease by 6 percentage points year-on-year, despite a 25% surge in the number of transactions.

    In May, the government released a national plan for the development of e-commerce by 2025, which targets revenue from B2C e-commerce to reach US$35 billion, or a growth rate of 25% per annum and to account for 10% of total goods retail sales and service revenue.

    Meanwhile, the government expects the rate of the population using related services, including non-cash payment services, at 50%, and through intermediary payment services at 80%, along with 55% of the population to shop online with average spending of US$600 annually by that time.

    Notably, Hanoi and Ho Chi Minh City would make up half of e-commerce revenues in the next five years.

  • Taxi giant lays off 1,300 employees

    Taxi giant lays off 1,300 employees

    Vinasun has cut its staff by 1,300 in the first nine months as it restructures to reduce costs amid the Covid-19 pandemic. The staff cut has lowered the company’s salary costs by 35.5 percent year-on-year to VND80 billion ($3.4 million), saving it VND4.9 billion each month. It now has 4,480 employees.

    However, lower salary costs have not been enough to offset Covid-19 impacts. The firm’s revenue in the first nine months plunged 52 percent year-on-year to VND734.7 billion, with business mostly frozen in April during the nationwide social distancing campaign.

    It has posted a loss of VND185 billion so far this year, compared to a post-tax profit of VND94 billion in the same period last year.

    It forecasts a post-tax loss of VND115 billion this year.

    Company leaders have said they expect the recovery process to be slow due to a lack of foreign visitors. After Vietnam closed its borders and stopped international flights in March, only a few routes have resumed operations

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  • Vietnam PM tells Samsung to set up chip plant

    Vietnam PM tells Samsung to set up chip plant

    Prime Minister Nguyen Xuan Phuc has called on Samsung Electronics to build a semiconductor plant in Vietnam. He made the suggestion at a meeting on Tuesday with the South Korean company’s vice chairman, Lee Jae-yong, who is on a three-day business trip to Vietnam to explore business opportunities, the Government news site reported.

    He said a semiconductor plant would enable the company to have a closed production chain in Vietnam where it already has smartphone and consumer electronics plants.

    Samsung has two factories making smartphones in the north and a consumer electronics manufacturing plant in Ho Chi Minh City.

    Phuc promised Vietnam would create the best possible conditions for Samsung to invest, including in R&D and hi-tech projects.

    He said Vietnam has managed to contain the Covid-19 pandemic and would be the only country in Southeast Asia to achieve positive growth this year, possibly emerging as the fourth-largest economy in the region this year.

    Lee said Samsung’s $220 million research and development center in Hanoi, the first of its kind outside South Korea, would begin functioning in 2022. Construction began in March this year.

    With more than 3,000 engineers it would become the company’s key R&D center globally, he said.

    He thanked the Vietnamese government for allowing more than 3,000 Samsung personnel to enter the country to work since March through the Covid-19 pandemic.

    If Samsung’s production units in Vietnam did not function normally, it would disrupt its global production and supply chain, he said.

    He plans to visit TV screen producer Samsung Electronics HCMC CE Complex (SEHC) at the Saigon Hi-Tech Park in HCMC’s District 9 and consider expanding it.

    The PM told him the government had agreed with HCMC’s proposal to allow SEHC to become an export processing company to enable it to expand and strengthen its global competitiveness.

    Vietnam is Samsung’s largest smartphone production base, with half of all its phones being made in the country. It has invested over $17 billion in Vietnam so far.

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  • Samsung heir visits Vietnam to discuss possible investments plan

    Samsung heir visits Vietnam to discuss possible investments plan

    Samsung Electronics vice-chairman Lee Jae-yong departed for Vietnam for a three-day visit to explore business opportunities. He is scheduled to meet Prime Minister Nguyen Xuan Phuc on Tuesday to discuss possible investment plans and visit Samsung’s plants in Hanoi.

    The focus will be on whether Lee announces new investment plans including the construction of a factory for electronic-car batteries in Vietnam.

    Lee is also expected to inspect the progress of a Samsung Electronics research center that is currently under construction in Hanoi.

    Construction of the $220 million research and development center, the first of its kind outside South Korea, began last March.

    It is Lee’s first visit to Vietnam since October 2018. He is exempt from mandatory quarantine after the government scrapped the quarantine requirement for foreign managers, investors, and diplomats visiting the country for less than 14 days.

    Vietnam is Samsung’s largest smartphone production base, with half of all its phones being made in the country at plants in Bac Ninh and Thai Nguyen provinces in the north. It has invested over $17 billion in Vietnam so far.

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  • Hanoi new apartment supply hits 5-year low

    Hanoi new apartment supply hits 5-year low

    Hanoi’s Q3 new apartment supply fell 60 percent year-on-year to a five-year low of 3,100 units as Covid-19 hampered new launches. Of the new supply, only 700 units, or 23 percent, came from four new projects, while the rest were from nine existing ones, Do Thu Hang, director of advisory services at real estate consultancy firm Savills Hanoi, said at a press briefing Thursday.

    “Major developers have been delaying launching new units this year due to Covid-19 impacts,” Hang said.

    The supply shortage has caused prices to rise 10 percent year-on-year to $1,500 per square meter, Savills data shows.

    However, these factors have also caused sales to fall 44 percent year-on-year to 5,200 units, with Grade B and Grade C accounting for 99 percent, while the absorption rate dropped 12 percentage points year-on-year to 20 percent.

    In the best-case scenario, apartment sales in the capital city is estimated at 20,000 units this year, nearly half of last year, Hang said.

    In the last quarter, nearly 10,000 apartments, mostly Grade B, are set to enter the market from 12 projects.

    Whether there will be a surge in new supply in the last months of the year depends on Vietnam’s ability to contain the pandemic, said Nguyen Duc Them, project sales manager of Savills Hanoi.

  • Japan, Vietnam boast thriving economic partnership

    Japan, Vietnam boast thriving economic partnership

    Japan has for years been one of Vietnam’s four largest economic partners, with their bilateral trade rising to nearly $40 billion last year.

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  • Vietnam workers’ wage rises lowest in a decade

    Vietnam workers’ wage rises lowest in a decade

    Average wages at multinationals and domestic enterprises in Vietnam respectively rose 6.5 percent and 5.2 percent this year, the lowest levels in a decade.

    Over the past 10 years, average salaries in both groups had risen at least 8 percent a year, according to a report by human resources solutions firm Talentnet Vietnam and American human resources consulting firm Mercer.

    The report surveyed 600 businesses in 16 different industries including technology, consumer goods, pharmaceuticals and manufacturing. Average wages were calculated off the firms’ total salary budget for each year.

    According to the report, 14 percent of multinationals surveyed said there will be no increase in employee salaries this year, and 34 percent of domestic firms said the same. Six percent of multinationals and 3 percent of domestic enterprises also said they will continue to implement the same “austere” approach in wage policies next year.

    In 2020, the sectors with the highest wage growth have been insurance with 8.7 percent, hi-tech with 8.5 percent, and pharmaceuticals with 8.4 percent. These are sectors least affected by the Covid-19 pandemic, Talentnet said.

    Meanwhile, the oil and gas industry recorded the lowest salary growth rate at 2.1 percent, followed by banking with 5.6 percent, and processing with 6.5 percent.

    Although almost all companies said they were tightening their purse strings, many said they are willing to give special bonuses to employees who play a key role in their business. As many as 69 percent of companies surveyed said they will pay such bonuses in a lump sum by year-end, while 13 percent said they were doing this quarterly, and another 13 percent were doing it monthly.

    Due to specific industry characteristics, businesses surveyed in the financial sector including banks, consumer lending companies and fund management companies were handing out the highest performance-based rewards, with bonuses ranging between 20-20.4 percent of annual basic salary, the report said.

    As of last year, Vietnam had one of the lowest average wages in the Asia-Pacific Region. An average Vietnamese worker earned $242 per month in 2019, compared to the regional average of $1,801, according to recruitment firm ManpowerGroup’s annual Total Workforce Index 2019.

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  • Vietnam fashion house Icon Denim to expand abroad

    Vietnam fashion house Icon Denim to expand abroad

    ICON DENIM Co., Ltd. officially launched its first store at 12-12 Bis Cach Mang Thang 8 Street, Ben Thanh Ward, District 1, Ho Chi Minh City.

    ICON DENIM brand was established in 2017, with the desire to bring the brand fashion closer to Vietnamese men. After 2019, ICON DENIM opened 3 large Flagship stores (showrooms) located in the front of the central districts: such as the store at Cach Mang Thang Tam Street – the junction of Phu Dong near New World Hotel, store at Su Van Hanh street – the busiest entertainment street for young people, store at Le Van Sy – the biggest fashion street in the city. The floor square of Flagship stores is from 150m2 to more than 200m2 to create a spacious and comfortable shopping area for customers. Founders of ICON DENIM Mr.

    Over the past year, ICON DENIM has affirmed its brand position, as well as created its own core values for the Vietnamese fashion communities. Aiming at the mid-range segment, ICON DENIM focuses on the “real value” of products, targeting customers who tend to shop for brands whose product prices are equivalent to the actual quality of goods. The models are diverse and are always in tune with world fashion trends. The company has ambition to create “real value” products in designing beautiful, trendy and diversified products; create high-quality, durable to high-end products with reasonable prices and value for money. That is ICON DENIM’s strategy in branding in the branded fashion market.

    To keep up with market trends, ICON DENIM always researches trend reports and consumer behavior reports of the industry to better understand the fashion needs of customers and listen to customers’ opinions. Since then, ICON DENIM has adjusted and developed its products to follow the market demand. Therefore, each month, this brand launches about 80 to 100 designs that follow the world’s trends, corresponding to thousands of products ranging from shirts, pants, accessories etc.

    With many years of experiences in the fashion industry and having a unique view on the fashion market, Mr. Tran Dai Duong – CEO of ICON DENIM said that the company is determined to build a men’s fashion brand with much diversity and differences in Vietnam. “Our key message is “Restyle. Reborn “is also the mission of ICON DENIM now as well as in the future – not only to become the choice of young Vietnamese people but also to reach to the level of international fashion brands.”

    The year 2020 also witnessed ICON DENIM’s efforts to perfect the Manufacturing Process, from design, production to image and display of the store. ICON DENIM always had a methodical process and strict control. With all dedication, when entering to any stores of ICON DENIM, customers will feel the difference of trendy fashion designs, new top styles, exclusive and the sincerity and enthusiasm given from each employee.

    Through a year of challenges and opportunities, ICON DENIM has been striving every day to improve its position in the hearts of customers. In Vietnam, in 2021, the brand will continue to open 4-5 stores in Ho Chi Minh City, and also expand to Hai Phong, Hanoi. The brand is also preparing to set up the first base for development in potential Southeast Asian countries such as Thailand, Cambodia, Singapore etc.

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  • Vietnam Airlines losses soar as Covid-19 grounds flights

    Vietnam Airlines losses soar as Covid-19 grounds flights

    Vietnam Airlines has reported losses of VND10.7 trillion ($464 million) in January-September, hit hard by Covid-19. The national flag carrier recorded revenues of VND23.9 trillion in the first nine months of this year, down 58.3 percent year-on-year, it said in a press release on Tuesday.

    During this period, the carrier transported 10.2 million passengers, down 41.2 percent from a year ago.

    The airline has blamed its loss on the pandemic’s impacts on the aviation industry. It said it has cut sales, financial and management expenses, reduced salaries of pilots and flight attendants as well as increased the operation of repatriation flights as part of efforts to reduce costs and boost incomes.

    The carrier’s third-quarter revenues fell 68 percent year-on-year after the second Covid-19 outbreak hit the country in late July, said Tran Thanh Hien, the airline’s chief accountant. The third quarter was usually the highest revenue earner of the year as summer travel peaked, Hien noted.

    The second outbreak forced Vietnam Airlines to cancel 22 new domestic routes during the peak period. So far, it has resumed 11 of these and is considering the viability of resuming the rest in the fourth quarter, always a low travel period.

    The national carrier currently operates more than 60 domestic routes with an average of 300 flights per day. It has resumed one-way flights to Japan and plans to reopen routes soon to mainland China, Taiwan, Laos, and Cambodia.

    As of last month, the airline said its cash reserves had gone down to just VND1.9 trillion.

    The airline has estimated this year’s total loss at around VND15.2 trillion on revenues of VND55.7 trillion.

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  • Largest solar plant in Southeast Asia begins operating in Vietnam

    Largest solar plant in Southeast Asia begins operating in Vietnam

    The largest solar farm in Southeast Asia has been commissioned in Vietnam’s central province of Ninh Thuan.

    The 450 megawatt Trung Nam Thuan Nam Solar Power Plant, which spreads over an area of nearly 560 hectares in Thuan Nam District, went on stream on Monday evening, 102 days after construction began in mid-May.

    Built by Ho Chi Minh City-based energy firm Trungnam Group at a cost of VND12 trillion ($518 million), it has a plant that can produce over one billion kilowatt-hours of electricity a year and a 17-kilometer transmission line to connect it with the grid.

    This is the first time a private company has been allowed to install a transmission line, a preserve thus far of state-owned utility Vietnam Electricity (EVN).

    Laying transmission lines has become a critical task since the rising number of renewable energy plants is overloading existing ones.

    Trungnam has added a total of 1,064 megawatts capacity to the national grid comprising of hydropower and solar and wind power. It plans to have a renewable output of nearly 10,000 MW by 2027.

    There are over 100 solar power plants operating in the country with a total capacity of over 6,300 MWp.

    The Ministry of Industry and Trade is drafting a national power development plan for the next decade with a 80 GW addition to the generation capacity of which 37.5 percent will come from wind and solar power.

    Vietnam needs over $133 billion over the next decade for building new power plants and expanding the grid to fully meet its surging demand for electricity.

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  • VinSmart produces smartphones for US mobile service provider

    VinSmart produces smartphones for US mobile service provider

    VinSmart, a subsidiary of Vietnam’s largest listed company Vingroup, has received a contract manufacturing order for two million smartphones from a major U.S. carrier.

    Le Thi Thu Thuy, general director of VinSmart, without identifying the U.S. company, said Thursday at a press conference that the first consignment was sent a month ago. The phones carry the American service provider’s logo.

    “This is an important step in understanding the U.S. market… before taking Vsmart phones there in future,” Thuy said.

    The U.S. company has such stringent standards that despite having a team in Vietnam to supervise the VinSmart factory 24/7, it still thoroughly inspects the phones once they reach the U.S.

    The contract is for four models, all of them supporting 4G.

    A confidentiality agreement prohibits VinSmart from disclosing the name of its partner.

    VinSmart has a plant for manufacturing 125 million phones, IoT devices, and other smart devices per year at the Hoa Lac Hi-Tech Park in Hanoi.

    The brand is currently sold in three countries, Russia, Myanmar, and Spain, but the company expects to sell its Aris 5G in the U.S. by next year.

    VinSmart had a 16.7 percent market share in the first quarter and surpassed Apple to become the third-largest smartphone brand in Vietnam behind Samsung and China’s Oppo.

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  • Korean firm invests in Vietnam car-wash chain

    Korean firm invests in Vietnam car-wash chain

    South Korean oil refiner GS Caltex Corp has bought an 11.56 percent stake in car-wash startup Vietwash for $1.7 million. Nguyen Thanh Duong, founder of Vietwash, said the money would be used to double the number of outlets to over 100 in the next few years.

    It now offers car and motorbike wash services at 51 locations in Ho Chi Minh City and central Da Nang City.

    Hur Joon-hong, GS Caltex executive vice president, said his company would help Vietwash develop an automatic car maintenance system and expand.

    Vietwash, which began operations in 2014, claims to be the first car-wash chain in Vietnam and serves 1.3 million customers a year.

    In 2016 it received an investment of $1 million from private-equity firm Vietnam Investments Group. GS Caltex has been selling vehicle lubricants in Vietnam since 2017.

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