Traders warned to quote prices in dong not
Many local traders are continuing to quote the
price of goods in U.S. dollars despite the recent
announcement from the State Bank of Vietnam (SBV)
stating that it would be taking strong measures
to stop this practice.
The central bank is speeding up its investigation
into traders suspected of violating the ban on
listing prices in a foreign currency. If found
guilty violators can be fined between VND5-70
The ban was made in 1999 with the aim of restricting
the ongoing dollarization process in the country,
but it has not been strictly followed and traders
still quoting in dollars have said the ban would
affect their business with foreigners.
"Since the Government's ban, we had to quote
our prices in Vietnamese dong, but this has caused
us many troubles as most of our customers are
foreigners. Since they are not quite familiar
with dong value, they cannot decide whether the
goods are expensive or not," a souvenir trader
in the Dinh Liet street said.
Computer companies and hotel owners who often
quote their prices in dollars said that they face
a similar problem even though their customers
Many traders have chosen to quote prices in both
dong and dollar as a compromise, but Ho Huu Hanh,
deputy director of the SBV's HCM City branch,
said this double quoting system is not allowed.
He said the ban has been in place since 1999
and traders should already be following the regulations
not giving reasons for not following the rule.
"We admit that dollarization is popular
in economies in a transition period. However,
it is unacceptable if prices are quoted and payments
are made in foreign currency," said Truong
Van Phuoc, head of the SBV's Foreign Exchange
Management Department. (VNS)
FDI businesses' remittance to State budget
on the rise
Contributions by foreign direct invested (FDI)
businesses to the State budget rose sharply in
the first half of this year, accounting for 53.2%
of the target and increasing by 43.9% compared
with the same period last year.
The surge was attributed to an increasing number
of FDI businesses that are no longer in their
According to the General Tax Department, domestic
tax collection (excluding tax on crude oil) in
the first six months of this year was 53.9% of
the target, a 21.5% year-on-year increase. State-owned
businesses' remittance to the State budget accounted
for 50.2% of the annual plan, a 16% year-on-year
The customs sector has so far this year collected
VND22.375 billion (roughly US$1.4 billion), including
an import-export tax collection worth VND1,579
billion (roughly US$100 million), and a value
added tax collection of VND11,747 billion. (VNA)
Foreign companies get nod to set up subsidiaries
Foreign-invested enterprises, already allowed
to convert to joint stock companies, will shortly
be able to re-organize under the parent-subsidiary
model, under a plan approved in principle by the
The Ministry of Planning and Investment (MPI)
will begin working this week with relevant offices
on regulations that would govern a foreign-invested
enterprises (FIEs) organization as a parent company.
"The parent-subsidiary model for FIEs is
new in Vietnam so the country does not yet have
regulations on the operation of this model,"
said deputy head of the MPI's Foreign Investment
Agency Nguyen Anh Tuan. "The ministry expects
to have general management regulations on parent
companies next week."
Panasonic Vietnam could become the first FIE
to set up a parent-subsidiary company in Vietnam,
Under its plan, Panasonic Vietnam would become
a parent company with two subsidiaries, one operating
its current factory in Hanoi and the other a HCM
City-based trading and distributing company for
The new parent company would have a total capital
of US$30 million, US$8 million from the HCM City-based
company and US$22 million from Hanoi-based factory.
There is some confusion whether parent companies
will be permitted to import goods into Vietnam
for sale, an issue that regulations are] expected
to clarify. (VNS)
Malaysian leading retailer opens 1st store
Parkson Vietnam Co. inaugurated its first department
store last night after three months of preparation,
and Saigon-tourist Plaza became Parkson Saigontourist
Parkson has leased the building from Vietnam's
Saigontourist Holding Co. for 25 years to sell
Vietnamese and foreign brand clothes, cosmetics
and other products, modernizing the country's
"We foresee a promising future for Parkson
in Vietnam, and we intend to satisfy the growing
needs of the Vietnamese consumers by introducing
branded merchandises to all," said Tham Tuck
Choy, general director of Parkson Vietnam.
The brand distribution manager for Bossini, Baleno
and S&K said he rented 160 square metres to
sell Baleno, S&K and Jornano outfits and bags.
Parkson will run various seasonal promotions
and sales, which are still uncommon in Vietnam.
The group's marketing will focus on attracting
youths, and middle-class and high-income people.
The new department store, which has a 50-year
license and US$7 million in capital, will provide
direct and indirect jobs for 1,000 people.
Parkson plans to set up about 10 department stores
in HCM City, Hanoi, Da Nang, Can Tho and Hue,
spending an estimated US$70 million.
Parkson, a member of the Lion Group, started
off in Malaysia in 1987 and is now a major retailer
in Malaysia and China. (SGT)
IFC finances VN furniture exporters
The International Finance Corp. (IFC) - a financial
arm of the World Bank - has agreed to grant furniture
exporter Khai Vy a five-year loan of US$6 million
to boost the latter's business.
Representatives from the IFC and the Khai Vy
Corp. signed the funding contract on June 29.
Khai Vy was established in 1995 and currently
runs four factories, one in HCM City, two in Binh
Dinh province and one in Binh Phuoc province.
Khai Vy's factories produce enough furniture
to fill 4,100 containers annually, according to
Khai Vy general director Doan Van Trang.
The company's export turnover was almost US$37
million in 2004, and revenues reach US$50 million
this year, Trang said.
"Markets in the EU, including the UK, France,
Germany and Spain, represent around 70% of our
sales, and America and several other markets take
the remaining 30%," he said.
According to Doan Kham, an IFC investment officer
in Vietnam, the IFC will not only provide the
loan but also support this furniture manufacturer
with regard to management, environment and market
On June 30, Kham said, the IFC will sign a similar
contract worth US$8 million to support another
furniture manufacturer, Theodore Alexander, a
British invested company in HCM City. (VnMedia/VNS)
Vietnam struggles to boost fragrant rice exports
Vietnam - the world's second largest rice exporter
- is struggling to boost exports of its fragrant
rice due to low product quality, according to
industry experts and businesses.
This year, fragrant rice exports, will drop as
much as 30% from last year's volumes despite high
prices, which could reach US$360 per tonne, industry
But, fragrant rice sales have always been sluggish
for Vietnam in the past. Usually, fragrant rice
only makes up 3 to 5% of the country's total rice
For example, in 2004, the country exported 3.5
million tonnes of rice, but only 99,614 tonnes
was fragrant rice. (TN)
VN becoming market economy: EU
The European Union (EU) has yet to accept Vietnam
as a market economy, however, the bloc has recognized
the country's progress in meeting requirements
to become one.
It was announced by the EU's market economy status
mission whose participants were on a two-day working
visit in Hanoi. The mission said that the EU will
continuously consider Vietnam's detailed report
on the country's standing as a market economy.
At the working visit, which ended on Tuesday,
Fritz Harald Wenig, director of the EU's Trade
Defence Directorate, said the EU will recognize
Vietnam as a market economy as soon as possible.
Vietnam filed a request to the EU for market
economy status three years ago, and the Ministry
of Trade (MoT), in May last year, sent a preliminary
report on the country's legal system and economic
situation to the EU for consideration.
The EU then required a more detailed report and
the MoT supplemented additional information to
the preliminary report to meet the bloc's requirement.
Though the EU recognized Vietnam's multi-faceted
achievements and progresses in economic development
and integration, the EU has not yet recognized
Vietnam as a market economy, and has only offered
Vietnam temporary market economy status.
The temporary status gives an advantage to Vietnamese
exporters to the EU in cases of anti-dumping litigation,
as firms may be able to prove they are operating
under market mechanisms. (VNS)
VN's franchising industry to be on a roll
The franchising industry is seen to be growing
strongly in near term given Vietnam's efforts
to provide a full legal framework for the new
activity and corporate eagerness to get involved
in franchise deals.
Vietnam is creating an emerging franchise business
climate that is catching up with international
standards, VinaCapital managing director Louis
Nguyen told the seminar, which was organized bu
VinaCapital in HCM City on June 28.
Vietnam now has different laws on franchising
and its newly-revised Commercial Law provides
more details in this regard, said Baker &
McKenzie managing partner Frederick Burke. The
legal environment is good enough for the development
Nguyen Tran Quang, marketing director of coffee
processor Trung Nguyen, said on the sidelines
of the meeting that his company would franchise
an additional 200 coffee shops by the year-end.
Nam An Group, meanwhile, plans to opens five
franchised restaurants in the rest of this year
on top of its current chain of twelve Pho 24 noodle
restaurants, founder and managing director Ly
Quy Trung said.
Kinh Do Corp., which now has 25 bakeries including
one franchised, plans to franchise tens of shops
in the coming time, chief operating officer Patrick
Ho Loke Yin said. (SGT)
IDG to promote Vietnam's hi-tech park abroad
International Data Group (IDG) will market and
promote northern Vietnam's Hoa Lac Hi-Tech abroad
following a memorandum of understanding (MoU)
inked with the Ministry of Science and Technology.
Hugo Shong, senior vice president of IDG and
president and CEO of IDG Asia, and Deputy Minister
of Science and Technology Tran Quoc Thang signed
the deal at the MIT campus in Cambridge on June
Prime Minister Phan Van Khai witnessed the signing
while he was in Massachusetts as the last stop
of his historic visit to the United States from
IDG said in a statement that the deal was designed
to help build high-tech research and development
capacity, promote the development of high-tech
industries, and encourage technology innovation
and commercialization of technology products in
The world's leading global technology media,
research and event management company also agrees
to provide advice and support for the ministry
as it plans construction and operation of a hi-tech
conference and exposition centre in the Hoa Lac
Both organizations will study the possibility
of signing a long-term contract where IDG will
rent the centre on an annual basis to help construct
an exhibition hall.
Also on June 25, Shong of IDG signed an MOU on
co-operation with Vu Tien Loc, chairman of the
Vietnam Chamber of Commerce and Industry (VCCI).
Vietnam Business Day to take place in Berlin
The Germany-Vietnam Friendship Association (DVG)
will organise a Vietnam Business Day at the fifth
Asia and Pacific Week (APW), scheduled from Sept.
19 - Oct. 2 in Berlin.
The DVG will work with the Asia and Pacific Forum
in Berlin and German tourism group (TUI) to dvertise
about Vietnam's tourism potential. A seminar themed
"Vietnam - 30 years after the war" is
also expected to take place.
They are among more than 200 cultural, scientific,
economic and tourism events during the festive
week. About 20 countries in the world have registered
to attend this year's APW.
On the initiative of the Governing Mayor, the
APW has taken place in Berlin every two years
since 1997. The Republic of Korea will be the
focus country of the fifth APW which will focus
on economic and scientific aspects. (VNA)
25 foreign firms in Vietnam to convert to
By the end of this year, Vietnam will likely
allow up to 25 foreign-invested companies in the
country to convert into shareholding firms, the
Ministry of Planning and Investment has announced.
Most of the companies that are expected to convert
are operating in industrial and construction areas,
the ministry said in a recent statement. Investment
capital of a vast majority of the companies is
higher than US$10 million.
So far, the green light has already been given
to two foreign companies: Hoang Gia Company Ltd,
a US$46-million hotel developer, and Austnam,
a US$1.9-million metal roofing manufacturer.
The ministry is currently taking steps to give
licenses to four other foreign enterprises to
convert into joint-stock firms. Also, the government
has agreed, in principle, to allow five other
foreign companies to follow the same step.
The number of companies seeking government permission
to become stake-holding firms is rising.
Under current law, foreign-invested enterprises
in Vietnam can only exist in the form of a limited
liability company, making them unable to issue
shares to raise capital. (TN)