Netherlands-Vietnam Chamber of Commerce (NVCC)

Events 2018

Successfull Meeting with the Ambassador

8 November 2018, The Hague

The board of the Netherlands Vietnam Chamber of Commerce had the pleasure of receiving NVCC members and special guests at a special luncheon meeting with and hosted by H.E. Mme Ngo Thi Hoa, Ambassador Extraordinary and Plenipotentiary to the Netherlands on 8 November at the Embassy in The Hague.

During the luncheon, Mme Ngo answered questions from her guests on the developments in the Socialist Republic of Vietnam and the Vietnamese – Dutch relations.

Mr. Nguyen Hai Tinh, Commercial Counsellor of the Embassy, gave a briefing on the effects of the European- Vietnamese Free Trade Agreement.

All guests were treated to a great lunch with Vietnamese specialities.

A link to the Photo album can be found here.

Boost your trade with Vietnam

By: Mr. Joost Vrancken Peeters, Partner, Attorney, Kneppelhout Korthals Lawyers

What tariff benefits does your company enjoy from the EU-Vietnam FTA?

“We now look forward to the early signature of the agreements and to the possible ratification of the trade agreement.”

– Commissioner for Trade Cecilia Malmström and Vietnam’s Minister for Industry and Trade, Tran Tuan Anh

On 19 October 2018, the EU and Vietnam reconfirmed commitment to trade and investment agreements. After the conclusion of the legal work this summer, they are looking forward to the early signature of the agreements and to the possible ratification of the trade agreement.

 

Main TARIFF benefits

In general, almost all custom duties of both sides will be cut over a transitional period. As soon as the EU-Vietnam Free Trade Agreement (EVFTA) enters into force, 65% of EU exports to Vietnam will become duty-free while the remaining trade (with a few products excepted) will be progressively liberalised in 10 years. Meanwhile, EU will liberalise 71% of Vietnamese exports from day one and 99% will become duty-free after 7 years.


Figure 1. Tariff benefits for key EU exports products

For some specific sectors, eliminating customs duties does not result in automatic access to the market of the trade partner if the EU goods do not comply with relevant Vietnam’s rules. These non-tariff barriers will also be reduced as one of the main benefits of the agreement, which will not be addressed in this article.

The EVFTA will make a significant contribution to promoting the relationship between the EU and Vietnam in terms of bilateral trade. From the perspective of Vietnam, the current benefit of preferential access enjoyed through the Generalised Scheme of Preferences (GSP) is limited, since Vietnam had access only for products unilaterally defined by the EU and the EU may change the conditions at any time. As for the EU, although having granted the GSP to developing countries, it has no preferential access to Vietnam. Therefore, the implementation will provide both economics with mutual benefits.

 

EU exports

In contrast with the GSP which was granted by the EU to developing countries, the EVFTA will provide the EU with preferential access to Vietnam.

However, EU exports cannot practically benefit from the agreement to a full extent immediately after its entry into force. Unlike textile fabric, which will be fully liberalised at the entry into force of the agreement, most EU export products which are being allowed to enter Vietnam duty free will have a transition period of 3 to 10 years. The tariff schedule of Vietnam can be found here. Such long transition periods were set forth so that Vietnam, as a developing country, is allowed to adequately adapt to the increased competitive pressures from the EU.

 

Vietnamese exports

Under the GSP, only less than half of Vietnamese exports to the EU currently enjoy a zero-percent tax rate but this will increase after the implementation of the EVFTA. Pursuant to the standard GSP agreement, Vietnam will lose its status as a GSP beneficiary country since the EVFTA provides better tariff preferences.[1] In this case, Vietnamese operators then have two years, from the date of application of the EVFTA, to adapt to the change of their status.[2]

Thanks to the EVFTA, Vietnam will be allowed to maintain its free access to the EU market in the future, even if its economic situation no longer justifies the preferential treatment reserved under the GSP. Furthermore, Vietnam can benefit from both of these two deals during the post-GSP-two-year period. In particular, companies may choose the lower preferential rate between those provided under GSP and EVFTA (an example is shown below).


Figure 2. Yearly tax rate of two Vietnamese exports to the EU pursuant to the GSP and EVFTA[3]

However, this two-year adaptation period is still limited compared with the longer liberalisation phase provided by the EVFTA. According to this new deal, a maximum period of 7 years applies to some products which are sensitive for EU producers, particularly in the sectors of textile apparel and footwear. There is an uncertainty whether a better preferential rate may be enjoyed after the two-year adaptation of GSP. The tariff schedule of the EU can be found here. It is said the EVFTA would be one of the most ambitious trade agreement which aims to set a model  of promoting trades between EU and developing countries. Before the agreements enter into enforce, there is still time to make adjustments on your trading strategy to benefit from these deals to a largest extent.

For more information contact Joost Vrancken Peeters +31620210657 or jvp@kneppelhout.nl, Anting Zhang +31634011860 or az@kneppelhout.nl.

[1] Article 4(1)(b), Regulation (EU) No. 978/2012.
[2] Paragraph 2, recital 9, Regulation (EU) No. 978/2012.
[3] The data on the base rate and GSP rate can be accessed through http://madb.europa.eu/madb/euTariffs.htm; the information on the EVFTA staging is provided in the ANNEX 2-A of the agreement.

Can your company benefit from the FTA’s with Vietnam that are expected in 2019?

Source: PWC

In this news alert we will elaborate on recent developments with respect to trade agreements between the EU and Vietnam.

EU – Vietnam

On 17 October 2018 the European Commission adopted the EU-Vietnam trade and investment agreements. Next steps will be the signature and conclusion of these agreements.

Consequences

The EU-Vietnam trade agreement will ultimately eliminate over 99% of customs duties on goods traded between the two sides. Vietnam will remove 65% of import duties on EU exports as of the moment the agreement will enter into force, with the remainder of duties being gradually eliminated over a 10-year period. EU duties on imports from Vietnam will be eliminated from entering into force of the agreement or progressively over a 7-year period.

To be able to apply reduced import duty rates the products need to be of EU or Vietnamese preferential origin. Products can benefit from preferential tariff treatment of this agreement upon submission of an origin declaration or a EUR.1 certificate. In the future, the EU may move to a system of registered exporters (REX), which could stipulate that the use of an origin declaration or a EUR.1 certificate will be replaced by a statement on a commercial document.

 

Currently Vietnam has trade preferences with the EU under the Generalised Scheme of Preferences (GSP). Vietnam will be removed from the list of GSP beneficiary countries two years after the date that the EU-Vietnam FTA enters into force. From the moment of entry into force of this FTA, companies can benefit from both agreements for two years (e.g. if the rules of origin under the GSP are less strict than under the EU-Vietnam FTA, however likely the preferential rate under the FTA will be lower than under GSP).

Way forward

The Commission is now submitting the proposals for signature and conclusion of the agreements to the Council. Once authorised by the Council, the agreements will be signed and presented to the European Parliament for consent. After the European Parliament has given its consent, the trade agreement can be concluded by the Council and enter into force.

Take away

We advise companies to assess whether they have flows of goods that can benefit from one of these FTAs. Whether they have goods that qualify so that they can benefit from the reduced or removed import duty rates and whether they fulfill the formal criteria to issue origin declarations, EUR.1 certificates or origin statements.

Since it will take a couple of months before the agreements enter into force there is sufficient time if the goods do not yet comply, to make adjustments to the supply chain or sourcing in order to be able to benefit once the FTA’s will enter into force.

If you have any questions regarding on of these FTAs or require any assistance, please do not hesitate to contact Claudia Buysing Damsté (claudia.buysing.damste@pwc.com / +31 (0)88 792 3811), Suzanne Bras (suzanne.bras@pwc.com / +31 (0)88 792 4267) or Stan Vullers (stan.vullers@pwc.com/ +31 (0)88 792 1490).

Luncheon with the Ambassador, 8 November

The board of the Netherlands Vietnam Chamber of Commerce has the pleasure of inviting you to a special luncheon meeting with and hosted by H.E. Mme Ngo Thi Hoa, Ambassador Extraordinary and Plenipotentiary to the Netherlands.

During the luncheon, Mme Ngo will answer questions from her guests on the developments in the Socialist Republic of Vietnam and the Vietnamese – Dutch relations.

Mr. Nguyen Hai Tinh, Commercial Counsellor of the Embassy, will give a briefing on the effects of the European- Vietnamese

The meeting will be moderated by NVCC Chairman Mr. Joost Vrancken Peeters.

The number of seats at the luncheon is limited, priority will be given to members of the Netherlands Vietnam Chamber of Commerce.

Participation is free of charge.

Date: 8 November

Time: 11:00 – 13:15 hrs

Venue: Vietnamese Embassy, Javastraat 1, The Hague

Please register on or before Friday 2 November.

 

 

 

 

 

Vietnam cherishes investment from EU

Source Viêt Nam News

Update: October, 18/2018 – 09:00

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Prime Minister Nguyễn Xuân Phúc meets with European business leaders who participate in the Việt Nam EU-Belgium Business Forum on October 17. — VNA/VNS Photo Thống Nhất

BRUSSELS — The Vietnamese Government is making concerted efforts to improve the business climate for both domestic and foreign enterprises, including those from the Europe, Prime Minister Nguyễn Xuân Phúc said on October 17.

Attending the Việt Nam EU-Belgium Business Forum jointly held by the Việt Nam Chamber of Commerce and Industry (VCCI), the Belgian Vietnamese Alliance, embassies and trade offices of Việt Nam and Belgium, PM Phúc said that the Government pledges favourable conditions to connect enterprises from both sides for the benefits of the firms and the people.

Two-way trade has increased tenfold over nearly a decade, he noted, adding that it is likely to rise to US$53 billion this year. Emphasising the Europe-Việt Nam free trade agreement (EVFTA) which is expected to open the door for the enterprises to capitalise on their cooperation potential when it takes effect, PM Phúc hoped that the European business association, especially Belgian firms, would raise their voices to push the signing of the deal.

Việt Nam will serve as a bridge for European enterprises to break into ASEAN market toward a free and fair trade, he said, underlining Việt Nam’s advantages for Belgian investments like stable socio-political and macro-economic conditions and well-developed port systems.

Together with the imminent signing of the EVFTA, Việt Nam has participated in 15 new-generation free trade agreements, which means that if Belgian firms enter Việt Nam, they will have access to a global market, he underlined. At the forum, PM Phúc and officials of both nations witnessed the signing of several cooperation documents between the VCCI and the Belgian Vietnamese Alliance, Việt Nam Post and Telecommunication Group and European mobile network business centre, and Việt Nam Project company and Sarens Group.

Speaking at the event, Chairman of the Belgium – Việt Nam Friendship Alliance Andries Gryffoy said Belgian firms are interested in seeking opportunities in health care, real estate, green energy, food, beverages, seaport infrastructure and other fields in Việt Nam, adding that they are promising investors. He said Belgium boasts a business-friendly government, dynamic research environment, and education system up to international standards and high labour productivity.

Lying in the heart of the EU with a population of 420 million and modern infrastructure, Belgium focuses on industries such as aerospace, chemicals, energy, waste and wastewater treatment, artificial intelligence and 4.0 technology, which are potential fields for partnership with Vietnamese firms, he said.

The same day, PM Phúc had working sessions with representatives from EU and Belgian leading firms operating in Việt Nam, during which they informed the Vietnamese leader on outcomes and investment and business plans in the Southeast Asian nation in such fields as oil and gas, renewable energy, agriculture, fertiliser and insecticide production, seaport infrastructure, rubber and tire production. They also made recommendations on how to accelerate cooperation between the business communities of Việt Nam and the EU, as well as between those of Việt Nam and Belgium in particular.

On October 16, Prime Minister Nguyễn Xuân Phúc received leaders of Solveigh and Nijhuis – the Dutch businesses with experience in anti-erosion, water exploitation and use, and carrying out a climate change adaptation project in central Việt Nam.

The PM hailed Solveigh and Nijhuis as well as other Dutch partners in conducting surveys, research and working solutions to minimise coastal erosion in Việt Nam. He described their work as a specific action to implement cooperation programmes within the framework of the strategic partnership on adaptation to climate change and water management between Việt Nam and the Netherlands.

Menno Holterman, managing director of Nijhuis, said the project’s partners inspected erosion in Hội An and agreed to carry out another project to address challenges in the area. It aims to improve safety and livelihood for locals, and protect and restore Hội An’s coast, while forming new eco-system tourist sites there. Investment for this will be arranged by European and Dutch organisations and businesses and Việt Nam’s T&T group.

Representatives of the two Dutch groups expressed their wish to continue receiving attention and facilitation from the Prime Minister and relevant agencies of Việt Nam during the project’s implementation.

Welcoming proposals from Dutch organisations and businesses, PM Phúc said the Vietnamese Government hopes for experience-sharing and support on human resources and technology from the Dutch partners to solve urgent issues in Việt Nam, especially coastal and riverbank erosion and subsidence, climate change response, and helping local people’s sustainable socio-economic development.

The PM suggested Dutch and Vietnamese partners coordinate with the People’s Committee of Quảng Nam Province to accelerate the study and survey to have an optimal plan.

The two Dutch groups, T&T group and other partners were asked to work with Việt Nam’s Ministry of Agriculture and Rural Development and Quảng Nam authorities to reach an implementation plan. — VNS

Shopee becomes top e-commerce player by traffic in Q3

Source Viêt Nam News

Update: October, 19/2018 – 15:57

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A customer shops on the Shopee platform. — VNS Photo
HÀ NỘI – Shopee has beat Lazada to become the top e-commerce platform by traffic in the third quarter of this year, according to the Map of E-commerce in Việt Nam recently published by Iprice Insight.

Statistics showed that Shopee had a monthly average traffic of 34.5 million in the quarter.

It was closely followed by Lazada with a monthly average traffic of 30.2 million.

This is the first time Lazada has lost the top position since the second quarter of 2017.

Other players in the top five included Tiki with 29.4 million traffic per month, Sendo with 20.7 million and Adayroi with 5.3 million.

The top four, including Shopee, Lazada, Tiki and Sendo all received foreign funding.

The competition was growing fierce in Việt Nam’s e-commerce market, which is anticipated to reach US$10 billion by 2022.

The ranking was forecast to see significant changes in the last quarter of this year when e-commerce platforms would offer more promotion and discount programmes to stimulate shopping as the year-end approaches.

Iprice Insight is run by iPrime Group, a price comparison platform in seven markets, including Malaysia, Indonesia, Singapore, Hong Kong, Thailand, the Philippines and Việt Nam. — VNS

Vietcombank prepares for private placement to foreign investors

Source: Viêt Nam News

Update: October, 19/2018 – 15:44

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Vietcombank’s profit by the end of September is estimated to exceed VNĐ11 trillion. – Photo VCB
HÀ NỘI — Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has come closer to a private placement of 579.7 million shares to foreign investors in a move to raise charter capital to VNĐ39.57 trillion (US$1.69 billion).

According to the largest Vietnamese lender by market value, the State Securities Commission (SSC) on Wednesday affirmed that it received Vietcombank’s application and other relevant documents for the private placement.

Under Vietcombank’s issue plan, the bank is expected to offer 53.9 million shares, or 1.36 per cent of the bank’s total shares after the offering, to its largest current foreign investor Mizuho Bank so that the Japanese bank will maintain its holding in Vietcombank at 15 per cent.

The 305.8 million remaining shares, or 7.73 per cent of the bank’s total shares after the offering, will be offered to other foreign investors.

After completing the sale, the shares will not be transferable for one year.

Vietcombank hasn’t so far released details about the private placement. However, according to the bank’s resolution of the annual general meeting of shareholders early this year, the offering price will not be lower than the price determined by an organisation providing corporate valuation services and the market price averaged in the 10 consecutive sessions before the date investors announce to buy the shares.

Additionally, the lender will favour foreign investors with strong financial status, possibly including one or several existing shareholders of Vietcombank.

With the sale, Vietcombank expects to increase its charter capital by VNĐ3.6 trillion to VNĐ39.57 trillion in a move to meet a capital adequacy ratio (CAR) of at least 8 per cent as per the State Bank of Việt Nam’s Basel II norms, starting in 2020.

Vietcombank’s profit by the end of September is estimated to exceed the VNĐ11 trillion that the bank gained in the entire 2017. The figure is up some 50 per cent against the same period last year.

With the rise, the bank is expected to soon surpass the VNĐ13 trillion profit target set for 2018 at the bank’s annual general meeting of shareholders.

Vietcombank shares (VCB) closed Friday’s morning session at VNĐ57,800 apiece, down 0.3 per cent against Thursday. — VNS

In Memoriam President Tran Dai Quang

Vietnamese state media have reported today, 21 September 2018, the death of President Tran Dai Quang (61), after a long ilness.

The board of the Vietnam Chamber of Commerce in the Netherlands offers its condolences to the family of President Quang and to the people of Vietnam.

CNBC: Vietnam shines despite Southeast Asia’s struggles with trade and emerging market pressures

  • Vietnam is defying the stress in emerging markets as its Southeast Asian rivals face an uncertain outlook driven by trade war risks and a stronger dollar.
  • Vietnam received an estimated $11.25 billion in foreign direct investment in the January to August period of 2018, up 9.2 percent from the same period a year earlier, the investment ministry said last month.
  • But policymakers must ensure the country’s budget deficit doesn’t blow out and the economy doesn’t overheat, one expert says.

Vietnam — with its economy growing at its fastest pace in eight years in the first half of 2018 — is defying the stress in emerging markets as its Southeast Asian rivals face an uncertain outlook driven by trade war risks and a stronger dollar.

The threat of an escalating global trade conflict is weighing on prospects for export-dependent economies like Singapore and Malaysia, while Indonesia and the Philippines face challenges funding their high levels of external debt as their currencies come under pressure from a rising U.S. dollar.

Despite the spillover into Asia, Vietnam’s geographical proximity to China and its historically strong political and economic links with Beijing are paying dividends. Facing cost pressures created by U.S. trade tariffs, Chinese manufacturers are starting to shift production away from the mainland into cheaper Asian locations such as Vietnam and Bangladesh. South Korean, Japanese and Taiwanese firms are already invested in Vietnam.

Many of the countries in ASEAN — the Association of Southeast Asian Nations — are in a far stronger economic position than during the financial crisis of the late 1990s. But the latest fluctuations from emerging market worries, together with global trade frictions, raise questions about who will be impacted the hardest, what the contagion risk for the region will be like, and how best to limit the impact of outflows and currency weakness.

Policymakers and business leaders meeting in Hanoi at the World Economic Forum on ASEAN will attempt to discuss ways to mitigate what Mizuho strategists call a “double-barrelled U.S. shotgun” of a more hawkish Federal Reserve and U.S. President Donald Trump“upping the ante on trade war risks.”

“What we are looking at now is a sign of regional EM (emerging markets) differentiation, because certain markets don’t warrant the negativity,” said Dwyfor Evans, the head of Asia Pacific macro strategy at State Street Global Markets.

“If the U.S. is unable to offset lower Chinese imports by reshoring manufacturing, then continued strong demand conditions in the U.S. will have to be met from alternative sources,” he said. “I will not import toys from China. Instead, I will import from Vietnam, so trade wars and protectionism actually end up as a positive for Vietnam.”

Foreign investors

Vietnam received an estimated $11.25 billion in foreign direct investment (FDI) in the January to August period, up 9.2 percent from the same period a year earlier, the investment ministry said last month. In 2017, Vietnam received a record $17.5 billion in FDI.

“A lot of companies are relocating,” said Robert Subbaraman, head of emerging markets economics at Nomura told CNBC on Monday. “FDI inflows in particular have been very strong and have been providing good balance of payment support for Vietnam.”

Though current fundamentals look “pretty good,” Subbaraman said Vietnam must exercise caution on the fiscal front. Policymakers must ensure the budget deficit doesn’t blow out and the economy doesn’t overheat. “That often happens when you get the very strong inflows and companies moving in.”

Michael Langford, executive director at Airguide, a corporate advisory and consultancy, said Sino-U.S. trade tensions “politically will tighten the relationship between China and Vietnam.”

“Many Chinese firms have factories located in Vietnam now. Companies from battery manufacturers like Vision, through to furniture and textile manufacturing,” he added.

Vietnam may yet be a victim of its own success as it moves up the value chain from low-margin textiles to high-tech products.

“Binary risks around growth are intensifying as a protectionist U.S. puts the key exports engine at the risk of sputtering abruptly,” said Mizuho’s Vishnu Varathan in regional economic quarterly research published on Aug. 7. “We expect that longer term boost to inward investments into Vietnam remains a compelling proposition; as the natural ‘flow down’ of industries from China is hastened by trade war risks.”

Vietnam is a heavily trade-dependent economy with a trade-to-GDP ratio of approximately 200 percent “and rising,” according to Standard Chartered Bank economist, Chidu Narayanan.

Still, FDI inflows are set to remain high in 2018, led by manufacturing which makes up close to 50 percent of inflows, Narayanan said in research published in late June.

Standard Chartered expects both registered and implemented FDI to be close to $15 billion in 2018, moderating from $21 billion in 2017, he said.

“Vietnam has benefited from its participation in regional trade pacts, a young and educated population, a still-cheap and growing labour force, and geographical proximity to China,” he said.

“This should continue to attract strong FDI inflows in the coming years.”

Ambassador Elsbeth Akkerman’s first weeks in Vietnam

source: Ministry of Foreign Affairs

“In my first working weeks in Vietnam I experienced a very diverse palette of official engagements, which gave me the opportunity to familiarize myself with the multiple dimensions of my responsibility: fostering the warm relations and good co-operation between the Netherlands and Vietnam.

The celebration of Vietnam’s 73rd National Day.

National Day in Vietnam

On the occasion of Vietnam’s 73rd National Day, me and my husband had the honor to be invited to a reception hosted by Prime Minister Phuc. In his speech the Prime Minister elaborated on Vietnam’s robust economic growth, its ambition to engage in international relations and its commitment to the Sustainable Development Goals.

The evening also offered me a first unofficial introduction with many relevant members of the Vietnamese government whom I look forward to get to know better (in person) after my official installment. The commemorations continued on Friday the 31st of August (the next day) when I paid tribute to late President Ho Chi Minh together with the rest of the diplomatic corps.

“I found the firm belief of Dutch companies in the economic potential of Vietnam truly inspiring”

Visit to Nedspice Processing Vietnam Ltd: a company specialized in producing and exporting spices all over the world.

Visit to Ho Chi Minh City

After these first work experiences in Hanoi I was invited by the Dutch Consul General Carel Richter and his team in Ho Chi Minh City for a two day program during which I was able to meet representatives of Dutch companies that are active in Vietnam, several of them being social entrepreneurs who ‘while doing business give back to society’. I found their commitment and drive as well as their firm belief in the economic potential of Vietnam truly inspiring.

The latter also goes for the Re-think Plastic Initiative that was launched by the Dutch Community in Ho Chi Minh City that aims to increase the awareness on plastic production and consumption; not only shedding light on what a pollution problem plastic is, but also to what solutions might be found from very easy to very high-tech.

Vietnamese students

Very easy to join is the ‘plastic diet challenge’ that helps to reduce our unhealthy ‘intake of plastic’ at the super market (bags) and in the café (straws). Of a more complex nature is Dutch scientist Bojan Slat’s initiative to clean up the Great Pacific Garbage Patch that started last weekend by launching a 600m-long floating barrier off the coast of San Francisco. Even more inspiration I got from a meeting with the Nuffic Neso team that links Vietnamese students with an ambition to educate themselves abroad with Dutch Universities. Based on the number of student visa our consular department issued over the summer period one can conclude that studying in the Netherlands is quite popular.

World Economic Forum

From 11- 13 September Vietnam hosted the WEF on Asean Forum that was dedicated to entrepreneurship and the 4th Industrial Revolution. As a participant to the session on Accelerating Trade and Investment in Asia Pacific, I also had the opportunity to listen in to the speeches of amongst others Klaus Schwab and PM Phuc. Both referred to the current global political and economic dynamism, the economic potential of the ASEAN region and Vietnam in particular. Also they underlined the opportunities and challenges of Industry 4.0 for economies, businesses and societies. With over 1000 participants and numerous exchanges between representatives of governments, companies and civil society organizations was a very impressive event.