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Hourly leased apartments to be regulated by law



The HCM City Real Estate Association (HOREA) has proposed amending the Housing Law and 2014 Law on Real Estate Business to recognize short-term leasing of apartments as a legal business.

Voters have recently reported big problems in managing apartment hourly leases. In many cases, leased apartments are used for prostitution activities, drug trafficking and hi-tech crimes.

Hourly leased apartments to be regulated by law

They have asked for new regulations related to the use of apartments for hourly rentals and sanctions on violators.

In reply, the Ministry of Construction cited the 2014 Housing Law which says house owners who are domestic institutions, households, individuals, or overseas Vietnamese have the right to use houses for residential purposes and other purposes not prohibited by law.

Decree 99 dated in 2015 stipulates that the act of using an apartment for non-residential purposes, such as providing short-term or hourly leasing services, is strictly prohibited by law.

Meanwhile, HOREA said leasing houses, including apartments, under the mode of ‘sharing rooms’ for the short term is a new renting mode, such as used by Airbnb, that fits the ‘sharing economy’.

However, the association pointed out that existing legal documents are not sufficient to manage the business of ‘sharing rooms using the Airbnb service’, thus resulting in negative consequences. It causes loss of state budget revenue and affects social safety and order. In many cases, leased apartments are used for criminal activities.

There have also been ‘conflicts of interest’ between leasers using Airbnb services and local residents, because unfamiliar tenants regularly appear, causing insecurity and affecting the private space of the households in the same residential quarters.

However, despite the problems, HOREA believes that the business of renting out apartments will continue to develop in the future with the strong development of digital technology.

The Airbnb service is popular in many countries, and it can help attract domestic and foreign travelers in Vietnam, especially those who don’t have a high income and want to save on accommodation costs.

Airbnb is convenient also. Leasers and tenants don’t have to meet because they can make transactions online.

An analyst said that the business would develop rapidly in the future because of the high demand from people who have empty apartments and travelers who want to save costs.

“The ‘prohibit all that is unmanageable’ thinking will not work. It is impossible to prohibit hourly leasing business, because this is a real need of life. Where there is demand, there will be supply,” HOREA chair Le Hoang Chau said.

Meanwhile, Lawyer Nguyen Thanh Toai from Hung Dong Law Firm said the Housing Law stipulates that houses must not be used for wrong purposes. Therefore, it is necessary to amend the law if this type of business is recognized. 

Thuy Nga



Nearly a third of local sugar plants shut down



A farmer harvests sugarcane. Nearly a third of domestic sugar plants have shut down – PHOTO: THANH HOA

HANOI – Only 29 of 40 local sugar plants remained operational in the 2019-2020 season due to a high volume of sugar imports and the deployment of the ASEAN Trade in Goods Agreement (ATIGA) with lower tax rates for sugar imports from ASEAN markets, according to the Vietnam Sugarcane and Sugar Association (VSSA).

The 2020-2021 season is forecast to be a hard time for the sugar sector, especially since the Covid-19 pandemic remains a big challenge. Four more sugar mills—Son Duong, Nong Cong, Van Phat and Pho Phong—are likely to stop their operations due to a shortage of input materials, resulting in their poor performance.

The local sugar sector has been hit for many years due to the smuggling of sugar, mainly from Thailand.

Meanwhile, other ASEAN countries, such as Thailand, the Philippines and Indonesia, despite commitments to the ATIGA, have still employed measures to protect their sugar firms.

Vietnam has fulfilled its commitments to the agreement since January 1 by setting no limits on the volume of sugar imports from ASEAN countries and applying a tax rate of 5% for sugar imports from these markets.

According to statistics from the General Department of Vietnam Customs, nearly 884,300 tons of sugar was imported into the country in the January-October period of this year, higher than the locally-produced volume of sugar. Of the total, sugar from Thailand accounted for 87.67%.

Due to a high volume of low-cost sugar imports, the prices of local sugar products have plunged, leading to low sugarcane prices. As a result, many farmers have incurred debts and stopped growing sugarcane.

In reality, the Ministry of Industry and Trade launched an anti-dumping and anti-subsidy investigation into sugar products that originate from Thailand in September. The ministry had earlier imposed anti-dumping measures on high-fructose corn syrup products originating from China and South Korea.

According to VSSA, Thailand has banned sugar imports, while Indonesia and the Philippines have allowed the import of a volume of sugar equivalent to the deficiency in volume.

In these three countries, sugarcane farmers are supported through direct and indirect aid and the profit sharing system to ensure they earn a stable income.

Specifically, the Thai Government annually provides at least US$1.3 billion to the sugar sector.

Therefore, Nguyen Van Loc, acting general secretary of VSSA, proposed Vietnam should apply trade remedies in line with the international law and rules of the World Trade Organization.


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UL help deliver confidence in life safety & business continuity



Building owners and operators know that life safety and efficient operation are important concerns. However, meeting these criteria requires thorough understanding, effort and knowledge.

UL has helped many investors in Vietnam and the community in the field of inspection and verification as they build a safe foundation for buildings and occupants.

Customers choose to work with UL to help demonstrate their safety commitment to occupants, insurers as well as take advantage of such added values as detailed and complete reporting, useful information for further informed decisions, improvement and study. They may also have improved peace of mind that systems have been objectively inspected and accurately evaluated.

According to Ms Lưu Thị Thanh Mẫu, CEO of Phuc Khang Corporation, “The infrastructure quality in Vietnam is gradually developing in parallel with the perfection of safety standards. Vietnamese real estate companies have also been contributing significantly to improving general safety standards and applying international assessment programs for their buildings.”

Along with pioneering the application of green building assessment programs, Phuc Khang Corporation has been cooperating with UL to evaluate comprehensively systems of fire protection, security and life safety inside buildings and fully trusted in UL’s competence and expertise to these programs.

Rome by Diamond Lotus of Phuc Khang Corporation is the first residential building that applied UL Standards right from its design stage”

During the COVID-19 pandemic, UL had urgently built an evaluation program for reoccupancy
(Building Reoccupancy), aiming to support enterprises as they emerge from occupancy restrictions.

Some services provided by UL’s Building Inspection Services in fire and life safety include: occupancy classification, fire zones/compartmentation, emergency and escape lightning, and illumination of means of egress; as well as other important services in security systems and fire protection systems such as fire pump, sprinkler, burglar alarm system and monitor detectors.


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Private airlines appeal for Government support




A Vietnam Airlines aircraft. VNA/ Photo Huy Hùng

HÀ NỘI — Aviation firms appealed for Government support to overcome the difficulties caused by the COVID-19 pandemic at a seminar recently held by the Vietnam Aviation Business Association (VABA) in Hà Nội.
Nguyễn Khắc Hải, deputy general director of Bamboo Airways, told the seminar last week that private airlines needed the same support that was being afforded to State airlines.

“Bamboo Airways has asked the National Assembly and the Government to consider the same support packages for private airlines that have been approved for Vietnam Airlines.”

Hải said the pandemic had severely affected the operation of airlines, and Bamboo Airways had lost up to 90 per cent of its business at the peak of the pandemic.

Although the firm has not disclosed details of its business results in 2020, Hải said additional costs for quarantine and pandemic prevention had added to the airline’s losses.

In response to this, Hải said Government financial support was necessary for firms to maintain cash flow alongside support policies such as tax breaks.

Considered a private airline with a strong financial foundation, VietJet Air is forecast to lose in 2020. Vietjet Vice President and CFO Hồ Ngọc Yến Phương told local media that VietJet Air needed VNĐ10 trillion in loans. 

“Other domestic airlines want access to preferential loans over three to five years from the State to overcome the crisis,” she said, asking the Government to simplify procedures to disburse support packages in a timely manner.

Having been issued a support package of VNĐ4 trillion at 4 per cent interest recently, Nguyễn Tiến Hoàng, deputy head of the Development Planning Department at Vietnam Airlines, said the firm was still facing with difficulties, estimating the recovery would take three to four years.

Hoàng forecast that the local aviation sector would lose $4 billion in 2020, of which Vietnam Airlines’ revenue would fall $608-652 million.

“Although the domestic market has recovered, purchasing power remains weak and ticket prices have dropped sharply. The only international routes operating are repatriation flights. The pandemic has created a long term psychological concern that has halted the aviation industry.”

Hoàng said the Government and Ministry of Transport (MoT) should not consider licensing new airlines before the market recovered.

According to the International Civil Aviation Organization (ICAO), there were two scenarios for the aviation industry. The first was a freefall followed by rapid growth, whilst the second was a three- to five-month baseline.

The ICAO forecast the aviation market would decline 48-71 per cent depending on the pandemic.

Phạm Văn Hảo, deputy director of VABA, said the association was co-ordinating with research firms to submit a plan to the Government regarding reopening international flights.

Hảo said: “In the most positive scenario, the aviation market will take three years to bounce back to where it was in 2019.”

Economist Trần Đình Thiên said given the Government held a 86 per cent stake in Vietnam Airlines, the support package was transparent and marketable. However, he said other airlines also needed refinancing interest rates from the Government to stand firm and bounce back when the global aviation market recovered.

Thiên said local airlines should focus on the domestic market as a means to survive and recover from the pandemic.

“The pandemic has changed the structure of the global aviation industry and created opportunities for local aviation firms to better serve local customers.”

According to the association, in 2019, local airlines carried more than 136 million passengers and operated more than 900,000 flights. However, the pandemic had disrupted economic activities, causing great losses to the aviation industry.

Deputy Minister of Transport Lê Anh Tuấn said the ministry would continue to monitor the situation and formulate policies to help the aviation industry recover. —


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