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Under FTAs, car imports will be subject to lower tariffs

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The two important FTAs – CPTPP and EVFTA – all have strong commitments on tariff cuts, with the tariffs expected to be completely removed in 7-13 years.

In 2018, Vietnam and 10 countries, including Japan, Australia, Canada, Singapore and Mexico, signed the CPTPP which sets open mechanisms on trade, investment, government procurement and the environment.

Under FTAs, car imports will be subject to lower tariffs

Regarding the tariff on car imports, Vietnam committed to cut tariffs on imports with fewer than 9 seats from many leading automobile manufacturing countries in the world, including Japan, Mexico, Australia and Canada, under short and long term roadmaps.

The import tariff on CPTPP countries is 70 percent currently, the same as committed within WTO. In the short term, Vietnam will cut the tariffs by 4-6 percent per annum on average.

Under the government’s Decree 57/2019 on the preferential tariff in 2019-2022, the import tariff on CBU cars with fewer than 9 seats from Mexico will decrease to the lowest rate of 56 percent by 2022.

Meanwhile, the sharper tariff cuts will be applied to imports from the other four countries, including Japan, Australia, Canada and Singapore, with the cylinder capacity of over 2,500 cc. The current import tariff of 52 percent applied to over 3,000 cc cars will be cut to 46.2 percent by 2022.

The car models with cylinder capacity of 1,500-2,000 cc will see the tariff cut to 56 percent, while 2,000-2,500 cc cars will see the tariff reduction to 50.9 percent by 2022.

In the long term, Vietnam has committed to cut tariffs and open its market to car imports from Japan and Canada from the seventh year after the official signing of CPTPP.

The government’s Decree 111 released recently on the exemption of import/export tariff in accordance with EVFTA in 2020-2022, the import tariff on cars from EU, mostly Germany, France, Italy and Sweden, will see decreases of 6.8-7.4 percent per annum, depending on the vehicle cylinder capacity.

As for other partners, common tariffs will be applied based on cylinder capacity. Vietnam will remove the import tariff on the cars with less than 9 seats and cylinder capacity of over 3,000 cc from the 10th year onwards (2029). Meanwhile, the tariffs will be removed from the 13th year for the models with lower cylinder capacity.

As such, from 2026 to 2032, the import tariffs on cars from some CPTPP countries will gradually reduce to zero percent.

According to experts, some partner countries can enjoy tax removal sooner than others instead of the same removal roadmap for all FTA member countries, depending on the negotiations between Vietnam and each country on each other’s advantages and disadvantages.

This is the difference between the next-generation FTAs and WTO, the playing field where the rights and benefits go to large founding countries.

At present, the number of CBU car imports from Japan is low. The imports are mostly luxury models, specialized vehicles and passenger cars. Meanwhile, the models with less than 9 seats cars bearing Japanese brands (Honda, Mitsubishi, Toyota and Subaru) are imported from Thailand and Indonesia which can enjoy the preferential tariff of zero percent, applied since 2018.

Therefore, analysts believe that the removal of the tariff on Japanese sourced CBU imports from the seventh year of the FTA (2026) won’t have a big impact on the Vietnamese car market.

Under EVFTA, Vietnam will also strongly cut the tariffs on CBU imports from the 28 economies of the EU, commencing from August 2020. The market will be totally opened when 2030 ends.

The government’s Decree 111 released recently on the exemption of import/export tariff in accordance with EVFTA in 2020-2022, the import tariff on cars from EU, mostly Germany, France, Italy and Sweden, will see decreases of 6.8-7.4 percent per annum, depending on the vehicle cylinder capacity.

The current tariffs on imports from the EU are between 67 and 70.9 percent. So, with the planned tariff cut of 6.8-7.4 percent per annum, it will take 9-10 years to completely remove the tariffs. The tariff cuts of tens of percent will be sharper from the third to the fifth year of the FTA implementation.

In theory, the prices of import models such as Audi, Peugeot, Renault, Lexus and Volvo from Germany, France, Italy, Sweden, or Japan, Mexico and Australia will be cheaper in the future. However, the selling prices will still depend on other conditions as well, including market demand and customer tastes.

As for used imports (used for no more than five years in export countries), under CPTPP, in 2019, Vietnam imported 66 used cars and the number of cars will increase by six year by year. 

Dan Tri

Source: https://vietnamnet.vn/en/feature/under-ftas-car-imports-will-be-subject-to-lower-tariffs-690217.html

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VN-Index continues to fly high

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Maybank Kim Eng Securities employees monitor share prices in this file photo. The VN-Index of the Hochiminh Stock Exchange expanded by 0.54% on December 2 – PHOTO: THANH HOA

HCMC – Despite unfavorable news about the complicated Covid-19 situation, active trading continued to help the VN-Index of the Hochiminh Stock Exchange fly high, ending at 1,014.32 points today, December 2, increasing by 0.54%, or 5.45 points, against the previous session.

Winning stocks outnumbered losers by 234 to 199. The southern market saw 684.5 million shares worth over VND14.3 trillion change hands, surging by 17.4% in volume and 22.6% in value against the previous session. Some 200 million shares worth over VND4.64 trillion were traded in block deals, including 160 million shares worth VND3.44 trillion of construction enterprise DIG.

The strong cash flow helped many bluechips extend. In the VN30 basket, electricity stock POW shot up to the ceiling price at VND10,800. Other top performers were property firm VHM, brewery SAB and low-cost air carrier VJC, increasing by 2.28% to VND85,200, 1.71% to VND196,800 and 1.27% to VND119,500, respectively.

Among bank stocks, TCB grew by 2.45% to VND25,100, while MBB and VCB were up 2.4% to VND21,350 and 1.63% to VND93,500, respectively.

Other large-cap stocks that gained ground included GAS, MSN, GVR, VRE, PLX, FPT, BVH and EIB, but at modest rates.

In contrast, industrial development corporation BCM, lender TPB and mobile phone retailer MWG were the biggest losers, declining by 4.16%, 2.01% and 1.72%, respectively.

Lender TCB led the southern market by liquidity with 27.5 million shares traded, followed by POW with 24.8 million shares.

On the Hanoi Stock Exchange, the HNX-Index increased by 1.25%, or 1.86 points, against the previous session, to close the day at 150.8 points, with gainers outnumbering decliners by 95 to 63. There were 69.8 million shares worth over VND1 trillion traded on the northern bourse.

The top gainers were service company THD and port operator PHP, which soared by over 9% to VND121,000 and VND15,700, respectively, and investment and trading company TNG and industrial development firm IDC, which shot up to the respective ceiling price of VND15,000 and VND32,400.

Major contributors also included securities company SHS, bank stock SHB and construction stock VCG, up 2.07%, 0.58% and 0.48%, respectively.

SHB led the northern market by liquidity with 9.8 million shares changing hands.

Lender ACB, one of the largest and most actively traded stocks on the Hanoi Stock Exchange, will be moved to the Hochiminh Stock Exchange from December 3.

Source: https://english.thesaigontimes.vn/79632/vn-index-continues-to-fly-high.html

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Social impacts key success factor for Vietnamese startups: experts

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Social impacts key success factor for Vietnamese startups: experts

Entrepreneurs attend the Gala Startup Viet 2020 in Ho Chi Minh City in December 2020. Photo by VnExpress.


Vietnamese startups using technology to create positive and sustainable impacts on the larger community have higher chances to succeed, experts say.

Le Diep Kieu Trang, a popular entrepreneur in Vietnam’s tech industry and founder of private equity firm Alabaster, said while many entrepreneurs focus on short-term benefits, those who can deliver products and services that are both profitable and have a positive influence on society are usually more well-received by the public.

Trang, one of the judges of the Startup Viet Gala 2020, a competition hosted by VnExpress Wednesday for young entrepreneurs to pitch their ideas and raise funds, said many youngsters think creating an app is by itself guarantees success, but in reality, attracting users to the app is the key and this is not easy.

“Apps only have impacts if they can attract users,” she reiterated.

Truong Gia Binh, chairman of tech giant FPT, said although technology is very important and the modern entrepreneur needs to have knowledge of artificial intelligence and Big Data, the most important knowledge is about humans.

“Startups need to know what value are you bringing and to whom.”

To succeed, entrepreneurs also need to find the right teammates and persevere. “No matter how many times you fail, stand up again,” he said.

Other experienced entrepreneurs also said that being persistent was very important. Phan Xuan Canh, CEO of recruitment platform Viec.Co, said in order to achieve a vision, startups will have to try different paths and fail, and perseverance is needed to go through the process.

As a judge at Startup Viet Gala 2020, Trang said she prefers startups that can bring a new and breakthrough product to the table with high technological application, and the company needs to be able to expand its market throughout Vietnam and the world.

“If your business model does not survive in Vietnam, I don’t think you can survive overseas.”

Step out of comfort zone

The problem with many startups in Vietnam is that they try to improve on the traditional business model with modern technology without bringing in any breakthrough idea, and those that only do this will not attract investments, she added.

Trang said she wants Vietnamese startups to think bigger. Although the Covid-19 pandemic has caused major difficulties in most sectors, it has also opened new doors for startups, not just in the Vietnamese market, but the world as a whole, she said.

Entrepreneurs who are willing to step out of their comfort zone and take this opportunity to move forward with more emphasis on the online market will have bigger advantages, she added.

Startup Viet 2020 Gala seeks to identify the best 15 startups in Vietnam and award them with a prize pool of VND3 billion ($130,000).

The winner of the competition on Wednesday was Tep Bac, which provides management and analysis services for seafood farms using technology. Other notable startups in the top five were Drone Pro, a provider of delivery services using drones, and BioStarch, which produces environment-friendly plastic bags using a mixture of cassava powder and primary microplastics for fast decomposition.

Source: https://e.vnexpress.net/news/business/economy/social-impacts-key-success-factor-for-vietnamese-startups-experts-4200504.html

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VND4 trillion tower: no buyer after 10 years

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Many buildings up for sale cannot find buyers.

JLL has reported a slowdown in the number of real estate M&A deals in the first nine months of the year.

VND4 trillion tower: no buyer after 10 years

One example: BIDV announced the selection of an institution to organize the auction of the debt of Tai Nguyen Construction, Production and Trade Company. The assets put into auction were the principal and interest on the auction day, worth VND4.063 trillion.

Kenton Residences is one of the projects developed by Tai Nguyen. It was initially designed covering an area of 9.1 hectares, comprising nine 15-35-story towers, 1,640 high-end apartments and a 20,000 square meter shopping mall. The total investment capital was $300 million.

The construction began in 2009, but stopped in 2011. In 2017, Kenton Residence was activated again, renamed into Kenton Node, and had the design changed.

BIDV Gia Dinh Branch also announced the compulsory sale of 65 apartments at Ky Nguyen Apartment Bloc in district 7, HCM City developed by Duc Khai JSC. The starting selling price was VND2.188-5.4 billion per apartment with the area of 135.98 to 368.45 square meters.

The prices are reasonable at VND15-16 million per square meter, including VAT.

This is the third time that BIDV has offered to sell Ky Nguyen apartments. The first auction was organized in October 2019, when only one out of 27 apartments was sold.

Commercial banks, one after another, have continuously put real estate into auction to collect debts since the beginning of the year.

VietinBank has offered to sell the land-use rights and assets on land at Can Tho Center, 3.23 hectares, with the starting price of VND190 billion.

On its website, SCB have offered to sell 10 real estate assets which have value of between several billions of dong and hundreds of billion of dong. These include Phuoc Son storehouse in Thuan An commune in Binh Duong province, offered at VND830 billion.

The other assets, houses and land use rights are offered at VND2.2-10 billion.

Dinh The Hien, a finance expert, commented that banks have recently put real estate into auction to collect debts, while they previously sold assets through many different channels.

Though the selling prices are viewed as ‘very reasonable’, many assets still cannot find buyers. The assets of Hung Ngan Housing JSC have been put into auction four times with prices falling by tens of percent compared with the first auction. But they still cannot be sold.

In the latest auction, BIDV set the starting price at VND396 billion, or 24 percent lower than the figure at the first auction in February 2020. 

Duy Anh

Source: https://vietnamnet.vn/en/business/vnd4-trillion-tower-no-buyer-after-10-years-694284.html

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