H.E. Commissioner Tajani and European companies briefed on Whitebook 2014 and general business climate in Vietnam
In addition, the European Commission in collaboration with EuroCham Vietnam, the VCCI and the Konrad Adenauer Foundation are organising a B2B session between the visiting European companies and Vietnamese companies in the afternoon.
The annual publication of the EuroCham Whitebook provides a comprehensive overview of the current business, economic and regulatory environment in Vietnam, from the perspective of the European business community. The purpose of the publication is to inform policy making and serve as a foundation for further constructive dialogue between the European business community and the Vietnamese Government.
A range of cross-sectoral as well as industry-specific issues
The Whitebook is a collective expression of the views of EuroCham’s almost 800 members who operate in a wide range of business sectors in Vietnam. Like in previous editions, topics covered include: Human Resources, Intellectual Property Rights, Taxation, Transport and Logistics, etc. As an outcome of the successful Green-Biz 2013 Conference in September, an additional chapter on Sustainability was added in this year’s Whitebook, underlining EuroCham’s efforts in this area. Sector-specific chapters include Banking and Finance, Energy, Fast Moving Consumer Goods, Information Technology and Tourism. In total, the Whitebook encompasses eight (8) cross-sectoral and thirteen (13) sectoral chapters.
A concise summary of the key issues facing European businesses
This year’s Whitebook’s structure is a reflection of EuroCham’s wish to work alongside the Vietnamese Government towards achieving common goals: facilitating and increasing foreign investment in Vietnam, boosting economic growth, providing new job opportunities for the local population and enacting positive socio-environmental changes, amongst others. With this objective in mind, EuroCham members identified the top issues in their business area which they feel the Government should address with priority. Member companies also outline the potential benefits or hindrances to Vietnam, arising from these challenges, as well as specific recommendations to resolve or improve the current situation.
Recognising the Vietnamese Government’s achievements
Throughout the publication, European businesses note the Government’s strong relationship and collaboration with EuroCham. It is recognised that the authorities have set in motion a number of positive developments in areas like tax incentives, Human Resources (through the new Labour Code), and Responsible Tourism. The removal of Notice 197 relating to import requirements and the introduction of the Law on Pricing were also welcomed steps. However, key concerns remain, emphasising the need for further cooperation between the Government and the private sector.
Implementation of the regulatory framework lacks consistency
As Preben Hjortlund, Chairman of EuroCham, remarks: ‘despite a comprehensive legal framework in a number of sectors, the main challenge revolves around the implementation of regulations. This is largely due to the lags between the law and the implementing documents as well as varying interpretations and applications at local authority levels.’ European businesses indicate that this is evident in relation to granting equal access to foreign companies. For example, Decree 102/2010/ND-CP, dated 1 October 2010, clarifies that companies established in Vietnam with foreign ownership of up to 49% can enjoy the same investment rules and conditions as those applicable to local companies. However, EuroCham members find that there is no consistency in interpretation and application of the rules among the local investment licensing authorities, some of which being of the view that a Vietnamese company would become a foreign-owned company regardless of the foreign ownership percentage level.
Likewise, EuroCham Sector Committees also highlight the need for more effective and coordinated enforcement of Intellectual Property Rights (IPR) through more resolute prosecution of violations. This message is echoed consistently throughout the Whitebook, as lack of strong IPR enforcement impacts the majority of industries including Pharmaceuticals and Agri Business.
Other key concerns and advice focus on education and training, alignment with international standards and fair pricing.
Vietnam as a strong regional player
EuroCham’s Chairman, Preben Hjortlund notes "EuroCham is proud of our strong relationship with the EU Delegation and we welcome Commissioner Tajani to Vietnam. We hope that many of the companies accompanying the Commissioner over time will establish themselves in - and invest in - Vietnam. This is also why our Whitebook publication plays such a key role, as it informs potential European investors of the opportunities and challenges with doing business in Vietnam. Furthermore, the Whitebook aims to give the Vietnamese Government a clearer overview of how different issues impact, not only the European business community, but also how, - if resolved – these issues could influence the potential growth of the Vietnamese economy in terms of increased FDI, jobs, tax returns and better and safer products for the Vietnamese population."
EuroCham’s Executive Director, Csaba Bundik, notes "Through our Sector Committees, we provide the Commissioner and the visiting companies with an overview of the opportunities and challenges in different sectors in Vietnam. We see this as one of the key objectives of the Whitebook and as part of EuroCham’s work to support Vietnam on its journey to becoming a local powerhouse and improve the overall business environment in Vietnam."
Please click to download EuroCham's presentation in the meeting