Vietnam Business Forum (VBF) 2020

Vietnam Business Forum (VBF) 2020, an annually held event to create a continuous dialogue between the Government of Vietnam and the business community, was successfully organized on December 22 in Hanoi. The VBF 2020, entitled “Challenges and Opportunities in the New Normal,” was organized by the VBF Consortium in cooperation with the Ministry of Planning and Investment, the World Bank Group (WB), and the International Finance Corporation (IFC) and in the presence of the Deputy Prime Minister and Foreign Minister Pham Binh Minh and the Minister of Planning and Investment Nguyen Chi Dung. The event was joined by key decision-making Government officials, business leaders, and representatives from international organizations and business associations such as Britcham Vietnam, Eurocham, Kotra, JCCI, Auscham, Amcham, and many others.

On this special occasion, Britcham Vietnam congratulates the Vietnamese Government on its success of controlling COVID-19, whilst continuing its growth and attractiveness to Foreign Direct Investment, as well as supporting the UK’s request for official observation status with ASEAN and CPTPP.  BritCham fully supports the Government on its progression to a more open and transparent business environment.

At the VBF 2020, we would like to reiterate that on 11 December 2020, the UK-Vietnam Free Trade Agreement was signed in principle in Hanoi. The agreement provides opportunities to increase trade and support jobs and growth on both sides when it comes into force from 1 January 2021.

Among several issues which have been raised by our member companies in Vietnam, Britcham Vietnam brought to the attention of the Government three top issues together with our recommendations as follows:

Issue 1 – Extension of Feed-in-Tariff (FIT) for wind and solar energies: The current FIT for wind is due to expire on 1 Nov 2021, which leaves insufficient time for wind developers to get their 91 projects operational in time to be included in the current Power Development Plan 7 and still waiting for licenses from Ministry of Industry and Trade.

Britcham recommends that the FIT be extended for at least 2 years, until 31 December 2023.  For solar energy FIT extension, we also recommend FIT should have a longer expiry to enable developers to further develop solar projects.

Issue 2 – UK international schools are facing a complex and discouraging set of procedures to obtain four different licenses for establishing campuses, namely (1) land use; (2) permission to build; (3) building completion; and (4) permission to open the school. These are handled by different ministries.

Britcham recommends Ministry of Education and Training collaborate with the Ministry of Planning and Investment to provide a clear process for obtaining licenses, with time scales and a line of appeal.

Issue 3 – Border control/Visa/Travel issue: Many businesses operate with Vietnam-based executives that have reporting or management responsibilities in regional locations.  Further, business executives based in regional locations have management responsibilities for their investments and activities in Vietnam.  Additionally, significant capital projects in both the private and state sectors require technical experts to visit Vietnam for matters such as complex machinery installation, where expert involvement is essential for warranty validity. The prolonged border closure has protected Vietnam from the worst impact of the global COVID pandemic but is impacting business sentiment, the ability to conduct business in Vietnam, and the timely execution of capital projects. This is impacting Vietnam’s economic growth and may become a competitive disadvantage for Vietnam as global travel restrictions ease.  Furthermore, many businesses are finding major challenges operating without key employees, and families particularly those with children are finding it very damaging by this prolonged separation.

Britcham recommends prioritizing the establishment of safe travel “bubbles” or “air corridors” with regional financial centers that are important to Vietnam such as Singapore, Thailand, Korea, Japan.  Arrangement to allow short-term business travel and the entry into Vietnam of technical experts with a streamlined procedure, combined with a streamlined application process including the approval of flights and removing direct approvals to specific flights on specific days.