Cassava (Khoai Mi) exports is booming

Cassava export turnover has now surpassed pepper, tea, fruits and vegetable. This boom is bringing in hundreds of million of USD annually. The Ministry of Industry and Trade said cassava has brought in $230 million USD in the first half of this year alone, an increase of 41 percent in volume. The bulk of the purchase was made China, which totaled $189 million USD. Taiwan, the Republic of Korea, and the Philippines are among the rest of the buyers.

To keep up with demand, Vietnam is looking to invest in a greater number of growing areas, upgrading its processing facilities as well as adopting new techniques.

Vietnam coffee going to Chicago is just a rumor

Well, it looks like the news about Vietnam coffee going to Chicago Mercantile Exchange (CME) is just a rumor after all. Doan Trieu Nhan, the Deputy Chairman of the Vietnam Coffee and Cocoa Association, said today that the news is not true. Considering Vietnam annual coffee output currently cannot meet export demand, it doesn't make a lot of sense to sell it abroad at this time.

HSBC puts out a BUY rating on Vietnamese stocks but should you buy?

The Hong Kong and Shanghai Banking Corporation (HSBC) has just released its report recommending the purchase of Vietnamese stocks.

At first glance, there are many factors which explains HSBC's rating. Vietnam foreign investment stands at $6.7bil YTD, which is much higher than last year's $2.8bil. Vietnam's export is also growing at 19%. The 12 blue chips companies saw an amazing net profit growth rate of 83%. Earning per share grew 35% over the same period last year.

However, part of the 83% growth rate came from financial investment deals. Without the foreign investment, the growth wouldn't be nearly as much. Also, additional shares will have to be issued for these foreign investment deals, which dilutes the current shares outstanding which in turn could bring down the 35% earning per share (EPS) at year end. Next, the current price to earning ratio (P/E) is at 31 which is a bit high considering the EPS growth rate is expected be around 25% for 2007 and 15% for 2008. At these rates, the P/E should be around 20.

Conclusion, the shares are not cheap but as long as foreign investment keeps pouring in everything should be fine.

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Hon Hai to invest $5 billion in next 5 years

World's largest electronics manufacturer follows Intel's path into Vietnam

The world's largest contract electronics manufacturer, which assembles gadgets from Apple Inc. iPods to Sony Corp. PlayStation 3 consoles and Nokia Corp. handsets, became the latest company to announce a high tech investment in Vietnam, with plans to spend a massive $5 billion over the next five years.

The investment by Taiwan's Hon Hai Precision Industry Co. Ltd. will be aimed initially at building a base of electronic components factories near Vietnam's capital, Hanoi, a Hon Hai spokesman said Thursday.

The huge investment shows that Vietnam has continued to increase its allure as a haven for IT investments. Last year Intel Corp. announced it would expand a chip packaging and testing project in Vietnam into a US$1 billion affair, more than triple the size of the original plan. The factory is slated to begin operations in 2009, near Ho Chi Minh City. Earlier this month, Taiwan's Compal Electronics Inc., the world's second largest laptop PC maker, revealed a plan to invest US$30 million in a factory in Vietnam. The company plans to make notebook PCs at the factory, which will be located near Hanoi.

Source: http://www.infoworld.com/

Vietnam unable to take full advantage of booming franchise market

A shortage of funds and lack of managerial expertise is keeping Vietnamese businesses out of the lucrative franchise market as droves of leading international corporations flock to the country.

US fast-food chain KFC has 38 locations in the country and expects to have 100 in three years’ time.

Korean fast-food chain Lotteria has opened 35 franchises in Vietnam.

US restaurant chain Pizza Hut opened its first two first restaurants in Vietnam this year. Each location, both in Ho Chi Minh City, is worth around US$500,000.

The chain, which sees HCMC as its largest market in the country, aims to have 20 outlets opened in Vietnam by 2010.

McDonald's is also planning to open its first outlet in Hanoi by the year’s end.

Gloria Jean’s Coffees, a leading Australian coffee shop chain, opened its first two outlets in Hanoi and HCMC this year.

Singapore’s popular World of Sport has opened six stores in Vietnam since 2005.

Additionally, Japan’s Best Denki electronic retail supermarket group, the US’s Walt Disney chain, and Australia’s LJ Hooker real estate have all opened franchises in Vietnam.

But few Vietnamese names have been picked up for franchises by international backers as the domestic companies are seen as lacking financial experience and management know-how, said Nguyen Phi Van, managing director of Gloria Jean’s Coffee Vietnam

One franchise industry expert has also pointed out that most domestic firms cannot afford franchise fees and other management expenses.

Each McDonald’s outlet costs an estimated $1 million, Pizza Hut $500,000, Lotteria $300,000-400,000 and KFC $200,000, which are out-of-reach prices for most all Vietnamese firms, even successful ones.

Aside from costs poor management is the biggest obstacle between Vietnamese businesses and the franchise market, said the expert.

Conforming to strict management standards, quality control requirements and service standards are not Vietnamese firms specialty, said the expert.

Additionally, most international groups argue that location is what most affects a business’s rise or demise.

Some such foreign companies have said that scouring an ideal spot was “the fiercest battle” in Vietnam.

So, to take advantage of this angle, several Vietnamese firms are now using an interesting strategy: they’re working to build attractive outlets at ideal locations to resell them to foreign groups, who are expected to continue blitzing the country in the near future.

Source: http://www.thanhniennews.com/business/?catid=2&newsid=31529

US apparel importers come back to Vietnam

VietNamNet Bridge – US apparel importers have come back to place orders after a long time of waiting, listening for news.

Thang Long, Hung Yen and Hiep Hung garment companies all have got orders which ensure production through the first quarter of 2008.

According to Le Van Dao, Secretary General of the Vietnam Textile and Apparel Association (Vitas), US importers have come back as Vietnam’s products have retained the confidence of the importers.

In the past, US authorities discovered trade fraud with imports from Vietnam: apparel products were imported from third countries and then were labeled as Vietnam-origin products to be exported to the US. The trade fraud has been stopped as a result of the strict control of relevant ministries.

The Thang Long Garment Company once operated in moderation and incurred losses due to lack of orders. The situation has become quite different now: Thang Long has got orders enough to ensure production through the first quarter of 2008. Not only traditional importers have returned, other big importers in the US have also tried to contact the company.

Nguyen Thi Tuyet, Deputy Director General of Thang Long Garment Company, said that since the US imposed the monitoring scheme on apparel imports from Vietnam, importers had been more skeptical when placing orders. However, as the US Customs Agency announced the “health” of imports from Vietnam, they have resumed placing orders with Thang Long Company.

Mrs Tuyet said that her company had invested $300,000 in a modern production line, aiming to improve quality and raise productivity. Moreover, in order to fulfill new big orders, the company plans to expand workshops and install new modern equipment.

The Hiep Hung Garment Company also said that it had signed export contracts for the remaining months of the year and early 2008. Doan Thi Huu Nghi, Director of Hiep Hung, said that US importers like silk-made products and were ordering these products in large quantities. Orders from the US have increased by 30-40% over the previous time.

The latest report by the US Customs on apparel imports in the first six months of the year showed that Vietnam’s apparel exports to the US in the first half increased by 20.7% over the same period of last year.

Regarding the prices, the categories of products which were put under supervision in June 2007 saw little in the way of price decreases. Especially, cat 341/641 reduced by 31.93% in price. The average price of the first six months decreased: cat 341/641 saw the biggest price decrease by 15.77%, while car 638/639 increased by 1.18%.

With these figures, the exports of apparel to the US prove to be “healthy” and there are no abnormal signs. However, Vitas is still calling for stricter control over the volume of categories of products to be exported to the US. The association has also advised garment companies not to rely on the US as the only market – they need to expand export markets.

The Ministry of Industry and Trade has asked garment companies to keep cautious when signing contracts with partners on exporting ‘sensitive’ categories of products, especially cat 339, 641, 639, and 648. Garment companies have also been asked to seek high-value contracts and refuse orders with low prices.

Apparel exports in August were very satisfactory with the export turnover of $844mil, or $4mil higher than the previous month. As such, Vietnam reaped $5.084bil in apparel exports in the first eight months of the year, an increase of nearly 30% compared to the same period last year. Experts have said that apparel export turnover may reach $7.5bil in 2007.

Source: http://english.vietnamnet.vn/biz/2007/08/735390/

Miss Vietnam Global 2007 results to be announced September 2

Thirty-seven contestants competed for the first pageant ever for Vietnamese beauties worldwide, has been unfolding in the beautiful city of Nha Trang, and so far, it hasn’t been uneventful. The results will be announced on the final night of the pageant, September 2.
Numerous activities have been organised for the pageant’s major sub-contests, Miss Photogenic, Miss Tourism, and Miss Sea. But perhaps the most interesting event so far has been the contestants’ presentations of the cultures of the countries where they are currently living.

As requested by the organisation committee, each beauty bought to the contest one item that could best represent her country, and what they showed yesterday, August 27, was as diverse as their different looks and personalities.

Mai Thuy Duong, an architect from Hanoi, brought a bag of o mai (dried fruits) from well-known ancient Sugar Street in her hometown. And no sooner did she finish her presentation than the bag of dried fruits was empty.

As for beauties of Vietnamese origin living overseas, they delighted and impressed with their cultural gifts as well. Coming from Bulgaria, the land of roses, Nguyen Hoai Milena has lots of perfume made from roses and said she would share it all with her friends so they would remember their shared experience in Nha Trang.

There were numerous other items ranging from Russian Matrioska dolls to British double-deck bus models which helped overseas contestants tell down-to-earth, interesting stories about how they live in their second homelands.

For some contestants, there has been a great deal of fun as well as health problems because of their hectic schedules. Indeed, these days, they all are sleeping as little as 4 to 5 hours daily since there are so many activities to take part in and many places to visit.

Some have fainted during photo shoots under the sun, and all are trying to sleep as much as possible, leaving such things as make-up to be done during the spare time they have while waiting for buses or boats to come to pick them up for their daily outings.

Overseas contestants, in particular, are enjoying their stay in Vietnam very much because in their different ways, they have learned about and fallen in love with their homeland.

The three sub-contests, Miss Photogenic, Miss Tourism and Miss Sea, will be broadcast At 5 pm on VTV3 on August 30, 31, and September 1, respectively. Results of these contests will be announced on the final night to be held on September 9.

http://english.vietnamnet.vn/lifestyle/2007/08/734788/

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Miss Vietnam to promote Vietnam with DVD revenue will be donated to charities

One year after being crowned Miss Vietnam, Mai Phuong Thuy is actively engaged in numerous projects, one of which is the production of Field Flowers, a DVD on Vietnamese sceneries. All revenue from sales will be donated to charities.

“The wish of promoting and introducing beautiful images of Vietnam to the world has never subsided in me,” said the young and bright beauty queen who has become a very familiar face to the public.

Not only should Vietnam be known for her natural beauty, but the beautiful image of the Vietnamese people should also be promoted, said Miss Vietnam 2006. And in order to do so, Thuy said Vietnamese people should show the world what is original, rather than stereotypical, in them.

“For instance, foreigners should know that Vietnamese girls aren’t just black-haired and slender-bodied. But they are also tactful and subtle in the way they speak, the way they live with family and others,” said she.

At present, Miss Vietnam 2006 is also an ambassador for the Children’s Smiles Fund.

http://english.vietnamnet.vn/lifestyle/2007/08/733472/

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Real estate market forcast to increase thanks to open policies

As the stock market keeps falling down and bank deposits cannot bring high profit, investors are turning to inject money in real estate projects, making the market warmer.

No price fever is occurring on the real estate market; prices are just moving up gradually as the demand is expected to increase as more Viet Kieu will return home to settle down when they can enjoy visa waivers, and foreigners are allowed to buy houses for accommodation.

Saving money in… houses

House prices began escalating in March 2007. Mr Tan, the broker at the Van Quan Property Office in Ha Dong town, said that the prices of the villas in advantageous positions had seen two-fold increases, from VND3bil to VND6bil on average.

The prices of Vimeco’s apartments near Big C Supermart in Trung Hoa-Nhan Chinh new urban area have increased by VND500mil from the original prices. The owners of Vinaconex’s 34-storey apartments, who bought the apartments two years ago, are now leasing the apartments at $500-1,000.

Lam Van Chuc, Director of the HCM City-based Phuc Duc Real Estate Brokerage Company, said that buyers were queuing to buy luxury apartments on ‘beautiful land plots’ like An Phu-An Khanh, Huy Hoang and 21st Century.

The prices of houses and land in districts 2 and 9 in HCM City changed continuously last week. The land plots on Song Hanh Road, Hanoi highway and An Phu-An Khanh residential quarter, which were offered at VND30-32mil/sq m, have jumped to VND35mil/sq m. Meanwhile, the prices of Huy Hoang apartments, which were thought to have the lowest levels, have also soared to over VND20mil/sq m from the previous levels of VND17-19mil/sq m.

Meanwhile, more than 400 buyers had to join the lucky draw to find out the ones eligible to buy 37 apartments of PN-Techcons project on Hoa Su Road in Phu Nhuan district. Those, who won the right to purchase the apartments, now can resell the apartments, gaining the profit of VND1-2mil/sq m.

Both supply and demand up

Investment in real estate market can bring stable profit, while the stock market proves to be quite ‘fragile’. That explains why many investors have returned to the real estate market, while securities investments do not bring fat profit any more.

Though the supply has improved, it cannot meet the increased demand for accommodation. Lang-Hoa Lac road in Hanoi is nearly occupied with residential quarters. Neighbouring areas of Hanoi and HCM City are also full of residential quarters. Especially, investors accept buying projects that remain on paper. Investors with long-term vision are now seeking land plots in Vinh Phuc, Ha Tay and Bac Ninh – 25 km from the centre of Hanoi.

The demand for accommodation is forecast to increase in the near future thanks to open policies. Nguyen Manh Ha, Head of the Housing Management Department under the Ministry of Construction, said that the ministry had submitted to the government a plan on allowing foreigners living and working in Vietnam to buy houses for accommodation. It is estimated that some 21,000 foreigners will be eligible to buy houses in Vietnam once the government gives the nod on the plan.

Source:http://english.vietnamnet.vn/biz/2007/08/735206/

Vietnam’s apparel exports jumped 30 percent with US remained the largest importer

Vietnam’s apparel exports have jumped 30 percent in the first eight months to US$5.1 billion, according to the General Statistics Office.

In August alone, export earnings were $844 million, topping $800 million for the second straight month.

The US remained the largest importer, buying almost $3 billion worth products, a year-on-year jump of 20 percent and accounting for 60 percent of Vietnam’s overall garment exports.

Le Quoc An, chairman of the Vietnam Textile and Apparel Association (Vitas), said, however, that the exports did not show any signs of “unexpected highs” for the US side to use as a pretext for suing on dumping charges.

The US Department of Commerce (DOC) began a surveillance of imports from Vietnam soon after lifting quotas following Vietnam's accession to the WTO last January.

The supervisory will remain in place for the duration of the present US administration until next January.

As a result, US importers put off signing contracts with Vietnamese firms until this month, when the DOC will announce the results of the surveillance.

Importers have feared the outcome could be unfavorable and in the worst case they might stop buying from Vietnam.

Vietnam was yet to hear about the results, An said.

He said his association would work with the Ministry of Industry and Trade to lobby the US Department of Commerce to lift barriers blocking the country’s apparel exports.

However, he urged domestic enterprises to focus sharply on high-value items.

Vitas also recommended that exporters make direct sales to overseas markets instead of acting as sub-contractors.

It also advised the same businesses to avoid excessive dependence on the US because of the high risk of law suits. The association offered the exploration of untapped markets like the EU, Japan and South Africa as viable alternatives to the US.

Vietnam’s apparel exports are set to grow by 27 percent this year to $7.3 billion.

Source: http://www.thanhniennews.com/business/?catid=2&newsid=31480

Gillmann Group and Fidelity Ventures to invest $5Bil USD building recreation complex in Ba Ria – Vung Tau

A US consortium led by Gillmann Group and Fidelity Ventures plans to invest US$5 billion in building a recreation complex in Vietnam’s southern Ba Ria – Vung Tau province.

Gillmann Group CEO Fred Gillmann, Fidelity Ventures chairman and director Xuan Vu Peter Nguyen, and other consortium executives told President Nguyen Minh Triet about the proposal during a meeting with him Monday.

But details of the project are not available.

Triet welcomed their investment and hoped they would successful.

The executives said Vietnam should have more resorts and entertainment facilities to add to its wonderful beaches to woo more international tourists.

The Gillmann Group is a leading international and native American tribal gaming company.

Fidelity Ventures invests private equity in entrepreneurial information technology and communications companies preparing to go to the market.

It manages more than $500 million in venture capital.

Source: http://www.thanhniennews.com/business/?catid=2&newsid=31425

Hon Hai is quintupling its investment in Vietnam to $5 billion

Hon Hai Precision Industry Co., the world's biggest electronics contract manufacturer by revenue, is quintupling its planned investment in Vietnam to $5 billion, reflecting the southeast Asian country's growing appeal to high-tech manufacturers.

Hon Hai and its affiliates will make the investment over the next five years, spokesman Edmund Ding said Wednesday. The company, which manufactures personal computers and consumer gadgets for customers including Hewlett-Packard Co. and Apple Inc., has already been ramping up its operations in Vietnam this year, and had previously said it planned to spend $1 billion there. The new investment will go to factories that will make a range of components and products, including digital cameras, Mr. Ding said in a telephone interview.

Hon Hai's planned investment marks a significant victory in Vietnam's increasingly successful effort to woo foreign technology companies, which value its inexpensive labor and relatively stable economic regime. Last year, Intel Corp. said it would build a $1 billion semiconductor testing and assembly plant near Ho Chi Minh City in the south. Call centers and other outsourcing operations have also established themselves in Vietnam to make the most of the country's young and increasingly computer-literate population.

Intel's decision in particular was treated as a seal of approval by other investors here, and prompted a buying spree of local stocks on the Vietnamese stock market. After the Intel announcement early last year, Vietnamese government officials say they fielded a surge of inquiries from other companies also hoping to build plants in Vietnam.

Hon Hai has long centered its manufacturing operations in China, where it is the single biggest exporter and employs some half million workers. But Terry Gou, the company's hard-driving founder and chairman, has been rapidly expanding its international presence in recent years, from Brazil to Hungary. He has voiced special fondness for Vietnam, which like China is shifting from Communism to market-oriented policies, and which Mr. Gou lauded for putting economic development ahead of political liberalization.

"Vietnam is good. Why? Because they follow the Chinese system," Mr. Gou said in an interview earlier this year. "They are not [moving] too fast to move to an American-style democratic system."

Mr. Ding, the Hon Hai spokesman, said Wednesday the company is also expanding in Vietnam because of requests from its customers.

Hon Hai has already invested about $200 million in Vietnam and could become the biggest single foreign investor by investment amount and export revenue in five years, said Nguyen Dinh Oanh, an official in Bac Ninh province, about 40 kilometers north of the capital, Hanoi. The total $5 billion investment could create employment for about 300,000 workers, said Mr. Oanh, a director of the industrial parks management board in Bac Ninh, where Hon Hai has so far opened two plants.

Mr. Ding declined to comment on employment numbers.

Mr. Oanh said Vietnam is ready to provide Hon Hai with land of up to 2,000 hectares to build a large industrial park, commercial properties and housing areas.

Source: http://online.wsj.com/article/SB118839331953312077.html?mod=googlenews_wsj

Foxconn inaugurates first two factories specializing in producing camera modules, main boards and connectors

Taiwan-based Hon Hai Technology Group (Foxconn), the world leading manufacturer of outsourced electronics products, today inaugurated its two hi-tech factories at the Que Vo Industrial Park in northern Bac Ninh province. These are the first two factories among others to be built by Foxconn in localities throughout the country.

The two factories are built on a total area of 1.1 hectares, specialising in producing camera modules, main boards and connectors.

Opening the inauguration ceremony, Foxconn President Tery Guo affirmed Foxconn strong investment in Vietnam, targeting to become the biggest foreign investor in Vietnam with a total investment capital of US $5 billion. Foxconn also targets to become the foreign investor with the biggest export turnover in Vietnam, estimated at US $5 billion in the next 3-5 years; using the largest quantity of local workers, around 300,000.

Mr Tery Guo also committed to bringing to Vietnam the latest technology in telecommunications and information technology and being the group with the most contribution to Vietnam’s process of information technology development, urbanisation and modernisation.

Addressing the ceremony, Deputy Prime Minister Hoang Trung Hai appreciated the impressive targets set by Foxconn in Vietnam. The deputy PM also pledged that the government of Vietnam, the people’s committees of Bac Ninh in particular and other localities in general would create all favourable conditions to help Foxconn deploy its investment projects in Vietnam.

Deputy PM Hai stressed that Foxconn projects in Vietnam had been carried out at a record speed. It took less than a year for Foxconn from making decision to invest in Vietnam to building factories and put them into operations.

Vietnam needs many more investment projects deployed at such a speed, Mr Hai said.

Foxconn will also build a mega complex in the province, consisting of a hi-tech park, a new residential township, a golf course, a hospital, and a theme park.

Foxconn has also licensed to build an industrial-residential-golf course complex in Bac Giang province. Last month, Ho Chi Minh City authorities approved the company’s plan to invest US $1 billion to build a 200 hectare high-tech park and a high-tech commercial service center in the city. Earlier Foxconn signed a memorandum of understanding to invest US $1 billion in the central province of Binh Dinh, including a 700 hectare industrial park, a 300 hectare apartment building and recreation area, and a 50 hectare resort.

Foxconn Technology Group is the foremost provider of joint-design, joint-development, manufacturing, assembly and after-sales services to global Computer, Communication and Consumer-electronics ("3C") leaders.

Source: http://www.nhandan.com.vn/english/business/280807/business_w.htm

Coffee output in Vietnam forecast to decline 10 to 15 percent this year

Coffee output in Vietnam, the world's top robusta producer, is forecast to decline 10 to 15 percent this year to around 16-18 million bags from a record crop last year, a leading industry official said.

"Last year it was a bumper crop and post that yields usually drop," said Vivek Verma, managing director of Olam International's coffee division. "It could have been worse but high prices encouraged farmers to take good care."

Coffee crops typically move in bi-yearly cycles, with a good harvest followed by smaller one.

A lower crop in Vietnam plus a global deficit of 4 million bags according to a Reuters poll in July, may support London's robusta futures market prices.

But Verma said London robusta futures, which have declined from highs, were expected to trade between $US1600 ($NZ2276) to $US1750 a tonne because of easing global supplies.

"I don't think we will go back to $US1800-$US1900 range very soon now, unless something happens to (the) Brazilian crop or there is major disruption in supplies," he told Reuters in an interview.

November robustas finished $US6 firmer at $US1706 on Friday, well below the day's high of $US1738.

The contract dipped to a three-month low of $US1667 last Friday, weakened partly by turmoil in global financial markets, but has slowly been regaining lost ground this week.

Dealers said speculative buying had helped fuel the earlier rise in prices with some hedge selling noted.

Vietnam's Central Highlands, comprising five provinces, produces up to 90 percent of the country's total coffee output. The yield varies depending on soil quality and underground water reserves, ranging from 1 tonne to 6 tonnes per hectare.

The country's coffee crop year lasts between October and September. It is the world's largest producer of the robusta variety used for making instant coffee.

Verma said global coffee supplies were expected to improve in the coming months with good output from Vietnam and Brazil.

"Everyone is expecting (the) 2008 Brazil crop to be larger. The estimates range anywhere between 50 to 55 million bags," he told Reuters by phone from Singapore. "Vietnam anyway looks like a good crop. We will have a bit of easing up of supplies."

Coffee supplies from Indonesia have slowed down after a decline in global prices, said Manish Dhawan, Olam's senior coffee trader.

He said arrivals dipped to around 2500 tonnes last week from around 10,000 tonnes that usually come into the market at this time of the year.

Indonesia is in the middle of harvesting its coffee crop which is estimated around 440,000 tonnes.

In India, floods in southern Kerala state could damage the coffee crop but the overall impact would be marginal.

"We are hearing of floods in Kerala which produces a quarter of the country's robusta crop," Dhawan said. "In other areas there is no impact, so it should be a marginal."

Source: http://www.stuff.co.nz/stuff/4181442a6026.html

Should foreign ownership ceiling percentagge be raised??

Experts and investors once urged the government to offer more ‘room’ to foreign investors in local companies. The proposal is being repeated nowadays, as this is considered the only solution to rescue the market.

According to securities companies, foreign investors only eye blue chips like GMD, REE, SAM, TMS, or TDH. However, there is no more room for foreign investors in these companies as the investors now hold up to 49% of total shares, the ceiling level for foreign ownership.

Foreign investment funds all say that offering more room (raising the ceiling foreign ownership ratio in local companies) would be a good solution to the current situation. VinaCapital told the press that it hoped the government would offer more room. The prices of blue chips have decreased to acceptable levels, but they cannot buy these share items because of no more room for them.

PXP Vietnam also said that the VN Index might reach 1,200 points if the government raised the foreign ownership ratio and initiated other comprehensive measures.

PXP Vietnam advocates the raising of foreign ownership ratio in local companies for the sake of the market’s long-term development, while it does not consider this an immediate solution to deal with the market’s falls, the fund stated in its report on Vietnam’s stock market.

A frequent event occurred at the HCM City Stock Exchange last week, which showed that foreign investors are thirsty for high-quality shares. The Securities Depository Centre made mistakes in defining the volume of Sacombank shares foreign investors could buy (the ceiling foreign ownership ratio in a bank is 30%, while the centre announced it was 49% as in other kinds of enterprises). As a result, foreign investors rushed to place orders to purchase Sacombank shares at the ceiling prices.

Meanwhile, Sacombank shares (STB) and ACB did not see many transactions for a long time, because the two banks had sold out the share volume they could sell to foreign investors before listing on the bourse.

How to offer more room?

Some investors still insist on the current ‘close mechanism’, saying that the ceiling 49% would help Vietnamese owners to retain the right to manage enterprises, and prevent them from being swallowed by foreign investors.

Meanwhile, other investors do not think so. They say that offering more room will help stimulate demand, thus warming up the cold stock market. Moreover, higher foreign ownership proportions in local companies will benefit private enterprises. In some cases, enterprise owners may sell enterprises to recover money to make investment in other projects; why prevent them from doing that, then?

Tran Dac Sinh, Director General of the HCM City Stock Exchange: We should not be inflexible with the foreign ownership ratio:

The foreign ownership ratio in local companies will be raised in accordance with the drawn roadmap, especially with the commitments Vietnam made when joining the WTO.

Currently, the ceiling of 49% being applied to all kinds of enterprises, except banks, to some extent, proves to be unsuitable. In some cases, the regulation prevents private enterprises from mobilising capital and receiving technologies from outside.

I think we should raise the foreign ownership ratio in enterprises operating in the fields where we don’t need to set restrictions. Meanwhile, we will have other treatments for the ‘sensitive’ fields like distribution or telecommunications.

We now have the State Capital Investment Corporation (SCIC), a big investor on the market. The corporation will buy shares or sell them when necessary, which will help regulate the market.

Nguyen Van Nam, Director of Nam Hung Law Firm: 51% ownership still cannot ensure the safety of Vietnamese investors

I think that no one protests the raising of foreign ownership ratio, and the question now is when to offer more room.

One may think that the 51% ownership ratio would ensure the safety of Vietnamese investors. In fact, important decisions of enterprises, according to Vietnamese law, and international practice, must be ratified by at least 75% of shareholders.

The problem now in Vietnam is that no research can point out how many percent of shares foreign investors are holding in Vietnam’s joint stock companies. As there is no exact figure about this, on which basis should we rely to make decision?

As Vietnam has joined the WTO, Vietnam must ensure the rights of foreign investors, but WTO rules do not prohibit Vietnam from protecting its national rights and benefits, provided that Vietnam’s policies do not come contrary to general rules of the WTO.

Source: http://english.vietnamnet.vn/biz/2007/08/734730/

Hanoi grants 50 new investment licences in eight months

The Management Board of Industrial and Processing Zones in Hanoi on August 24 announced the granting of new licences to 50 investment projects worth more than VND679 billion in the first eight months of this year.

It also provided certificates to three additional capital projects in industrial zones (IZs) in Cau Giay, Hai Ba Trung and Dong Anh.

To meet the demand for production space and reduce environment pollution in the inner city, Hanoi built two pilot medium and small-sized IZs in Vinh Tuy (Thanh Tri district) and Phu Thi (Gia Lam district), bringing the total number of IZs to 18.

Medium-and-small sized IZs brought out more than VND452.9 billion turnover and generated nearly 6,000 stable jobs for local people, contributing to the capital’s socio-economic development.

By the end of this year, the board plans to grant 40 investment licences to businesses in Ninh Hiep, Hapro and Mai Dinh and renew investment certificates for 15 businesses with total additional capital of VND120 billion.

Source: http://english.vietnamnet.vn/biz/2007/08/734144/

Industry-Trade Ministry to change market control operations

What new in the state’s market control strategy as the Ministry of Trade and Ministry of Industry have merged to become the Ministry of Industry and Trade? Deputy Minister Le Danh Vinh of the new ministry talks about changes in market control operations.

How will market control operations be adjusted to adapt to the new situation?

From now on, the state will no longer make production plans and set the prices of almost all kinds of goods. This task will be the right of businesses under the law.

The state’s market control operations will focus on the construction and implementation of the system of legal documents, collecting information on the local and international markets to process and analyse to provide the best forecast of the world market to serve enterprises and consumers.

Market controllers will use macro-economic tools (mainly the legal system and financial and monetary policies) to influence production, business, and to ensure supply-demand balance of the economy, such as balance in money-goods, budget spending-collection, import-export, and supply-demand of essential goods.

The Ministry of Industry and Trade will check and compile legal documents to perfect the current legal system to create favourable, open and transparent conditions for enterprises of all economic sectors to develop in a sustainable manner.

What formalities will be simplified or abolished?

First of all, all kinds of sub-licences will be abolished. Requirements in sub-licences will be turned into conditions of business registration. Many kinds of sub-licences are formalities because, actually, no state agency is able to keep track of and manage them.

I think it is necessary to expand the forms of registration such as: business establishment registration, business registration, product quality registration, pricing registration for essential products, etc. with state management agencies under specific and clear regulations.

The government has issued a decree on guiding the implementation of the Trade Law, specifically on goods purchasing and operations directly related to goods purchasing of foreign-invested firms in Vietnam. How will the domestic market change along with the participation of this new subject?

In my opinion, the local market will see many changes. It will be more diverse and more bustling with many more goods providers, many more kinds of goods, and new forms of goods supply, etc.

The buyer (including producers and consumers) will have opportunities to select sources of supply of goods and services which are diverse in sort, quality and prices. The competition in the market will be fiercer and it will be the positive factor to promote the development of the domestic market.

Are Vietnamese enterprises able to compete in the home market as conditions set for foreign investors are being loosened?

We worry about the weak competitiveness of Vietnamese enterprises when we open the market and integrate into the international economy. However, it doesn’t mean that our enterprises are too weak and can’t compete with foreign enterprises in the home and international markets.

Recently there have been many anti-dumping lawsuits against Vietnamese exports. This fact reflects the weakness of Vietnamese businesses: unfamiliarity with business habits of the world and the ability of Vietnam ‘scares’ them and makes them sue Vietnamese goods.

Many local enterprises have made joint ventures and cooperate with each other and with foreign partners in the fields of distribution and retail. I believe that Vietnamese distributors and retailers will be able to compete in the local market in the coming time.

Source: http://www.vneconomy.com.vn/eng/?param=article&catid=03&id=82bb87c3e8501f

US Exim bank eyes Viet Nam’s financial market

Executives from the Export-Import Bank of the US (Ex-Im Bank) visited Viet Nam from August 21-25 to scout for opportunities in this burgeoning financial market.

According to the US Embassy, the visit by the bank’s President James Lambright and Senior Vice President for Finance Export John McAdams, was aimed at seeking opportunities to supply financial services for exports of US businesses in aviation, infrastructure, energy, marine transportation as well as to develop the bank’s commercial and financial services in Viet Nam.

During their visit, Lambright and McAdams held meetings with Vietnamese ministries and agencies and Vietnamese and US businesses. They also met with Prime Minister Nguyen Tan Dung, Governor of the State Bank of Viet Nam Nguyen Van Giau and Deputy Minister of Industry and Trade Bui Xuan Khu.

An official credit export agency of the US, Ex-Im Bank has helped to supply financial services to the export of US goods and services over the past 73 years, mainly to developing markets worldwide, revolving around loan guarantees, export credit insurance and direct loans.

In 2006, Ex-Im Bank underwrote loans by national carrier Vietnam Airlines to purchase four Boeing aircraft, which are scheduled to be delivered to the airline by 2009-10.

Source: http://www.vneconomy.com.vn/eng/?param=article&catid=01&id=88414d7b7e4dc3

$1bil motorbike export plan might be too ambitious

Vietnam should relinquish the dream of manufacturing its own cars as it does not have enough capability to do that, say experts.

Low capability

According to the Ministry of Industry and Trade, investors are now rushing to set up car assembly workshops with surprisingly low capital, even lower than the price of a car. Two of the 35 domestic automobile manufacturers have capital of less than VND10bil ($625,000).

Phan Dang Tuat, General Director of the Institute for Industry Policy and Strategy (IPS) under the Ministry of Industry and Trade, made the comparison that a wedding gown shop in Vietnam must have the capital of VND20bil ($1.25mil), while some investors intend to assemble cars with just several billion dong.

Investors rush to set up car assembling workshops, while no one thinks of producing car parts to provide for car assemblers, though Vietnam is still very weak in supporting industries.

Mr Tuat cited an example: Toyota has 1,400-1,600 car part suppliers, while in Vietnam there are only 60 car part suppliers, which serve 50 car assemblers.

Just focus on fortes

Vietnam has been considered a car market full of potential, which is believed to be a foundation for developing an automobile industry. Why not make cars domestically, when several billions of dollars are spent every year to import cars?

However, Mr Tuat said that Vietnamese enterprises should know their fortes and shortcomings to decide where to invest. He cited Truong Hai and Xuan Kien as the two examples. The two manufacturers’ sales have been very successful, ranking the second and third among Vietnam Automobile Manufacturers’ Association (VAMA) members, just after Toyota (Toyota sold 1,774 units in July, Truong Hai 956 and Xuan Kien 608). Mr Tuat said that the manufacturers followed the right way when focusing on buses and vans, which the market needs and fit their capability.

Mr Tuat said that Vietnam should draw lessons from Europe’s stories. The continent, which is considered as having a powerful automobile industry, has only five nations successful in car manufacturing, while other countries still have to face a lot of difficulties.

Making sedans requires super technologies. A driving seat of a Mercedes Benz S500 has 26 small engines. One automobile manufacturer in the world needs several thousand car part suppliers. “It is clear that making sedans should not be seen as the job of Vietnamese enterprises,” said Mr Tuat.

Source: http://www.vneconomy.com.vn/eng/?param=article&catid=01&id=31a7c8dcd516f6

Top 10 DON'Ts to doing business in Vietnam

1. DON'T be late to business meetings
You may have heard that Vietnamese are casual about punctuality when meeting with friends or attending various social events. There is even a term called "gio day thung" meaning "rubber band time" that is often used as a joke among Vietnamese. However, when it comes to business meetings Vietnamese are very punctual and you’ll need to be on time--it’s a huge sign of disrespect when you are late although they might not tell it to your face.

2. DON'T talk about religion, politics, or the Vietnam War
If these topics are brought up by others, resist the temptation to join in. It might be best to gently change the topic.

3. DON’T say anything to offend the Vietnamese government
There may be times when foreign press (or the local press) may ask you for an interview. Foreign press representatives in Vietnam must follow strict guideline on what they can and cannot do in Vietnam. Make sure the reporter has been authorized by the Vietnamese government to interview you. During the interview, remember the adage, “If you don’t have anything nice to say, don’t say anything at all.”

4. DON'T assume the current Vietnamese laws will not be changed
Vietnamese rules and regulations are constantly changing. Many foreign operators have said this is one of the most frustrating things about doing business in Vietnam right along with going through the slow application procedure dozens of times to get the necessary permits to operate in Vietnam.

5. DON'T expect to sleep in late
Vietnamese start their day early (6 a.m.). Most merchants start wheeling their cargo around 5 a.m. Do expect the noise in the morning to be a little overwhelming for first timers.

6. DON’T expect to reach an agreement quickly
Most decisions are made by committee in Vietnam and negotiations can be quite lengthy.

7. DON’T touch a person's head
It is very disrespectful to touch someone's head. The head is considered the sacred and only parents may touch the head of their young children.

8. DON'T accept an on-the-spot invitation to dinner at someone’s house
If you happened to stop by someone’s house near or during dinner time, more often, you will be invited to sit down for dinner. This is only a formality and the invitation should always be declined even if they repeat the offer the second time. Unless you know the family very well and it’s their third or fourth offer, you may accept but only eat a few bites—most Vietnamese only make enough food to consume at one sitting so there may not be enough to go around when there is an unexpected guest.

9. DON’T accept a compliment
This may sound strange but in Vietnam it is customary to deny a compliment. When you receive a compliment, be polite, smile, and play it down. For example, if someone said you're a good speaker, just reply, "Oh, I am not that good really but thanks." To get a feel for it, try offering a Vietnamese a compliment and see how to they turn it down.

10. DON'T cause someone to lose face in front of others
This is a big one. Vietnamese put a very high value in maintaining and saving face. Embarrass or insult someone in a business meeting (or in a social setting) and they will remember it for a long time. On the other hand, if you go out of your way to save face for someone, they will definitely know it and will remember your kind gesture.

Top 10 DO's (view details)

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Top 10 DO’s to doing business in Vietnam

1. DO handle business cards with two hands
When presented with a business card, always receive it with both hands. Vietnamese view business cards as representation of the individual so treat the cards with some respect. Don’t stuff it hastily in your pocket. Do spend a few seconds observing the card. If you are sitting in the meeting, place the business card neatly in front of you. Respect is a big deal in Vietnam and more often, the handling of a business card is the first chance you get to show it. Try not to carry the cards loose in your pockets or allow them to become soiled. You might want to store them in a discreet card case. By the way, do remember to bring plenty of business cards along on your trip.

2. DO dress conservatively for business meetings
There is no "business casual" in Vietnam so dress conservatively. The South is a little more casual than the North. During the hot summer months, you might be able to get away with attend a meeting without a jacket. However, when it comes to first meetings or meeting with senior management, a suite is a must.

3. DO expect an element of corruption and bribes
The Vietnamese government is actually doing a pretty good job at curbing this problem and it is definitely less prevalent now than it was 3 or 4 years ago. Some Vietnamese feel that this the way business in done in Vietnam. Some foreigners feel that this is the cost of doing business in Vietnam. However you look at it, it's still a part of doing business in Vietnam. You need to be aware of it and be prepared in advance to deal with payoffs, kickbacks, and “gifts” requests. Do keep in mind that anyone convicted of corruption can be sentenced to death or face long prison sentences.

4. DO remember that age is still highly value
Vietnamese show a great deal of respect to their elders. The respect is expressed through gestures such as bowing and through language such as putting certain words in front of each spoken phrase to indicate respect. All Vietnamese has to select the appropriate personal pronouns when addressing someone older.

5. DO expect the traffic to be pretty crazy
If this is your first trip to Vietnam, you WILL be overwhelmed with the traffic especially when crossing the street or riding on the back of a motorbike taxi. It is best to hire a personal driver to take you around and do give yourself plenty of time to get to important meetings. Take a look at some images on Google to get an idea of the insane traffic.

6. DO be polite
Vietnam is a polite society and they don’t tolerate rudeness well. In Vietnamese, when you want someone to do something for you, it is best to say, “If it is only convenient for you, may we stop by the market on the way to my hotel?” Most Vietnamese would be happy to comply whether it is convenient for them or not. Vietnamese often use the phrase, ‘xin phep’ meaning ‘to seek permission’ before contributing to a discussion. Therefore, when you are at a business meeting, remember to always use the phrase, ‘May I suggest something’ before presenting an idea.

7. DO bring your own interpreter to business meetings
The value of a private interpreter is not so much in doing the interpreting but also to tell you afterwards the hidden meaning behind some translated responses. No matter how well government officials or potential business partners appear to speak English, do not assume that they fully understand you or that YOU understand them. Sometimes, a “yes” may not mean “yes”. A good interpreter (a native Vietnamese) should be able to catch and point out instances where a "yes" meant "maybe" or even "no".

8. DO remember the reverse order of names
First and last names are said in reverse order from English. The family name always goes first, then the given name. Introductions are said in the following order: Mr. surname, middle name, given name. Since many Vietnamese share common surnames, people are addressed with Mr., Mrs. or Miss and their given name. For example, when someone is introduced as Mr. Nguyen Van Long, you should address him as Mr. Long (his first name) and not Mr. Nguyen (his last name.)

9. DO try to eat what you’re served
Whenever you are presented with food that is not so good (that is not good to you), never say so, be gracious, and always thank your host. If you don't have an adventurous palate, why not change your thinking from, “I am afraid to try it this new food” to “Hmm...this dish looks interesting, I am curious to see what it tastes like.”Do this and you will have a much better time. Who knows, you might even enjoy some of the food. Also, an offer of tea at a reception or business meeting is a form of hospitality and should not be refused. By the way, when dining with acquaintances or business partners, don't pick up the last piece of food on the plate. It is meant to be left on the plate. The only time you would eat the last piece of food is when someone else picked it up and put it on your plate.

10. DO expect hotels to be very clean
Most hotels are very clean, equipped with hot water, toiletries, and satellite TV with business channels including CNN, CNBC, and Bloomberg.

Top 10 DONT's (view details)

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GOV to make business environment more transparent

The Government of Vietnam will continue to improve institutions and reform administrative systems to make the business environment more liberal, transparent and conducive to ASEAN and foreign businesses in the country.

Prime Minister Nguyen Tan Dung made the commitment at the ASEAN 100 Leadership Forum 2007 with the theme “How different will our future be?” that opened in Ha Noi on August 23.

The government leader emphasised Vietnam’s consecutive high economic growth rate, improved economic and social infrastructure, the second largest population in ASEAN and political and social stability as attractive economic foundations for investors to build on.

”The Government of Vietnam is ready to meet with investors to deepen mutual trust and understanding and we consider foreign-invested enterprises an integral part of our national economy,” he stressed.

PM Dung said that over the past 12 years of membership of the Association of Southeast Asian Nations (ASEAN), economic, trade and investment ties between Vietnam and ASEAN countries have grown dramatically, noting that two-way trade reached US$20 billion in 2006, accounting for 25 percent of Vietnam’s entire foreign trade.

ASEAN member countries have invested in close to 1,000 projects with a total capital of US$13 billion, making up 20 percent of foreign investment in Vietnam. Meanwhile, Vietnam has poured US$700 million into 120 projects in ASEAN countries.

The two-day forum, jointly held by the Asia Inc Forum and the Vietnam Chamber of Commerce and Industry, brought together more than 200 entrepreneurs, government officials and representatives of social organisations from ASEAN nations.

The participants are expected to discuss a wide range of issues related to the development of the bloc and seek trade and investment opportunities in Vietnam and other ASEAN member countries.

The ASEAN bloc consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Source: http://www.vneconomy.com.vn/eng/?param=article&catid=01&id=fbf52718a85ecb


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Korea ranks first in VN investment among 40 countries

Vietnam attracted more than 8.3 billion USD in foreign direct investment in the first eight months of this year, representing a 39.8 percent increase from the same period last year.

The figure included 7.1 billion USD invested by 814 newly-licensed projects with the rest coming from 247 capital expansion projects, the Department for Foreign Investment under the Ministry of Planning and Investment said.

It went on to say that foreign investment was mostly funnelled to the industrial, construction, service, agriculture and forestry sectors and that s outhern Ba Ria-Vung Tau province, Ha Noi and Ho Chi Minh City took lion share in attracting capital from abroad.

According to the department, the Republic of Korea (RoK) ranked first among the 40 countries and territories investing in Viet Nam, boasting 238 projects, worth a total of over 1.7 billion USD.

The RoK was followed by Singapore, with 50 projects, capitalised at more than 1.3 billion USD.

The Department for Foreign Investment also revealed that an additional 50 foreign-invested projects, valued at around 50 billion USD, are preparing for investment in Viet Nam.

Phan Huu Thang, Director of the Department for Foreign Investment, said the performance in the first eight months of this year will help Viet Nam fulfil its target of attracting 12 billion USD in capital from abroad.

Source: http://english.vietnamnet.vn/biz/2007/08/733532/

Vietnam trade deficit widens - sharpest rise in imported automobiles

Vietnam's trade deficit widened to 6.4 billion US dollars in the first eight months, driven by higher imports of machinery and materials for production, the government said Friday.

Between January and August, Vietnam spent 37.63 billion dollars on imports, up 29.9 percent year-on-year, while exports reached 31.21 billion dollars, an increase of 19.3 percent, the General Statistics Office (GSO) said.

The GSO also released a revised trade deficit of 5.62 billion dollars for the January-July period, up from the earlier estimate of 5.45 billion dollars. Revised exports were 26.81 billion dollars and imports 32.43 billion dollars.

The trade ministry has said Vietnam's trade deficit could top eight billion dollars this year -- compared to 5.09 billion dollars in 2006, according to a government report presented to the national assembly in March.

Among imports, Vietnam spent 6.21 billion dollars on materials and equipment for production so far this year, a rise of 51.4 percent. Steel imports rose by 54.9 percent to 2.95 billion dollars, said the GSO.

Imports of oil and petroleum products reached 4.48 billion dollars, up 6.3 percent.
Vietnam has large offshore crude oil deposits but no operating refinery and imports all its refined petroleum products.

The sharpest rise in imports was a 92.5 percent increase in assembled automobiles, amid a rise in orders from Vietnam's growing middle class, although the total sum was modest at 271 million dollars.

On the exports side, the country's revenues from crude oil sales -- the top export earner -- were down 11.8 percent at 5.09 billion dollars.

Vietnam aims to achieve a yearly economic growth rate of between 8.2 and 8.5 percent. Its growth last year was 8.2 percent.

Source: http://www.forbes.com/markets/feeds/afx/2007/08/24/afx4051000.html

Chicago Mercantile Exchange to trade Vietnamese coffee

The ambition to bring Vietnamese coffee to the Chicago Mercantile Exchange (CME), the world’s biggest forward trading floor, is becoming reality: the government has agreed to the plan on putting Vietnamese coffee into transactions on CME.

Van Thanh Huy, Chairman of the Vietnam Coffee and Cocoa Association (Vicofa), talked to VietNamNet about the plan’s implementation after he discussed the issue with Deputy Minister of Agriculture and Rural Development (MARD) Luong Le Phuong on August 22.

Mr Huy said:

Van Thanh Huy, Chairman of the Vietnam Coffee and Cocoa Association (Vicofa)In 2002-2003, coffee prices saw big fluctuations, and enterprises found out that they faced big risks with the price-fixed contracts. Since the 2005-2006 crop, Vietnamese enterprises have always used price-to-be-fixed contracts while trading Robusta on LIFFE (London International Financial Futures and Options Exchange), Arabica on NYBOT (New York Board of Trade). However, transactions have still been carried out through third parties.

Coffee will be the ‘pioneer’

How has Vicofa been preparing for the plan to put Vietnamese coffee into transactions on CME?

The idea has got the support of the government and branches. Most recently, Deputy Prime Minister Pham Gia Khiem has assigned MARD, the Ministries of Foreign Affairs, Industry and Trade, Dak Lak People’s Committee, the Vietnam Chamber of Commerce and Industry, and Vicofa to compile the detailed project. We have been given autonomy in contacting and working with CME on putting Vietnam’s coffee into transactions. Coffee will be the ‘pioneer’, and if successful, other farm produce will also be brought to trading floors.

On August 22, MARD Deputy Minister Luong Le Phuong had a meeting with Vicofa to discuss the issue. In the immediate time, we will set up a committee in charge of compiling the project on cooperating with CME.

I have heard that under the association’s trade promotion programme, in the second quarter of the year enterprises went to learn about some trading floors. Could you please tell me about the outcome of the trip?

Our trip was from June 26-July 6. The delegation consisted of 18 members, including representatives of MARD, the Ministry of Industry and Trade, Vicofa and association members. We visited NYBOT and CME. Established in 1870, CME is now the world’s biggest forward trading floor, and even more bustling than the floors in New York, where important products are being traded. We had a meeting with CME’s managers. They were pleased to hear about our plan and expressed their hope of seeing Vietnamese coffee on the trading floor soon.

CME’s Asian forward transaction centre’s director promised to help Vietnam train officers for trading floors. We will send several officers to Chicago first, and then CME will send experts to Vietnam to help train officers in Vietnam, which will help save on expenses.

Please tell me what will we have to do to get ready in technical and material facilities to put Vietnamese coffee into transactions on CME?


In November 2004, the construction of the Buon Ma Thuot Coffee Exchange Centre was kicked off, which was designed to become the trading floor for all coffee trading enterprises, individuals and institutions. The first transactions were made at the end of 2006, when the infrastructure items were completed.

However, the transactions being carried out here are most local. I mean, the traders mostly come from the region (Dak Lak is the capital city of coffee) and other localities of Vietnam. We plan to organise a seminar in September to collect ideas about the regulations and operations of the centre.

If the cooperation with CME goes smoothly, the Buon Ma Thuot Exchange Centre will be able to place orders directly with CME in March 2008, and there will be no need to go though any third party. Currently, this work still needs to be carried out through third parties, like Techcombank, BIDV or ATB.

The most difficult technical problem is the building up of software for the centre. We are considering hiring a professional company to write the software. In the immediate time, orders will still be placed manually.

Vicofa suggests not signing contracts in large quantities

What is your assessment about Vietnam’s coffee exports in 2007 and the next crop? Does Vicofa have any suggestions for enterprises about how to ensure supplies for export?

The coffee price has remained high this year, at $1,430/tonne, higher than 2005’s level at $1,066/tonne. Vietnam has exported 900,000 tonnes so far this year, reaping $1.2bil. I think that coffee exports will bring $1.5bil this year. The price slightly decreased by $100-200/tonnes in the last three weeks, but I don’t think this is a worrying sign.

Experts have forecast that Brazil’s output would be 33-35mil bags in the 2007-2008 crop due to the bad harvest. Vietnam is expected to have 1.5mil bags, the same as last year’s level (the harvesting will be in October). Therefore, the export price is expected to stay high.

The export coffee price may drop in the fourth quarter, but will recover soon in the second quarter of 2008. Vicofa has advised enterprises not to sign contracts in large quantities, 40,000 tonnes would be fine instead of 120,000 tonnes as previously. Coffee should be reserved for the contracts in the future.

source: http://english.vietnamnet.vn/biz/2007/08/733060/

The 20 plots of ‘gold land’ for investment in HCM City

The 20 plots of ‘gold land’ for investment in HCM City

1. Ben Thanh Quadrangle
2. Ernst Thallman Quadrangle
3. Saigon Hospital Quadrangle
4. Eden Quadrangle
5. The land in front of Park Hyatt Hotel (Lion restaurant, Hoang Long…)
6. The land in front of Park Hyatt Hotel (Tran Phu Printing Factory…)
7. Saigon Beer Factory’s land
8. HCM City Department of Culture and Information’s land
9. Dan Sinh market
10. Ma Lang Quadrangle
11. 129-131 Co Giang
12. Nguyen Du-Chu Manh Trinh corner
13. HCM City Department of Education and Training land
14. 25 Bis Nguyen Thi Minh Khai
15. 257 Tran Hung Dao
16. Ba Son Shipyard
17. The land in front of Tax Trading Centre
18. Ben Thanh market
19. Streets around Ben Thanh market
20. Pasteur, Ton That Dam, Ton That Thiep, Huynh Thuc Khang

source: http://english.vietnamnet.vn/reports/2007/08/733248/

Motorbike expected to reach 24 million by 2010

The Institute for Industry Policy and Strategy (IPS) has submitted to the Ministry of Industry and Trade the programme on the motorbike industry’s development for 2006-2015 with a vision to 2020.

Under the programme, from now to 2010, the industry will satisfy 100% of the demand for popular vehicles in rural areas, 90% of the demand in urban areas.

Raising the localisation ratio of products is always the most important task for the motorbike industry. By 2010, it is expected that the locally made content of scooters will reach 90% of total parts, while the ratio will be over 90% for popular motorbikes.

By 2010, Vietnam plans to export $300mil worth of motorbikes and motorbike parts. In 2011-2015, Vietnam hopes to become a centre for designing, producing and assembling motorbikes. The motorbike industry is hoped to become an industry with high global competitiveness when Vietnam fully integrates into the world and will not need protection by the state with tariffs.

By 2015, Vietnam hopes to be involved in the international production line, which will allow it to make engines and motorbikes for export, including engines and products using clean technologies. Vietnam will also pay appropriate attention to the forming up of support industries which can provide parts to assembling workshops.

From 2016 to 2020, Vietnam will focus on developing engines and motorbike products using clean technologies, which will serve the domestic demand and for export, estimated to bring about the turnover of $1bil.

Also according to IPS, by 2010, the number of motorbikes rolling on the streets will reach 24mil units. The figure will be 31mil by 2015 and 33mil by 2020. From now to 2010, it is expected that 2mil new motorbikes will be put into circulation every year.

On the domestic market, scooters are the most favoured by medium and high income earners. Experts say that the market now is far from the saturated level: the demand for scooters keeps rising, and local manufacturers are competing with each other mostly in the segment of scooters.

Locally made motorbikes, like Nouvo, Excel, Attila, Classic and XO, which are priced at between VND27-35mil ($2,187), prove to be most wanted. Imports are also popular choices of customers, though they are 3-8 fold more expensive than locally made products.

source: http://english.vietnamnet.vn/biz/2007/08/733062/

US-invested bank keen on HCMC infrastructure projects

The US-invested Export-Import Bank has a keen interest in developing Ho Chi Minh City infrastructure projects, said its president Tuesday.

Meeting with HCMC mayor Le Hoang Quan at City Hall, James H. Lambright said his bank would provide partial or full support for infrastructure projects, such as routes 5 and 6 of the city’s future subway system.

He stressed that Eximbank has studied Vietnam’s rapid economic growth and is pleased with the increase of bilateral trade between Vietnam and the US since 2001.

He hoped HCMC would use more American services, technologies and contractors in implementing its urban infrastructure development projects.

The chairman and president of the bank arrived in HCMC on Monday for a three-day visit to learn about the city’s plans to develop its urban facilities as well as the city’s long-term foreign investment attraction strategies.

Also on Tuesday, Lambright met leaders of the Southern Airports Authority (SAA). A source said the Long Thanh International Airport project in neighboring Dong Nai Province was discussed at the meeting.

The bank delegation will today leave HCMC for Hanoi where Lambright will meet with some ministries and Vietnam Airlines, which recently obtained an Eximbank loan to purchase six Boeing aircraft.

Source: http://www.thanhniennews.com/business/?catid=2&newsid=31238

Vietnam auto market small but full of potential: Ford Vietnam

Michael Pease, who has come from Malaysia to Vietnam to take the post of Director General of Ford Vietnam, said that Vietnam’s automobile market remained small but had a lot of potential, like a child who needs more care to grow up.

Had you heard anything about Vietnam before coming to the country to take the post of Ford Vietnam Director General?

I came to HCM City seven or eight years ago. The biggest impression on me at that time was the big number of bicycles. When I returned to Vietnam several days ago, I found out that these bicycles have been replaced with motorbikes, and I hope that the motorbikes will be replaced with cars in 7-8 more years.

What do you think about Vietnam now?

Vietnam is very close to China, both in geographical distance and market characteristics, including the automobile market. Therefore, I can say that Vietnam is a very dynamic market which promises both big opportunities and challenges for enterprises.

Naturally every market has its own characteristics. After 15 years of working in East Asia, I have found out that I should understand my clients very well. Therefore, I think that I will seek necessary information not only from the events or through sales system, but also from direct meetings with clients.

What are your comments about the policies being applied to the local automobile industry?

Vietnam and other countries in Asia all are trying to impose high taxes on cars, and as a result, taxes always account for a big proportion of car selling prices. Therefore, it is understandable why Vietnamese customers always have to buy cars at high prices.

The government of Vietnam, on one hand, aiming to protect local automobile production, on the other hand, trying to limit the number of cars in circulation due to bad infrastructure, has been levying high taxes on cars, including imports. However, I think that with the commitments made when joining the WTO, the government will gradually lower taxes on cars.

I think that Malaysia also imposes high taxes on cars like Vietnam. Previously, the country always tried to protect the local automobile industry, but it is now trying to treat all car manufacturers equally.

The government of Vietnam has lowered the tax on brand new imports under the form of complete built units (CBU). However, in order to obtain car price reductions, it should consider the two factors that create car selling prices: tax and market scale. Low tax rates and big market will lead to low selling prices.

Ford Vietnam has been facing a lot of difficulties in Vietnam, as it has won less favour from Vietnamese customers if compared to other brand names. Do you think so?

I know Vietnamese customers do not like Ford products very much. They simply think that Ford cars consume too much fuel, and they have the wrong idea. I think I will have do my best to change this mentality. Besides, Ford Vietnam will try to use new technologies for our products, improve quality while lowering selling prices.

Source: http://english.vietnamnet.vn/biz/2007/08/732210/

Vietnam textile group seeks to set up bank

Vietnamese state-owned textile and garment giant Vinatex said Monday it has applied to the central bank for setting up an industrial bank.

Vinatex, short for Vietnam National Textile and Apparel Group, will be one of the four founders of the VND1 trillion (US$62.5 million) Industrial Development Bank.

Vinatex (14 percent), Hanoi Beer-Alcohol & Beverage Corporation (12 percent), Vietnam Steel Corporation (10 percent), and Vietnam International Bank (5 percent) will hold nearly half the bank’s equity.

The remaining 59 percent will be offloaded to other parties yet to be named.

Le Quoc An, Vinatex chairman, said the new bank would focus on industrial projects left out of the ambit of the government credit policy.

The State Bank of Vietnam (SBV)’s rules require new commercial joint stock banks to have at least VND1 trillion in chartered capital, and to ramp it up to VND3 trillion by early 2009.

The textile group is one of many large corporations branching out into banking.

Vinatex is the largest stakeholder in the recently launched Empower Securities Co. It holds 22 percent.

An SBV official said 24 proposals had been received for setting up new banks, but none had been considered yet.

Seven state-run banks, including two policy banks, and 34 partly private banks now operate in Vietnam. Apart from domestic banks, branches of 35 foreign banks and six joint venture banks also compete in the Southeast Asian country.

More targets

Vinatex set to sell bonds worth VND1 trillion (US$62 million) this year to finance the group’s business expansion.

It will issue the bonds in two tranches and the proceeds should help it and subsidiaries boost production.

The textile group has posted an 8.4 percent rise in sales to VND11 trillion for the first half of the year and targets to ship $1.55 billion in exports this year, up 18 percent from last year. The exports are headed mainly to the US and EU.

Vinatex said it needed some $4 billion to produce 500 million sq.m of woven fabric by 2010 and one billion sq.m of cloth by 2015.

The funds would be mobilized through foreign investors and the stock market, said the company, adding that it would seek capital sources in Taiwan and Korea.

Vinatex, which accounted for 22 percent of Vietnam's textile and garment exports in 2006, set to sell shares in 13 wholly-owned subsidiaries by 2007.

Phong Phu Fabric Textile Factory and Phong Phu Towel Textile Factory – two Vinatex subsidiaries – plan an initial public offering in later this month.

Six already went public last year. Vinatex itself would auction shares in 2008.

Source: http://www.thanhniennews.com/business/?catid=2&newsid=31218

High-end hotels in demand in Vietnam

The demand for luxury hotels in Vietnam is rising on the back of increasing annual foreign visitors, according to Grant Thornton Vietnam.

A survey but the accounting and consulting firm said the annual increase of foreigners traveling to the country has been 10-20 percent over the past few years.

Ho Chi Minh City needs 17,000 more international-standard luxury rooms by 2010.

The city now has some 11,000 rooms in 171 hotels, with most being budget or midrange options.

Hanoi’s hotels can only meet 70 percent of needs during the peak tourism season.

Last year 3.6 million foreign arrivals hit Vietnam, nearly 23 percent of which were business travelers, and about 60 percent tourists.

Another 18 million Vietnamese tourists traveled within the country.

Most foreign and domestic travelers chose to stay at luxury hotels, according to the survey conducted at 29 hotels in 10 big cities nationwide over the last two years.

The survey also showed net profits were up 21 and 40 percent at four and five star hotels respectively, much higher than the 4 percent increase at three-star hotels.

The local hotel industry generated US$2.25 billion worth of revenues in 2006.

Source: http://www.thanhniennews.com/business/?catid=2&newsid=31151

BMW designates exclusive importer in Vietnam’s southern metro

The corporation will import, retail, and service BMW automobiles, catering to growing demand for the premium brand in Vietnam, one of Southeast Asia's fastest growing economies.

A newly constructed 8,800sq.m facility with a retail showroom and ser­vice center will open in Phu My Hung in HCMC’s district 7 in fall 2008.

The sophisticated sys­tems and processes in the showroom will link the Phu My Hung facility di­rectly with engineers in Munich, Germany, who will provide sup­port to the local, BMW-trained and certified staff.

Until the Phu My Hung facility is ready a bou­tique showroom will open in the downtown area to serve customers.

There is also an interim service facility in district 5, opened last July.

Source: http://www.thanhniennews.com/business/?catid=2&newsid=31219

Vietnam eases visa rules

Vietnam will grant visa exemptions to its overseas emigres, or Viet Kieu, and their spouses and children from September 1, state media reported Monday in the communist country.

The move is part of Vietnam’s drive for closer links with its diaspora of nearly three million people and tap their expertise and wealth to boost the developing country’s rapid economic growth.

Ethnic Vietnamese who hold foreign passports and their immediate family members will benefit from the policy approved by Prime Minister Nguyen Tan Dung, said published newspaper reports by the Vietnam News Agency (VNA).

Viet Kieu will need to gain visa exemption certificates valid for five years that will allow them to return to their former homeland for 90-day stays, with extensions available incountry, said VNA.

Expecting a rush of applications, the foreign ministry’s Committee for Overseas Vietnamese (COV) has sent 200,000 of the certificates to embassies overseas, said the report published in the English-language Vietnam News Daily.

To qualify, overseas Vietnamese need to submit a document that proves they are ethnically Vietnamese, or a guarantee by an overseas Vietnamese association in their country of residence or by a Vietnamese citizen, said VNA.

Source: http://www.manilatimes.net/national/2007/aug/22/yehey/opinion/20070822opi9.html

New US Ambassador recognized by Vietnam President

The new United States Ambassador to Vietnam Michael W. Michalak became official at a proceeding with Vietnamese President Nguyen Minh Triet in Hanoi Monday morning.

The Vietnamese leader welcomed Ambassador Michalak at the Presidential Palace and wished him success in his new position.

Michalak, a career Foreign Service officer with extensive knowledge and experience in Asia, was sworn in as the US Ambassador to Vietnam on August 10, 2007 by Deputy Secretary of State John Negroponte.

Prior to this position, Ambassador Michalak served as the US Senior Official to APEC. In his over 30 years of service with the US Department of State, Michalak has worked in Japan, Australia, Pakistan and China.

Born in Detroit, Michigan, Michalak received his Bachelor of Science and Master of Science degrees in Physics from Oakland University in Rochester, Michigan, and Catholic University of America in Washington, DC, respectively.

He received a second Master's degree in Public Administration from the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts. He speaks Chinese, Japanese and French.

Ambassador Michalak will be joined in Hanoi by his wife and one of his three daughters.

source: http://www.thanhniennews.com/politics/?catid=1&newsid=31178

POSCO to Build 8 Mil. Ton Mill in Vietnam

POSCO plans to build an integrated steel mill with an annual production capacity of eight million tons at Van Phong Bay on Vietnam's south-central coast.

The company is currently constructing cold-rolled and hot-rolled steel plants in Vung Tau in the south. Once all the mills are finished, POSCO will have a complete one-stop steel manufacturing system in the Southeast Asian country. Total investment is an estimated W7 to W8 trillion.

According to POSCO and Vietnamese media Sunday, the Korean steelmaker signed a memorandum of understanding with Vietnam's largest state-owned shipbuilder Vinashin in May and is reviewing the project's feasibility.

Van Phong Bay has been tentatively decided as the construction site. The Hanoi government has designated the bay, a logistics hub of Khanh Hoa province, as an economic zone and plans to build an international container harbor there by 2020.

In the project's first stage, POSCO and Vinashin will invest US$4.5 billion from 2009 to build a four million ton capacity mill. The second phase of project, planned for 2012, will hike the capacity to as much as eight million tons.

POSCO said the mill will likely employ the company's proprietary FINEX technology which was successfully commercialized this year, as requested by the Hanoi government.

Source: http://english.chosun.com/w21data/html/news/200708/200708200009.html

Labor market forecast to be hot at year’s end

Seven months of 2007 have passed but the labor market is still very hot. Companies in all fields complain of lacking workers.

According to experts, the labor market will be still in a ‘fever’ in the remaining months of the year.

HCM City is taking the lead in making jobs, accounting for 50% of the total new jobs created in the seven months, followed by Hanoi, Binh Duong, Dong Nai, Bac Ninh and Hai Duong.

The need for labor will not decline

According to statistics by the HCM City Department of Labor, War Invalids and Social Affairs, the city created jobs for nearly 134,000 people in the first half of 2007 through organising labour trading floors, job festivals, recruitment activities.

However, the city’s efforts have only helped partly satisfy the thirst for labour of local enterprises at this moment.

Shortages of labor are not only happening at enterprises in certain fields but all enterprises. With the high demand for labor, laborers have many choices of jobs, which causes the situation in which workers run from this enterprise to another very quickly. Economic development has led to changes in the labour market when the need is soaring but the source of supply is unready.

Labor transaction sessions held by the HCM City Job Service Centre are always full of orders from businesses. The third transaction floor on July 20-21 saw requests for 15,000 labourers and it was more than 10,000 for previous sessions.

Imbalance between supply and demand of labor

A survey of the HCM City Job Service Centre shows that the serious shortage of labor continues to occur at textile-garment, footwear, wood processing enterprises and in the tourism field.

According to Navigos’ recent human resources report, the need for labour of 45/46 fields increased remarkably in the second quarter of 2007, focusing on jobs that require high skills and qualifications.

Recently, banks expanded their networks and as a result, their human resources increased by 57% in the second quarter, followed by accounting and financial institutions with 42%, waste treatment with more than 40%, real estate and translation, 39%.

Though the supply of labor rose in the second quarter the source of supply didn’t catch up with the demand: the supply increased by 30% while the demand was up by 142% compared to the first quarter.

Labor shortage, thus, is forecast to not be solved in the remaining months of the year.

Source: http://english.vietnamnet.vn/reports/2007/08/731555/

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10 Steps to Starting a Business in Vietnam

The following list of 10 steps to starting a business in Vietnam is from The World Bank Group as posted on doingbusiness.org. Doingbusiness.org is a site which provides objective measures of business regulations and their enforcement across 175 countries. Among other things, they identify the bureaucratic and legal hurdles an entrepreneur must overcome to incorporate and register a new firm. A very cool site!!

I would strongly encourage you to visit http://www.doingbusiness.org/ and view all the cool stats posted on doing business in Vietnam. Please note that there might be other steps you must go through due to the constantly changing requirements in Vietnam. Also, I expect the fees associated with these steps will be increased so visit http://www.doingbusiness.org/ to check for updates or contact each agency and get the latest information yourself.

-----------------------Data is as of 2006 from doingbusiness.org--------------------------

10 steps to starting a business in Ho Chi Minh City (Saigon), Vietnam

STEP 1 - Check the proposed company name. Obtain a business registration certificate from the local Business Registration Office under the Department of Planning and Investment
Time to complete: 15 days
Cost to complete: VND 200000 (official fees) or $12USD
Comment: Application documents should include: the application in the specific form provided by the Ministry of Planning and Investment; the Company's charter; and a list of the company's members. Having obtained the business registration certificate, the company is entitled to business operation and does not need to apply for any further permission from the local authorities.

The Business Registration Office in 2004 introduced online application assistance. Forms now can be downloadable and application can be submitted online. The Business Registry Office shall verify the application submitted online for completeness and correctness then reply via email for an appointment upon which the registrant representative should be present to submit the original application documents. The Business Registration Office then needs another 3-5 days for verification of the original application in comparison with the online submitted documents and the issuance of business registration certificate.

STEP 2 - Obtain a seal-making license from the Public Security
Time to complete: 4 - 7 days
Cost to complete: no charge
Comment: This is done at the Administrative Department for Social Order under the Municipal Police Department (the "ADSO"). The application documents include an application in the form provided by the ADSO and a notarized copy of the certificate of business registration.

Seal making is governed by Decree 58/2001/ND-CP of the Government dated 24 August 2001, which replaces Decree 62/CP of 1993. Most of business transaction documents must be signed and sealed before they are considered valid and legal. Without a seal, an enterprise cannot register with the tax department, open a bank account and apply for operating facilities and services (e.g. telephone, electricity and water supply, office leasing, etc.)

On average, two office visits were required before a company can obtain a seal.

STEP 3 - Make and pick up company seal
Time to complete: 7 days
Cost to complete: VND 165,000 ($10USD) for bronze seal
Comment: The seal must be made by the seal-making service, which is recommended by the ADSO. The original of application for making the seal and the seal-making license must be submitted to the seal maker. The seal maker takes the finished seal to the ADSO. The seal must be picked up at the ADSO together with a certificate of registration of the seal specimen issued by the ADSO.

STEP 4 - Open a bank account
Time to complete: 1 day
Cost to complete: no charge
Comment: Each bank requires different minimum deposit. For instance, Vietcombank requires the fixed amount of VND 5 million for an account in VND and USD$500 for that in USD, meanwhile Asian Commercial Bank (ACB) requires VND 1 million for a VND account and US$100 for a USD account. An application dossier to open the account includes: an application in the form provided by the bank, the company's business registration certificate, resolution of the management board on the authorized signatures and the company seal.

STEP 5 - Publish announcement in a daily newspaper
Time to complete: 7 days
Cost to complete: VND 1,026,000 ($63USD)
Comment: Cost depends on the newspaper, the page and the length of the announcement. In the case of New Hanoi, 9x4 cm, VND1,026,000 for three issues. Details to be made public: name and type of company; the number and the issuance date of the Business Registration Certificate; headquarters and business objectives; charter capital; name of the legal representative and place of business registration.

STEP 6 - Apply for a tax code at the Hanoi Municipal Taxation Department; pay business license tax
Time to complete: 15 days (simultaneous with previous step)
Cost to complete: VND 3,000,000 ($185USD) for business license tax
Comment: Required documents are: a declaration of tax registration (standard form is available); a certified business registration certificate. This procedure registers the company for all necessary taxes. After issuance of the business registration certificate, the company goes to the Hanoi Taxation Department for declaration of relevant taxes and the accounting system.

Within 15 days from the date of the receipt of the application for tax registration, the company will be issued a taxation code. Taxes and the applied accounting system connected to operations of the company (business license tax, VAT, corporate income tax, personal income tax, etc) are to be declared.

For the approval of accounting system, required documents are: an application for approval of the accounting system, a certified business registration certificate, and a C.V. of the chief accountant. The company must comply with the Ministry of Finance's regulations on accounting standards and maintaining its accounting records.

MOF allows a domestic company to incorporate the application for approval of an accounting system into the application for the tax code and for the combined application to be submitted to the provincial tax department belonging to the MOF.

STEP 7 - Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self printed VAT invoices
Time to complete: 15 days (simultaneous with previous step)
Cost to complete: If buying the pre-printed VAT Invoices: VND 14,000 (0.90USD) per book (50 copies). If self-printed : it shall depend on the design and requirements
Comment: Required documents are: authorization of the General Director of the company to the person who shall contact the Department to buy invoices, Application for buying pre-printed invoices (standard form available), ID card of the buying person, Business registration certificate and copy, tax registration certificate and copy.

Upon completion of the application, Tax Dept shall issue an appointment of not more than 5 later days for purchase of invoices. During this 5 days period tax officer shall pay visits to the company's office to certify the existence of the company and sign with the company a minute of certification of the company office location. First purchase is not allowed to be more than two books (100 copies).

It would take more time to have the company's invoices printed at its own requirements. It may take 7-10 days to obtain registration of self-printed invoice from the Municipal Taxation Department. Required documents are: application for registration of self-printed invoices (standard form available), model form of self-printed invoice including all statutory details, map drawing showing the location of the Company's office or copy of the lease contract, if the office property is leased, certified by ward/commune people's committee, ID card of the General Director, copy of business registration certificate, and tax registration certificate and copy.

It will take 7-15 more days to have approved invoice printed at printer authorized by the General Taxation Department of Vietnam. After having the invoice printed and before use, the Company must register the serials of the invoices with the Municipal Taxation department.
The procedure takes from 10 to 20 days.

STEP 8 - Register with the local labor office to declare use of labor (Municipal Department for Labor, Invalids and Social Affairs).
Time to complete: 1 day
Cost to complete: no charge
Comment: Can be done simultaneously with the previous step. This step must be carried out within 30 days after the company is operational. All the employees and their qualification must be registered with the labor office (in conformity with set forms). The relationship between employees and the company is regulated by the Labor Code and set forth in labor contracts. The company can recruit employees itself or hire labor service agencies to do it.

STEP 9 - Register employees with the Hanoi Social Insurance Fund for the payment of health insurance and social insurance.
Time to complete: 1 day
Cost to complete: no charge
Comment: Can be done simultaneously with the previous step. The company must declare all the employees who engage in the labor contracts with the definite term of 3 months or more. The declaration must be in the form provided by the Hanoi Social Insurance and must include the following information: name, date of birth, salary (as stated in the labor contract), serial number of social insurance book (for employees already issued with those books), together with a certified copy of the company's business registration certificate and copy of each labor contract. The Social Insurance Office will issue an insurance registration book for each new employee (i.e. one who did not have an insurance registration book with his/her previous employer). The company is responsible to pay the social insurance and health insurance contributions for each employee directly to the Hanoi Social Insurance on a monthly or quarterly basis. A health insurance certificate will be issued in the first month of the year.
The Health insurance and social insurance funds have been merged.

STEP 10 - Establish a trade union with the City's Trade Union
Time to complete: 15 days
Cost to complete: no charge
Comment: This procedure is compulsory for every company, and must be done within 6 months after start of operation. This first trade union is provisionary, and its term of office is 1 year. Upon expiry of the aforementioned term and according as the presence of some conditions legally required, the provisional trade union unit shall be transformed into an official grassroots trade union unit. The time is not specified as it doesn't affect the operation of the company.

Source: http://www.doingbusiness.org/ExploreTopics/StartingBusiness/Details.aspx?economyid=202

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10 steps to starting a business in Vietnam
Overseas Vietnamese no longer need visa
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