Briefing
Vietnam spotlight - COVID-19
Business updates
- COVID-19 to pull Việt Nam’s growth down to 6.3%. Fitch Solutions revised down Vietnam’s economic growth in 2020 to 6.3 per cent from 6.8 per cent previously due to the Covid-19 outbreak. Source: Vietnam News
- Vietnam suspends rice export from March 24 to ensure national food security. Vietnam will suspend signing new rice export contracts until March 28 at the earliest in order to ensure domestic supplies are sufficient during the coronavirus outbreak. Source: Vietnam Time
- Samsung announced that it will shift part of its domestic phone production to Vietnam due to the fast spread of coronavirus in South Korea. The outbreak has forced frequent shutdowns of its home plant, causing disruption to premium smartphone production for the local market. Source: Financial Times
- Vietnamese government agreed to let 700 engineers of Samsung skip mandatory centralized quarantine required for anyone arriving from South Korea. Instead, Vietnam required strict medical supervision for 14 days for the South Korean engineers who must also make medical declarations before entering the country. Source: Vnexpress International
- Ford Motor Company suspends its Vietnam plant. Ford is temporarily suspending vehicle and engine production at its International Markets Group manufacturing sites, including its plant in Vietnam - Ford Vietnam Limited Hai Duong Assembly Plant, in response to the growing impact of the coronavirus. Source: Ford Media Centre
- Many businesses are struggling from a lack of raw materials and falling exports due to the impacts of the global pandemic COVID-19. The processing and manufacturing industry was the most heavily affected with growth in the first two months at only 7.4 per cent, much lower than the increase of 11.4 per cent posted in the same period last year. Source: Bizhub
- The Formula 1 (F1) Vietnam Grand Prix in Hanoi scheduled for April 5 has been postponed due to the epidemic. Source: Formula1 website
- COVID-19 brings more business to insurers. The COVID-19 pandemic has so far hurt many businesses in the country, except the insurance industry. Source: Vietnam News
- Vietnam will close all non-essential services, such as bars, karaoke clubs, massage parlours, cinemas, restaurants, beer clubs, entertainment centres and tourist spots, except for those selling food and essential goods. Operation of public transports will be halted while flights connecting two major cities – Hanoi and Ho Chi Minh City – and other localities should be reduced. This order will be effective from 0:00am of 28th March with no end date specified. Source: Vietnam Investment Review
Government measures to support businesses
Directive 11 of the Prime Minister
- Directive No 11 issued by the Prime Minister on 3 March 2020 requested that all ministries, People’s Committees and leaders of State-owned and private enterprises take on a “double mission” fighting COVID-19 and ensuring socio-economic development. The directive outlined actions that central and local authorities should take to ensure socio-economic stability. The Prime Minister requested:
- the Ministry of Finance to propose a deadline extension for tax payment and land rent for those affected by COVID-19 in March;
- Customs authorities to simplify administrative procedures for customs clearance, tax refund, tax deferral for entities affected by Covid-19 pandemic;
- the Ministry of Transport to reduce administrative and logistics procedures for maritime, aviation, road, inland waterway, and railway companies;
- The Ministry of Culture, Sports and Tourism to promote Vietnam’s tourism at the national level and collaborate with localities to promote domestic tourism, and develop new tourism packages to attract international tourists;
- The Ministry of Industry and Trade to focus on completion of large scale industrial projects to boost growth, including Thai Binh 2 Thermal Power Plant, Long Phu I Thermal Power Plant, Song Hau I Thermal Power Plan, gas power projects, renewable energy projects, power transmission systems; speed up the development of the national master plan for power development 2021 – 2030 with a vision towards 2045; resolve or request competent authorities to resolve difficulties encountered during the implementation; make sure there is no shortage of power for production and domestic use during 2021 – 2025;
- the Ministry of Labour, Invalids and Social Affairs to collaborate with local labour sectors to encourage workers to overcome the difficult time, and provide assistance and incentives for those who lost their jobs due to COVID-19. Source: Vietnam News.
Delaying tax payment
- The government is considering delaying the tax payment deadline by five months for businesses impacted by COVID-19. This would cover VND23 trillion (US$974 million) in taxes from businesses in agriculture, textiles, footwear, automotive, aviation, electronics, food processing, and tourism sectors, among many others. Source: Vnexpress International
Securities market
- The Ministry of Finance decided to exempt six types of fees, such as fees for listing and registration, and cut nine other fees by 10%-50% for such services as securities custody, derivative transactions and position management. Source: Reuters
Banks’ support
- The State Bank of Vietnam instructed commercial banks to delay, extend, and reschedule debt payments as well as reduce interest rates and fees for businesses, while providing new loans to help them overcome difficulties. Besides, the State Bank has adjusted interest rates to support credit institutions with easier captial access.
- On March 13, 2020, the SBV Governor issued Circular 01 directing credit institutions and foreign bank branches to restructure their repayment periods, waive and reduce interest rates and fees, and maintain debt classifications in order to support customers affected by the Covid-19 pandemic. Source: Vietnam +
