Prime Minister orders tighter control of Bitcoin, cryptocurrency
Source: Vietnam Net
Prime Minister Nguyen Xuan Phuc has required the State Bank of Vietnam (SVB), financial institutions, and other organisations providing payment brokerage services to intensify inspections and promptly report suspicious cryptocurrency transactions. The Prime Minister has just signed Directive No.10/CT-TTg on the matter, following repeated warnings from relevant agencies on risks associated with Bitcoin and other cryptocurrencies, along with the threat that cryptocurrencies can be used to finance crimes such as money laundering, terrorism, tax evasion and fraud. At the same time, cryptocurrency trading and investment is on the rise, posing a threat to the stability of the financial market and social order and safety due to the high risk involved. The PM instructed the Ministry of Public Security to join hands with the SBV and relevant ministries to detect and handle any case of using cryptocurrency for illegal payment or any activities connected to money laundering and terrorism sponsor activities via cryptocurrency. Meanwhile, the Ministry of Finance is requested to study global experience to recommend solutions to counter initial coin offering (ICO). In addition, the ministry should work to reduce the import of Bitcoin mining machines. The Ministry of Industry and Trade must channel efforts into addressing illegal activities relating to the illegal use of Bitcoin to make payment on e-commerce websites or applications. The Ministry of Justice is responsible for completing a legal framework on the management and settlement of cryptocurrency or crypto assets. The media are urged to do their part in raising public awareness on the risks and negative consequences of cryptocurrency investment and trading. Cryptocurrency is considered an illegal non-cash payment method in Vietnam. The use of virtual money as a means of payment is prohibited and will be handled according to the country’s legal regulations. The police in Ho Chi Minh City are coordinating with relevant agencies to investigate an alleged cryptocurrency fraud involving over 32,000 people and a sum of 15 trillion VND (666 million USD).
Law on dual roles rearranges top bank personnel
Source: Vietnam Investment Review
In order to comply with the new amendment on holding dual posts in commercial banks and enterprises, leaders of various banks, including LienVietPostBank and Nam A Bank took leave, signalling huge changes in the banks’ board of directors (BOD). On March 28, LienVietPostBank reported appointing a new chairman of the bank’s BOD as part of its annual meeting voting results. Specifically, Nguyen Dinh Thang, the bank’s former vice chairman of the BOD since April 2017 and member of the BOD since 2008, was elected as new chairman. Previously, before the annual general shareholders’ meeting (AGM), Nguyen Duc Huong, the bank’s former chairman, handed in his resignation because of “health issues.” Another bank expecting a change in the members of its BOD and Board of Supervisors (BOS) for the term of 2018-2022 was Kienlongbank. Specifically, the posts of chairman, vice chairman cum general director, and head of BOS will have to comply with the new amendment.
New amendment denies dual roles for heads of Cis: Likewise, shareholders at Nam A Bank voted Tran Ngoc Tam, the bank’s former deputy director, as the new general director. Luong Thi Cam Tu, the bank’s former general director, resigned from her post because of “personal reasons.” Additionally, executive posts at other commercial banks, including SeABank, ABBank, HDBank, and Viet A Bank will likely welcome new members in the coming time since an individual is not permitted to concurrently hold key roles in a commercial bank and an enterprise at the same time. According to Nguyen Tri Hieu, a Vietnamese financial analyst, the finance and banking sector should expect a whole new crop of bank leaders as a result of the new legal framework.
Law on Credit Institutions, No.47/2010/QH12 dated June 16, 2010, revised on November 20, 2017
Article 34: Cases banned from concurrently holding different posts
- Director general (director), deputy director general (deputy director) and holders of equivalent titles may not concurrently hold either of the following posts;
a/ Member of the board of directors or members’ council or control board of another credit institution, unless this institution is a subsidiary of the credit institution;
b/ Director general (director) or deputy general director (deputy director) of another enterprise.
New technological trends impact online business
Vietnam’s e-commerce growth for 2017 was estimated to be about 25% and that rate is predicted to be maintained this year. E-commerce transactions have penetrated multiple fields with the emergence of innovative technologies such as cloud computing, Big Data, social networks, Internet of Things (IoT), and blockchains. The E-Business Index 2018 released by the Vietnam E-Commerce Association (VECOM) on March 14 showed that Vietnam’s e-business index hit 37.7, higher than last year’s figure of 31.2.The growth rate of e-commerce transactions in 2017 compared to the previous year stood at 20-25%.
Online retail sees impressive growth: Online retail and marketing, tourism, and payments experienced the most impressive growth. For example, online retail revenues increased by 35%, while earnings from shipping services grew from 62% to 200%. The National Payment Corporation of Vietnam (NAPAS) reported that in 2017 online transactions using domestic cards rose by nearly 50% in volume and 75% in value year-on-year. Several affiliated marketing companies posted a growth of 100-200%. According to the 2016 hotel survey conducted by Grant Thornton, bookings through online travel agents (OTA) accounted for 20% of all income from reservations. From the results of a 2017 survey by VECOM, the rate of reservations via online travel agents increased by more than 30%, pushing online tourism earnings up by more than 50%. According to the statistics for Vietnam in 2017, there are 53 million Internet subscribers in Vietnam and the figure is forecast to hit 59 million by 2020. Experts say that cloud computing, Big Data, and mobile phones have made a huge impact on Vietnam’s e-commerce. A further impact is expected from other dominant technologies such as artificial intelligence, Internet of Things (IoT), virtual reality (VR),andblockchains, which will affect e-commerce this year and in the following years. The development of new technologies has accelerated the establishment of various types of online business and poses a number of challenges related to healthy competition and consumer protection.
Impact of new technological trends: Sharing the view on the impact of new technological trends in e-commerce at the Vietnam Online Business Forum (VOBF), Ms Dang Thuy Ha, director of Consumer Behaviour Research at Nielsen Vietnam, said 14 technological advancements such as Artificial Intelligence, Big Data, and virtual reality (VR) will become ever more widespread and have an impact on the business activities of enterprises. Mr Ha noted that technological advancements have affected users and e-commerce activities in Vietnam, and trends such as the sharing economy, VR,Big Data, and cashless payment are projected to become pervasive in the near future. Revenues from the sharing economy are predicted to reach US$300 billion by 2025 and nearly 4 billion people worldwide are to subscribe to the Internet by 2020. About 30% of global retail sales will be conducted via software applications or computers. Experts say cashless payment systems are a dominant trend that has developed rapidly over the past two years. In addition, the impacts from activities of transport service providers such as Uber and Grab have popularised the concept of a sharing economy in Vietnam. However, like other nations, Vietnam has encountered difficulties in managing the new economic model. Experts have emphasized the need to research the benefits of the sharing economy model and build proper policies to encourage businesses and other firms to provide services under the model based on the principle of improving socio-economic efficiency. Another trend to attract the attention of e-commerce businesses is the emergence of mega corporations. A representative from Amazon said that the global retail market has shown a trend of moving toward a dependence on e-commerce. According to the statistics from research companies, e-commerce earned revenues of US$2 trillion in 2016 and will expand by more than 100% in the next four years. This is a significant change in the retail sector while the sector’s growth rate stands at 26%. Trans-border sales have developed rapidly with a growth rate of 20-30% predicted for the next few years. Following this trend, Amazon is investing in helping sellers gain access to global buyers in the most efficient manner. A representative from the Import-Export Department under the Ministry of Industry and Trade says the combination of e-commerce and import-export activities are a vital factor for businesses in the current context. The representative emphasizes the need to have global businesses like Amazon support export activities so that businesses will pay more attention to the application and benefits of e-commerce. Experts say the potential for e-commerce in Vietnam is great but will require joint efforts for further development. They note that in the current environment of Vietnam’s comprehensive integration, the recent signing of several free trade agreements (FTAs) such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will have a huge impact on e-commerce activities. However, the legal foundation for e-commerce activities remains limited, posing a number of challenges to many nations, including those at a higher level of development.
Investors happy about new cut in corporate income tax
Source: Vietnam Net
The stock market has shown positive reactions to the disclosure of the government’s intention to slash the corporate income tax (CIT) from 20-22 percent to 15-17 percent. Prime Minister Nguyen Xuan Phuc made the announcement at a recent event, saying the move will help make Vietnam one of the most competitive economies in the region. However, details about the cut are still unclear. The HCM City Securities Company (HSC), in its latest report, commented that small and medium enterprises (SMEs) could be the first beneficiaries, recalling a series of ministries’ moves in the past. Phuc’s announcement coincides with information that the Ministry of Finance (MOF) in August 2017 suggested slashing the CIT rate to 15 percent for micro enterprises and 17 percent for SMEs. Micro enterprises have annual turnover of less than VND3 billion. SMEs refer to enterprises with no more than 200 workers with an insurance policy and annual revenue of VND3-50 billion. The draft decision on tax reduction compiled by MOF says that the preferential CIT rates of 15-17 percent will not be applied to businesses organized under the parent-subsidiary model in which holding companies hold 25 percent or more shares of subsidiaries. HSC believes that the tax reduction will not have a big impact on the tax collections, but will bring significant economic benefits. HSC says SMEs account for 95-97 percent of total number of registered businesses, but the SMEs with revenue of less than VND50 billion only pay VND7 trillion in CIT annually. The figure is equal to 3.5 percent of total revenue from CIT collections and 0.8 percent of total revenue from tax collections. The stock market bounced back after the announcement as investors hope large corporations will also enjoy the tax reduction. “Investors do not question the sphere of tax adjustment, believing that sooner or later, it will be applied to all kinds of businesses,” HSC commented. Nguyen Duc Thanh, general director of Tanimexco, said businesses will have more capital for re-investment, and will be able to reduce the number of loans. Tanimexco has to pay VND10 billion in CIT a year, and if the company has a 15-17 percent CIT rate, it would save VND2-3 billion a year. Nguyen Tri Hieu, a finance expert, commented that the tax reduction, if applied only to SMEs, will be significant. He thinks it would be better to apply to all businesses, including large corporations.
Casinos need at least $1b investment: draft law
Strategic investors in tourism-casino complex will have to commit an investment of some US$1 billion for a casino project. This is mentioned in the latest draft on law on special administrative-economic zones in Van Don, Bac Van Phong and Phu Quoc. The new regulation has been added to the draft law to ensure that investors are capable of spending money to implement the casino project, reports baodautu.vn. According to the draft law, strategic investors who invest in service, tourism and entertainment-casino complex should have a minimum investment capital scale of VND44 trillion ($1.92 billion), half of which must be paid for the casino project. The disbursement will be conducted following a committed process, but not exceeding eight years of the investment registration certificate being issued. The draft law also adds several criteria for strategic investors on capital, disbursement as well as regulations relevant to financial capacity and the investors’ administration. They will have to commit in written for application and transfer of new and advanced technology, training and human resource development. According to the Ministry of Planning and Investment — the architect of the draft law — after reviewing the law, it will supplement jobs with business conditions in the special administrative-economic zones instead of the 108 areas in the previous draft law. However, the investment and business procedures will be adjusted for simplicity and transparency. The draft law focuses on contents to evaluate projects and shorten the time of granting investment certificate. As per the draft, chairmen of the special administrative-economic zones will have the right to evaluate and grant investment registration certificates for projects. Only casino projects will be decided by the National Assembly. The draft law is aimed at creating a legal framework for the development of three special administrative-economic units, including Bac Van Phong in central coatal Khanh Hoa Province, Van Don in the northern province of Quang Ninh and Phu Quoc in the southern province of Kien Giang. Bac Van Phong is estimated to need more than VND100 trillion to develop its infrastructure by 2025. The zone will focus on developing marine transport, logistics, trade and financial services as well as tourism, healthcare, education services and hi-tech industries. Van Don is expected to become a green coastal city and an example of climate change response in the region. Quang Ninh has employed Arcadis & Callison RTKL Company, which has branches in the United States, the Netherlands and some other countries, to prepare the master plan. Meanwhile, Phu Quoc is expected to become a modern tourism and resort hub as well as a hub for trade, exhibitions and meetings, with international competitiveness targeting global reach.
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