Vietnam - News and Regulations

Personal income tax exemption “FOREVER”for International NGOs in Vietnam (INGO) expatriates

According to Committee for Foreign NGO Affairs (Comingo) the Prime Minister of the Socialist Republic of Vietnam has decided to grant the exemption of personal income tax (PIT) to foreigners employed and working at Representative and Project offices of INGOs in Vietnam.

This exemption shall be considered on the following conditions:

- As from 1st of January 2009, all income (salaries, allowance subsidies and other benefits) paid to foreign employees of INGOs must be proven as stemming from sources outside Vietnam and not from project/programme budget.

- INGO foreign employees deemed eligible to PIT exemption include expatriates and Vietnamese individuals with a foreign passport.

- Terms of exemption shall be defined in an agreement which is duration - based, and agreed mutually by the individual INGOs and the Government of Vietnam of the Committee for Foreign NGO Affairs upon the Government's authorization.

The Ministry of Finance of Vietnam shall provide necessary instructions accordingly and INGOs will be notified in due course.

For the time being, if you have any question, do not hesitate to contact the People's Aid Coordination Committee (telephone: 04-38436936(ext:206), fax: 04-38452007) or email: info@paccom.org.vn

INSURANCE - Insurance companies cooperate with banks

Only after short time of cooperation between insurance companies and banks, banks now have become a potential distribution channel of insurance products. Insurance companies are continuously developing bancassurance and expect that this will be the key product in the next two-three years.

Insurance companies are also trying to turn clients of banks into clients of insurance companies.

After signing a cooperation deal with ABBANK on selling insurance products to key staff of corporate clients who are depositing money in the bank, Prevoir Vietnam has signed another cooperation contract on insuring secured consumer borrowers at Asian Commercial Bank (ACB). Accordingly, in case consumer borrowers unfortunately meet risks in the scope of insurance, Prevoir Vietnam will help them to pay the remaining debts to ACB. Currently, over 12,000 clients of ACB have used lending and deposit products insured by Prevoir Vietnam. A representative from Prevoir Vietnam said that in the near future, the company would continue cooperating with banks to develop independent insurance products.

On November 17, AIA Vietnam and VietBank also signed a cooperation agreement in order to supply and manage life insurance products for clients. The two sides will cooperate together in distributing life insurance products to the existing and potential clients of VietBank.

From 2009, Prudential Vietnam has considered cooperating with banks as a development strategy of the company. Currently, Prudential has developed bancassurance products in HCM City, Hanoi through branches of partner banks. At present, Prudential is cooperating with four banks, ABBank, Standard Chartered, Agribank and Vietcombank in order to distribute retail sale insurance products through branches of those banks. Prudential now continues working with many potential partner banks in order to strike new cooperation deals.

Taking most advantage of clients in the banking system of Bank for Investment and Development of Vietnam (Bidv), Bidv Insurance Co (BIC) has launched insurance products for Visa credit card holders of Vietnam-Russia Joint Venture Bank (VRB). Pham Quang Tung, director of BIC, said that the company would continue developing more bancassurance products in order to satisfy demand for finance and health package products of clients. BIC is also expanding its cooperation with other banks to take most advantage of potential from different banks in developing products and taking care of clients.

Talking about the trend of cooperating between insurance businesses and banks, a representative from Prudential said that with the development of banks, the bancassurance model in Vietnam will develop as in other Asian countries.DTCHK

BANKING - VietinBank targets $1b inward remittance in 2009

Vietnam Bank for Industry and Trade (VietinBank) is launching online VietinBank eRemit remittance transfer product, creating facilities for transferring money from the US to Vietnam via Internet.

According to the State Bank of Vietnam (SBV), this year's inward remittance could reach $6.8 billion, marking a satisfactory figure against the forecast figure of $5.8-6 billion in early this year but still lower than the figure of $7.2 billion of last year.

In the common downturn tendency, the remittance revenue of many banks also fell. However, some banks including VietinBank still set a higher target of remittance compared to previous year.

VietinBank's head of Remittance Service Department said that this year, VietinBank plans to reach $1 billion of remittance, accounting for some 15 percent of the market share. In comparison with last year's figure of $900 million, the bank accounted for 12 percent market share.

During the first nine months this year, VietinBank's remittance revenue achieved $700 million. Traditionally, the volume of inward remittance often increases by the end of the year because overseas Vietnamese send money to their relatives in Vietnam for Tet festival (Lunar New Year). Therefore, the bank's remittance target of $1 billion is very feasible.

VietinBank is confident with this target because it has many advantages such as wide network, plentiful foreign currency sources, and many foreign partner banks to set up a direct money transference channel to Vietnam. At the same time, VietinBank has also strived to offer suitable products with each market such as money delivery service via mobile phone in Korean market and online eRemit money delivery service in the US market.

Particularly, the VietinBank's online eRemit service could bring many conveniences for customers. With this service, customers can access website http://vietinbank.vn at home to deliver money to receivers in Vietnam in anytime and at anywhere without going to the bank.

The VietinBank's online eRemit service includes two main products namely Direct Deposit applying for receivers having ATM account at VietinBank and Cash Pickup applying for receivers without account at VietinBank.

At present, VietinBank has 800 branches and transaction sites nationwide. This will be very convenient for receivers. As for customers with ATM accounts, receivers can receive money during 24h/24h and seven days/week at any ATM machine of VietinBank.

VietinBank's remittance service department said that with transaction worth $3,000 (the regulated limit for one delivery) the fee will be only $10 for each transaction. Customers are allowed to deliver a total amount of $15,000 a month and not exceed 10 times a month.

The registration procedures to use VietinBank eRemit service are very simple. Depositors just access VietinBank's website, select using online VietinBank eRemit remittance delivery service and finish simple proceedings.

Currently, VietinBank's eRemit service is carrying out for money delivery from the US to Vietnam. VietinBank is studying to develop this service to other markets such as Canada, Australia and Germany in the near future.

Along with online remittance delivery product, VietinBank is now launching other services like WellsFargo Express Send from the US to Vietnam. The product has come on account of the cooperation between VietinBank and the US-based WellsFargo Bank with the fee of only $8 per transaction. Customer living in the US can send money up to $300 per day and they are able to receive money within that date. WellsFargo Bank has over 3,000 transaction sites throughout the US so WellsFargo Express Send service is very convenient.

In order to meet money delivery demands of customers in the US, VietinBank is building online cooperation with many big banks in 20 countries and territories such as Germany, France, the UK, Switzerland, Sweden, Russia, Australia, Middle East areas, Korea, Japan, Taiwan and Malaysia.

VietinBank is an official and prestigious agent of Western Union global express money delivery service with some 10 percent remittance revenue of VietinBank.DT

RENEWABLE ENERGY - Energy security challenge-wind power and difficult start

The world now has over 80 nations and territories using wind power energy. Vietnam has only the five-turbine wind power project of Renewable Energy Joint Stock Co (REVN) in Tuy Phong Dist, Binh Thuan province.

According to World Bank, many provinces nationwide receive resources to generate wind power plants. From southern Binh Thuan to Ninh Thuan's Thuan Bac Dist (bordering Khanh Hoa province's Cam Ranh) are ideal locations to install wind power turbines. In these areas, the wind speed reaches over seven metres per second (m/s) and there are 60-100 metre high sand hills compared sea surface.

To date, Binh Thuan provincial People's Committee has approved nine investors to carry out 12 wind power plants in the province. After one investor asked for withdrawal, the province has remaining 10 projects with total registered capacity of 1,511 MW, using about 13,000 hectares of land. Currently, the investors have built 11 wind measurement pillars.

Five turbines of REVN's project put 7.5MW to the national grid. The number will be 13 turbines in 2010 and 20 turbines in 2015 with a total capacity of 120 MW. Some other projects include the 50 MW wind power project of Renewable Energy Asia JSC in Bac Binh Dist of Binh Thuan province, another 200 MW plant of Saigon-Binh Thuan Electricity Plant Investment and Development JSC, and one 50MW plant of Thuan Binh Co in Tuy Phong Dist.

Director of Binh Thuan provincial Department of Industry and Trade, Tran Van Nhut said that the government gave special priorities for wind power field by issuing many preferential policies for investors. An official from the province's Energy Service assessed, the operation starting of five turbines of REVN"s wind power plant abolished the doubt on the success of wind power projects in Vietnam and initially built up the experiences in technology, installation skill and management for following projects.

The big difficulty in developing wind power is the equipment supply. All turbines of REVN in Tuy Phong Dist must be imported from Germany and cost much because Vietnam could not produce the technical equipments requiring high accuracy. Total expense of REVN for purchasing the five turbines is over 817 billion dong (according to the market prices of 2008). Even REVN had to purchase the over-500 tonne cranes to install the turbines.

Another project investor in Tuy Phong said that the investment cost for wind power is very high compared with that for hydropower, thermo-power and gas power. While the hydropower investment is $1,300 per KW, the investment for wind power is $2,000 per KW. Therefore, the price of 1 kWh of wind power will be no less than $cent 10 per KWh (about 2,000 dong per kWh). Also, wind power investors had to hire experts of equipment suppliers to install and transfer generating and repairing techniques.

Tran Van Nhut worried, there are many wind power projects asking for Binh Thuan governance's approval but the human resource training here has no progress. An investor said that wind power is a totally new field so banks still are hesitant in lending. The tardiness of wind power project is partially for capital shortage.

Wind power projects of Binh Thuan and Ninh Thuan province now are mainly located in black sand areas (titanium) so the majority of projects must be controlled closely while waiting for the titanium reserve exploration and mining.

While Ministry of Natural Resources and Environment does not yet finish the titanium survey in two provinces, local governances will be disallowed to license new wind power projects, according to prime minister's order.VNS

TRANSPORTATION/RAILWAY - Jica funds Ben Thanh centre railway-station project

HCM City People's Committee has recently approved the plan of using non-refundable capital source of Japan International Cooperation Agency (Jica) to build feasible study for Ben Thanh centre railway station project.

The Ben Thanh centre railway station is under the Ben Thanh-Suoi Tien inner-city railway route project.

PMU of urban railway project is responsible for determining the content and work scope of advisory services and responsibility regulations of consultant, in close coordination with consulting units of Jica to complete the feasible study report on the project to submit to the authorities for approval.

Ben Thanh centre railway station is a complex function, serving to connect the urban railway lines with multiple modes of passenger transportation, especially buses, combined with the urban services and diversified commerce in the city.DT

TELECOMMUNICATION - Ministry says difficult to manage pre-paid subscribers

The Ministry of Information and Communications yesterday re-affirmed its failure in managing pre-paid subscribers despite issuing a regulation requiring personal information declaration last year, as about half of the country's pre-paid subscribers have supplied false information.

Minister of Information arid Communications Le Doan Hop said at the question and answer session of the 12th National Assembly meeting in Hanoi yesterday that the management of pre-paid subscribers was facing difficulties in spite of the regulation.

According to Hop, Vietnam has 119 million phone numbers, with about four million post-paid mobile subscribers and 16 million landline users. The rest are pre-paid subscribers. Meanwhile, at least 30 percent of the pre-paid accounts are virtual users.

"To manage pre-paid subscribers, the Ministry of Public Security and the Ministry of Foreign Affair must complete e-identify cards and e-passport numbers. With these digital numbers, the ministries can manage pre-paid subscribers;' Hop suggested.

At the question and answer session, Le Nhu Tien, a deputy from Quang Ninh, raised the question on how to reduce the unhealthy competition and prevent a monopoly among telcos.

Hop said his ministry deeply understood that too many telecom providers could lead to a waste of digital resources. However, if there were few companies, it could result in monopoly.

According to Hop, Vietnam has seven telecom providers but the country's telecom industry is still in the early stages of development.

Hop admitted to' unhealthy competition among the telcos like unlawful promotions and undercutting.

"To choke off the phenomenon, we are drafting a regulation to punish any telcos who are found to engage in unhealthy competition;' Hop said.

In answering another NA deputy, Hop said Vietnam had 42,000 BTS, a modest number compared to other countries. Viettel has 16,000 BTS, MobiFone has 11,000andVinaphone 10,000. The rest are divided among the other telcos.

Hop forecast that the number of BTS would rapidly increase because Vietnam was building a.3G network.

According to Hop, his ministry this year has examined 25,000 BTS and found only 117 violations, such as poor construction quality and building without a license.SGTD

Telecommunication - Huawei Group provides equipment for 3G network of EVN Telecom

China-based Huawei Group and Electricity of Vietnam (EVN)'s Telecommunication Co (EVN Telecom) recently signed a contract whereby Huawei Group has pledged to supply equipments and solutions for 3G network building project of EVN Telecom.

Accordingly, Huawei Group will focus its human resource and equipments for timely fulfilment of the project so that EVN Telecom is able to provide 3G mobile information services with the best quality.dt