Ho Chi Minh City "removes difficulties" for Korean enterprises

At the local level, the friendly relationship between Ho Chi Minh City and Korea has also achieved many successes. Currently, Korea is one of the leading partners in trade, investment and tourism, with a community of more than 80,000 people and more than 2,000 Korean enterprises living and working in the city. This is an important resource contributing to the city's development and a "bridge" to strengthen the connection between the two countries.

Ho Chi Minh City has implemented many solutions to implement Resolution No. 31-NQ/TW dated December 30, 2022 of the Politburo on development directions and tasks until 2030, with a vision to 2045, Resolution No. 98/2023/QH15 dated June 24, 2023 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City and supporting businesses, attracting investment, and restoring the city's economic growth after the Covid-19 pandemic. The city government always makes every effort to ensure a stable socio-political environment, as well as create favorable conditions for foreign-invested enterprises in general, and Korean enterprises in particular, to operate stably, long-term and effectively in the locality.

“We consider the success of businesses as our success and that is the driving force for the city to continuously improve the investment environment, accompanying the business community because we understand that “if you want to go fast, go alone, if you want to go far, go together”. Ho Chi Minh City cannot develop further if it only relies on its strengths without strengthening solidarity and regional connectivity” – Vice Chairman Vo Van Hoan emphasized.

Mr. Vo Van Hoan, Vice Chairman of Ho Chi Minh City People's Committee

Currently, Ho Chi Minh City has been implementing many solutions to support businesses, attract investment and restore economic growth. In addition, the city government always makes every effort to ensure a stable political and social environment and create favorable conditions for foreign businesses, especially Korean businesses, to operate stably, long-term and effectively.

On the Korean business side, Mr. Kim Nyoun Ho - Chairman of the Korean Chamber of Commerce in Vietnam (Kocham) pointed out the difficulties and obstacles that Korean businesses are facing in the process of investing and operating in Ho Chi Minh City. Thereby, he made recommendations and hoped to receive support from the Ho Chi Minh City People's Committee to improve the environment so that Korean businesses can operate more stably, effectively and sustainably in Vietnam.

First of all, the biggest problem that Korean businesses are facing is the VAT refund procedure. Delays in VAT refunds and temporary suspension of refunds for on-site exports have caused many impacts and losses to businesses, including large-scale businesses.

Although some businesses have received VAT refunds, there are also cases where large exporting businesses such as Samsung still face delays in refunds. A quick refund processing policy is an important factor for businesses to be able to flexibly rotate capital and expand investment. Therefore, the city government needs to improve this process soon.

In addition, the issue of suspending VAT refunds related to “on-site export” activities for raw material suppliers is posing a great risk to the survival of many businesses. Currently, supporting enterprises in Vietnam are operating by paying 8-10% VAT when importing raw materials. After processing, they will supply to exporting enterprises with a VAT rate of 0%.

In addition, Ho Chi Minh City needs to quickly resolve the issue of changing the standards for applying port infrastructure fees. Currently, for the purpose of production and export, many businesses are operating in the form of temporary import of various packaging materials for production and then re-export. These packaging materials are essential factors in the process of transiting goods, distributing finished products, and are indispensable main raw materials in production activities.

However, the Ho Chi Minh City Inland Waterways Port Authority has decided to apply a higher fee standard than before and require businesses to pay the difference. This has caused a great burden on businesses’ production and investment plans, and has also led to concerns about reduced competitiveness due to increased export costs.

The remaining problem is the establishment of an integrated administrative management system for foreign investors. Currently, when carrying out investment licensing procedures and administrative procedures in Vietnam, investors need to receive approval from many different ministries and branches. The interconnection between the systems of ministries and branches is not really effective, leading to frequent delays in administrative procedures. Because the documents and procedures of each ministry and branch are different, it causes great difficulties for investors. This can also negatively affect Vietnam's investment environment.

Mr. Kim Nyoun Ho – Chairman of the Korean Chamber of Commerce in Vietnam (Kocham)

In response to these recommendations, Mr. Vo Van Hoan - Vice Chairman of Ho Chi Minh City People's Committee affirmed that, on behalf of the city government, he acknowledged all the difficulties and problems of the Korean business community and proposed that the city could further improve to truly be an attractive and trustworthy destination for Korean investors in particular, and foreign investors in general.

Investment projects of Korean enterprises do not stop at accessing the Vietnamese market, but also aim at a more meaningful goal of “cooperation for mutual development”. The consistent viewpoint of the city government is to always support and create all favorable conditions for foreign enterprises, including Korean enterprises, to produce and do business effectively, safely and sustainably.

“In particular, I encourage the Korean business community not only to promote investment and trade cooperation, but also to play a pioneering role in promoting the overall cooperative relationship between Vietnam, Ho Chi Minh City and Korea. On the part of the city government, we are ready to discuss and welcome businesses to contribute practical solutions and initiatives for the development of Ho Chi Minh City in particular and Vietnam in general,” Vice Chairman Vo Van Hoan concluded.

Source: https://thoibaonganhang.vn/tp-ho-chi-minh-go-kho-cho-doanh-nghiep-han-quoc-161812.html