Dialogue With Theme “Administrative Reform: A Key Role in EVFTA Implementation”

On June 30th, in Hanoi, European Chamber of Commerce in Vietnam (“EuroCham”) and Prime Minister’s Advisory Council for Administrative Procedure Reform held the Dialogue. With theme “Administrative Reform: A Key Role in EVFTA Implementation”, the Dialogue is to discuss administrative reform ahead of the implementation of the EU-Vietnam Free Trade Agreement (“EVFTA”) which enters into force on August 1st. The Dialogue brought together many ministries and sectors; EuroCham; diplomatic missions; journalists; numerous representatives of the business community, … to discuss how administrative reform can help to unlock the full potential of the EVFTA. Specially, the event also featured the launch of EuroCham’s 12th Whitebook publication.

The successful implementation of EVFTA in 2020 is very important. In order for EVFTA to come into effect, Vietnamese competent authorities, Europe and enterprises needed to continue implementing solutions to ensure the effectiveness of implementation, including the establishment of EVFTA Business Council for reviewing the challenges in the implementation process and coordinating. The more important thing is Vietnam’s efforts to implement administrative reforms, creating an open investment environment for enterprises.

At the event, 17 difficulty groups of European enterprises have been stated (pharmaceutical, medical equipment, intellectual property, labor, law enforcement, food, agriculture, automotive industry, motorbike, digital technology, tax and transfer pricing, tourism-hotel …) related to field of state management and settlement of Ministries, sectors and authorities … Most of the reflections and recommendations of the enterprises are from the practice of production and business activities.

In fact, Vietnam has made many administrative procedure reforms, from processing dossiers and documents, handling manual works to processing dossier and documents, solving works on electronic, non-paper environment; continue to cut administrative procedures, business conditions, products and goods subject to specialized inspection. The resolution of administrative procedures under the “One-door” and “One-stop-shop” mechanism has received many positive feedbacks.

EuroCham has developed clear recommendations, orientations and analysis to complete the legal framework in the context of EVFTA implementation in a very wide range. They are issues related to case law, competition, commercial mediation activities, dialogues at the Court, the right to appeal, the validity of arbitral awards, commercial mediation, antitrust, public-private partnership (PPP), real estate, “conditional” business.

One of the remarkable proposals given is the proposal to reduce many taxes this year. Specifically, EuroCham proposed reducing by 50% for corporate income tax, reducing by 50% of personal income tax, reducing by 50% for VAT and reducing by 50% compulsory social security contributions. Remarkably, relating to reducing by 50% of registration tax-fee of domestic assembled cars, Whitebook requests “the removal of a discriminatory taxation reduction applying only to locally assembled vehicles, and recommend applying it to all automotive assemblers, importers and dealers of new vehicles”. In addition to above proposals, EuroCham also requests more stimulus packages that could bolster the economy after Covid-19.

Regarding to Business Confidence Index BCI, inspite of reduction, EuroCham representative predicted this index will recover soon. Regarding mergers and acquisitions, M&A is also expected to continue to grow more quickly in 2020, especially in the context of the EVFTA Agreement ratified.

The EuroCham’s Whitebook publication, the annual report of EuroCham, is also launched which summarises the important issues for the business activities of 17 sector committees under EuroCham, together with recommendations that the Vietnamese Government can implement to improve the domestic business environment and enhance trade and investment with the EU.

Whitebook 2020 of Trade & Investment issues implemented by EuroCham, developed recommendations to complete the legal framework and policies to implement the EVFTA Agreement.

The publication of the Whitebook is to continue promoting positive progress in administrative reform, streamlining business conditions, strengthening the business and investment enviroment, sharing the goal of attracting Foreign Direct Investment (FDI) with Vietnam Government. If the recommendations of EuroCham are thoroughly considered by the Government, more and more European businesses will invest in the country in the future. This important publication reflects the sincere wishes of the European business community in supporting the Government’s reform program and helping Vietnam more attractive, more competitive and more friendly towards enterprises.

Vietnam acknowledged EuroCham’s efforts in the launch of the publication and appreciated the focus of this year’s Whitepaper on administrative reform – an essential process for the smooth implementation of the EVFTA. This publication has reflected the desires of the European business community to promote the improvement of the business environment in Vietnam.