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VBF. V ietnam B usiness F orum Sin Foong Wong IFC Country Manager June 2007. Agenda. Overview of VBF Mandate Structure and operation Participants Key policy areas/themes VBF May 30, 2007- Issues and Resolutions Going forward. Overview of VBF.

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Sin Foong Wong

IFC Country Manager

June 2007

  • Overview of VBF
  • Mandate
  • Structure and operation
  • Participants
  • Key policy areas/themes
  • VBF May 30, 2007- Issues and Resolutions
  • Going forward
overview of vbf
Overview of VBF
  • Background: established in 1997 as a result of the Vietnam Consultative Group (CG) Meeting in Tokyo
  • Objectives:
    • To improve the investment and business environment in Vietnam
    • To strengthen the role and voice of the private sector in Vietnam
  • Method: to promote ongoing, structured policy dialogue between the business community and the Government
vbf structure
VBF structure

Vietnam Business Forum (VBF)

Consultative Group (CG)

World Bank (WB)

(Deputy) Prime Minister

International Finance Corporation


Ministry of Planning & Investment


VBF Secretariat

Inter-Ministerial Team (IMT)

M&D Working Group

Banking Working Group

Business Associations

State Bank of Vietnam (SBV)

Capital Markets Working Group

Ministry of Finance (MOF) & SSC



Infrastructure Working Group

Note: Working relationship



Tourism Working Group

Vietnam National Administration of Tourism (VNAT)

main business groups participating in the vbf
Main business groups participating in the VBF

Business Groups actively participating in the VBF activities:


  • Can Tho Business Association (CBA)
  • Association of Garment, Textile, Embroidery, and Knitting (AGTEK)
  • Hanoi Young Business Association (HBA)
  • HCMC Association for Young Entrepreneurs (YBA)
  • Hanoi Union of Association of Industry and Commerce (HUAIC)
  • Vietnam Association of Financiers (VAFI)
  • Vietnam Chamber of Commerce and Industry (VCCI)
  • HCMC Computer Association (HCA)
  • HCMC Food and Foodstuff Processing Association


  • Eurocham
  • Auscham
  • Amcham
  • Singapore Business Group (SBG)
  • Canadian Chamber of Commerce (CanCham)
  • Korean Chamber of Commerce and Industry (KORCHAM)
  • Hongkong Business Association (HKBAV)
  • Japan Business Association (JBA)
key areas themes
Improve tax regime

Streamline registration/licensing/procedures

Unify investment

incentives and protections

More equitable access to land

and land use rights

Broad collaboration in a range of initiatives toward sustainable tourism development

Improve banking system and develop sustainable capital markets

Streamline legislative regime in infrastructure development

Enhance capabilities and private participation in 3 prioritized sectors: port, power and telecoms

Enhance skill labor quality and supply along with labor relations

Reduce obstacles associated with labour requirements and licensing

Key areas/themes
main recent results
Main recent results
  • Unified legal framework for domestic and foreign investment and business.
  • Newly-established legal framework for BOT projects (BOT Decree issued in May 2007).
  • Clearer and more transparent land clearance and compensation procedures (Decree 84 issued in May 2007).
  • Detailed guidelines for implementing Decree 22 providing more opened environment for foreign banks.
  • Close collaboration of the Vietnam National Administration of Tourism and the private sector in tourism development strategy and tourism marketing and promotion initiatives.
  • Improved port handling capabilities to catch up with cargo and economic growth demands.
vbf may 30 business s perception on business environment
VBF May 30 Business’sPerception on Business Environment
  • WTO accession => Business legislation being harmonized with international practices
  • More level playing field for all enterprises regardless of ownership

How Vietnam should respond to and capitalise on its recent acession to the WTO?

  • Implementing the WTO commitments in a timely manner
  • Closer co-ordination between the government and business associations to adapt to the new rules and tap into the WTO benefits
  • Diseminating comprehensive information on WTO to frontline goverment officials to ensure proper and uniform implementation
  • Encouraging private sector participation in educaton and training to adress the shortage of human resources
vbf may 30 issues resolutions banking and capital market
VBF May 30 – Issues & resolutionsBanking and Capital Market


  • Upgrading Vietnamese banking regulations in line with WTO and international practices.
  • Recognition and application of international laws to Vietnamese court system in addressing cross-border banking transactions.
  • Further liberalization of forex transactions.
  • Strengthening inter-ministerial co-ordination to ensure capital market development and macroeconomic stability.
  • Clarifying regulation on subscription rights; Role of securities companies in underwriting; and possibilities for private companies to issue corporate bonds.


  • Greater liberalization along with market developments to be granted. Detailed guidelines for implementation of Decree 160 on forex transactions to be consulted and issued in Summer 07.
  • Need of strong co-ordination between state agencies in development and supervision of capital markets was noted. Establishment of a supervisory body comprised of the SBV and the MOF, including the SSC is under consideration.
  • Regulations on bond issuance for private companies are available (Decree 52); Credit rating agencies, a separate “market” for issuing bond and an electronic portal for bond trading connecting to the ASEAN bond market are under establishment process.
vbf may 30 issues resolutions implementation of vietnam s wto commitments
VBF May 30 – Issues & resolutionsImplementation of Vietnam’s WTO commitments


  • Measures to offset subsidy removal in export manufacturing.
  • Use of WTO commitments as the floor, or minimum standard.
  • Detailed guidelines to implement the WTO commitments.
  • Clarification on the licensing for foreign trade branches, criteria distinguishing between foreign and local companies.
  • Impediment to import, export and distribution: “Economic Need Test” for foreign invested retailers, cumbersome re-registration requirements for representative offices.


  • Measures to offset subsidy removal are under consideration.
  • Vietnam’s rules will prevail if they are more favorable than WTO commitments.
  • Circular to guide Decree 23 on FDI Enterprises trading and the Decree to guide the implementation of certain WTO commitments to be finalized and issued soon.
  • Existing enterprises only need to revise import/export rights if needed and re-register them with the MPI.
  • Commercial presence in branch form in certain areas e.g. distribution services, advertising, and logistics is no longer allowed.
vbf may 30 issues resolutions implementation of investment and enterprise laws
VBF May 30 – Issues & resolutionsImplementation ofInvestment and Enterprise Laws


  • Uniform guidelines from the central government to provinces to ensure the consistent application of the laws nationwide.
  • Further guidance or clarification to facilitate the implementation of the laws:
    • Conditions applicable to projects in conditional business sectors.
    • Sales of shares in local companies to foreign investors.
    • Conversion of BCC into JVs or Joint stock companies.
    • Procedures for transferring shares or transferring a project.
    • Practicing certificate, company name, criteria for director, language used in official documents etc.


  • Difficulties of businesses in implementation of the two laws were acknowledged.
  • A new Decree addressing the mentioned problems is under consultation and to be issued soon.
  • BCC conversion is not covered by the new Decree as related provisions in the EL and IL suffice
  • Specific conditions for certain areas of investment to be subject to specific laws and regulations governing those areas.
vbf may 30 issues resolutions others
VBF May 30 – Issues & resolutionsOthers


  • Port
  • Lack of sea port capacity to cope with increasing demand in the next few years post WTO entry.
  • Inadequate development of in-land infrastructure & channel systems.
  • Delay of the ODA-funded terminal project at Cai Mep.

2. Tourism

  • Inadequate transportation and accommodation facilities to meet increasing demand and quality standard.
  • Delays in planning and project approvals.
  • Bad practices, including broken contracts.


  • Port
  • A number of licenses be granted to port developers recently.
  • Handling capacity in several ports have been improved.
  • Port Master Plan is under review to reflect market changes and be submitted for approval in July.
  • An inter-ministerial team supervisory body to be set up to identify shortfall and solutions for port planning.

2. Tourism

  • Good co-operation between VNAT and TWG to be continually fostered.
  • Implementation of Tourism Master Plan to be discussed with TWG once the plan is approved.
vbf may 30 issues resolutions others1
VBF May 30 – Issues & resolutionsOthers


3. Mining

  • Decision 67 is to encourage the development of domestic processing capabilities.
  • Continued dialogue with the Government in mining issues to be held.


3. Mining

  • Reconsideration of Decision 67 on export tariff of minerals
  • More encouragement of FDI in the mining sector
going forward
Going forward
  • Include fully domestic and regional investors
  • Improve position paper quality
  • Diversify forms of co-operation with the government, not just closed door meetings (e.g. workshops, surveys, research, publication)
  • Form Education & Training working group
  • Strengthen communication activities by finalizing the construction of new VBF Website
  • Coordinate closely with donor programs and CG agenda to implement necessary reforms


C/o: IFC

63 Ly Thai To


Tel: +84 4 9342282

Fax: +84 4 9342289


Contact person

Pham Lien Anh, VBF Secretariat