Vietnam - Viet Nam to amend int'l trade decree

Viet Nam's Ministry of Industry and Trade plans to amend a governmental decree regulating the operation of representative offices and branches of international companies in Viet Nam.

Dr Pham Sy Chung, acting director of the ministry's Planning Department, said that Decree 72ND-CP issued in 2006 would be amended to reflect the country's World Trade Organisation's commitments. New changes would also help the representative offices and branches of international companies.

Chung said the representative offices and branches, of which there are 2,378 in HCM City and 1,495 in Ha Noi, contributed 17.2 per cent of national export turnover last year, assisting domestic businesses in importing technology and equipment, and creating jobs for 10,600 local residents.

However, many representative offices and branches have violated regulations that cover operations. Many of them have not submitted yearly reports or informed local authorities of changes in foreign personnel. They have also had unclear taxation reports, he said.

Speaking at a workshop last week in Ho Chi Minh City held by EU-Viet Nam MUTRAP III, a multilateral trade assistance project in its third phase to assist Viet Nam in WTO commitment, Pham Dinh Thuong recommended that the decree be amended soon.

Thuong, deputy director of the ministry's Legal Department, said the decree changes would enhance legal transparency.

"These new regulations will be consistent with international commitments and the development of the country's economy, as well as create a fair business environment," he said.

The Department of Industry and Trade of HCM City, which has the highest number of representative offices and branches in the country, wanted new rules of the establishment and scale of operations, as well as foreign employees, rights and responsibilities of head personnel, and office locations.

The department said it had faced difficulties in managing the representative offices and branches.

International experts said any changes should be considered carefully and fairly as it relates to investors in the country.

"Viet Nam is open for business, so what we don't want to do is make it difficult to do business," said John J Downes, an expert with MUTRAP III. "We should create fair business rules to ensure foreign businesses aren't behaving unfairly," he emphasised.

Many foreign representatives at the workshop were concerned about the limitation of five foreigners and 10 local Vietnamese employees at each representative office, a provision that would be added to the decree.

Chung said the existing decree did not regulate the number of personnel, which had led to the over-recruitment of foreign staff, especially by companies from neighbouring countries.

Several offices even have 200-300 foreign employees.

"The exact number for each representative office will be considered. But there will certainly be a limitation becauses several representative offices that have violated rules have negatively affected the legitimate trade of other businesses," Chung said.

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