European distributors quitting Vietnam

European companies are beset by the twists and turns of Vietnamese regulations

This was announced by Tomaso Andreatta, vice chairman of European Chamber of Commerce in Vietnam (EuroCham), at the Vietnam Business Forum (VBF) 2017 co-chaired by Minister of Planning and Investment Nguyen Chi Dung, IFC senior country manager for Vietnam, Laos, and Cambodia Kyle F. Kelhofer, chairman of Vietnam Chamber of Commerce and Industry (VCCI) and VBF co-chairman Vu Tien Loc, and VBF co-chairman Hirohide Sagara. The forum took place this morning at Lotte Hotel in Hanoi.

Andreatta said that European companies bring with them a way to do business that wed respect for the environment, employees, and for the society where they operate, with high value-added goods.

They do not come to Vietnam only to make shirts and shoes or to assemble electronics, but to develop the entire supply chain and all the sophisticated services that support it. To bring these to Vietnam, European companies need qualified employees who speak foreign languages and they need reassurance that intellectual property rights are effectively protected.

Along with the concerns about employees, European investors saw three main challenges to address, including corruption, protectionism, and a lack of legislative co-ordination.

Therefore, EuroCham issued three proposals to deal with the above challenges.

As to the first, EuroCham warmly welcomes and appreciates the work of the government in reducing opportunities for corruption and upholding the law. At lower levels, the main levers are adequate salaries, pride of belonging to the administration and moving people around, while at higher levels they are the lack of transparency, the excess reliance on permissions and certifications, and the high degree of arbitrariness by those in charge.

As the consequence of protectionism, local companies and the local administration must pay more, otherwise they are unable to access higher quality and safer, more reliable goods.

The government should reduce overlapping and conflicting procedures in public administration, which not only create the waste in fees and taxes, but also the time and human resources.

In addition, the government needs to reconsider the corporate income tax, fully implement the national single window policy, and extend online payments in foreign currency.

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