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|Korean investors have proposed solutions to improve the investment environment.|
At a working session between the government and the foreign business community on September 17, Han-Yong Kim, chairman of the Korean Chamber of Commerce (KorCham), mentioned four proposals to deal with problems that foreign investors, particularly those from Korea, face.
One of their concerns is the transfer pricing and the Advance Pricing Agreement (APA). According to KorCham, taxpayers who do business with foreign-related parties are exposed to the risk of double taxation due to transfer pricing, and to prevent this risk in advance have applied for APA, but negotiations have not been made so far due to the revision of Vietnam's tax management act.
“We hope that The General Department of Taxation of Vietnam will introduce detailed guides for existing APA applications and new applicants with the amended law, and guide us to achieve tangible results through mutual agreement procedures this year,” he said.
There has cases in Vietnam where foreign-invested enterprises collectively attract research and development (R&D) personnel who have been painstakingly nurtured, but later they go elsewhere. Han-Yong Kim is concerned that if R&D labour flows out, there will be no incentive for foreign-invested companies to train in R&D or expand in Vietnam, and there is a worry that it will limit investment.
|Businesses hope that The General Department of Taxation of Vietnam will distribute detailed guides for existing APA applications and new applicants as per the amended law, and guide us to achieve tangible results through mutual agreement procedures this year.|
“To prevent manpower leakage we suggest that the provisions of the legislation to prevent it is reflected in the Intellectual Property Law and the Competition Law,” he said.
KorCham members agree with the legislation for the Enforcement Decree of Personal Information Protection. However, they see the fine of up to 5 per cent of Vietnam's sales for the violation, which is mentioned in the Draft Decree on Personal Data Protection, as too high.
Thus, to avoid putting an excessive burden on companies, they hope a more balanced bill can be enacted that is more predictable, such as calculating fines based on a fixed amount (for example, VND500 million) rather than sales.
The Korean business community has also proposed that Vietnam has a more open visa policy to become a global tourism powerhouse and attract more investment.
“The issuance of visa-related documents for those who work or invest in Vietnam is an obstacle to investing because the documents they prepare for obtaining a status of residence in Vietnam are so complex and numerous. If this is resolved, it is believed that more investment will come to Vietnam,” he said.
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