Home > Blog >

Vietnam Market Watch: Russian Relations, SME Loans, and Public Investments - Vietnam Briefing News


Vietnam, Russia Seek Greater Economic Ties

Government officials from Hanoi (Vietnam) and Moscow (Russia) are urging businesses from both countries to invest into both cities. This is especially after the upcoming enforcement of the Eurasian Economic Union (EAEU) trade agreement of which Russia is a member. Vietnamese officials have stated that they welcome all Russian businesses and would support them. Russian officials also responded that Moscow has a lot of potential for Vietnamese enterprises, particularly for Vietnam’s high quality goods. In addition, Moscow has been implementing infrastructure facilities and industrial parks to attract small and medium sized businesses with preferential tax rates. Officials also highlighted the fact that businesses should come into Moscow as it hosts the 2018 World Cup.

The Russian Chamber of Commerce and Industry (RCCI) wants to meet with Vietnamese officials to create plans for investment and trade in 2017. The developments come after the Hanoi Expo which was held on September 9, where around fifty Vietnamese companies showcased commodities such as bamboo, traditional toys, cosmetics, food and footwear products. The EAEU agreement will open up 175 million strong market for Vietnamese goods. Vietnam’s exports to Russia increased by 20 percent while imports rose by 48 percent in the first seven months of 2016. Bilateral trade is estimated to reach up to US$10 billion by 2020 thanks to the trade agreement.

RELATED: International Tax Planning Services from Dezan Shira & Associates


Cheaper loans for Small and Medium Size Businesses

The Ministry of Planning and Investment has introduced a financing arm called the Small and Medium Enterprise Development Fund (SMEDF) to allow small and medium enterprises (SMEs) to get access to cheap loans. Authorities said that while the fund was set up in 2013 it only came into effect now as the government was setting up the fund and establishing a workforce. The SMEDF has picked three banks, Vietcombank, BIDV and HD Bank to represent it and has just started receiving loan requests from SMEs.

SMEs can borrow up to US$1.3 million (VND 30 billion) with a maximum term of seven or ten years with an annual interest rate of 5.5 percent for a tenor of less than 12 months and 7 percent for medium and long tenors. In the future, finances are expected to come from the banks rather than the state budget. SMEDF has four lending programs for SMEs, the first is for SMEs with innovations, followed by SMEs in agricultural, forestry and seafood sectors, the third is SMEs in electronics and engineering sectors and lastly, SMEs in waste and water management activities.

RELATED: An Introduction to Vietnamese Product Labeling Requirements


Government Needs More Funds for Public Investments in 2016-2020

Vietnam will require close to US$ 100 billion to fund public investment projects in 2016-2020 amid an increasingly tight state budget. As per the General Statistics Office (GSO), overspending stood at US$6.9 billion (VND 154.6 trillion) in the nine-month period. Vietnam used US$4.8 billion (VND 109.8 trillion) to pay foreign debts between January and September, which represents around 70.8 percent of the plan. By September, disbursements for basic construction projects had reached 51 percent of the full year estimate.

The Planning and Investment Ministry and the Finance Ministry have been urged to work together to tackle the budget deficient and use proceeds from lottery sales to finance transport, irrigation and other key projects. In addition, priority will be given to major projects such as North-South Expressway, coastal roads, border patrol roads and climate change among others.


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email [email protected] or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Annual Audit and Compliance in Vietnam 2016
In this issue of Vietnam Briefing, we address pressing changes to audit procedures in 2016, and provide guidance on how to ensure that compliance tasks are completed in an efficient and effective manner. We highlight the continued convergence of VAS with IFRS, discuss the emergence of e-filing, and provide step-by-step instructions on audit and compliance procedures for Foreign Owned Enterprises (FOEs) as well as Representative Offices (ROs).

Navigating the Vietnam Supply Chain
In this edition of Vietnam Briefing, we discuss the advantages of the Vietnamese market over its regional competition and highlight where and how to implement successful investment projects. We examine tariff reduction schedules within the ACFTA and TPP, highlight considerations with regard to rules of origin, and outline the benefits of investing in Vietnam’s growing economic zones. Finally, we provide expert insight into the issues surrounding the creation of 100 percent Foreign Owned Enterprise in Vietnam.

Tax, Accounting and Audit in Vietnam 2016 (2nd Edition)
This edition of Tax, Accounting, and Audit in Vietnam, updated for 2016, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who must navigate Vietnam’s complex tax and accounting landscape in order to effectively manage and strategically plan their Vietnam operations.