Draft regulations will benefit US-owned companies

HA NOI — Draft regulations now being written by the Ministry of Trade (MoT) will allow US - owned enterprises in Viet Nam to import materials and goods.

The new regulations accord with provisions of the 2002 Viet Nam – US Bilateral Trade Agreement, says a statement issued by MoT.

The provisions stipulate that America-owned producers and manufacturers would be allowed to import material three years after the agreement became effective.

The exceptions are the export-processing industry and services, including hospitality, insurance and consultancy, it says.

The draft regulations will allow enterprises to import materials and parts used in production and to enhance business performance without first seeking approval.

Volume will be unrestricted but to stabilise the domestic market, the draft regulations limits the imports to those carrying the trademarks of the US-owned enterprises.

For example, Ford is permitted to import only car or light lorry Ford vehicles.

Only existing agents and shops that sell the products of the enterprises will be allowed to sell the imported materials and parts. The establishment of shops for the purpose is banned.

Although the regulations are being written for US-owned enterprises, the policy is expected to apply to other countries also, says the trade ministry and the enterprises of each country and territory to qualify will soon be published.

But the enterprises will have to be major producers and manufacturers with an investment of at least US$40 million.

The beneficiaries will also have their infrastructure complete with their factories working and making a profit.

The draft says the enterprises will have to pay import tax, value added tax and special consumption tax for their imports.

They also have to pay a corporate income tax rate of 28 per cent on turnover from their import business performance as do domestic firms.

Viet Nam News, May 21, 2005