10. ICHAM's tenth anniversary celebration in Ho Chi Minh City 12. Pharmacy Made in Italy—First Edition
IN THIS ISSUE News
Market info
5. Message from our Chairman
19. Tax and Accounting Updates
6. Conference for the celebration of
in Vietnam
“30 Years of FDI in Vietnam” 8. Seminar “Tuttofood 2019” 10. ICHAM's tenth anniversary celebration in Ho Chi Minh City 12. Pharmacy Made in Italy—First Edition 14. Meeting with Italian ambassador in Vietnam Mr. Antonio Alessandro 16. Business mission to HOMI Milano fair
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Message from our Chairman Dear Members and Friends, As you all know, the Italian Chamber of Commerce in Vietnam (ICHAM) was founded in 2008 and has celebrated its 10th year of activities during 2018.
I would like to start the year listing for you what are the intentions of the Council and what are some of the key actions that we intend to pursue in this year: Participate in promoting activities of Italian Excellencies in Vietnam; Keep a high level of attention to the needs of our members by involving and promoting ac tivities, seminars, services, workshops directed to fulfill their demands; On the same subject, ICHAM plans to organize more and more events with Italian and Vietnamese companies in Vietnamese provinces; Improving the network of services to attract more and more incoming missions of Italian companies interested in the Vietnamese market; Continue the collaboration with the Italian Embassy in Vietnam, the Consulate General in Ho Chi Minh City and ICE, in order to pursue the common goal of “system” and “show a single face of Italy”; It’s my intention and as well as the Council and the staff, to have with each of you a fruitful dialogue using all the resources and time available to us. Do not hesitate to contact us and to communicate with us, to share your ideas or ask for support on issues for which the Chamber can be of help.
Greetings to all of you, for a profitable year of the Pig. The Council, The staff The President Michele D’Ercole
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Conference for the celebration of “30 Years of FDI in Vietnam” The morning of 4th October, in the tion to the development of its GDP,
new National Conference Center in which has been growing at 6.79 yearHanoi, the conference “30 years of FDI on-year (sì ma quando??) and it is still in Vietnam” was held. Over the confer- constantly rising. ence, the most relevant steps that led Vi- A symptom of such increase is indeed etnam to become a rapid developing the creation of many new open job powere commemorated by outstanding sitions: the number of the employees speakers, such as governmental person- shifted from 330,000 in 1995 to 3.6 alities and professionals. million in 2017. The first step commemorated couldn’t be but the “Đổi Mới” policy. In December 1986 “Đổi Mới” – Gorbachev’s perestroika – was implemented to shift the economy of the country from a centrally planned one to, a market oriented one, which slowly led Vietnam to
achieve today’s international prestige. Over the late Eighties, foreign investors became a significant part of the country economy, by giving a major contribu-
Vietnamese Prime Minister Nguyễn Xuân Phúc also has the chance to speak up and show his determination to maintain and improve his policy on foreign investors with the aim of providing greater benefits to the country. In particular, he highlighted the necessity of the Vietnamese government to improve foreign policies to help foreign
7 investors expand, by making administrative lations (expand) and bureaucratic procedures much easier and Moreover, a lot of prospecting solutions for faster. the quality improvement of foreign investHe also noted the necessity of Vietnam to ments have been proposed. invest in “Industry 4.0�: technology is in fact key to a winning country. Indeed the climax of the conference was the Free Trade Agree-
ment between EU and Vietnam (EVFTA), the latest step made so far by Vietnam towards the opening of its market, and this may create new opportunities for commercial re-
The number of the current investor countries in Vietnam is 129, with Japan and South Korea in pole position, and a percentage of 57.1 resources invested on the manufacturing sector.
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TUTTO FOOD 2019 On 11 of October, the presentation about always been well-known around the world. COOP the new edition of TUTTO FOOD took place. TUT-
one of the biggest Italian supermarket network-
TO FOOD, organized by Fiera Milano, is an interna- shows that Italy spends more than other countries tional B2B exhibition on the topic of food & bever- in food. According to the data collected, Italy has age which has been organized in the past 6 years th
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an annual average expenditure per person of
and will be held again from the 6 to the 9 of
2,438 € that means that the 19% of the total earn-
May 2019 in Milan. This event has become the
ings are addressed to the purchase of food. By
leading European fair to launch a new product in
comparing the results obtained in France with
the national and international markets.
2,353 € (18%) and Germany with 2,091 € (14%) we can easily spot the differences.
The Caravelle Saigon Hotel in Ho Chi Minh City hosted the meeting where the executive di-
The research carried out by COOP also shows that Italian consumers tend to prefer to buy organic and biologic food, for a healthy lifestyle.
rector of ICHAM Mr. Pham Hoang Hai with his team were the key-note seakers and Samantha
Because of the increasingly multietnicity Italy is
Raimondi from the international network of Fiera
experiencing nowadays, international food is pav-
Milano and involved 28 Vietnamese vendors who
ing its way. In accordance to COOP, the 56% of
are interested in exporting their products into the
Italians is used to eating ethnic food at the restau-
Italian market.
rant and 2 Italians out of 3 have declared that they
Following the success of the last edition in 2017, that has seen the realization of the first Vietnamese Pavilion represented by 5 delegates, we can look forward confidently to the quality of the 7
consider it part of their diet. Hence, the importance of creating new trade opportunities between Italy and Vietnam.
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edition.
With the introduction of EVFTA (EUVietnam free trade agreement) scheduled to be
On the top of the aspects that make the
effective by the end of 2019, the relation between
trade Italian market interesting among the F&B
the two countries are expected to grow signifi-
area we can find the food culture. Italian food has
cantly despite their relations are already existing
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and positive.. The data drawn up by the Italian Minister of Foreign Affairs show that, between 2006 and 2016, there has been an annual percentage increase of 6,83% on the trades between the two countries.
build closer bonds and mutual trust. TUTTO FOOD will be a big opportunity for all the Vietnamese vendors who want to present their products to different markets. Thanks to the brand-new platform called “My matching� it will be easy to find a match be-
This preparatory meeting has helped the Vietnamese companies understand the best way to trade with
tween the buyer and the exhibiting companies creating a direct link between supply and demand.
the Italian partners. In fact, it has been mentioned the
Furthermore, ICHAM will be side by side to the expositors
importance of the interpersonal relationships and of the
helping for what concerns the communication throughout
face-to-face meetings, with which they can be able to
the event.
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ICHAM's tenth anniversary celebration in Ho Chi Minh City On 27th November 2018 ICHAM celebrated 10 - Piaggio - manufacturer of the Vespa brand, the years of activity with a Gala Dinner at the Park Hy- company that has chosen Vietnam as a hub for att Hotel in Ho Chi Minh City. Asia's development strategy; Among the guests were present many members and partners of the Chamber who have supported the development during the last ten years: Dante Brandi, Consul General of Italy in Ho Chi Minh City, Trần Phước Anh, Deputy Director of the DOFA Department Of Foreign Affairs, Nicolas Audier, coPresident of Eurocham and Tomaso Andreatta, Vice President of Eurocham. On this occasion, the President of ICHAM, Michele D'Ercole, welcomed the members and the partners, thanking them for the trust they placed in the Chamber and expressing gratitude for all the support received during these ten years of work. Then he thanked the Consul General, Dante Brandi for being present to celebrate this important milestone. ICHAM was born on October 22nd, 2008 from an idea of some Italian entrepreneurs located in Vietnam; after starting as a business association, in 2013 it joined Assocamerestero and obtained recognition from the Ministry of Economic Development. Today ICHAM is also a partner of EuroCham and the EU-Vietnam Business Network (EVBN), a project co-founded by the European Union.
- Ariston Thermo, producer of water heaters; - Datalogic - the world's leading manufacturer of laser scanners; - Bonfiglioli - manufacturer of electric motors and engines for plants; - Danieli and Tenova in the steel industry. - Ghella for infrastructure. - Perfect Van Melle - manufacturer of chewing gum and confectionery; - Generali Vietnam and many others. ICHAM Vietnam has contribute in promoting and creating opportunities for Italian companies in Vietnam, as well as supporting Vietnamese companies to do business in Italy through conferences, seminars and B2B missions.
During the evening, the president of ICHAM and the Consul held a seminar in which, together, commented on the ten slides of Symbola and Assocamerestero "2018 Italy in 10 selfies - Quality as a Competitive Edge". The function of the seminar was to highlight the results obtained by Italian competitiveness on global markets, showing its quality drivers (environment, design, culture). In addition, During these years many MoUs have been signed the President D'Ercole and the Consul Brandi fobetween the Chamber and the most significant in- cused on the exceptional performance of the indistitutions and associations. Among the more outvidual industries of the Made in Italy brand (agrostanding we can find the agreement signed with the food, wood furniture, mechanical engineering, General Department of Vietnamese Customs, with fashion and other leading industries such as the the Department of Foreign Affairs of the Vietnam- pharmaceutical industry). ese Provinces, with the HCMC Business AssociaOnce the thanks and the greetings of the Deputy tion (HUBA) and Hanoi Business Association Director of the DOFA were over, a short speech (HBA). was given by the Consul, Dante Brandi, about the In these ten years, the Italian presence in Vietnam Italian Cuisine Week in the world, also introducing has grown with presences in different sectors. Chef Matteo, head of the ICHAM event menu, - Two of the most important banks in Italy, Intesa also part of the Italian Cuisine Week in the world. Sanpaolo and Unicredit; The President of ICHAM then wanted to reward
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eight companies that have registered in the Chamber for ten consecutive years, such as Bonfiglioli Vietnam, Datalogic Scanning Vietnam, De Masi Taddei Vasoli, Franco Pacific Vietnam, Interglobo Far East, Intesa Sanpaolo, Pacorini Vietnam, Perfect Van Melle.
Sponsors: Pacorini Vietnam, Interglobo Vietnam and Maserati; Silver Sponsors: UBI BANCA, Boncafe Vietnam, Bonfiglioli Vietnam, Tenova Vietnam, La Vie and Generali and finally the Lucky Draw Sponsors: The Loop, Banme House Coffee, IDD, Classic Fine Foods, ᝙a L᝙c Wines, Liquid Gold Asia, Park Hyatt Saigon, Nikko Hotel SaiJoseph Perruca, President of GIVI Vietnam, then gon, The Reverie Saigon, Saigon Boat Company, took the floor to present the case of success of GIVI and its activities in Vietnam and to congratu- SIR Tailor, Ducati VietNam, GIVI Vietnam, late ICHAM for the efforts and successes achieved Boncafe Vietnam, Turkish Airlines VietNam). in recent years, as well as for the key role played by This tenth anniversary marks a milestone in the dethe Chamber and for the numerous partnerships velopment of the Italian Chamber of Commerce in between Italy and Vietnam. Vietnam and we are eager to continue contributing As ICHAM we would like to thank all those who to the close collaboration between Italy and Vietnam. have made this important milestone possible: the institutions of both countries, the members and the friends who have gathered to celebrate, the staff, the sponsors: Platinum Sponsors: Datalogic Scanning Vietnam and GIVI Vietnam participants; Gold
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Pharmacy Made in Italy FIRST EDITION
Following the success of the past edition of “Lifestyle made in Italy” – B2B event dedicated to the furniture and interior design sector – ICHAM has decided to launch a new version of the same event, but focused on the Pharmaceutical and Para-pharmaceutical sector: Pharmacy Made in Italy. The B2B meetings were held between 15-16 January at MGallery Hotel de l’Opera Hanoi. Despite the initial scepticism of Italian firms, who had never been involved in such an event in Vietnam before, five companies took part in the talks, alongside more than 20 buyers and potential partners from Vietnam, Korea, Singapore and Thailand, supported by their respective Italian Chambers of Commerce. Head of the economic and trade section of the Embassy Mr Antonino Tedesco also took part in the event: after a speech about the
current situation of the pharmaceutical market in Vietnam, he encouraged the Italian companies to invest in this expanding market. Although in this edition the five Italian companies presented different products, the Asian buyers proved coherent with their requests. Specifically, two companies dealt with generic pharmaceutical products, one with ophthalmic products, one with skin cosmetics and one with medical devices. The event involved two intense days of B2B meetings among companies and a networking dinner at Casa Italia, ICHAM’s Hanoi headquarter. As mentioned above, Pharmacy made in Italy had the purpose of promoting the export of Italian pharmaceutical products to Asia, specifically to Vietnam. This is due to the excellent performance Italy has reached in this sector over the last year. In 2018 a historical record has been achieved by
13 Italian pharmaceutical industry, reaching a production worth 31.2 billion EUR – exceeding the 30 billion EUR of Germany, who has always been the European leader in the sector. Despite the apparently slight gap, it has been a striking outcome, which will for sure push our export (especially to South East Asia), for the combination of investments and exports has made this sector the first one in Italy. From 1991 to 2017 the value of exports shifted from 1,3 billion EUR to 24,8; which means that if medicals were used to be ranked 57th among Italian economic sectors, they are now ranked 4th out of 119 (only transports and mechanics performed better). These data, and the fact that the Vietnamese Government is currently working towards the de-
velopment of a universal sanitary plan providing all the residents with basic medical care, has made Pharmacy Made in Italy an incredible opportunity. We foresee a prosperous future for the Italian pharmaceutical industry in Vietnam and hope the next editions of this event will involve a growing number of companies willing to catch this opportunity. ICHAM is proud of the outcome and wishes that Pharmacy made in Italy could keep backing pharmaceutical importers and exporters.
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Meeting with Italian ambassador
The morning of the 21st January ICHAM staff in Ho Chi Minh City had the honour and pleasure to host Italian ambassador to Vietnam Mr. Antonio Alessandro, for an informal meeting in occasion of his first visit to the city from his appointment. After showing ICHAM’s history and activities, the staff, together with Ambassador Mr. Antonio Alessandro, Consul General Mr. Dante Brandi and ICHAM Chairman Mr. Michele D’Ercole, gathered for a meeting with the aim of discussing possible ways of enlarging the scope of the Chamber. Specifically, the talks focused on how to make the membership to the Chamber more attractive, by establishing more restrictive and selective information channels, alongside further benefits. Moreover, the Ambassador encouraged the Chamber to play a more active role in searching and absorbing Italian companies in Vietnam, not only with the goal of increasing the number of the members, but also to make the networking activity of the Chamber and the collaboration among its members more productive.
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in Vietnam Mr. Antonio Alessandro
Secondly, the meeting faced the topic of how to use ICHAM’s and the diplomatic missions’ resources to gain more bargaining power before local authorities, so as to increase Italian System’s visibility and relevance in Vietnam. In the end, there was talk about the possibility of involving the student of the recently-established Italian Studies department at the University Nhan Van in Ho Chi Minh City, with a twofold goal: to provide them with a business-oriented language and to show them the concrete job opportunities they may aim at after graduation. Hence, the proposal of organizing lectures with Italian companies associated to the Chamber. In conclusion, ICHAM staff committed itself to make all these ideas factual. We would like to thank again the Ambassador and the Consul General of the productive meeting.
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Business mission to HOMI Milano fair
Over the last week of January ICHAM has led a business delegation to the winter edition of HOMI Milano fair, which takes place twice a year – in January and September. Every year our Chamber collaborates with Fiera Milano to offer companies in Vietnam the chace to know the opportunities and excellency of Italian Design. In this specific edition, our delegation has involved firms from the interior design sector, Modernform, Goldsun, AA Trading, PT Casa e Eurostyle.
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HOMI is a highly innovative fair: it is structured in 10 “satellites” or sectors, each for a different concept of contemporary man’s Lifestyle: Living Habits, Wellness and Beauty, Fragrances and Personal care, Fashion and Jewels, Gift and Events, Garden and Outdoor, Kids style, Home textiles, Hobby and Work, Concept Lab.
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Tax and Accounting Updates in Vietnam December 2018 publication on Tax and Accounting updates covers recent releases from Vietnamese authorities, particularly upcoming changes to payroll costs, along with our regular review of recent Official Letters released by the Tax Authorities. INCREASE TO MINIMUM MONTHLY WAGE FROM 1 JANUARY 2019 The Vietnamese Government has officially confirmed the previously announced increases to Minimum Monthly Wages from 1 January 2019, through Decree 157/2018/ND-CP. Details of the increases can be seen in Domicile’s 2019 Payroll Quick Guide, which is on our website. INCREASE TO MINIMUM BASIC WAGE FROM 1 JULY 2019 On 9 November 2018, the National Assembly of Vietnam passed Resolution 70/2018/QH14 covering the State budget for 2019. As a result, from 1 July 2019, the Minimum Basic Wage will increase from 1,390,000 VND per month to 1,490,000 VND per month. Although the Minimum Basic Wage generally only applies to Government employees (who are paid a multiple of this depending on a range of factors), and should not be confused with the Minimum Monthly Wage that applies to employers in Vietnam, the change will have an impact on employers and employees in Vietnam due to manner in which Social Insurance and Health Insurance caps are linked. As the maximum contribution caps to which Social Insurance and Health Insurance are required to be calculated and remitted are based upon 20 times the Minimum Basic Wage, the cap above which monthly salaries are not subject to these insurances will increase on 1 July 2019 from 27,800,000 VND to 29,800,000 VND.
OFFICIAL LETTERS RELEASED Official Letters are releases showing the Tax Authorities’ interpretation and application of Vietnam’s Taxation Laws, providing guidance to taxpayers in Vietnam.
Personal Income Tax (“PIT”) Finalisation for Foreign Employees Ceasing to Reside in Vietnam On 16 October 2018, the Hanoi Department of Taxation (“HDT”) released Official Letter 69271/CT-TTHT on PIT finalisations for foreign employees who were tax residents but have ceased to reside in Vietnam. Under Article 21 of Circular 92/2015/TT-BTC, foreign employees who are tax residents in Vietnam are required to finalise their PIT before departing. However, where foreign employees have not carried out their PIT finalisation, they are able to authorise their former employer under the Civil Code to undertake the procedures on their behalf. The Deadline for submitting PIT finalisation documents in this situation is 45 days from the individual’s final departure date. Accommodation/Rental Expenses for Visiting Foreign Experts to Vietnamese Companies On 23 November 2018, HDT issued Official Letter 77722/CT-TTHT providing guidelines on VAT deductions for accommodation/rental expenses of visiting foreign experts to Vietnamese companies. According to Clause 1, Article 14 of Circular 219/2013/TT-BTC, accommodation or rental expenses paid by a Vietnamese company for foreign experts who are sent to Vietnam under a services contract, will be deductible for VAT where the experts remain paid offshore by the
foreign company during their period working in Vietnam. In addition, the services contract must specify that the Vietnamese company is obligated to pay for accommodation costs. Where foreign experts are paid under a labour contract signed with a Vietnamese company, their accommodation/rental expenses will not be deductible for VAT.
Payments to Parent Company “Management Funds” On 30 October 2018, HDT issued Official Letter 72368/CT-TTHT providing guidelines on payments to management funds of parent companies. Under Article 4, Circular 96/2015/TT-BTC, payments contributing to management funds of higher level group entities are not permitted Foreign Contractor Tax (“FCT”) on Machinas deductible expenses for CIT at the subsidiery Leased from Foreign Entities ary level. On 22 November 2018, HDT issued Official Let- For Vietnam parent companies, upon receipt of ter 77482/CT-TTHT covering FCT on machin- management expense payments from subsidiery leased from foreign entities. Where an for- aries, the company will record the amount as other revenue and include it in taxable income eign entity earns income through machinery for CIT. leases to an enterprise in Vietnam, the foreign entity’s revenue will be subject to FCT. If the Guidance on E-invoices for Enterprises Esforeign entity is not eligible to declare and pay tablished from 1 November 2018 to 31 Octothe tax directly, the Vietnamese party will be ber 2020 responsible for withholding FCT on its behalf. On 29 November 2018, the General Department of Taxation issued Official Letter 4763/ Where the foreign entity sells machinery to the TCT-CS providing guidelines on e-invoice usVietnamese party without services being per- age for companies established from 1 Novemformed in Vietnam (under the forms provided ber 2018 to 31 October 2020 under Decree in Clause 2, Article 2 of Circular 103/2014/TT- 119/2018/ND-CP. BTC), FCT will not arise. For these enterprises, where the Tax Authority does not inform an enterprise that it can use einvoices, enterprises can register for paper inPIT for Individuals on Income Earned from voice usage. Capital Investments On 7 November 2018, HDT issued Official Let- Where an enterprise is informed to use eter 74216/CT-TTHT providing guidelines on invoices by the Tax Authority, but does not PIT for individuals on income earned from cap- meet the requirements/conditions for IT infraital investment activities. structure requirements and registers to use Under Clause 3, Article 2, Circular 111/2013/ TT-BTC, dividend income is subject to PIT from paper invoices, the enterprise is to submit invoice data to the Tax Authority using form No. capital investment activities. Where the individual converts the dividend into capital, PIT is 03 issued in Decree 119/2018/ND-CP, along not payable at the converting date. PIT will be with the VAT return. due when the individual disposes of the capital. Upon disposal of the capital, the individual is responsible for declaring and paying PIT on the For further information contact: gains from capital disposal and PIT on the gains from capital investment activities (The Matthew Lourey, Managing Partner enterprise is not responsible for withholding PIT for the individual following Article 25 and email: matthew.lourey@domicilecs.com Article 26 of Circular 111/2013/TT-BTC).
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