HSBC Treasury Management Profiles 2018 -

Current section, Introduction

Introduction

Vietnam is one of the world’s fastest growing markets: strong exports (the country forecasts earnings in excess of USD212 billion from exports in 2017, up from USD176 billion in 2016), domestic demand and high foreign direct investment (the country received an estimated USD17.5 billion in FDI inflows in 2017, up 10.8 per cent year-on-year, according to the Ministry of Planning and Investment) helped the economy grow 6 per cent in 2016 and 6.4 per cent in the first nine months of 2017. Low-cost manufacturing and labour attracts multinational investment while developing trade relations with new markets, such as in Africa and Latin America, for example, is boosting the country’s global economic integration. At home, Vietnam has launched a Socio-Economic Development Strategy (SEDS) 2011-2020 focused on structural reforms, environmental sustainability, social equity, and macroeconomic stability. Focus is also on the strategic restructuring of the banking sector, state-owned enterprises and public investment. Economic growth over the past two decades has seen the percentage of people living in extreme poverty fall to less than three per cent, and access to basic services improve across all sections of the society.

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Legal and regulatory

  • Foreign exchange accounts can be held by residents both domestically and, with prior approval, abroad. Resident domestic currency (VND) accounts cannot be held abroad, but are convertible into foreign currency
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts are convertible into foreign currency
  • All transactions between resident and non-resident companies and all transactions on the accounts held by resident companies abroad must be reported on a monthly, quarterly and annual basis
  • Non-residents generally require authorisation to carry out foreign exchange transactions within Vietnam

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Taxation

  • Resident companies are taxed on worldwide income
  • Non-residents are taxed only on Vietnamese-sourced income only
  • The standard rate of corporate income tax is 20 per cent. Oil and gas businesses, and other sectors exploiting rare and precious natural resources, are taxed at rates ranging from 32 per cent to 50 per cent
  • Foreign Contractor Withholding Tax (FCWT) is imposed on income from the provision of goods and services from overseas organisations (except for pure trading transactions), which comprises corporate income tax and Value-Added Tax (VAT) at a total combined rate of 0.1 per cent to 15 per cent

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Payment instruments and systems

  • Cash is the primary payment medium in Vietnam. Government use of cash for payments is restricted in order to encourage the use of electronic payment methods. Electronic credit transfers are typically used for salary and supplier payments. Payment card use, particularly of debit cards, is increasing. E-cards, such as MrTopUp, are popular; nine banks are authorised to issue e-money cards. Mobile wallet schemes are available
  • Vietnam operates two national payment systems: Inter Bank Payment System (IBPS), comprising the High Value Settlement System (HVSS), an Real Time Gross Settlement (RTGS) system, and the Low Value Settlement System (LVSS), for low-value payments. Banks are also able to process payments bilaterally via the clearing systems of the country’s six largest banks

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Cash management

  • A range of collection services are available, including collection services via security service providers
  • Payment fees are applied in fund transfers between resident and non-resident accounts

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Electronic banking

  • Electronic banking is available in Vietnam. There is no bank-independent electronic banking standard
  • Internet and mobile banking services are provided by the country’s larger banks for both corporate and retail purposes. As much as 44 per cent of commercial banking customers currently use digital banking services

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To read the full report on Vietnam and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.

Sources:

  • World Bank
  • Ministry of Planning and Investment
  • General Statistics Office

The materials contained on this page were assembled in May 2017 (unless otherwise dated).

 

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