Foreign firms complain about Vietnam

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vietam_officialsMany foreign firms plan to pull out or scale down business in Vietnam and go to other countries with better business environments, the Vietnamese Foreign Business Association said, according to the Saigon Economic Times.

At an investment conference on August 30 in Ho Chi Minh City, investors complained that there were too many changes in regulations causing difficulties for them.

Businesses were hit this year when the minimum wage was suddenly raised and labour laws were amended. New environmental regulations have forced many to call off new projects or scale back operations. Around 20 per cent of European firms have considered shifting to other Southeast Asian countries while 45 said other Southeast Asian markets are better business destinations than Vietnam.

They said they were disappointed with the business environment and are aware of the growing competitiveness of other markets in the region.

Two regulations limiting overtime working hours and increasing the minimum wage in the amendments to the Labour Code are causing the biggest worry for foreign companies. Employees can no longer work more than 200 hours overtime per year, and, in exceptional circumstances, no more than 300 hours. Investors said that this rule was inappropriate for firms in sectors like textile and footwear that carry out work on customers’ orders.

Other countries in the region like Thailand, Singapore, and Malaysia allow 900 hours a year or even more.

The Japanese Business Association in Ho Chi Minh City added that Vietnam’s investment climate “does not meet the expectation of Japanese firms.” Many of them complain about the difficulties they have to face when doing business in Vietnam such as the poor logistics and transport facilities, lack of traffic safety, and “tortuous customs and tax procedures.”

Deputy chairman of the Ho Chi Minh City People’s Committee, Le Manh Ha, and head of the Foreign Investment Agency, Do Nhat Hoang, promised to apprise the government about all the difficulties mentioned.

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Reading Time: 2 minutes

Many foreign firms plan to pull out or scale down business in Vietnam and go to other countries with better business environments, the Vietnamese Foreign Business Association said, according to the Saigon Economic Times.

Reading Time: 2 minutes

vietam_officialsMany foreign firms plan to pull out or scale down business in Vietnam and go to other countries with better business environments, the Vietnamese Foreign Business Association said, according to the Saigon Economic Times.

At an investment conference on August 30 in Ho Chi Minh City, investors complained that there were too many changes in regulations causing difficulties for them.

Businesses were hit this year when the minimum wage was suddenly raised and labour laws were amended. New environmental regulations have forced many to call off new projects or scale back operations. Around 20 per cent of European firms have considered shifting to other Southeast Asian countries while 45 said other Southeast Asian markets are better business destinations than Vietnam.

They said they were disappointed with the business environment and are aware of the growing competitiveness of other markets in the region.

Two regulations limiting overtime working hours and increasing the minimum wage in the amendments to the Labour Code are causing the biggest worry for foreign companies. Employees can no longer work more than 200 hours overtime per year, and, in exceptional circumstances, no more than 300 hours. Investors said that this rule was inappropriate for firms in sectors like textile and footwear that carry out work on customers’ orders.

Other countries in the region like Thailand, Singapore, and Malaysia allow 900 hours a year or even more.

The Japanese Business Association in Ho Chi Minh City added that Vietnam’s investment climate “does not meet the expectation of Japanese firms.” Many of them complain about the difficulties they have to face when doing business in Vietnam such as the poor logistics and transport facilities, lack of traffic safety, and “tortuous customs and tax procedures.”

Deputy chairman of the Ho Chi Minh City People’s Committee, Le Manh Ha, and head of the Foreign Investment Agency, Do Nhat Hoang, promised to apprise the government about all the difficulties mentioned.

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