Hanoi stays focus on addressing concerns of foreign businesses

Hanoi’s authorities are fully aware of the difficulties that the foreign enterprises are facing and will try their best to support all businesses to soon overcome the Covid-19 impacts and restore normal activities.

Secretary of the Hanoi Party Committee Dinh Tien Dung. Photos: Thanh Hai

Secretary of the Hanoi Party Committee Dinh Tien Dung made the statement during a dialogue between Hanoi’s leaders and foreign businesses in the city today [October 19].

According to Dung, the fourth Covid-19 outbreak since late April has posed severe consequences on Vietnam’s socio-economic lives.

“Hanoi, as the capital city of Vietnam, is under huge pressure to soon contain the pandemic for public safety and economic recovery,” Dung stressed.

“We have mobilized the entire political system and participation of the public in dealing with the pandemic, thanks to which the capital city has now been able to put the situation under control,” Dung noted, adding the city is gradually adopting measures for safe adaptation and the return of new normalcy.

Dung informed so far, the city has provided financial support worth VND1.55 trillion ($68.3 million) for 3.1 million people and businesses in the city, including foreigners.

Dung said despite the city accounting for only 8.5% of the population and 1% of the total area of the country, it makes up 16% of the GDP, 18.5% of the State budget revenue, and 20% of domestic revenue.

“Hanoi has been cementing its place as a regional and international financial hub, as well as serving as the driving force for growth in the Red River delta and of the country,” he said.

Overview of the meeting.

In this process, Dung stressed Hanoi considers the foreign-invested sector as an essential part of the economy. “The city is committed to creating favorable conditions for foreign businesses to make long-term investments and protect the lawful rights of all investors,” he continued.

To further attract investment capital into Hanoi, the authorities will focus on administrative reform and improving the business environment for the capital city’s greater economic competitiveness.

As of present, Hanoi is home to 6,625 valid foreign projects with registered capital of $48.7 billion.

The capital city stood atop nationwide in terms of FDI attraction in the 2018-2019 period with respective FDI of $7.5 billion and $8.67 billion. Last year, the city ranked third with $3.83 billion and nearly $1.3 billion in the first nine months of 2021.

FDI enterprises accounted for 10% of Hanoi’s State budget revenue, 12.6% of total investment capital, 30% of job creation, and 45% of exports.

“This showed Hanoi remains an attractive, safe, and stable investment environment for foreign businesses,” Dung added.

Vice-Chairman of the Hanoi People's Committee Nguyen Manh Quyen.

Hanoi ready for economic recovery

In efforts to aid businesses during the pandemic, Vice Chairman of the Hanoi People’s Committee Nguyen Manh Quyen said so far, banks and credit institutions in Hanoi have restructured debt payment for 57,700 customers with total outstanding loans of VND75 trillion ($3.31 billion); waived and frozen lending rates for loans worth VND335 trillion ($14.8 billion) for 189,000 customers; provided new loans worth VND1,160 trillion ($51.2 billion) with preferential rates for 103,000 customers.

Meanwhile, Hanoi’s tax authorities have delayed payment of value-added tax worth VND22 trillion ($971.6 million) for 29,700 enterprises, Quyen added.

According to Quyen, Hanoi has allocated VND352 billion ($15.5 million) to support businesses in 2021.

“During the lockdown period, Hanoi was able to maintain smooth export-import activities for production and domestic consumption,” he added.

Quyen stressed the city would continue to provide support for businesses by issuing an economic recovery plan in line with anti-Covid-19 measures.

“The main goal is to ensure businesses’ safe adaptation for soon recovery,” Quyen said.

Along with such efforts, Hanoi would speed up the establishment of e-government to further save time and costs for businesses, eventually reaching the goal of all administrative procedures related to businesses being settled online, including business registration, tax declaration, and payment, or issuance of construction permit.

“Hanoi would continue to promote international cooperation in science, technology, trade, investment, and tourism, along with thorough preparation to absorb new investment capital from a global shift in investment capital in the post-pandemic period,” Quyen suggested.

Foreign delegates at the meeting.

Hanoi- a safe business environment 

At the meeting, Inoue Soichi, representative of the Japan Chamber of Commerce & Industry in Vietnam (JCCI), proposed easing requirements for the resumption of manufacturing plants and the mobility of workers.

“The fourth Covid-19 outbreak and subsequent strict measures have put many foreign businesses under severe difficulties,” he said. 

Inoue suggested the authorities allow workers having vaccinated with at least one dose or negative test result to move from their home to workplace, regardless of whether the location is in the high-risk area or not.

He called for narrowing the size of testing to 5-10% of the total workforce and extending the validity of the test result certificates to two weeks.

“Hanoi should apply a single set of criteria of restriction measures on the whole city on which all procedures for business operation should be based, while the quarantine zone should only be at minimum scale if cases of infections are detected in the factory,” Inoue added.

Vice-Chairman of Eurocham Nguyen Hai Minh at the meeting.

Vice-Chairman of Eurocham Nguyen Hai Minh referred to a recent survey on European businesses by late August that nearly 91% of respondents were negatively affected by the pandemic.

Minh said the foreign businesses understand the necessity of a lockdown during the fourth Covid-19 outbreak to prevent the spread, especially as Hanoi remains among the country’s main political and economic hubs.

Minh also said Eurocham welcomed Vietnam’s decision to shift its Covid-19 strategy to safe and flexible adaptation to the pandemic, urging the local authorities to simplify procedures for foreign experts to reenter the country.

“With the high vaccination rate in Hanoi, Eurocham expects the city to become a safe destination for businesses,” he said.

During the meeting, a number of businesses called for government agencies to further reduce corporate income tax for businesses to maintain working liquidity and keep operations afloat. They also expected a further delay in premium payments of social, health, and unemployment insurance to relieve financial pressure on businesses.