The sixth term of the Vietnam Chamber of Commerce and Industry (VCCI) takes place as the ASEAN Economic Community (AEC) is taking shape. The deeper economic integration promises to open up many opportunities but also bring more challenges. What directions will VCCI need to follow, what action plans will VCCI need to take? Ms Nguyen Thi Thanh Hang, CEO of Nhat Hang Investment Construction and Trading Joint Stock Company (Nhat Hang Group), the owner of Dai Lai Resort, stressed “To effectively support businesses, VCCI must know what businesses need from the State; must advise and propose their recommendations to the Government and other State agencies." Hoang My reports.
As a representative of the business community in Vietnam, VCCI must clearly understand what enterprises need from the State?
Our economy and business community are entering a new stage of development where the required restructuring towards a modern and sustainable structure becomes a vital issue. VCCI, as the national representative of the business community, plays an important role in supporting companies to implement these requirements. VCCI should strengthen its roles, responsibilities and responses in policymaking advice to help formation of a perfect market economy, fair and transparent business environment. It needs to be more committed and professional in promoting and supporting entrepreneurs; add more efforts to unite enterprises and build a business association and business community networks to accumulate the strength of all business elements.
VCCI must understand what enterprises need from the State in order to send appropriate proposals and recommendations to the Government in support of business development. For example, one of the requirements Vietnamese enterprises need State help is: "Making lending interests of the Vietnamese banking system (hovering at 7 percent per annum) equal to that in regional and international countries (like Thailand, Indonesia and Singapore). In fact, in Taiwan, lending rate is 2 percent per annum while the rate in Japan is 1 percent, a very low interest rate. Since 2007, lending rates for Vietnamese enterprises have been around 12 percent per annum, much higher than that in other countries in the region. To satisfy expectations of enterprises, VCCI Executive Board must advise and propose these issues of enterprises to the Government.
As a big property investor, how do you see State support policies on the real estate market?
The State has many positive support policies to defreeze the real estate market like lowering corporate income tax from 25 percent to 20 percent. This is inherently a dream of Vietnamese and a repeated recommendation from professionals, organisations and associations but this is also an objective of a roadmap that brought the corporate income tax to 23 percent. Therefore, if this policy is realised now, it is vital for enterprises to survive, make a profit and have more capital for continued investment and enhance competitiveness. The Ministry of Construction also proposed the Ministry of Finance to study and draft a resolution to submit to the lawmaking National Assembly in order to implement incentives right in 2013. Accordingly, social housing investment and business will be slashed 50 percent of value-added tax (VAT); housing investors and developers are granted more time to pay corporate income tax from house sales; and social housing investment and business is granted highest preference in corporate income tax (10 percent).
Another bright spot is the issue and enforcement of legal documents concerning Real Estate Investment Fund. This launch, together with deferred tax payment for enterprises as stipulated in the Resolution 13/NQ-CP, has a significant impact on the life and death of property businesses. But, in my opinion, there is no better support than amending housing and land policies.
From the perspective of a company, what has Nhat Hang Group done to get through current difficulties of domestic and global economies?
To cope with economic crisis and property market slump, we have plans for every possible situation in specific phases. Nhat Hang Group always performs concentrated investment strategies with well-defined roadmaps. When the real estate market was vibrant, Nhat Hang Group enjoyed robust growth and development but it did not forget to prepare for unfavourable situations and risks. Hence, Nhat Hang Group is always active in any situation and is not heavily dependent on bank loans.
Nhat Hang is now focusing investment to keep track of Paradise Dai Lai Resort. Specifically, we are completing infrastructure and surrounding landscapes. Currently, we continue to make investment and plan to complete the following items in 2014: Restaurants, tennis courses, swimming pools and one-story rest houses. After that, we will invest to build golf course, marina and water entertainment zone. Paradise Dai Lai Resort is planned to be a 5-star luxury eco resort that meets leisure, relaxation and entertaining demand of people in Hanoi, surrounding localities and international visitors. The project - part of a national tourist site complex, featured by an 18-hole golf course, Hang Doi Eco Resort, Dong Dam Zone, Ngoc Thanh Horse Racecourse, and Lam Vien Resort, promises to bring perfect experience and leisure environment for customers.
Do you have any proposals to the VCCI Executive Board to better support real estate companies?
As far as I am concerned, VCCI played an active role in formulating and implementing the business support package worth VND29 trillion (US$1.4 billion) for enterprises. This was a strong energy booster for enterprises. In 2013, the Government launched another bailout package worth VND30 trillion. So far, Agribank has signed ‘in principle’ lending contracts with 13 projects invested by 10 companies. Other banks have reportedly received many borrowing applications from both businesses and individuals. Vietcombank has received 160 borrowing applications and BIDV has had approximately 100 applications. They are actively conducting appraisals for lending. However, according to the Ministry of Construction, up to now, only nearly VND68 billion out of VND30 trillion of real estate credit support package has been disbursed real estate - a very small proportion. Hopefully, VCCI will propose the State Bank of Vietnam (SBV) to speed up the disbursement.
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