Korean firms in Vietnam can reap FTAs benefits

Update: 10:25 | 03/12/2020
Korean businesses investing in Vietnam can capitalise on preferential treatment under free trade agreements (FTAs) that Vietnam has signed to boost exports, an official has said.
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Korean firms in Vietnam can reap FTAs benefits
At the event. (Photo: VNA)

Vu Viet Nga, Deputy Director of the East Asia Division under the Department of Asia-Africa Markets at the Ministry of Industry and Trade, was speaking during a teleconference held in Ha Noi on December 2.

Themed “Vietnam-Korea Investment Connection”, the event was co-organised by the Vietnam Trade Promotion Agency, the Department of Asia-Africa Markets under the Ministry of Industry and Trade and the Korea Trade-Investment Promotion Agency (KOTRA), with the aim to introduce and update information about investment opportunities and trends of Korean enterprises in Vietnam, as well as introducing investment environment in localities.

Vietnam has signed 14 free trade agreements, which are ATIGA, RCEP, CPTPP, ASEAN-India, ASEAN-Australia-New Zealand, ASEAN- Korea, ASEAN-China, ASEAN-Japan, ASEAN-Hong Kong, Vietnam-Chile, Vietnam-Japan, Vietnam-Korea, Vietnam- Eurasian Economic Union and Vietnam-EU, said Nga.

“In the 2016-2020 period, most tariff lines under the FTAs have entered the period of being deeply cut or completely removed,” she told Vietnam News.

“Foreign enterprises, including Korean firms, can make full use of much-touted benefits of those FTAs to increase export revenue as well as expand export markets, she said.

“But to be able to enjoy preferential tariffs under FTAs, the products must meet requirements under the rules of origin.”

Goods eligible for preferential treatment under FTAs have to meet general or product-specific rules of origin, and have appropriate documentation, known as the certificate of origin (C/O).

Each FTA has its own certificate of origin form, she said.

“Vietnam has a safe and stable investment environment, fast and sustainable economic growth as well as young and low-cost human resources. The country has done a good job in controlling COVID-19.

“To attract foreign investment, Vietnam has continuously reformed and simplified administrative procedures and policies, offering a large number of incentives in corporate income tax and import tax,” Nga said.

According to statistics in 2019, the whole country has 326 industrial parks and 17 coastal economic zones concentrated in big cities such as Hanoi, HCM City, Bac Ninh, Dong Nai, Binh Duong, Long An, Ba Ria-Vung Tau, Can Tho, Da Nang.

Nga added: “The road traffic system has been upgraded and expanded, highways are better developed to make trade between provinces and economic regions easier, as well as facilitating the transport of raw materials.

"In addition, with 49 seaports, 8 airports and 23 border gates, Vietnam is currently an international cargo transhipment hub in the Asia-Pacific region."

Since establishing diplomatic relations in 1992, Vietnam and the RoK have strongly developed in all fields of politics, defense, security, economy and culture, said Hoang Minh Chien, Deputy Director of the Ministry of Industry and Trade's Vietnam Trade Promotion Agency (Vietrade).

“The strategic cooperation partnership is tightened closer with the signing of the Vietnam-Korea Free Trade Agreement (VKFTA) on May 5, 2015," Chien said.

"Under the trade deal, the two sides had given each other many incentives in goods, services and investment, creating the driving force for growth in trade and investment cooperation.”

As of October this year, the total registered capital of Korean businesses in Vietnam reached 70.4 billion USD with 8,900 projects. This year, the RoK has been pouring into 530 projects in Vietnam a total capital investment of 3.4 billion USD, said Lee Jong Seob, President of the Korea Trade-Investment Promotion Agency (KOTRA) in Southeast Asia-Oceania cum General Director of KOTRA in Hanoi.

Even amid the COVID-19 pandemic, the number of Korean expats working in Vietnam has reached 10,000, which expressed the readiness of Korean businesses when investing in Vietnam, he said.

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(Source: VNA)