Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Issue 22
I would like to take the opportunity and wish you all a happy, healthy and successful new year 2012! Over the past year, EuroCham can proudly look back on a large number of successful events and initiatives: As one highlight, I would like to mention the 2nd edition of our GreenBiz exhibition and conference in HCMC on 15th/16th September. Green-Biz 2011 has attracted well over 80 exhibitors, 12 sponsors and more than 3,000 specialized visitors. Nearly 50 experts from business, government and academia discussed the most pressing environmental challenges and suitable business solutions in the conference part over two days. Green-Biz 2011 initiated and intensified the awareness and environmental concerns and offered solutions to the challenges that lie ahead and how to address climate change and sustainable cities as the most pressing issues for Vietnam. On December 1st, EuroCham has issued the 4th edition of our WhiteBook of Trade / Investment Issues and Recommendations 2012. The WhiteBook 2012, bilingual on 283 pages, specifies the main business issues our member companies are facing in Vietnam. As in prior editions, the Whitebook 2012 offers practical policy recommendations for the Vietnamese government, to tackle the numerous challenges to doing business in Vietnam. With 3,500 copies distributed, the Whitebook 2012 will again be a useful reference tool for both the Vietnamese government and the business community in Vietnam. Furthermore, EuroCham has hosted in 2012 numerous high-level dialogues, for example our meeting with the new MPI Minister in December 2011. EuroCham made its submissions at the Vietnam Business Forum (VBF) in Mai and December 2012, and held additionally events with Vietnamese Chamber of Commerce and Industry (VCCI) under the umbrella of the Vietnam-EU Business Forum (VEUBF). For example, the Whitebook 2012 was presented as a VEUBF event to key-policy makers at a roundtable dialogue with key government representatives from Vietnamese ministries and agencies in Hanoi on November 30th 2011. EuroCham finally also completed successfully the project Capacity Building on Trade Policy for Vietnamese Business Associations (VBAs) under the EU-MUTRAP III project from September 2009 to November 2011. Throughout the two years of implementation of the project, EuroCham has successfully enhanced the capacity of VBAs to become an efficient consultation partner for the Vietnamese Government on trade policy and market access issues, and increased the ability of VBAs to provide efficient assistance to their members on EU related trade issues. We are pleased to say that we have received much positive feedback for our activities and results from the Vietnamese Business Associations and other stakeholders. A full report of activities available at the EuroCham offices and website. Finally, I would also like to thank all our members and partners for their continued support during the last year and we hope you will help us making 2012 another successful year for EuroCham. With kind regards,
White Book 2012 roundtable dialogue with key government representatives from Vietnamese ministries and agencies held in Hanoi on 30. November 2011.
At the same time, much has been achieved now that Project 30 to simplify Administrative Procedures in Vietnam has been officially completed: The government
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Why Vietnam needs to better protect and enforce Intellectual Property Rights
As 2011 draws to a close, Vietnam is at a crossroads. In 2012, at a time of continuing global financial and economic uncertainty, Vietnam will continue to find itself competing for foreign direct investment with its ASEAN neighbours and other developing sector countries. In this situation, as European companies and other potential foreign investors consider where to invest in order to expand into the growing Asian markets, they must ask themselves the question: "Why Vietnam?" European companies remain hopeful that the investment and business environment in Vietnam will improve, but 2011 saw a significant drop in the confidence of European companies according to the EuroCham Business Climate Index, one measure by which the confidence of European companies in the business and investment environment in Vietnam is measured. In its annual dialogue with the Vietnamese government earlier this month following the issuance of EuroChams annual Whitebook for 2012 , representatives of the European business community in Vietnam identified a number of problems and issues that need fixing if the investment environment in Vietnam is going to remain attractive to European and other foreign investors. One of the key areas which require significant improvement is protection and enforcement of intellectual property rights. Nearly five years ago, Vietnam joined the World Trade Organization (WTO). At the same time, Vietnam undertook to immediately and unconditionally abide by the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs), the international agreement which set internationally respected standards of protection and enforcement of intellectual property rights. While Vietnams substantive legal framework for protecting and enforcing intellectual property rights (though not without shortcomings) is generally considered to meet the standards of TRIPS, significant problems remain in the application and enforcement of Vietnams intellectual property laws. European and other foreign investors face ongoing problems and uncertainty in connection with obtaining protection for and enforcing their intellectual property and related proprietary rights in Vietnam. In the view of many European companies, the situation is getting worse, not better. From the handling of trademark applications, opposition and cancellation proceedings by the National Office of Intellectual Property, to having their intellectual property rights effectively enforced by the relevant Vietnamese authorities, European owners of intellectual property rights, proprietary knowhow and related rights face significant problems which have caused them to seriously question whether such rights can really be effectively protected in Vietnam. This, in turn, has made European companies and others reticent to transfer their best technology and proprietary knowhow to Vietnam.
As EuroCham has communicated to the Vietnamese government repeatedly over the past several years, Vietnam needs to do its part if this is to happen. EuroCham has told the Vietnamese government that in order for European companies to feel comfortable transferring their best technology to their business operations in Vietnam and training Vietnamese workers with the most advanced know how and manufacturing methods, Vietnam must significantly improve the way intellectual property rights are enforced in this country. At the same time, the Vietnamese government must endeavour to create a public mind set which respects, encourages and values intellectual property rights and other products of the human mind. Specifically, Vietnam needs to needs to effectively enforce intellectual property rights by punishing infringers in a manner that will deter them from infringing the intellectual property rights of others and send a message to would-be infringers that infringers of intellectual property rights do so at their own peril. This means that Vietnam must robustly and transparently impose maximum penalties on infringers of intellectual property rights of foreigners and Vietnamese alike, and at the same time criminally prosecute those who engage in counterfeiting and intellectual property infringement on a commercial scale. In addition, Vietnam should train its judges in intellectual property matters and, better yet, establish specialized judicial tribunals to handle intellectual property cases so that owners of intellectual property rights, both Vietnamese and foreign, will be able to effectively obtain injunctive relief, monetary damage and other remedies available to them under Vietnamese law. Enforcement of intellectual property rights at Vietnams airports, seaports and border crossings must be upgraded to stop the large volumes of counterfeit products that enter the Vietnamese market from China. Meanwhile, Vietnam should also provide better training to NOIP examiners and other officials so that more reasonable decisions are issued on the issue of confusingly similarity of trademarks, and Vietnamese and foreign companies are not permitted to closely imitate the trademarks of others. Decisions in opposition and cancellation proceedings should be issued in a more timely manner and decided on their merits, not on the basis of whether or not a particular agent has a good relationship with the NOIP. At the same time, Vietnam must take concrete steps to educate the Vietnamese population at large on the importance of intellectual property rights to Vietnams continued economic development. Specifically, in order for Vietnam to evolve from an economy based on low technology, low cost labour to an economy driven by high-technology value-added manufacturing that can help raise the technical skills of Vietnamese workers, increase their productivity and lead to higher wages, Vietnam must respect and enforce intellectual property of both foreign and Vietnamese owners. This should also unleash the creative potential of the Vietnamese population and inspire them to create and innovate rather than imitate, thereby becoming an additional engine to drive the growth and competitiveness of the Vietnamese economy. At a time when European companies are carefully considering where best to invest in the Asia region, Vietnam has a unique opportunity to distinguish itself from other potential investment destinations by robustly enforcing intellectual property rights. EuroCham hopes to see a noticeable improvement in the administrative, judicial and criminal enforcement of intellectual property rights in 2012 and beyond. This will not only make Vietnam more attractive to foreign investors who, in turn, will be more inclined to transfer their more advanced technology to Vietnam, it will engender respect for intellectual property rights among the Vietnamese population and inspire creativity and innovation by Vietnamese themselves. In 2012, EuroCham will continue to monitor the situation in respect of intellectual property rights enforcement and other issues that affect the investment and business environment in Vietnam. EuroCham members are invited to keep EuroCham, as well as their respective diplomatic missions (at both the national and European Union level) informed of their experience (negative as well as positive) with the enforcement of their intellectual property rights in Vietnam. Only then, can improvements in this area be effectively measured.
Business Update
The Challenges of Retail in Vietnam
The domestic market for the last 3 years was presented as one of the pillar of the strategy to resist to lo global and local economic turmoil. What is the situation today of the so promising retail sector and what is to be expected in coming years?
FAVORABLE DYNAMICS OF PAST YEARS Market Attractiveness In 2009, retail sector effectively appeared as having a huge potential and unlimited perspective. This year Vietnam reached the rank of the 6th most attractive country for retail worldwide, third in Asia behind China and India (source: AT Kearney). In the same year, retail recorded a growth of 21%. Moreover, with its undeniable USD by 2012. Such encouraging figures shows that retail in Vietnam, though still small, appeared very promising rapid expansion, the sector, which totaled US$64.8 billion in 2009, is expected to surpass 90 billion. Indeed traditional trade still strongly dominates retail with 87% of the market against only 13% for modern trade, far behind Indonesia (43%) Thailand (46%), or China (64%). With over 900 stores in 2011 and 625,000sqm of retail space, modern trade sector in Vietnam is clearly one of the least developed in the region. As an illustration, HCMC, with 0.09sqm of modern trade retail space per inhabitant, is far behind Bangkok (0.78), Kuala Lumpur (0.64) or Jakarta (0.38) - Savills, 2011. Emerging Middle Class In 6 years (2005-2011), the GDP per capita in Vietnam doubled. Urban monthly income (Hanoi, HCMC, Da Nang, Can Tho) in the range of 6.5 to 13.5 million Vnd amazingly surged from 5% in 1999 to 46% in 2011 with 7.4 million people (source: TNS Vietcycle 2011). Vietnams young demographic, emerging middle class and main purchasing power has been widely praised for the last 3 years. With new expectations and needs, those new generations were to redefine the Vietnamese model of consumption and induce new consumer behavior. Indeed, consumption has become a mode of expression as a vector of social and economic development. Product diversification and the fast paced modern lifestyle have led to new demands. Very sensitive to branding, the young population shows a preference for quality products and a desire for international integration. The new consumers are also increasingly concerned with hygiene and shopping convenience. According to the Nielsen, Vietnam benefits as well from one of the highest consumer confidence worldwide. It ranked 11th in the global consumer confidence index for 2010, steady in 2011. THE CURRENT REALITY As we enter in 2012, the enthusiasm of previous years has somehow been mitigated by hard realities. The trends are not as favorable as forecasted and retail market attractiveness has slid further in the GDRI rank to reach the 23rd position in 2011, a slide of 11 places since 2010 and 6 more since 2009 and 6 more since 2008 (2nd) (source: AT Kearney). In Vietnam, domestic rather than external factors predominate. The tightening of monetary policy, stubbornly high inflation, and rising concern about macroeconomic stability has slowed retail sales volume growth in most sectors. Rising consumer concerns The Vietnamese Consumer Confidence Index aims to stabilise at a fairly positive level for 2012. However, continuous price increase on essential products and utilities will keep consumers and businesses in Vietnam cautious about spending. Vietnamese households have recently developed new concerns, among which 1) health, 2) increasing food prices and 3) increasing utility bills (electricity, water, gas) are at the top. Consequently, overall spending is expected to decline in coming 12 months and FMCG sector has already seen a growth of only 13% in 2011 against 21% in 2010 and it may slow down further in 2012. Nielsen consumer surveys showed that in 2011 more than 80% of people are cutting expenses on unnecessary items (entertainment, eating out, electronics, etc.) while maintaining current spent on family and children related expenses (education, healthcare, personal care, household utilities, ). In addition, both TNS and Nielsen share insight related to the new consumer behavior and attractiveness of promotions. As the future becomes blur, discounted prices are the preferred promotions. In the mean time, household savings are increasing steadily with an approximate 20% of earnings as compared to 10% in 2008. Vietnamese consumers seem to be preparing for rainy days.
With two third of the share of the country GDP generated by household consumption (ranking 3rd after US and South Korea), there is no doubt of the effect of a drop in consumer spend would have on the country economic dynamism.
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Business Update
Space availability Besides the cooling down of domestic demand, retail players encounter major development roadblocks, among which is the difficulty for market players to find more space at affordable price. According to a Savills benchmark, prime location rental price in HCMC or Hanoi are comparable to those in Jakarta, Kuala Lumpur, or even to Seoul. And when it is to find large surfaces for supermarkets or hypermarkets, all players, foreign or local, will tell you that it remains one of their top expansion limiting factor. Even though the real estate sector is currently facing intense deceleration, good location rental prices remain high, making large commercial spaces unaffordable and lengthen the return on investment time. Given the population density and infancy stage of urban planning, introducing the supermarkets format in urban areas still proves a complicated task as it involves the painful task of compensation and relocation of numerous inhabitants. Entry constraints for foreign players If quantitative restrictions and non-tariff measures no longer apply since 2009, the liberalization is still incomplete and will be implemented progressively by rounds and phase-ins. Currently the one try policy concerning foreign investors limits their venture to a single store. A market-need analysis and additional validation procedures are then required to expand foreign retail activities further. This Economic Needs Test (normally banned by the General Agreement on Trade in Services) is based on three cristeria: (1) number of existing service establishments in the geographic area, (2) stability of the market, and (3) geographic scope. ENTs undoubtedly lengthen and complicates the registration process. As criteria remain, for certain aspects, rather subjective, it dissimulates what some would call cautious market openness. This contrasting attitude is based on a valid assumption: local retailers would have difficulty to compete against the sophisticated marketing of operationally more efficient foreign actors. Despite recent signs of some easing for licensing, retail is still a well guarded activity when it comes to foreign direct participation. Connecting rural areas The United Nations foresee an urbanisation ratio of 35% in 2020 for Vietnam (as compared to 30% today). Thus, retailers have to address a strategic and supply chain question to fully exploit Vietnamese market potential on the long run: How to reach rural population? In 2010, according to Nielsen, 71% of investors expected rural Vietnam to have an increased impact on their companys growth. With 40% of Vietnams FMCG sales, the rural market has an even greater potential than the already urbanized areas. Indeed, the development of rural Vietnam would pioneer a new market of 63 million consumers. To capture this possible growth a strong understanding of the present situation is required. The investors must prioritize to target a small well-defined area of this vast potential, choosing the right location and shopper type. But the retail market cannot size such opportunities if geographic isolation persists. Good strategies are useless without access to the targeted area. And so, it is effectively road infrastructures that yield the future of the Vietnamese countryside. Vietnam offers countless opportunities for the retail sector, with numerous emerging markets still to conquer. Indeed, it is now for investors to shape Vietnam towards its ideal future.While the new purchasing power of young Vietnamese consumers craves for expansion, the limited number of modern retail actors greatly favors investments. However heavy registration procedures, lack of affordable retail space, impeding supply base fragmentation, and constrained logistics weigh heavily on market reach and return on investment. More than ever, the golden future of the retail sector in Vietnam relies on legal, supply chain, and infrastructure foundations. 2012 is the year of the Dragon, a deliverer of good fortune and a master of authority. Will it be enough to help Vietnamese consumers to sustainably contribute to their country economic development? Julien Brun General Director CEL Consulting www.cel-consulting.com
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In Focus
In Focus: ng Nai
Location Dong Nai is located in the Southern Key Economic Zone, at the eastern entrance and 30km to HCMC. The province, together with Binh Duong and HCMC- are the three powerhouse industrial provinces of the North Southeast, which alone account for a quarter of the non-oil gross domestic product of Vietnam. Development In 2011, Dong Nai exports turn-over reaches $2.8 billion, increases 30.3% comparing to 2010. The import turn-over is $10.6 billion, up 15.9% comparing to last year. Mainly exports including garments, footwear, wooden products, plastic products, computers, electronic components, rubber and so on. Many modern, well facilitated IZs are calling for investment in different districts like Bien Hoa, Long Thanh, Nhon Trach and Trang Bom. Already being one of the biggest industrial development centers in Vietnam. Dong Nai has 30 licensed industrial zones, 21 of which have begun production and or trading activities with an average occupancy rate of more than 60 percent. Growth The average GDP growth rate of Dong nai in the period of 2006-2010 was 13.2% while the GPD per capita in 2010 was $1,630 (National GDP per capital was $1,200). Currently, Dong Nai has 13,000 operational domestic enterprises. There are 978 FDI projects from 25 countries/ territories with the total capital of $19.4 billion. Most of them are from Taiwan, Korea, Japan, ASEAN, EU, USA, and China.
Area: Population (ppl.): Total workforce: Industrial Land: Industrial Zones: GDP growth: Investors include:
5,907 Km 2.600.000 1.600.000 9,573 ha 30 13.2% (06-10) Nestle, Philips, Robert Bosch, Bayer, Akzo Nobel, Metro, Fujitsu, Sanyo, Hyundai $ 19.4 Bn in 988 Projects
Human Resources European enterprises are 4th in term of FDI capital in Dong Nai, recruiting 20,500 employees. The province population is 2.6 million with over 1.64 million is at labor rate and 67% of labor force is under 35. To develop and improve human resource, the province has been building more qualified universities, vocational schools, training centers. Currently, it has 4 universities, 8 colleges and over 100 vocational schools with a total of 58,000 fresh graduates entering the labor market each year. Infrastructure Being at the crossroads of national roads and railway lines, Dong Nai is conveniently located in terms of transportation. The most significant infrastructure project is Long Thanh International Airport which will serve as HCMCs main airport and replace Tan Son Nhat in the future. Dong Nai has a developed port system which for ships up to 60,000 DWT including Dong Nai Port, Phuoc An seaport, Phu Huu Port. Electricity supply in Dong Nai consists of Tri An hydroelectric plant with a capacity of 400MW and 2 gas electric plants with capacity of 1,200 MW. Some IZs have their own electricity substation (Amata, Nhon Trach) ensure a stable supply.
Foreign investment:
On Friday the 4th November, a Delegation from EuroCham visited Dong Nai province. The delegation held an information session and open dialogue with the People's Committee of Dong Nai and later visited the Amata industruial zone and the Clipsal (Schneider Electric) and Robert Bosch Group factories in the province. During the visit, EuroCham members had the chance to exchange ideas with the Don Nai Peoples Committee chairman and various department heads and hold a dialogue about future European investment in the province. EuroCham would like to thank the People's Committee of Dong Nai, Amata Industruial Zone, Clipsal (Schneider Electric) and Robert Bosch Group for their kind hosting during the delegation visit.
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On 19th Oct, Beluxcham welcomed Belgian Embassador H.E. Bruno Angelet at the Eurocham offices for a meeting with about 25 members. Each member got 5 minutes to present themselves and their companys activities in Vietnam. This led to some interesting discussions about doing business in Vietnam, the amount of Belgian investment in Vietnam. On 9th November during the visit of the official delegation from Luxemburg and his majesty the Grand Duke Henri, Beluxcham organized a visit of CMIT container terminal on the Cai Mep River. The visitors were received by the CEO and CFO of CMIT/Maersk terminal and had a presentation of this new and impressive terminal followed by a visit of the site. To guarantee that a nice tradition was kept alive, Beluxcham hosted a brunch for all Belgians on Sunday 20th November at Flow restaurant, centre of Dist 1. BeluxCham members and their families enjoyed this for free, a way for Beluxcham to say thank you for members support in 2011. all 37 Belgians present enjoyed a nice early afternoon, including the Consul in Ho Chi Minh City.
Share expertise and experience is one of our missions. That is why the CCIFV organized several events with the participation of experts in different sectors. Among the last topics: Environmental issues and their implications for companies in Vietnam?; Corruption within companies: how to prevent it? How to punish it?; Can financial markets be regulated? Networking Events: In HCMC, the CCIFV organizes a networking event every last Thursday of the month. In October our European networking event gathered more than 120 participants. In Hanoi, the CCIFV organizes in collaboration with BBGV and Cancham a networking every 2nd Thursday of the month, often co-hosted by the Eurocham and other chambers. Team Building Bowling: for this end of the year the CCIFV offered to its members a Bowling Challenge. Nine teams of CCIFV members and a CCIFV team competed during this fun evening. Everybody could enjoy the game together, strengthening the team spirit. The winning team Rostaing got the first price, a dinner for ten people at Sofitel Plaza. This event was a real success, and the CCIFV is already planning a second one at the beginning of 2012. Upcoming Events HCMC, from 8th to 10th January: New training! This is a widely shared statement: the training of assistants and receptionists is not always satisfying in Vietnam. Thats why, the CCIFV offers a new exclusive training. For 3 mornings, the participants will learn, in English, how to write emails, answer the phone and welcome guests. Our trainer is a highly experienced and top level manager from the hospitality industry. For more information, please contact info.hcm@ccifv.org.
www.dbavietnam.net
Dutch Open Golf Tournament On Friday 18 November the Dutch Business Association Vietnam (DBAV) organized the 3rd edition of the Dutch Open golf tournament which was held this year in Long Thanh. It was a beautiful day for golf and the 100 participants enjoyed the full afternoon with sport, pleasure, networking and thanks to our sponsors were all provided with bags, shirts, balls, towels etc. An excellent evening program followed with dinner, drinks and prices that were won by those who played best and worst handed out by the Consul General of The Netherlands. We look forward to Dutch Open 2012! For further events and information please check our website www.dbavietnam.net
Recent events: 07th November: GBA Business Meeting, This Monthly Business Meeting was a remarkable welcoming His Excellency Ambassador Claus Wunderlich, the new German Ambassador to Vietnam. More than 100 GBA members enjoyed the meeting and had chance to network and meet the Ambassador. 21st November: Charity Gala - Dinner with former Chancellor of the Federal Republic of Germany Gerhard Schrder GBA and SBA in cooperation with Ringier were proud to host a Charity Gala - Dinner Event with his Excellency Gerhard Schrder, former Chancellor of the Federal Republic of Germany on Monday 21.11.2011, at the Intercontinental Asiana Hotel Saigon. This event was by invitation only for 100 Swiss and German CEOs and GMs in Vietnam who are members of SBA and GBA. It included also special distinguished guests including high representatives of the German and Swiss Diplomatic Corps. Aside of Gerhard Schroeder as key-note speaker, GBA and SBA welcomed Mr. Lito Camacho, Vice Chairman for Asia Pacific of Credit Suisse AG and Michael Ringier, President of the Ringier Holding AG - a Swiss global leading media corporation, to hold a speech at the Gala - Dinner. All profits from event were donated to the Dariu-Foundation in Vietnam.
October 6th, with AIESEC organization, co-hosted HR Networking Event for HR Managers and Alumni who studied abroad. October 13th, with Cancham, CCIFV and BBGV, co-hosted the Business Networking event Banking, Finance & Insurance. October 17th, ICHAM co-hosted, with AusCham, a Business Briefing Luncheon ADB working with Vietnam in the water sector. Guest Speaker: Mr Jelle Van Gijn Urban Water Supply and Sanitation Adviser, ADB Vietnam Resident Mission. October 19th, with the Unido Vietnam Agency, Icham co-hosted the Workshop "SME Cluster Development". November 9th, ICHAM organized the seminar International Debt Recovery with the support of the Italian Embassy, Bross & Partners and Sooklin & Book LLP - held at the Residence of the Italian Ambassador - Guest Speaker, Advocate Federico Vasoli (dMTV), Advocate Tran Anh Hung (Bross & Partners), a representative from Ministry of Justice, and advocate David Chan (Sooklin & Book LLP). November 14th, co-hosted the Business luncheon Does business have a role in science research, organized by Auscham. December 1st, Icham end of the year cocktail party to thank and greet all Icham members 2011. December 8th, Icham joined the Business networking Human resources education and training, organized by Cancham, CCIFV and BBGV and in collaboration with Auscham, Eurocham. December 9th, Elis Workshop: The Association Centro ELIS and the Hanoi Tourism and Commercial College have signed a cooperation agreement in order to realize a program to fight against unemployment, thus contributing to the Vietnam economic and social renewal process. December 11th, in the framework of Y-Viet and on the occasion of the 150th anniversary of the unification of Italy, the Embassy of Italy in Vietnam, with the sponsorship of DDP, has presented Dialektos, a jazz concert performed by the famous Duo Maria Pia De Vito and Huw Warren, designed to give an insight on jazz Italian culture.
www.nordchamhn.org.vn
Hanoi 11th October - East Sea: From disputed waters to the ocean of opportunities
The East Sea, encompassing an area of about 3.5 million km is the gateway between the Indian Ocean and the Pacific Ocean. Groups of islands located within the East Sea, are subject to a complex territorial dispute involving the surrounding countries. The interests of the countries involved in the sovereignty dispute include acquiring fishing areas, the exploitation of crude oil and natural gas beneath in the area, and the strategic control of the East Sea. EuroCham invited H.E. Ambassador Nguyen Duy Chien, Chairman of Joint Viet Nam China Land Border Commission to join a luncheon to share an inside view on the East Sea Dispute as well as whether business communities should be worried on the issue.
HCMC 21st October - Signing of MOU with HCMC Union of Business Associations
The HCMC Union of Business Associations (HUBA) and EuroCham signed a memorandum of understanding in HCMC. The memorandum outlines that the two organizations will 'work as a bridge' between HCMC, other provinces businesses and the European business community. Both sides coordinate to organize regular economic, cultural, trade and tourism meetings, workshops and events and to participate in business delegations to promote mutual trade and investment.
HCMC 28th October - Rise of the Industrial Market, Vietnams Current/Future Outlook
At this luncheon, members received an update on the Vietnam national industrial market, focusing on Vietnams rise into the global spotlight as a cost-effective manufacturing location in the region. As the cost of doing business in China continues to rise and regional instability in markets such as Thailand and Japan continues, the business luncheon addressed whether Vietnam as a China + 1 actually happening. Mr. Greg Ohan - National Head of Industrial & Logistics Services and Mr. Hieu Le - Manager, Industrial and Logistics at CB Richard Ellis (Vietnam) shared their insights on rising wages in China and outlined examples of businesses moving their production to Vietnam. They stated that Vietnam has a real change to become the "workbench of the world" but warned that tax incentives need to have a clear approval and application process or investors will walk away.
Hanoi 18th and HCMC 24th November - The EU Debt Crisis: Impact on Investment and Trade
Since the sovereign debt crisis in Europe began attracting attention in global financial circles, the crisis has grown into the biggest challenge the European Union has faced since the adoption of the euro as its single currency 12 years ago. Greece, Portugal and Ireland are on life support. Italy and Spain are exhibiting worrying symptoms. Germany and France, the healthy ones, are suffering from a global economic malaise. As the situation appears to be coming to a head, again, how can we tackle the crisis, and will the Euro be saved? At this EuroCham luncheon held in Hanoi and HCMC, Mr. Sanjay Kalra, the IMF Resident Representative for Vietnam and Laos and Mr. Sumit Dutta, CEO of HSBC Bank (Vietnam) offered their insights on the crisis and it's implications for Vietnam and global trade in general. During the Hanoi event, Standard Chartered Banks CEO for Vietnam, Cambodia & Laos Mr. Louis Taylor shared his insights with EuroCham members and guests on the causes and possible cures to the crisis.
Hanoi 30th November - Roundtable with the Government on improving the business climate in Vietnam 2012
The Roundtable marked the launch of the fourth edition of Whitebook 2012 of Trade/Investment Issues and Recommendations (see page 4-6) . With participation of almost all Vietnams Ministries including MPI, MoF, MoH, MoNRE, MoST, MoC, MoLISA, MoET, MoJ, MoT and the SBV, the roundtable is a unique advocacy event and an open discussion on key issues affecting the business climate for European businesses in Vietnam as well as a rare opportunity to exchange some issued raised in the Whitebook 2012 and ideas about further improvement for the business climate in Vietnam between EuroCham delegates, Vietnamese Vice Ministers and leaders from Vietnamese ministries and agencies.
Hanoi 12th December - Business Briefing Investment in Vietnam in the years ahead: New horizons?
EuroCham invited incoming Minister of Planning and Investment H.E. Mr. Bui Quang Vinh to join a special business briefing with members about the possible changes in the investment environment in Vietnam in order to increase attractiveness to both domestic and foreign investors and the Vietnam - EU trade and investment relationship. This event provided a unique chance for members to interact with one of the nations key decision makers as well as to have more information about Vietnams plan to attract foreign investment into the high value-added segments/production and move away from labour intensive low cost products. The MPI will introduce new measures on public investment and possible changes in the decentralization of budget allocation and execution as well as in the planning process of the key sectors in the future.
Hanoi SME Association (HASMEA) Viet Nam Leather and Footwear Association (LEFASO) Vietnam Textile and Apparel Association (VITAS) Handicraft and Wood Industry Association (HAWA) Can Tho Business Association (CBA) VCCI (HCMC) Young Business People of Association of HCMC (YBA) Vietnam Association of Seafood Exporters & Producers (VASEP) Dong Nai Exporters and Importers Club.
Many training courses were held in the EuroCentre in HCMC and other venues throughout Vietnam.
Outcome 1: Transfer of knowledge and best practice to VBAs and their members - Enabling VBAs to provide information and training to their members regarding management and trade related issues. Based on the results of a Training Needs Assessment carried out with all project partners, the contents and focus of training manuals for 6 courses were identified and developed by experts and lecturers. By May of 2011, 6 training courses (4 courses in HCM City and 2 courses in Hanoi) covering 4 different topics had been organized focusing on Strengthening the Capacity of Business Associations in Policy Advocacy and Member Consultation and Strategic Management of Business Associations further courses on Strengthening service provision capacity of Vietnamese Business Association; and Soft skills for Vietnamese Business Associations Communication and Proposals writing techniques were held in Hanoi and HCMC and other provinces. The total number of participants of these workshops were more than 1,000 people, averaging about 100 participants in each workshop.
Mr. Sanjay Kalra, IMF Resident Representative for Vietnam and Laos speaking at the MUTRAP closing workshop in HCMC.
The objective of prodiving update information on trade-related maket information and improving the VBAs capacity. Many representatives from EuroCham member companies and others participated in these seminars as speakers, offering their expertise on the topic. Amongst the speakers were experts from the Delegation of the European Union to Vietnam and high level experts of the Vietnamese Government. Vietnamese Government representation included the former Vice Chairman of the committee of the foreign relation office of the National Assembly, Madame Ton Nu Thi Ninh; former Vice Minister of Ministry of Commerce, Mr. Phan The Rue, Former Minister of Commerce Ministry, Mr. Truong Dinh Tuyen and speakers from the IMF, CIEM, STAMEQ, VCCI and FPT. Participating EuroCham member companies included: DHL Express, Highlands Coffee, Schneider Electric, Bureau Veritas, ELCA Information Technology (Vietnam) Ltd, TUV Rheinland Vietnam Co., Ltd., Investconsult Group, TNS Vietnam, BASF South East Asia Pte Ltd, Market-Edge Asia (Vietnam) Ltd and Fidal Franceskinj Chazard & Partners Co. Ltd. We would like to thank everyone who committed time and energy to assist in these seminars and workshops!
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Outcome 2: Improving the capacity of VBAs to provide policy and regulatory recommendations for the MOIT with the publication of a White Book. Based on EuroChams experiences in writing the White Book on Trade/Investment Issues and Recommendations since 2008. EuroCham has also transferred its experience in collecting recommendations and writing position papers to the 9 Vietnamese associations. The book aims to summarize the key issues affecting the business climate for Vietnamese businesses for the Vietnamese Government. The book covers the major issues that member companies of VBAs pay the most attention to, like e. g. tax, import and export, intellectual property rights, environmental issues, infrastructure and issuance of legal documents. Besides, the book comments on operations of business associations to improve the voice of Vietnamese Business Associations in the business community. Outcome 3: Establishing a sustainable and accessible source of information about EU market information and access in southern Vietnam in the form of an information and documentation centre in HCMC. One of the outcomes of the project was to establish a EU - Trade Information Centre (ETIC) in HCMC. The centre serves as an access point for Vietnamese SMEs to access information and advice about EU market entry requirements and other trade related issues. After one year in operation, the European Trade Information Centre has drawn considerable attention from Vietnamese enterprises, both for the centre and the webpage. The centre has welcomed many visitors, with different purposes, ranging from collecting information on the EU market, asking for advice, introducing companies and business activities, etc. The centre comes together with an interactive online trade portal (www.eticvietnam.org) that has seen over 14,000 page views so far. ETIC boasts exclusive and updated documents and publications on the EU, provided by reliable various sources namely MUTRAP III, Central Institute for Economic Management (CIEM), Ministry of Industry and Trade (MOIT), CBI (Center for the Promotion of Imports from developing countries), EU Delegation, EU Institutions, etc.
The ETIC includes around 100 publications (in soft and/or hard copies, in English and/or Vietnamese). These are offered free of charge to visitors interested. Some of the documents were translated into Vietnamese to provide better access for Vietnamese enterprises. Whereas, the ETIC webpage not only Visit the interactive online trade portal: includes downloadable publications/materials from different sources, but also tools to help www.eticvietnam.org Vietnamese enterprises explore the EU market and gain statistics, noticeably Export Helpdesk for Developing Countries, Eur-Lex, European Customs Info Portal, European Chemical Agency, Eurostat, IPR Helpdesk, International Trade Centre, Market Access Database, etc. Reliable contact points for Euro Chambers in each European country are also available. Outlook EuroCham looks forward to continuing and expanding the close relationship with all Vietnamese project partners forged during the 27 months of the project. Not only did we work together on capacity building and trade information, but staff and leadership of the associations also got to know each other well, paving the way for good cooperation in the future. As committed within the MUTRAP framework, EuroCham to seeks to finance sustainable future operation of the ETIC after the end of the project. We hope the ETIC and its web-portal will support Vietnamese Business Associations and their members to get ready for doing business with the EU and bringing EU markets and Vietnam closer together. For more information, personal consultation or any remarks and comments, we would like to invite you to visit the EITC in HCMC or contact us at: European Trade Information Centre Address: G/F, 49 Mac Dinh Chi Street, Da Kao Ward, District 1, Ho Chi Minh City Email: info@eticvietnam.org Website: www.eticvietnam.org For further information, please contact Ms. Mai Thi Thanh Huong at 84-4 3715 2228, or email programme@eurochamvn.org.
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asean
Over the last decade, the Association of Southeast Asian Nations (ASEAN) has become one of fastest growing regions in the world and is as such a valuable trading and investment partner of European businesses. Many European investors have turned their attention to this part of Asia, which has continuously lowered its trade and investment barriers and attracted in 2010 EUR 10 billion worth of European investments and totalling about EUR 150 billion in trade between the EU and ASEAN, making the EU its largest trading partner. Having established chambers of commerce and business associations in the major economies of ASEAN, the business now has taken the next step and works towards regional cooperation through the establishment of the EU-ASEAN Business Council, an initiative supported by the EU Trade Commissioner as well as ASEAN Economic Ministers. The EU-ASEAN Business Council has been established as a pan-ASEAN platform for European businesses to advocate their trade and investment interests in South-East Asia and to further engage with the ASEAN Governments on a regional basis. The importance and strength of EU-ASEAN trade and investment is a reflection of the timeliness of the establishment of the Council.
The network of ASEAN EBOs is composed of the European Chamber of Commerce in Indonesia, the EU-Malaysia Chamber of Commerce and Industry, the European Chamber of Commerce of the Philippines, the European Chamber of Commerce-Singapore, the Thai-European Business Association and the European Chamber of Commerce in Vietnam. Each of these EBOs nominates their Council Members that will have the following additional benefits: 1. The Council allows its members to engage in high-level meetings with policy-makers as it acts as an interface, both for institutions in the European Union and in ASEAN to engage in a dialogue with businesses, including in the framework of the EU ASEAN Business Summits and other regional meetings. The Council acts as an interface for public-private dialogue amongst the EU and ASEAN regions. Council Members will benefit from a strong regional network of business partners. Council Members get priority access to special meetings with EU and ASEAN government officials. The Council provides a platform for its members to advocate European business interests in ASEAN and can act as an interface for institutions in the EU and ASEAN to engage in a dialogue with EU businesses in the region, including in the framework of the EU ASEAN Business Summits. In its aim to promote the European business community in ASEAN, in collaboration with EU- and ASEAN-based partners and institutions, the Council provides a pan-ASEAN framework to share knowledge, resources and events with all stakeholders, including through sectoral working groups. Council Members have access to regional strategy and policy papers. Further activities will be offered at local level by each individual EBO as well as at regional level coordinated among EBOs. Each ASEAN EBO leads any activities and services that concern its respective country.
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Regional Update
The creation of the Council and its role to act as an interface for public-private dialogue amongst the two regions was presented as one of seven business recommendations to the ASEAN Economic Ministers and formally endorsed by EU Trade Commissioner Karel De Gucht and several of the ASEAN Ministers at the 1st ASEAN-EU Business Summit in Jakarta on 5th of May 2011. Following the founding of the Council, EU Trade Commissioner met with EU-ASEAN Business Council members and stated: I see this initiative as a step forward to enhancing the business dialogue between both regions and contributing to advocate European business interests in the ASEAN region. Since its founding the Council has participated in some high level meetings in the region, and is targeting to be a key dialogue partner with ASEAN, as well as individual Governments in the region and the EU. Recent Activities: Thus far the Council has met with Singaporean Trade & Industry Minister Lim Hong Kiang Indonesian Trade Minister Mari Pangestu (on the invitation of the ASEAN Economic Ministers Chair). The EU-ASEAN Business Council also participated in the ASEAN Economic Ministers recent summit in Manado, Indonesia and in Bali Indonesia. In Bali, high level meeting were held with ASEAN Economic Ministers Chair/Indonesian Minister of Trade, Gita Wirjawan and incoming ASEAN Economic Ministers Chair/Cambodian Minister of Commerce, Cham Prasidh. Taking place at the margins of the ASEAN and East Asia Summits of Heads of State, it gave the EU-ASEAN Business Council the opportunity to engage in private side-meetings with ASEAN leaders.
EU-ASEAN Business Council meets H.E. Gita Wirjawan, Minister of Trade, Indonesia, 16 Nov 2011
Jakob Sorensen, Chairman of the EU-ASEAN Business Council, withH.E. Gita Wirjawan
In the meeting with the EU-ASEAN Business Council, H.E. Gita Wirjawan, Minister of Trade, Indonesia, took stock of progress under Indonesias ASEAN Presidency 2011 towards the ASEAN Economic Community 2015. He highlighted in particular the need to advance on connectivity issues, both at regional and national level, to improve the flow of goods, people and information and encouraged European companies to continue to tap Indonesias and ASEANs market potential. H.E. Cham Prasidh, Minister of Commerce of the Kingdom of Cambodia shared with the EU-ASEAN Business his vision for Cambodias ASEAN Presidency 2012 and gave an update on the preparations. A milestone event will be the 2nd ASEAN-EU Business Summit that the Cambodian Presidency will host in 2012. He invited the EU-ASEAN Business Council to be the key business partner and to jointly develop recommendations on how to further business opportunities to the ASEAN Economic Ministers at the summit.
EU-ASEAN Business Council meets H.E. Cham Prasidh, Minister of Commerce of the Kingdom of Cambodia, 16 Nov 2011
For more information about the EU-ASEAN Business Council, please contact: exec-director@eurochamvn.org 20
Think globally Act locally Late last year the Chinese Prime minister said that in order to maintain the economy growing it is inevitable to improve significantly research, innovation and brand-building. All these three topics require a new sight on how to do business. One has to have a look at the so-called soft facts and soft skills: trust, credibility, creativity, team-spirit, image, workplace ambient, work-life-balance, etc. So a holistic CSR integration will play an important role. Today the requirements for export are the driver to invest in CSR but tomorrow the demand will come from the really huge domestic Asian markets. Local consumers will be the new number one driver. And who is not starting to think about CSR in time will miss an opportunity or even loose his business.
Firefighting Exercise at Hai Nam Textile Company in Gia Lam, Hanoi showcasing a win-win situation for company and local community
CSR is not an over-night change of technology, it is a continuous process. This process just has to be initiated by the first self-reflection. This is probably the most difficult step and this step does not cost any money just some creativity and time. So Corporate Social Responsibility should rather be seen as Corporate Social Opportunity. What is needed are time, willingness and a basic capacity to analyze the current situation. We should try our best to get companies from have to towards want to. In order to obtain this goal, supporting and encouraging activities from Government, financial institutions, international organizations as well as in particular from international buyers are necessary. CSR is a process of small steps. And if an entrepreneur sees the result it will encourage him to proceed to the next step. An example for a successful approach are activities related to work-place organization like the 5-S System. The time invested pays back in higher productivity, less accidents, higher quality and less losses. Interventions like 5-S can bee an example where active support from the buyers can lead to a Win-Win-Situation as quality as well as productivity is increasing. The national legal situation In general there are high quality laws and regulation in place when it comes to labour and environment. However the awareness and compliance amongst especially the SMEs are still quite low. We consider strengthening the role of the domestic consumer of high importance as well as the consideration of the principles of sustainable consumption and production in public procurement. So the role of the lawmaker is not only focused on direct intervention but also on creating and supporting new demands on the domestic market. This also will avoid the business sector from being divided into the good exporters and the bad domestic producers. The new European CSR framework On October 25th 2011 the European Commission published an updated strategy paper on Corporate Social Responsibility and defines CSR as The responsibility of enterprises for their impacts on society. This new approach and definition is evidence that formerly called soft-facts are increasingly seen as hard-facts. The paper stresses the multidimensional nature of CSR and its role as part of a companys core strategy. In order to define the outlines of this multidimensional approach the Commission is referring to mainly 5 internationally recognized documents: The UN Global Compact, the ILO-Tri-Partite-Declaration, the United Nations Guiding Principles on Business and Human Rights, the OECD Guidelines for Multi National Enterprises and finally the ISO 26000. Our project decided already last year to consider the scope of ISO26000 as the base of our interventions. This allows us today to deliver assistance to national and international enterprises covering the seven core subjects of CSR: Organizational Governance, Human Rights, Labour Practices, Fair Operation, Environment, Consumer Issues and Community Engagement in an integrative way. For more information please do not hesitate to contact us either through our webpage www.csr-vietnam.eu or directly with the UNIDO Chief Technical Advisor on CSR Mr. Florian Beranek, f.beranek@unido.org
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Business Update
Stricter Control of Employment of Foreigners
While some of the changes set out in Decree 46 and Circular 31 are welcomed, a greater number would appear to complicate the process for employing foreigners in Vietnam.
Earlier this year, the amendment of certain provisions of Decree 34/2008/ND-CP dated 25 March 2008 on the recruitment and management of foreigners working in Vietnam ("Decree 34") by Decree 46/2011/ND-CP ("Decree 46"), effective on 1 August 2011, raised critical comments from the foreign business community in Vietnam. Important changes resulting from the application of Decree 46 have been further detailed in the recently adopted Circular 31/2011/TT-BLDTBXH dated 3 November 2011 ("Circular 31"), effective on 18 December 2011. While some of the changes set out in Decree 46 and Circular 31 are welcomed, a greater number would appear to complicate the process for employing foreigners in Vietnam. New exemptions to the requirement for a work permit Decree 46 extends the list of foreigners exempted from the requirement to obtain a work permit to include:
Internal transferees within an enterprise operating in Vietnam in one of the eleven services sectors covered by the Vietnam WTO Commitments on Services (business services (including services in accounting/auditing, architecture, urban planning, engineering, advertising, management consulting, etc.), services in communication, construction, distribution, education, environment, finance, medical, tourism, culture and entertainment, and transportation). Non-Governmental Organisation (NGO) representatives who are head of the NGO's representative or project office or who act as representative of an NGO's operations in Vietnam. Experts providing expert and technical consultancy services or undertaking other tasks servicing research, formulation, evaluation, monitoring and assessment, management or implementation of a program or project using official development aid (ODA) in accordance with provisions or agreements in an international treaty on ODA to which Vietnam is a party.1 Journalists issued with a professional license by the Ministry of Foreign Affairs.
These exemptions are in addition to those existing under Decree 34, including foreigners working in Vietnam for a period of less than three months, foreigners who are a member or owner of a limited liability company or a member of the board of management of a joint stock company, foreigners entering Vietnam to offer services or foreign lawyers to whom the Ministry of Justice has issued a certificate. The "internal transferee" exception has been the most well received as it is expected to facilitate operations of multinationals in Vietnam. The main condition is that the transferee must have been working for the transferring enterprise at least 12 months prior to being transferred to Vietnam. As the implementation of this exemption is still subject to guidance by the Ministry of Industry and Trade (MOIT), it is however difficult, at the current stage to anticipate its practical application. New conditions to the extension of an existing work permit The most hotly debated change brought about by Decree 46 is the new requirement to include a copy of an apprenticeship contract, signed between the employer in Vietnam and a Vietnamese "apprentice" designated to replace the foreign employee once the extension of the work permit has expired, in the application file for an extension of a work permit. An extension for a work permit may currently be for a maximum period of 3 years, following which, on the face of Decree 46, the position must be filled by the Vietnamese "apprentice". This requirement is a serious concern for those companies employing foreigners with special qualifications or skills that cannot readily be obtained through on-the-job apprentice-style training. It is also not clear what would happen in the case the "apprentice" leaves the employer within the 3 year extension period. The later implementing Circular 31 may have softened this new requirement by providing an alternative to the apprenticeship contract. Under Circular 31, an employer has two options: (i) provide a copy of an actual apprenticeship contract; or (ii) provide documents evidencing that it has implemented a plan to train local employees to replace foreign employees as required by the Labour Code. The content of the plan should include the number of Vietnamese employees to be trained to replace the foreign employees for each position, the duration and location of employment and the form, organisation and result of the envisaged training.
1. This exemption previously existed by operation of international treaties, but has now been formalised in domestic legislation. 23
Business Update
The alternative approach, although welcomed, still leaves considerable uncertainty in terms of how it may be applied in practice. Note that internal transferees (not yet exempted from a work permit) may apply for a work permit extension simply by providing proof of a decision from their foreign employer of their appointment to the Vietnam entity, without needing to complete a full application file. Recruitment of foreign employees Decree 46 has introduced a more severe approach to existing policies and rules applicable to the local recruitment of foreign employees in Vietnam. Advertising jobs locally Previously, Decree 34 only required an employer to advertise its employment needs in a central or local newspaper at least 30 days before recruiting a foreign employee. Decree 46 now provides that the notice/advert must be published in at least one central and one local newspaper in written, oral, pictorial or electronic form, specifying precisely the number of employee(s) to be recruited, the working position, specialist qualifications required, salary and other entitlements, working conditions and other necessary items which the employer stipulates. The significant concerns raised by foreign businesses with respect to this more onerous requirement have been partially addressed in Circular 31, according to which an employer who has already published its employment requirements in at least two central and two local newspapers but was not successful in finding a candidate, may recruit foreign employees without additional advertising, provided the recruitment occurs within 36 months of the last publication. New timing for the execution of an employment contract Under Decree 34 the employer and the foreign employee were required to sign an employment contract after the foreign employee was issued with a work permit only, it being understood that a foreign employee could begin work while the application process was underway. Decree 46 now requires the execution of an employment contract between an employer and a foreign employee before the foreign employee starts work. Consequently, the starting date of a foreign employee must be pushed back if the issuance of his or her work permit is delayed. Tender documents/foreign contractors Decree 46 stipulates that invitations to tender must set out staffing requirements giving priority to employing Vietnamese and must require tenderers to provide a plan on employment of foreigners. A foreign contractor must provide a written report of its plan to employ Vietnamese employees to the chairman of the People's Committee where the project is executed. The report is required to indicate the required positions, number of employees, level of expertise, experience and duration of employment. If the People's Committee fails to supply the requested staff within 30 days (for the recruitment of fewer than 500 Vietnamese employees) or 60 days (for recruitment of 500 or more Vietnamese employees), the foreign contractor may recruit foreign employees to fill vacant positions. The Vietnamese investor or project owner must guide and check the implementation of regulations relating to the recruitment and employment of foreigners by the foreign contractors and must provide quarterly reports on these issues to the local Department of Labour.
Ms. Nguyen Tinh Tam and Mr. Antoine Toussaint Gide Loyrette Nouel http://www.gide.com
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New Members
Welcome to our new Corporate Members
Lys Events
NABEGA
HANOI
Located right in the heart of Hanoi and Ho Chi Minh City, the European Chamber of Commerce in Vietnam offers newly designed office and meeting facilities embedded into our EuroCentre and EuroCham offices. Additional services include business support. This is an excellent choice for any business, either small or large to be located at the heart of the European business community in Vietnam.
HCMC
For further inquiries, please contact Ms. Thuy at o.mgr@eurochamvn.org or call (08) 3827 2715
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HCMC 14th and Hanoi 15th December - Member Year-End Party 2011
H C M C H A N O I
The EuroCham Annual General Meeting will take place Thursday 7th March 2012 at Sofitel Plaza Hanoi and HCMC simultaneously To our direct members: To ensure you will be included in the upcoming EuroCham Membership Directory 2012, please renew your membership with EuroCham and submit your updated profile by January 30. 2012. to Ms. Nguyen Hong Ngoc ngoc@eurochamvn.org. If your membership renewal invoice is not settled by January 30., we can not guarantee your profile will be included in this edition. Please note that the EuroCham offices in Hanoi and HCMC will be closed from January 23. - January 27th. 2012 for Tet. The staff at EuroCham would like to wish our members and friends a safe and happy festive season!
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