ADVOCACY REPORT WHITEBOOK 2018 BRIEFING DANANG, 14 JUNE 2018

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1 ADVOCACY REPORT WHITEBOOK 2018 BRIEFING DANANG, 14 JUNE 2018 RECOMMENDATIONS FROM THE EUROPEAN BUSINESS COMMUNITY AND FEEDBACK FROM DANANG GOVERNMENT I. Education Speaker: Ms. Catherine McKinley Director at Green Shoots International School Topic 1: Decree 73 and bilingual education Some foreign-owned schools in Hanoi and HCMC have been granted special permission to run bilingual programmes for Vietnamese children as a pilot project pending the loosening of Decree 73 restrictions. Green Shoots would like to be allowed to do the same in Central Vietnam in order to meet the needs of local children here wishing to access a full-service international education. They have an increasing number of Vietnamese families contacting us but remain unable to offer this service. Feedback from the People s Committee of Danang: a. Ms. Huynh Lien Phuong IPA Deputy Director - This topic is under the authority of the central government. - The Danang Government will continuously recommend to the Ministry of Education and Training (MOET) for Decree 73 amendment. - Danang expects that there would be more funds and schools developed in Vietnam, especially in Danang. - The Danang Government is ready to support the implementation of specific projects. b. Ms. Truong Thi Kim Anh VCCI Deputy Director: - This topic was raised last year during the Whitebook 2017 Briefing in Danang as well as in a meeting between Green Shoots International School and VCCI. - VCCI has submitted this issue to Dr. Bui Tien Loc VCCI Director who has then forwardedthis to the Minister of Education and Training H.E. Phung Xuan Nha. - Minister Nha has acknowledged this difficulty and has been trying to have the situation improved. However, MOET needs more time for to enact tangible positive changes. - In order to consolidate EuroCham and Green Shoots position on this matter, VCCI recommends that there should be an official position paper on this topic sent to VCCI. 1

2 - The role of VCCI is to collect all feedback and recommendations from business community and particularly concentrate this on its quarterly feedback to all ministries. c. Mr. Huynh Duc Tho Danang PC Chairman: - This is not a new topic and it has been raised several times. - It is unfortunate that it was not possible until now to change this at the Central Government authority. - Hence, cooperation and mutual support between business and local Government is necessary to provide raise the profile of recommendations such as this so doors may be further open to education promotion and the country s global integration. Topic 2: Paperwork a. In Human Resources The paperwork required to obtain a work permit for a foreign teacher is becoming more and more onerous. Realising that rules are established by the Central Government, is there any local latitude for simplification? Example: One of our new staff members has estimated she will have to spend almost $2,000 to prepare the documentation we need in order to process her work permit, even though she already works as a teacher in Danang. This should only require a simple transfer of one work permit to another. b. Land rental: We are in the process of working through the documentation needed to access a plot of land that has been allocated for our use by the Quang Nam government. As a small company, we are struggling to find the right people to help us with this process and we lack the in-house capacity to do it alone. There are many other foreign investors in similar situations. Does Danang have (or could it create) a consulting service for foreign SMEs to help them navigate the administrative hurdles that come with such processes? Feedback from the People s Committee of Danang:: a. Ms. Huynh Lien Phuong IPA Deputy Director: is the year focusing on investment attraction. - Among solutions that could enhance investment attraction, IPA Danang has paid much attention to easing administrative procedures, especially in investment license issuance and clean land fund accessibility. - The IPA Danang is in the process of proposing a completely new procedure for investment implementation. - This procedure will be submitted to the Danang PC within this month and is expected to be introduced in the following month after passed. 2

3 - IPA Danang looks forward to feedback from investors about this procedure, having in mind the its ultimate purpose which is to reduce the time and cost. - Regarding to the paperwork burden, if the business community is faced with any difficulties, it is highly recommended that companies contact directly with IPA Danang and IPC Central Vietnam. - If the resolution of the issues faced is possible under the authority of the Danang People s Committee, they are committed to employ their best efforts to support the business community. II. ICT and Hi Tech Speaker: Mr. Hai Dang Ngoc Branch Director at Axon Active Vietnam Topic 1: IT Career Orientation While there is a huge demand for IT workers, and while companies often offer high salaries for IT positions, many universities and colleges struggle to enroll enough students in their IT courses. Recommendations: The Government should allow Da Nang University to increase there quota of enrolling IT students The university should optimize training curricula in order to reduce the studying time from 5 to 4 years, reduce all irrelevant subjects, and introduce more mandatory internship time at the companies. Recommendations: In light of the Government s prioritizing of the ICT sector, the Government should support the organization of an official Orientation Day to for graduate school students (and their parents) to raise the profile of IT careers, their high benefits, and the importance of participating in a key industry for the future of Vietnam. This should be done at the city level with the participation of the wider public and private training institutions, in the format of Open Exhibition Day. Topic 2: Improve quality of graduate IT students Graduated IT students often do not have enough skills to be fully prepared for the labour market. To tackle this, IT companies in Vietnam have to make substantial investment in fresh graduates from universities and provide additional vocational training to develop their technical, soft and English language skills. Recommendations: Da Nang Universities should introduce mandatory internships at companies as part of the curriculum. The performance evaluation should be considered as important part of the grading for students. A minimum qualification course should be designed to enhance soft skills and strengthen English communication Feedback from the People s Committee of Danang:: a. Ms. Huynh Lien Phuong IPA Deputy Director: - Danang appreciates all the recommendations and initiatives of Mr. Hai Dang Ngoc regarding how to improve both the quality and the quantity of IT students in Danang as well as in Vietnam. 3

4 - MOET has already signed documents allowing IT education institutions increase the quantity of student s enrolment and adjust the curriculum if necessary. - The Danang PC works closely with the Danang University and recently Bach Khoa University on documents and materials regarding IT majors which will be available soon. - The main purpose was to expand the enrolment scope and allow universities and institutions to change and/or adjust curricula in line with labour market demand. - The Danang PC welcomes the initiative from European businesses (orientation programs and various annual campaigns to motivate the spirit of IT students). - The Danang PC hopes that in the future, the business community will continue to cooperate with the city s authority in order to support human resources development towards meeting demand as soon as possible. - All the initiatives will be submitted to the Danang Department of Education and Training, especially the initiative to hold orientation programmes for high school students, where businesses would be invited to deliver speeches at high schools if such is possible to organise. III. Tourism and Hospitality Speaker: Mr. Jose Sanchez-Barroso EuroCham Central Vietnam Delegate/Hon. Consul of Spain/Vinh Tanh Investments Topic 1: Flight Connections Easing Flight connections to Seam Riep, Luang Prabang, Chiang Mai which can make Central Vietnam distribution hub for attractions in the Indochina region Topic 2: European investment in the MIICE sector Danang Government should have a plan to increase investment in infrastructure in facilities and the road towards making Danang a true events capital in Vietnam Topic 3: Destination Marketing: Danang Government has been exemplary in including the private sector in its Destination Marketing activities (e.g. Danang Tourism Committee). However, there should be plans to make a separate concrete promotion campaign for the Danang or Central Vietnam region (connected with Hue, Hoi An Quang Nam) Topic 4: Sustainable Tourist / Beach Cleaning campaigns Due to the rapid development of tourism infrastructure, Danang has been the target of concern due to environmental protection. A strong statement would be funding for sand cleaning machines managed by local NGOs and promoting incentives to sustainable tourism. Q&A: Mr. Thanos Lionsantos (Q&A) Director of Sales & Marketing at Pullman Danang Topic 5: Danang Destination Marketing: Taking the example of APEC 2017, Danang should consider pitching more international events and conventions in Danang which could bring new investors to the city. 4

5 Danang should take advantage of attracting young talents, university graduates, high-level managers to come to Danang and be Danang ambassadors to promote the reputation of the city. Danang should consider to develop its promotion as a film production destination. Pullman is ready to support to connect Danang PC with famous and reputable film makers. Feedback from Danang Government: a. Ms. Huynh Lien Phuong IPA Deputy Director: - Danang is planning to have one unique message to promote the image of the city. - The distinguishing idea is: Danang is a happy destination. - This is also the long-term vision of the city. - Danang is a happy destination for both Vietnamese and foreign investors, tourists, citizens; which is a method to attract more talents coming to Danang. - The city is also in the progress of reviewing and adjusting the development zoning of the city so that Danang narrows the key industries on which it is focused. - Within this year, Danang would introduce these key industries and attract talents in these industries (for example: hi tech, tourism, logistics ). - EuroCham and the European business community will be informed when official information is available. - The recommendations towards connecting Danang further with the Central region are really useful. - Recommendations on conventions organization and filming tourism well received and the IPA would communicate with the Danang Department of Tourism in this regard. IV. Taxation, Customs and Investment Promotion Speaker: Mr. Nguyen Hai Minh EuroCham Executive Committee/ Tax & Legal Partner at Mazars Vietnam Topic 1: Policy Focus: The Central Government has issued the Decree 04/2018/ND-CP regulating preference for a Danang high tech zone development. However, in practice, foreign businesses are more concerned about crucial issues underpinning a good business environment, before after being licensed. Resolving some of the more important issues would facilitate Danang s plans for specialized industrial development. Topic 2. Customs and Tax: Tax should be applied in accordance with international standards. Danang should support business on key customs concerns including HS Code and Customs valuation. These concerns should be looked upon not only at through the lens of policies and regulations, but also on how they are implemented in practice and the approach of the local entities that do so. Danang is in the process of attracting more investment, so working even further on ensuring a uniform, transparent and clear application of the rules should be a key concern for the local Government. 5

6 Q&A: Mr. Jan Segers BeluxCham Chairman / Transportation and Logistics Sector Committee Vice Chairman Topic 3. Infrastructure and Customs: The accessibility of Danang ports should be ensured in the process of their development. Import-Export administrative procedures may be different from province to province, therefore it would be necessary for Danang to ensure the most efficient possible. Q&A: Mr. Jose Sanchez-Barroso EuroCham Central Vietnam Delegate/Hon. Consul of Spain/Vinh Tanh Investments Topic 4. EVFTA Awareness: It is recommended that more events are organised to raise awareness among local European and Vietnamese businesses about the EU-Vietnam Free Trade Agreement and its advantages. Feedback from Danang Government: a. Ms. Nguyen Thi Thanh Van Deputy Director of Danang Department of Customs: - Vietnamese Customs Authorities are implementing FTA-driven regulations based on commitments undertaken by Vietnam, adding to other agreements signed by Vietnamese Customs Authorities, especially on the modernization customs procedures. - Such changes are instructed to be performed nation-wide. - Policies on Tax and Customs are unified in Vietnam so there are no differences distinguishing provinces from province. - The Danang Tax & Customs policies are applied in the most accountable way by the local entities mandated to do so. - The Danang Department of Customs is committed to facilitate businesses investing in Danang. - If businesses have any difficulties or concerns, the consulting section on the information website of Danang Department of Customs is a good channel to approach it. - In near future, logistics would be a key sector in Danang and the provincial Government will focus on improving access to Danang ports. Q&A: Mr. Jose Sanchez-Barroso EuroCham Central Vietnam Delegate/Hon. Consul of Spain/Vinh Tanh Investments Topic 5. Startup Ecosystem Development: Danang currently has an established preference for high technology companies, having promoted tax incentives in order to attract such enterprises to the city.. However, in practice, this has not been effectively applied. 6

7 Regarding the support for startups and SMEs, and despite the fact that in Danang there has already been a definition of startup investment funds; certain activities, conventions, and seminars have been conducted and there has been great support from the authorities. However, what Danang is lacking is an ecosystem connecting the startup community, analyzing their demands and output respectively. Danang should consider plan to build up that ecosystem in the near future as there is a thriving small startup and SME community currently being formed. This ecosystem would consist of a multi-resource platform where startups can get financial investment, experience support, as well as legal and administrative facilitation from the authorities. EuroCham is ready to support Danang to build up this ecosystem. Feedback from Danang Government: a. Ms. Huynh Lien Phuong IPA Deputy Director - Danang currently is one of 3 high technology zones of Vietnam with favourable preference (for example: investment tax preference for 30 years). - The city understands that human resources, infrastructure and accompaniment from the city government are what Danang must improve and promote. - The city is devoting much effort on infrastructure to support the business community. - Comments on creating a startup ecosystem are highly appreciated. - The startup community in Danang is only aits early stages and there has not been much occurring in terms of this policy-making perspective. - The Danang PC hopes that European companies with experience can also give their input in building a startup ecosystem and help develop this community in Danang. 7