VAFIE to step up business support, membership expansion

The Vietnam’s Association of Foreign Invested Enterprises (VAFIE) will ramp up efforts to better support businesses and expand its membership base, said Dr. Nguyen Anh Tuan, standing vice chairman of the association, the parent entity of The Investor.

Alongside improving the quality of legal feedback and promoting investment, the mentioned-above priorities will form part of VAFIE’s agenda in the new term, Dr. Tuan noted ahead of the association’s sixth congress on Thursday, April 24.

At VAFIE’s 2024 year-end review conference, association chairman Prof. Dr. Nguyen Mai emphasized that the association’s overarching mission for 2025 and beyond is to “innovate and enhance the quality and effectiveness of operations, deserving of its role as a representative body for the business community in this era of integration and national rise.” What are the key measures VAFIE will implement in the upcoming term to successfully achieve this mission?

Under the regulations approved by the Ministry of Home Affairs, VAFIE is a voluntary organization gathering foreign-invested enterprises in Vietnam and economic organizations from all sectors of the Vietnamese economy that have economic and investment ties with foreign partners.

The association aims to establish non-profit collaboration to protect the legal rights and interests of its members, support one another through shared business management experience, provide professional training, and deliver information on Vietnam's economic policies, guidelines, and legal frameworks. It also focuses on promoting and enhancing the effectiveness of foreign investment in Vietnam and supporting Vietnamese companies’ investments abroad.

From its name to its mission, VAFIE’s activities are closely aligned with the operations of its member businesses, helping them overcome challenges in business. This, in turn, will promote the addition of new members, ensuring that VAFIE is deserving of its role as a representative association for the business community in the era of integration and national rise.

A key lesson learned from VAFIE's activities in 2024 is that the more closely the association is connected with businesses and the better it supports them in removing obstacles in business, the more its role is strengthened, leading to the acquisition of more new members.

Could you elaborate on how VAFIE supported businesses in 2024?

Foreign-invested enterprises (FIEs) in Vietnam often face procedural hurdles regarding investment expansion, tax refunds and calculations, customs services, import-export, land access, and credit financing. In 2024, VAFIE received dozens of petitions from businesses seeking help in navigating these challenges. The association closely examined each case and promptly set forth practical solutions to assist enterprises in resolving their issues.

For example, in the area of taxation, VAFIE assisted Vung Ang II Thermal Power LLC (VAPCO) in successfully handling issues related to the implementation of the agreement for avoidance of double taxation between Vietnam and Japan, following Vietnam’s enforcement of the Global Minimum Tax rules.

The association also helped Piaggio Vietnam untangle corporate income tax incentive issues arising from differing interpretations of tax and investment laws, and supported South Korean firms including JMT, Dreamtech, and YoungPoong in securing value-added tax (VAT) refunds.

Regarding customs procedures, one example is ToTo Vietnam, which faced difficulties with on-the-spot import-export processes, while its branch had yet to benefit from preferential customs treatment.

Regarding credit financing, VAFIE assisted American firm Australis in resolving procedural issues with Vietnamese authorities to secure concessional financing from the Asian Development Bank (ADB) for expanding its investment.

In 2024, the VAFIE chairman signed and submitted dozens of documents to various ministries, agencies, and local authorities, asking for consideration and resolution of the legitimate demands of businesses. Some of VAFIE's proposals were thoroughly addressed, while others are still under review by relevant authorities.

With such a large volume of work, how does VAFIE manage to address the businesses' requests in a timely manner?

First and foremost, we have a team of experienced experts in each field, including both dedicated specialists and a network of collaborators.

For example, in the field of taxation, in addition to veteran experts such as Nguyen Van Phung, former director of the Large Enterprise Tax Department at the General Department of Taxation (now Department of Taxation), we also have tax specialists working at "Big 4" firms, including Huong Vu (E&Y) and Nguyen Cong Ai (KPMG).

In the field of investment law, VAFIE has experts such as Prof. Dr. Nguyen Mai, former VIce Chairman of the State Committee for Cooperation and Investment; Nguyen Noi, former deputy director of the Foreign Investment Agency; and Nguyen Thi Minh Hien, former investment counselor of Vietnam in the U.S. and South Korea.

In addition, we maintain strong relationships with ministries such as the Ministry of Planning and Investment (now the Ministry of Finance), the Ministry of Natural Resources and Environment (now the Ministry of Agriculture and Environment), and the Ministry of Construction, and with local authorities, especially those with many FDI projects.

Another favorable factor is that in June 2023, the VAFIE chairman signed a decision to establish the Business Support and Tax-Legal Advisory Committee, along with its working regulations with a clear mandate, enabling it to operate effectively.

Upon receiving recommendations from businesses, the committee conducted case reviews and engaged in dialogues with relevant ministries and local authorities to develop appropriate solutions.

You just mentioned that the better the association supports businesses, the more it can expand its membership base. Could you elaborate on this point?

First of all, I’d like to note that 2024 was a highly successful year for VAFIE in terms of membership expansion, with more than 40 new members. These include major corporations such as Samsung Electronics Vietnam, Cai Lan Port, GMT Vietnam, Saigon Beer-Alcohol-Beverage Corporation (Sabeco), Vung Ang II Thermal Power LLC, Nghi Son 2 Power Limited Liability Company, Goertek Vina, Timberland, Pepsico, Toto Vietnam, and Song Ngu Son JSC, among others.

The above results are primarily attributable to VAFIE’s growing reputation, particularly in providing feedback to consolidate laws and policies, strengthening business support efforts, resolving numerous obstacles in enterprise operations, and safeguarding the legitimate interests of its members.

Aside from supporting businesses and expanding its membership, what other key tasks will VAFIE focus on in the upcoming term?

Policy feedback and argument will be one of the key tasks that VAFIE will prioritize and continue to strengthen in the upcoming term. To ensure the quality and effectiveness of this work, it is essential to gather the voices of the business community.

VAFIE will enhance its efforts to solicit opinions from businesses on draft laws, government decrees, and ministry circulars, so that it can compile them and provide recommendations to relevant authorities.

I believe that only when legal documents are created based on practical realities can they ensure feasibility, fairness, and thus be successfully implemented. For a long time, we have only discussed bringing laws into practice, but in my opinion, we must also bring real-life situations into laws, making them more easily integrated into daily life.

Another important task for VAFIE is to enhance investment promotion efficiency to attract high-quality FDI projects that align with the national socio-economic development strategy in the new era, particularly in sectors such as high-tech, environmentally friendly projects, semiconductors, information technology, AI, big data, FinTech, and more.

Chairman Nguyen Mai has emphasized the task of innovating and improving the quality and effectiveness of VAFIE's operations. Could you share the direction and key reforms VAFIE will implement in the upcoming term?

First, all of VAFIE's activities must be closely aligned with businesses, strengthening its connection with them and placing them at the center of both its operations and its image and brand.

Next, VAFIE will streamline the organizational structure of its affiliate bodies. In this regard, the Business Support and Tax-Legal Advisory Committee is expected to be renamed the Business Support and Membership Development Committee. Additionally, the operational model of the Investment Promotion Center will be reorganized to meet the requirements of the new phase.

VAFIE will also further develop its team of experts and collaborators across various fields. Additionally, the association will enhance its information efforts. In addition to The Investor ((wwww.theinvestor.vn) and its Vietnamese-language sister Nha dau tu ((www.nhadautu.vn), the association's website will be upgraded to promptly provide members with essential information related to business and investment activities.

In the most succinct terms, what would be the key focus of the association's reforms in the upcoming term?

The key focus will be to make VAFIE truly the association of businesses, with activities that are practical and beneficial for the country and for the legitimate interests of foreign-invested enterprises in Vietnam, as well as Vietnamese businesses with economic and investment ties with foreign partners.