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Economic conditions

Vietnam's Service Sector Safeguards Amid WTO Entry Fears

Strategic Insights

— 1 min read

Vietnam's service sector faces significant challenges as the country prepares to join the World Trade Organisation (WTO), with experts warning of the potential loss of market share to foreign companies. However, a trade ministry official has downplayed these concerns, citing the country's commitment to open its market in 11 to 12 fields and 110 sub-branches of the service sector as "reasonable" compared to other new members. Despite fears of foreign retail groups dominating the domestic market, Vietnam has taken measures to protect its retail sector, limiting the number of foreign-owned supermarkets and reserving the right to reject further requests. The country has also imposed a $15 million fee for foreign banks to open a second branch, encouraging them to acquire shares in local banks or establish joint ventures instead.

Key Takeaways:

  • Vietnam has committed to opening its market in 11 to 12 fields and 110 sub-branches of the service sector, which is considered a "reasonable" commitment compared to other new WTO members.
  • The country has taken steps to protect its retail sector, limiting the number of foreign-owned supermarkets and reserving the right to reject further requests.
  • A $15 million fee has been imposed on foreign banks to open a second branch, encouraging them to acquire shares in local banks or establish joint ventures instead.
  • The Vietnam-US Bilateral Trade Agreement (BTA) and the country's commitments to WTO membership require a 100 per cent foreign enterprise to be established in 2009.
  • Vietnam has only allowed the setting up of one 100 per cent foreign-owned supermarket in one designated province or city.
  • The State Bank of Vietnam (SBV) has imposed a $15 million fee for foreign banks to open a second branch, limiting their opportunities to expand.
  • Foreign banks are currently allowed to hold only 30 per cent of the total chartered capital in Vietnamese banks.

Statistics:

  • Vietnam has committed to opening its market in 11 to 12 fields and 110 sub-branches of the service sector.
  • A $15 million fee has been imposed on foreign banks to open a second branch in Vietnam.
  • Vietnam has only allowed the setting up of one 100 per cent foreign-owned supermarket in one designated province or city.
  • Foreign banks are currently allowed to hold only 30 per cent of the total chartered capital in Vietnamese banks.
  • The Vietnam-US Bilateral Trade Agreement (BTA) will implement its requirements in 2009.

Sources:

  • (VNA) 01-09 1350.

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