Industry Update/National Response 

• As of early July, around 7.8 million workers have lost their jobs or were furloughed due to the pandemic, according to the Ministry of Labour, War Invalids and Social Affairs (MOLISA).
• As of early July, Vietnam’s borders will remain closed to international tourists as per Prime Minister Nguyen Xuan Phuc in order to prevent a second wave of the pandemic.
• Vietnam’s National Assembly ratified the EU Vietnam Free Trade Agreement (EVFTA) on 8 June. Following the approval, the deal could take effect as early as August. The FTA is expected to boost the country’s manufacturing sector and exports as it recovers from the pandemic.
• As Vietnam’s economy recovers from the pandemic, the government has proposed a cut in corporate income tax of 30 percent to boost cash flow. The proposal would apply to the 2020 financial year and in particular help small and medium enterprises.
• The National Assembly approved increasing personal income tax deductions for individuals and dependents for 2020 to increase economic growth and consumption.
• The Ministry of Finance has cut license and administrative fees for several industries to help them recover from the COVID-19 pandemic. The cut in fees range from 20-50% and took effect on 5 May. The reduction will remain in effect until the end of the year, following which normal prices will be applicable.
• The government on 29 May issued Resolution 84/NQ-CP unveiling a number of incentives for businesses affected by the pandemic. The Resolution includes the reduction of certain fees, as well as the easing of various regulations related to trade, industries, and foreign employees.
• Vietnam has approved the reopening of sub-border gates and border crossings in Lang Son and Quang Ninh provinces connecting with China to ease trade between the two countries.
• As of May 11, the government eased its social distancing campaign and allowed a series of non-essential businesses and services to resume operations, excluding karaoke parlors and discos. All students are back in school. 
• In late July Vietnam’s first community transmission case after 99 days was reported in Da Nang. As a precaution, Da Nang city authorities have announced 15 days of social distancing measures from July 28. 
• The International Monetary Fund has stated that Vietnam’s economic growth may slow down to 2.7 percent this year due to the pandemic, but may pick up to 7 percent in 2021.
• Vietnam reported a 1.81 percent GDP growth in the first half of 2020, its lowest since 2011, according to the General Statistics Office.
• Vietnam donated medical supplies worth US$240,000 to eight countries including Australia, Brunei, India, Indonesia, Malaysia, the Philippines, Singapore, and Thailand. The US will give Vietnam an aid package worth US$9.5 million to combat the COVID-19 pandemic.
• The Prime Minister issued Directive No. 19 on measures to cope with COVID-19 on 25 April. The measures give directives on handwashing wearing face masks, while banning religious gatherings, festivals, and sporting events. In addition, bars, pubs, beauty salons, and karaoke bars will continue to remain closed until further notice.

• The Ministry of Finance recently composed two key draft decrees to be tabled to the Prime Minister for consideration, including a draft decree to increase the cap of deductible interest expenses under Clause 3 Article 8 of Decree 20/2017/ND-CP and a draft decree on invoicing.
• Authorities are considering a wide range of COVID-19 support measures, including reductions of customs duty and customs audits, but such measures are not officially announced.
• Textiles businesses, including several with no prior experience, have begun producing antibacterial masks after authorities announced a daily need of 10 million.
• According to a Vietnam Chamber of Commerce and Industry Survey, nearly 35,000 companies and small businesses have stopped operations during Quarter 1 and more than 75% of companies will need to reduce their workforce (10% of them by 50%). Over 1,500 companies were dissolved in Ho Chi Minh City in the first quarter of the year as per the municipal government figures. Vietnam could miss its target of having one million businesses this year,  due to the pandemic causing many to shut down.
• The government has suspended until 20 June the payment of social insurance premiums into the retirement and survivorship fund, without late payment interest charges, for businesses that have at least 50% of their labour force temporarily on leave as a result of the pandemic. Affected businesses are also exempt from contributions to the Labour Union fund.  
• On 25 March the Ministry of Labor, War Invalids and Social Affairs issued an official letter to enterprises to guide wages payments to those laid off due to COVID-19.
•  Authorities have approved a plan to delay the collection of US$7.6 billion worth of taxes and land rent to help industries affected by COVID-19.
• The government has passed a US$2.6 billion financial support package including a monthly allowance for between US$21.5-US$77 for up to three months for six categories of individuals and businesses affected by COVID-19. 
• The US became Vietnam’s leading export market between the January and May period with export turnover of US$24.6 billion, an annual increase of 8.2 percent. This is despite a fall of 17 percent year on year in FDI in the same period.
• Vietnam will grant e-visas to citizens of 80 countries as of July, per Resolution No. 79/NQ-CP. While this is a positive sign, the country’s borders currently remain closed to foreign visitors due to the pandemic.  
• Vietnam is planning a US$679 million cut in corporate income tax for small and medium-sized businesses to combat COVID-19.
• Vietnam has shipped up to 2 million hand sanitizer units to the US, Europe, and Canada. Another shipment of 4 to 6 million units is scheduled for late May.

Factory Service Update

• Vietnam is now experiencing a “new normal” following COVID-19 disruptions. Better Work is gradually resuming in-factory services in the past few weeks, including advisory and assessment, following the government’s social isolation restriction easing.
• Advisory services are being delivered both virtually (upon factory request) and on-site, with a focus on prevention and mitigation of COVID-19.
• After piloting online training courses in the past month, Better Work will provide both online and in-factory training courses in the next few months. These online courses will fit the demand of the factories who find difficulties in transportation.
• Online training courses are being piloted, and these courses will be implemented until the end of May 2020.
• Better Work has developed and shared guidelines for factories on response to COVID-19. Better Work will update these guidelines with any new policies announced by the government.
• Better Work organized eight online industry seminars for factories from 10-30th April to introduce stimulus package proposals of the government to counter the economic fallout of the COVID-19 pandemic. Approximately 230 enterprises participated. 
• As of June, Better Work continues to provide virtual industry seminars to help factories overcome this challenging period, focusing particularly on those who are severely affected by COVID-19 disruptions. 

Additional Better Work Activities

• Better Work is liaising with all stakeholders to limit the impact on workers and business and identify a collective approach to support the industry.
• Better Work organized a buyer webinar on 3 April, as well as a buyer legal forum with attendance by representatives of the Ministry of Labour, Invalids and Social Affairs on 23 April.
• Better Work organized a webinar to share updates with brands on 12 May.