by Bao Long
HÀ NỘI Changes to business regulations and laws are needed if Vietnamese
businesses are to take advantage of the global market offered by the Internet, according
to market observers.
Lack of a legal framework facilitating business-to-business transactions over the
Internet is the biggest stumbling block to e-commerce expansion in Việt Nam, the
Furthermore, a reluctance amongst the countrys bankers to embrace new technology
such as electronic invoices and digital signatures is hampering efforts to develop the
necessary infrastructure for e-payments, a key component of e-commerce.
Offering an example of the situation, manager of computing company Opticom, Stefan
Probst said: "Existing laws and regulations require a sealed contract if a
transaction value is above a certain limit.
But of course e-commerce means paperless transactions. There is no printed contract,
which could be signed and sealed."
According to Probst, this regulation could be dropped quite easily and digital
signatures used to replace the so-called "red seals" if the initiative was
However, he said that the single biggest hindrance to business-to-business e-commerce
and the one that may be the most cumbersome to remove was the present legal
requirement for "official financial invoices" in transactions controlled by the
"In e-commerce the invoices are printed out from the Web (if needed). The invoice
number is solely controlled by the seller. No seal, no signature of the seller. So, I
dont think it will be possible to drop that requirement only for e-commerce, and
keep it for other transactions at the same time," said Probst.
He suggested that the tax office should consider how to drop the concept of the
"financial invoice" as soon as possible and to allow businesses to overview
their own invoices so as to enable e-commerce.
For domestic bankers, apart from obstacles presented by the absence of laws, there is a
reluctance to transform their traditional payment systems.
"The fact is that bankers are afraid of losing highly profitable and low-risk but
old payment services even though they acknowledge that the e-payment will benefit their
customers more," one banking insider who wished to remain anonymous said.
But, he predicted, conservative bankers would be wiped out of the marketplace in the
next couple of years if they remain unchanged.
"Traditional banks will face tough competition from non-credit organisations born
by the Internet-driven economy such as supermarkets and consumer goods producers," he
Such companies are beginning to offer credits such as goods purchasing cards to their
customers with the advantage of wider distribution networks, more attractive credit prices
and flexible procedures than traditional banks.
Probst said the situation is even worse, when it comes to transactions of "digital
content," such as software, services which can be delivered through the Internet as
only the export of goods is exempted from VAT, export of services is not considered.
He added that: "The tax office doesnt accept zero per cent-VAT invoices for
exports which are not confirmed by the customs office but customs cannot confirm the
export of deliveries via the Internet."
Probst noted that Việt Nam is connected to the same Internet over which some
companies in other countries sell equipment worth several tens of millions US dollars
every day, using the same technology available in Việt Nam.
"Changes to the law in relation to contracts, accounting and customs regulations
have to be made as soon as possible," Probst said.
The low usage of credit cards and PCs in Việt Nam, as well as relatively high
Internet fees, explain only a rather small part of the slow e-commerce progress, he said.
"In e-commerce, usually a distinction
is made between Business-to-Business and Business-to-Consumer
transactions, where the former one represents
world-wide a significantly bigger volume than
the latter one."
"Since the purchasing power of consumers
in Việt Nam is rather low, Business-to-Consumer
transactions are not hurt too much by the
present dearth of laws in this area."