Duty-free zone boosts trade with Cambodia

22nd September, 2009)

Customers shop at the Tinh Bien commercial zone in the southern province of An Giang. — VNA/VNS Photo Thoai Trung

AN GIANG — The opening of the Tinh Bien Commercial Zone late last month has significantly energised two-way trade between Viet Nam and Cambodia, a local trade official says.

"Trading at the newly opened commercial zone has been rather exciting, with an average turnover of more than VND1 billion (US$56,000) per day," said Nguyen Minh Tri, head of the zone’s management board.

Tri said southwestern An Giang Province has mobilised domestic manufacturers to bring their products to the Tinh Bien Commercial Zone to export and sell goods for residents of both countries living in border areas.

The Tinh Bien Commercial Zone has become a hub for high quality Vietnamese goods while other tax-exempted areas at commercial zones lying near border areas are full of imports from other countries, Tri said.

"Vietnamese goods at the commercial zone are exempted from value added tax, export tax, and need to follow very simple procedures for exporting," Tri said. "We focus on promoting high quality Vietnamese goods, as well as creating the most favourable conditions for businesses from either country to contact each other directly."

Some Cambodian buyers said they used to buy goods from Thailand or China, but the the tax exemption on many high quality Vietnamese goods, ranging from textiles and garments, foodstuff, chemicals and consumer goods to household utensils, interior decorations, and electricity equipment, has enticed them to visit the zone at least once a week.

Many Cambodian retailers also buy a large number of Vietnamese goods for selling in the provinces of Kampot, Kampong Speu, Kampong Cham and Ko Kong in their country.

Vuong Dinh Ngan, deputy head of the Ministry of Industry and Trade’s Department for Trade Promotion, said this was the first time Viet Nam was exporting high quality domestic goods through a tax-exemption area.

The Tinh Bien Commercial Zone was not merely a duty free trade zone, but offered an opportunity for domestic businesses to introduce their products and set up long-term partnerships with Cambodian distributors, Ngan said.

Chanh Thon, a dealer from Cambodia’s Kampot Province said he had contacted Vietnamese exporters for interior decoration and handicrafts at the commercial zone. "We recognise the variety of sophisticated, well designed and reasonably priced Vietnamese goods," he said.

Hua Muoi Tu, sales manager of Duy Tan Plastic Co, said the company had appointed a distributor in Phnom Penh. Another one at the Tinh Bien Border Gate would facilitate deeper penetration of the south-east Cambodian market, he said.

Cong Danh Co Ltd, which previously sold small volumes of its products to Cambodia, has invested in the tax-exempt supermarket to serve tourists.

Director Ung Van Thanh of the company said: "Bringing domestic goods to the border gate can easily attract customers from the other side of the border. Relying on this, the turnover is increasing every day."

Instead of going to HCM City and eastern provinces to seek partners, enterprises in the Cambodian province of Takeo would just go through the border gate, said Ung Chea Kuk, chairman of the province’s Enterprises Association.

At the An Giang Commercial Zone, domestic and international tourists are allowed to buy imported products exempted from import tax, value added tax and special consumption tax for the first VND500,000 worth of purchases.

The zone has attracted six investors so far in its supermarket and more than 40 companies have registered to lease space in it, accounting for a total investment of more than VND350 billion ($19.5 million). — VNS