A double taxation pact to do away with taxes between Vietnam and Hong Kong will further boost economic cooperation as well as increase trade between the two sides in the future, said a Hong Kong trade official.

The Vietnam-Hong Kong Comprehensive Double Taxation Agreement (CDTA) was signed by the ministries of finance in December last year and will come into full effect in January 1, 2010.

At the workshop in Hanoi on August 4, Law Kin-wai, the Acting Director of the Hong Kong Economic and Trade Office (HETO) in Singapore , said that the pact will help to create a stable and transparent legal environment for taxation.

This will help businesses to expand their operations in both Vietnam and Hong Kong , he added.

The workshop, jointly organised by the Vietnam Chamber of Commerce and Industry (VCCI) and the HETO, was attended by representatives from 100 enterprises in Hanoi from every economic sector. A similar seminar will take place in Ho Chi Minh City on August 5.

Two-way trade between Vietnam and Hong Kong hit four billion USD in 2008. In the first five months of this year, the figure hovered around 1.66 billion USD, up by 19 percent compared to the same period last year.

Hong Kong is one of the first and biggest foreign investors in Vietnam right after the Foreign Investment Law came into full force in 1988.

By June this year, it had invested in 528 projects in Vietnam with a committed capital of over seven billion USD.

According to Director Law, Hong Kong has many advantages, including its independent legal system, well-established financial services and its excellent geographical location.
He suggested Vietnamese businesses should make the best of such benefits to develop trade with other markets in the region and around the globe.

Since the late 1980s when Vietnam embarked on “doi moi” or renovation policy, and opened its economy up to the world, Hong Kong has played an active role in bridging Vietnam ’s trade activities with foreign countries.

Aside from trade, Vietnam and Hong Kong have established a close partnership in other areas. Both parties have signed three other memoranda of understanding on education, trade promotions and finance after Prime Minister Nguyen Tan Dung visited Hong Kong this April./.