Following the free trade agreement concluded between the EU and Vietnam in 2020, the import duty on 94% of Vietnamese fruit and vegetables was immediately reduced to 0% as of 1 August. A boost for the country, which, according to market experts, has the potential to become one of the most important fruit exporters for the EU and the world. With a population of 99 million, Vietnam is the fastest growing economy in the ASEAN region.
In the field of fruit and vegetables, the country is already doing well. Vietnam has an area of more than 1 million hectares of fruit trees. Vietnamese growers increasingly apply food safety and hygiene according to GlobalGAP standards. The products dragon fruit, mangoes, pomelos, longan, rambutan, mangosteen, jackfruit, fruit star apples, lychee, passion fruit, coconuts, pineapples, lemons, and sweet potatoes are among the largest export products. Horticulture and ornamental horticulture are also promising sectors of the Vietnamese economy and will remain a very large potential market in the coming years as the horticulture and ornamental sectors are expected to develop into a mature and technical industry.
Nevertheless, according to Laurens Maartens of StoneX, which specializes in so-called 'cross-border payments' into the less common currency, there is still a lot more money to be saved for importers or parties with a production location in Vietnam when making payments in the local currency.
"Up until now, almost all payments to Vietnam have been in euros and dollars because most Dutch parties cannot facilitate payment in the local currency. Therefore, the local bank converts the currency to the Vietnamese dong. As a result, companies often have no idea what exchange rate is charged by the bank. They are completely locked in and at the mercy of the local bank. How big that percentage is varies, but if you use your debit card to withdraw money in Norway, you quickly pay a few euros in transaction fees, never mind what a Vietnamese bank charges..."
StoneX - a member of the Dutch Business Association Vietnam - already handles many payments towards Vietnam in the local currency for a large, diverse group of customers. "This ranges from the import of goods to meeting tax obligations or salary payments of Dutch companies with a production facility in Vietnam," Laurens says. "We can do that thanks to our corresponding banking network. Our working method is completely transparent; we give a client an exchange rate so that they know in advance how many euros or dollars he will have to pay to meet his obligation. No fees, commissions, or other costs are added to the transactions." Laurens points out that he can only help customers convert euros and dollars to dong and not vice versa. "That has to be done by the local bank."
Laurens calls on importers, exporters, and companies with a production facility in the country to put it to the test. "Recently, a client of ours did just that by carrying out half of his savings in the usual way and letting us take care of half. This resulted in substantial savings of 4 to 6%. What is perhaps even more important, the customer regains control of his payment. Our working method is transparent, the risk of errors is much lower, and it is also cheaper. Count your profits."