FDI and Foreign Trade

New Issue of Vietnam Briefing: 100% FOEs, JVs and the Promotion of Supporting Industries

Jan. 17 – The new issue of Vietnam Briefing Magazine, titled 100% FOEs, JVs and the Promotion of Supporting Industries, is out now and is immediately available as a complimentary PDF download on the Asia Briefing Bookstore.

For investors looking to make forays into Vietnam, choosing between a wholly foreign-owned enterprise (100 percent FOE) and a joint venture (JV) can have significant implications, as both have their pros and cons and the permissible establishment details (such as percent of foreign capital contributions) for each vary by sector.

As 2012 will be a year of significant change in limitations on foreign ownership regulations for 100 percent FOEs and JVs, this issue offers a clear snapshot of up-to-date regulations and specific changes to expect in 2012, as well as a useful summary of tax incentives and exemptions. Also, a roadmap and timeline for licensing procedures take the guesswork out of this initial step in establishing a business in Vietnam. Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade, Featured, Markets | Tagged Vietnam Briefing Magazine, Vietnam Establishment, Vietnam FDI, Vietnam FOEs, Vietnam JVs | Leave a comment

Exporters Urged to Increase Focus on Germany

Dec. 29 – There is still much potential in the German market for Vietnamese exporters to explore, said participants in a conference held in Ho Chi Minh City on Tuesday.

While Germany has grown into one of Vietnam’s major trading partners since 2007, the current export volume to the European country is still modest compared to the volume of export to China, Thailand and India, noted Do Thang Hai, director of the Trade Promotion Agency at the Ministry of Industry and Trade (MIT). Continue reading →

Posted in Business, FDI and Foreign Trade, Ho Chi Minh City | Tagged Vietnam Export, Vietnam Germany Trade | Leave a comment

Vietnam’s Bank Restructuring a Big Opportunity for Foreign Investors

By Lorenzo Martelli

Dec. 14 – Increases in the ownership ratios that foreign strategic partners can hold at Vietnamese joint stock banks, encouragement for the merger of weak banks, and not increasing the chartered capital are the main points of the European Chamber of Commerce (EuroCham)’s proposal when talking about bank restructuring.

Decree No. 69/2007/ND-CP enacted by the Prime Minister in 2007 decided to allow a strategic foreign investor to purchase from between 15 percent to 20 percent stake in a domestic bank, which, however, must not exceed 30 percent of the chartered capital of that bank. Continue reading →

Posted in Business, FDI and Foreign Trade, Finance, Tax and Accounting | Tagged Eurocham, Vietnam Banking, Vietnam FDI, Vietnam Finance, Vietnam Regulatory | Leave a comment

Vietnam Drawing Increasing Interest from Italian Investors

Dec. 8 – Trade and investment between Italy and Vietnam has increased steadily over the last 10 years. According to statistics issued by the Government of Vietnam, Italian FDI projects amounted to US$187 million in 39 projects at the end of 2010. The manufacturing industry still has the biggest share amid Italian FDI, even though other sectors are increasingly showing their interest in the market.

In the wake of a recent successful business mission by 24 Tuscan wineries to Vietnam at the beginning of November, Damiano Francovigh, head of the Economics and Commercial Section of the Italian embassy in Vietnam, shares his vision of the potential cooperation between the two countries. Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade | Tagged Italian Trade Commission, Vietnam FDI, Vietnam FDI Attraction, Vietnam Foreign Trade, Vietnam Wine Market, Vietnam-Italian Trade | Leave a comment

Lower Rent for Manufacturers and Environmental Tax Exemptions

By Lorenzo Martelli

Manufacturers benefit from lower rent
Dec. 7 – On November 23, the Vietnamese Government issued Decision No. 2093/QD-TTg to reduce businesses’ land use rental costs for 2011 and 2012. A 50 percent reduction in rentals for leased land will be enjoyed by firms conducting manufacturing businesses. According to calculations, under Decree No. 121/2010/ND-CP, the rental fee is paid annually. However, reductions can be applied under some circumstances only. The land rent charge is reduced when such entities:

Have the proper and lawful use of the leased land;
Have been subject to statutory increases in land rent charges at least twice in 2010. Continue reading →

Posted in Business, FDI and Foreign Trade, Legal and Regulatory, Regulatory Update | Tagged Vietnam Environmental Tax, Vietnam Incentives, Vietnam Overheads, Vietnam Rent, Vietnam Tax, Vietnam Tax Exemptions | Leave a comment

Vietnam’s M&A Activities 2011

Nov. 7 – Following amendments more than five years ago to two major laws regarding investment activities in Vietnam – namely the “Competition Law” and the “Law on Investment” – the country’s mergers and acquisitions (M&A) market has increased from US$299 million in 2006 to US$1.7 billion in 2010. Furthermore, M&A activities for the first nine months of 2011 have reached over US$2.6 billion, doubling the value seen in the same period last year. M&A transactions are also expected to continue to see strong growth in the foreseeable future.

“M&A in Vietnam will flourish in the last quarter of 2011 and the following years, with an annual growth rate of 30 percent to 40 percent,” said The Competition Management Department (under the Ministry of Industry and Trade) at the Vietnam M&A Forum 2011 held in Ho Chi Minh City on June 9, 2011. Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade, Markets | Tagged European Chamber of Commerce in Vietnam, Vietnam Economy, Vietnam European Union, Vietnam FDI, Vietnam Japan, Vietnam Mergers and Acquisitions | Leave a comment

Germany-Vietnam Investment Cooperation

Germany now Vietnam’s largest EU trading partner

Nov. 3 – In 2010, bilateral trade between Vietnam and Germany reached US$4.1 billion, showing substantial development since the two countries set up diplomatic agreements on September 23, 1975. The mutual understanding between Vietnam and Germany has been further strengthened through maintaining trustworthy partnerships and a political consultation mechanism between the two Foreign Ministries that was established in 2008. Moreover, the two countries have signed a number of agreements to form a legal foundation for bilateral economic cooperation such as the Agreements on Double Taxation Avoidance, Investment Encouragement and Protection, Maritime Shipping and Aviation.

As German Chancellor Angela Merkel has recently pointed out in her official visit to Vietnam for the Vietnam-Germany Economic Forum, German entrepreneurs consider Vietnam as fertile ground to do business, particularly in the high-tech industry as well as in education and environment. She also expressed her good impressions on Vietnam’s socioeconomic achievements, particularly in the last 10 years, and affirmed that Ho Chi Minh City was the most dynamic economic center in Vietnam. Thus, Germany would like to establish additional cooperative relations with Vietnam in general and HCM City in particular. She also identified some key issues to enhance Vietnamese investment environment. Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade, Ho Chi Minh City | Tagged Angela Merkel, Deutsche Bank, Germany, Germany-Vietnam Trade, HCMC, Metro Cash & Carry, Siemens, Vietnam FDI | Leave a comment

Viet–U.S. Pacific Free Trade Talks could Impact on China SOEs

Oct. 31 – The United States, currently locked in discussions with Vietnam over the nine country Trans-Pacific Partnership (TPP), has had proposals to include new rules concerning state-owned enterprises rebuffed by Hanoi.

The United States believes that SOEs often reap additional benefits directly from the State which amount to unfair subsidies and protectionism. Washington wants a strong and definable regulatory position in place in the Vietnam agreement as it is expected to become the working model for future trade talks with China, which has over 20,000 state-owned enterprises, many of them multinationals in their own right. Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade | Tagged APEC, China State-Owned Enterprises, Trans-Pacific Partnership, Vietnam Politics, Vietnam State-Owned Enterprises, Vietnam Trade | Leave a comment

Corporate Income Tax Delayed One Year For Labor-Intensive Enterprises

By Lorenzo Martelli

Oct. 28 – Good news for labor-intensive firms in Vietnam. Decision 54/2011/QD-TT inked by the Prime Minister last week agrees to extend corporate income tax payments in 2011 for labor-intensive companies as well as “co-operatives lawfully established and operating which have revenue from the production or processing of agricultural, wood, seafood, garment, footwear, or electronic products, or from development, construction, and installation of infrastructure works.”

In order to benefit from the tax payment deferral, labor-intensive enterprises are required to employ at least 300 workers, not counting workers with contracts of three months or less. The right to delay payment for 2011 corporate income taxes for one year takes effect from the due date this year. Continue reading →

Posted in Business, FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged Vietnam FDI, Vietnam Incentives, Vietnam Labor, Vietnam Ministry of Finance, Vietnam Regulatory, Vietnam Regulatory Update, Vietnam Tax | Leave a comment

Real Estate Market Trends in Hanoi

Oct. 26 – Investor interest in Hanoi’s residential property has increased in recent years. With an average population growth rate of 5 percent a year coupled with a considerable area of vacant land, housing prices in Hanoi have been pushed up to levels that are higher than they should be. Selling prices of upmarket houses remain high while prices of average houses climbed 8.5 percent.

“The population in the next 15-20 years will grow constantly with middle-class people and medium-sized enterprises having the fastest growth rates,” according to Mr. Vu Xuan Thien, deputy director of the Housing and Real Estate Management Department. Continue reading →