Economy & Trade

Binh Duong: Ideal Destination for Investors

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VB- Investment Environment in Binh Duong

By: Dezan Shira & Associates
Editor: Koushan Das

Binh Duong province, at the center of the Southern Key Economic zone and just north of Ho Chi Minh City is fast emerging as a favorite for foreign investors. The province, with its 28 industrial parks spread over 10,000 ha, is second only to Ho Chi Ming City, in terms of FDI attraction. With its renewed focus on high-tech industries, development of new industrial zones, and a gross regional domestic product (GRDP) of 8.5 percent, the region will continue to be a priority for foreign investors.

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Vietnam rises 14 places in the World Bank’s Ease of Doing Business Rankings

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By: Dezan Shira & Associates
Editor: Koushan Das

Vietnam climbed 14 places to 68th amongst 190 economies in the latest World Bank’s Ease of Doing Business 2018 rankings. It ranked fifth amongst ASEAN countries, with Singapore, Malaysia, Thailand, and Brunei leading the group. As per the report, significant improvements were made in the area of paying taxes, trading, enforcing contracts, access to credit, and electricity reliability.

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State Divestment: Exciting Opportunities for Investors

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VB- State Divestment- Exciting Opportunities For Investors

By: Dezan Shira & Associates
Editor: Koushan Das

For the last few years, equitisation continues to be a focus for the Vietnamese government. The government hopes that equitisation will increase the efficiency and improve the management of the State-owned enterprises (SOE) which have been suffering from inefficiency for years. In addition, the much required capital raised from divestments will also assist the government to reduce its growing debt and fund infrastructure projects. In August 2017, the government released Decision No.1232/2017/QD-TTg approving a list of 406 state-owned enterprises to be divested during 2017-2020.

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Vietnam’s Growth Accelerates to 7.46 percent in Q3 2017

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Vietnam’s Q3 2017 GDP

By: Dezan Shira & Associates
Editor: Koushan Das

Vietnam grew by 7.46 percent in Q3/2017, the highest in the last seven years. From January to September, the country grew by 6.41 percent, the strongest since 2015. This growth surge was largely driven by the industry, construction, and service sectors. According to the Vietnam Institute for Economic and Policy Research, Vietnam will continue to grow at 7.12 percent in this quarter, bringing the annual growth rate to 6.64 percent.

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Facilitating SME Growth in Vietnam

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By: Dezan Shira & Associates
Editor: Koushan Das

Small and medium-sized enterprises continue to play a major role in Vietnam, accounting for 98 per cent of all enterprises, 40 percent of GDP, and 50 percent of employment. The number of SMEs has grown by around 100,000 in 2016, driven mostly by government reforms. However, SMEs continue to face problems such as access to finance, market access, and competition with foreign firms. The government has introduced the Law 04/2017/QH14 – Law on Support for Small- and Medium-sized Enterprises (SME Law) establishing support measures for SMEs in terms of incentives, credit access, land rental preferences, and human resource development.

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Growing Food & Beverage Sector in Vietnam

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By: Dezan Shira & Associates
Editor: Koushan Das

The food and beverage sector in Vietnam has shown strong growth in the last decade, driven by not only foreign brands, but also local brands. In the last few years, numerous foreign brands have invested heavily in the market and are predicted to continue to do so, largely driven by rapid urbanization, increased spending, and growth of the middle-class population. Local brands offering Vietnamese cuisine and street food are also emerging as a tough competitor to the global food chains. In fact, foreign fast food chains in the last 2-3 years have underperformed and slowed down their expansion plans due to consumer preferring the local taste and lower prices. However, few foreign brands such as Jollibee, Lotteria, and KFC who were early market entrants are performing much better in comparison to new players such as McDonald’s, Burger King or Subway.

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Vietnam Proposes New Incentives for Special Administrative-Economic Zones

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By: Dezan Shira & Associates
Editor: Koushan Das

Vietnam’s Ministry of Planning and Investment has submitted for approval, a new draft law on special administrative-economic zones (SAEZ) to attract more investments in three special administrative-economic zones located in Van Don (Quang Ninh Province), North Van Phong (Khanh Hoa Province) and Phu Quoc Island (Kien Giang Province).

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Vietnam’s Real Estate Industry: Poised for a Major Structural Funding Shift

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By Keith Hilden, Squawk Advisors

Contrary to other nations, Vietnam is primarily reliant on bank loans and associated bank guarantees. This both plays to the current inefficiencies plaguing other capital access points and is characteristic of a nascent market in a developing frontier-status market country, as well as reveals an additional point of risk developers currently take on.

For the most part, developers in Vietnam are beholden to the quality of the negotiated bank loan and associated bank guarantee that they receive. In many cases, a bank guarantee can make or break many a real estate development project. This leaves many developers in a position where they aim to diversify their funding streams as much as possible in order to avoid reliance solely on the whim and funding decisions of domestic and international partner banks.  

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Chinese FDI in Vietnam: Growing Economic Ties, Despite Strains

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VB- Chinese Investment in Vietnam

By: Dezan Shira & Associates
Editor: Koushan Das

For the past 25 years, Chinese investments in Vietnam and bilateral trade between the two nations has grown steadily despite issues such as the South China Sea and increasing cooperation between Vietnam and countries such as US, India, and Japan. The Chinese mainland has emerged as the eighth largest investor in Vietnam, with the actual FDI much higher if we include their affiliates in Hong Kong and Macau. Over 60 percent of all Chinese FDI focuses on manufacturing and processing, with a majority of the investment focused on labor-intensive industries.

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Korean Investment in Vietnam

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VB- Korean Investment in Vietnam

By: Dezan Shira & Associates
Editor: Koushan Das

The year 2017 marks 25 years of Vietnam and South Korea’s diplomatic relations. During this period, the focus of trade and investments has shifted from labour intensive sectors such as garments and textiles, to capital intensive sectors such as electronic goods, and finally at present to consumer goods and services. Bilateral trade jumped from US$0.5 billion in 1992 to US$45 billion in 2016, while in terms of investments, South Korea has emerged as the largest foreign investor in Vietnam.

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