Economy & Trade

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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Vietnam to Introduce Customs Bond to Facilitate Customs Clearance

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By: Dezan Shira & Associates
Editor: Koushan Das

Vietnam will be introducing a customs bond system to facilitate customs clearance and reform import and export procedures. The joint project launched by the Global Alliance for Trade Facilitation (GATF) and Vietnam Private Sector Forum (VPSF) on 1st September will help in modernizing the import and export administrative procedures. GATF will work with local government agencies and monitor the Vietnam Automated Cargo and Port Consolidated System (VNACCS) and Vietnam Customs Information System (VCIS) to assist in implementing the new system.

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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: Consumer Confidence Hits Record High

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VB- Consumer confidence at record high

By: Dezan Shira & Associates
Editor: Koushan Das

Vietnam’s consumer confidence hits a record high according to the recent Nielsen Q2-2017 Consumer Confidence Index. The country stands as the fifth most optimistic country with an index score of 117, up five places from last quarter of 2016 and its highest score in the last five years. The Nielsen study aims to measure the consumers’ confidence, concerns, and spending intentions.

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Vietnam to Divest in 406 State Owned Enterprises by 2020

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By: Dezan Shira & Associates
Editor: Koushan Das

Vietnam is planning to divest 406 state-owned enterprises (SOE) by 2020, with 135 scheduled for 2017 alone. Changes in foreign ownership limits, a growing economy, and a strong performing stock market have attracted considerable interest from foreign investors for earlier SOE’s divestments. However, a lack of transparency and the slow progress of divestments have been hampering investor sentiment.

Some of the big-ticket divestments include Vietnam Engine and Agricultural Machinery Corporation (VEAM), Airports Corporation of Vietnam (ACV), Vietnam Airlines, PVOil, and PVTex. Since its inception in 2006, SCIC has divested in over 900 enterprises. In 2016, SCIC divested from 60 business and in turn achieved an impressive 2.58x return.

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Vietnam – Singapore Trade and Investment Relations

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By: Andrea Bottega
Editor: Koushan Das

VB-Singapore and Vietnam - Trade and Investment Relations

Since the establishment of bilateral diplomatic relations in 1973, trade and investments between Singapore and Vietnam have grown immensely and has been a significant factor in forging robust bilateral ties. In addition, since the implementation of the Connectivity Framework Agreement in 2006, several steps have been taken in creating a conducive environment for Singapore companies investing in Vietnam. The seven Vietnam-Singapore Industrial Parks in Binh Duong, Hai Phong, Bac Ninh, Quang Ngai, Hai Duong and Nghe An are examples of the close economic cooperation between the two countries.

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Laying Foundations for Growth: The Future of Vietnamese Infrastructure

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vietnam PortBy: Eugenia Lotova

With the signing of several free trade agreements, Vietnam is expected to see significant uptakes in trade with nations around the globe. In addition to presenting opportunities for investors and promising to increase wealth for Vietnam’s growing middle class, the ramping up of global interconnections is likely to increase strain on national infrastructure. Although presenting a salient risk for operations within the country, these issues have not gone unnoticed by officials, which have increasingly turned to the private sector as a source of funding.

This turn in itself presents investment opportunities for companies seeking to invest in Public Private Partnerships and bodes well for traditional manufacturing operations that will likely see improved logistics in the medium term. The key for successful short term investment, however, lies in the ability to identify where infrastructure is set to improve and the ability create strategies to capitalize on these emerging changes.

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Vietnam Startup Ecosystem

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By: Giovanni Panizza
Editor: Erasmo Indolino

2016 was the year of startups in Vietnam. In the last few years, entrepreneurship has slowly emerged as a key driver for economic prosperity and growth. 39580 startups have entered the Vietnamese market in just the first four months of 2017, an increase of 14 percent from the first quarter of 2016. Aggregate capital registered in 2017 is approximately US$ 17 billion, an increase of 54 percent compared to the first quarter of 2016.

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Market Entry Modes for Vietnam

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By: Dezan Shira & Associates
Editor: Koushan Das

Foreign investment in Vietnam has grown substantially in recent years. This growth began in the 1980s with the Doi Moi reforms and picked up again in 2007 with the country’s entry into the WTO, which reduced trade barriers to entry for foreign investors. Investors have a number of options for entry into the Vietnamese market. Vietnam’s Law on Enterprise and Law on Investment implemented in 2015, define all market entry options. We have outlined the most common forms of market entry for foreign investors, touching on the requirements, time frame for the establishment and best structure suited for each mode of investment.

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The Guide to Understanding Vietnam’s Industrial Zones

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By: Dezan Shira & Associates
Editor: Koushan Das

The number of industrial parks in Vietnam continues to rise as foreign investment pours in. As of September 2016, there were 325 industrial zones set up nationwide, with 220 already in operation on a total of 60,900 ha. In 2017, the government plans to open three special economic zones in the Northern, Central and Southern key economic zones. The parks occupy a natural land area of almost 85 thousand hectares, with about 66 percent of the total land area designated as industrial land for leasing. Occupancy reached 51.5 per cent overall, and 73 percent at operating industrial parks.

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