Dec. 4 – The World Bank (WB) released its bi-annual assessment of Vietnam’s economy Monday, projecting that the country’s macroeconomic stability will continue to improve considerably in the medium-term.
The report entitled The Taking Stock estimates that Vietnam’s GDP will continue to grow 5.5 percent by 2015. If the country continues to move forward with planned structural reforms aimed at strengthening its market economy, however, Vietnam’s economy can expect even larger gains. Continue reading
Oct. 25 – According to the International Air Transport Association, over the next year Vietnam should become the world’s third-fastest growing market for international passengers and freight. It will also be the second-fastest growing market for domestic passengers.
In addition, Vietnam’s Department of Aviation has predicted that the country will see an increase of 15 percent in domestic passengers in 2013 (over double last year’s 7 percent growth rate).
The Vietnamese airline industry is currently quite small, but it is poised for massive growth with the domestic airlines planning to either double or even triple their fleets as they seek to service the country’s 90 million plus citizens over the next few years. Further, the fast growing tourist industry has been increasing at a 20 percent rate year-on-year. Continue reading
Sept. 26 – The new issue of Vietnam Briefing Magazine, titled Manufacturing in Vietnam to Sell to ASEAN and China, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore for a limited time only.
As many international manufacturing enterprises are now looking to expand or relocate their China operations into alternative markets to capture new opportunities or hedge their China risk, the search is currently on to find Asia’s new emerging market darling for foreign investment. In this area, one of the most talked-about regions offering promising prospects is the Association of Southeast Asian Nations (ASEAN). And what better place to start than Vietnam – an already booming Southeast Asian nation. Continue reading
May 10 – The new issue of Asia Briefing Magazine, titled An Introduction to Development Zones Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of May and June.
The use of development zones in their different guises has been an effective model essentially brought to prominence by China over the past 25 years to help both foreign investors and domestic companies meet in a relationship that provides tax advantages to both. Development zones typically permit the foreign investor to bring component parts into a country for assembly without having to pay import duties. Investors may then add in locally-sourced components, assemble the final product, and warehouse it all duty free before then having the option of exporting the finished product (collecting some VAT rebates on the locally sourced portion) or entering the domestic market with a product assembled at local labor costs. Continue reading
May 9 – After a 15-month hiatus, Vietnamese produce exporters are now allowed to resume shipments of fruits and vegetables to the European Union (EU) after Vietnam’s plant protection department agreed to re-issue quarantine certificates.
Exports will resume as normal starting June 30.
Vietnam’s plant protection department stopped issuing certificates in March 2012 in an effort to prevent certain exported fruit (such as blue dragon or grapefruit) from being added to the EU’s blacklist after Vietnamese basil, sweet pepper, celery, bitter gourd and coriander failed to meet the EU’s food hygiene and safety regulations. The EU threatened to ban all Vietnamese produce if they found five more batches that were in violation of their regulations. Continue reading
By Hoang Thu Huyen and My Nguyen, Dezan Shira & Associates
Mar. 21 – By continually issuing favorable policies and incentives aimed at attracting inflows, and deciding to decrease the country’s corporate income tax levels from January 1, 2014, it is clear that Vietnam’s government is intent on taking a proactive approach to foreign direct investment. Enterprises and individuals interested in taking advantage of the country’s friendly investment environment therefore need to be aware of the various market entry structures available to foreign investors.
There are two main types of vehicles for foreign investment in Vietnam: 100 percent foreign-owned enterprises (FOEs) and joint venture enterprises (JVEs).
100 percent FOEs can be established by one or more foreign investors, under the form of either a limited liability company (LLC) or a joint-stock company (JSC). JVEs can be established as an LLC, a JSC, or a partnership, and the profits and risks in a JVE are distributed among the parties in proportion to their charter capital contributions. Other options for establishing a commercial presence in Vietnam include representative offices and branch offices, but these are not legal entities. Continue reading
Feb. 11 – Research has shown that Vietnam’s e-commerce market, which totaled approximately US$300 million in 2011, is expected to grow at an average rate of 75 percent per year between 2011-2015 to reach upwards of US$2.8 billion by 2015. While this may seem largely optimistic, several factors regarding supply and demand influence this huge potential growth.
On the supply side, certain online shopping business models are crucial to creating awareness and transforming potential demand into actual sales. Furthermore, the introduction of group-buying websites radically changed the pace of e-commerce in Vietnam in 2011. Continue reading
Jan. 23 – On January 16, the Multilateral Trade Assistance Project (MUTRAP) and the Danang Branch of the Vietnam Chamber of Commerce and Industry (VCCI) held a seminar to discuss the contents of the Vietnam-European Union (EU) Free Trade Agreement (FTA). The seminar’s purpose was to assist Vietnamese enterprises in gaining a clearer understanding of the impact of the FTA, and to clarify the key opportunities and challenges that the FTA will create.
In attendance at the seminar were representatives from the Vietnamese Ministry of Industry and Trade, craft associations, and major businesses that have trade ties with EU member countries. In addition, consulting experts from the European Trade Policy and Investment Support Project were also present.
The EU is one of Vietnam’s top economic, trade and investment partners. It has grown to become its largest export market with a total turnover estimated at US$20.3 billion in 2012 (up 22 percent since 2011). This accounts for 17.7 percent of Vietnam’s overall exports. The FTA aims to slash at least 90 percent of tariff lines on Vietnamese exports to the EU. Continue reading
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
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