Hong Kong Investment into Vietnam at Peak
HANOI – Hong Kong has been ranked the second largest capital investor in Vietnam for 2014. The Vietnamese Ministry of Planning and Investment’s Foreign Investment Agency registered a total of US$3bn in Hong Kong investment into Vietnam during the period January 1 to December 15, 2014. The investment reached 23 existing and 99 new projects and brought Hong Kong’s foreign investment contribution to 14.8 percent of Vietnam’s annual total. There are currently 869 projects operated by Hong Kong investors in Vietnam. The total registered capital in Hong Kong-invested projects reached US$15.46bn, ranked sixth of 101 countries and territories invested in Vietnam.
Investments from Hong Kong averaged US$17.8m, US$3.5m above the average for foreign-invested projects. While 45.7 percent of Hong Kong investment went to the processing and manufacturing sectors, with 409 projects reaching a total capital of US$7.06bn, Hong Kong investments in the real estate sector also reached US$2.5bn in 45 projects.
The largest Hong Kong-invested projects included US$2.25bn registered capital in Jaks Hai Duong Electricity Ltd’s construction of the Hai Duong Theme electrical plant, the US$1.25bn investment from Dewan International into developing a Nha Trang beach resort, and Intel Products Vietnam Ltd’s US$1.04bn investment into product development.
Total foreign direct investment (FDI) registered in Vietnam reached US$20.23bn 2014, in 54 cities and provinces in Vietnam. While the total was 6.5 percent down from last year, it overshot the annual target by 19 percent. Additionally, 1,558 new foreign-invested projects received investment licenses, a year-on-year increase of 9.6 percent.
South Korean investment reached US$7.32 billion, ahead of Hong Kong’s US$3bn and Singapore’s US$2.79bn, leaving Japan in fourth place with US$2.05bn and Taiwan in fifth with US$1.18bn. The northern province of Thai Nguyen attracted the most foreign capital, with US$3.35bn in investments, 16.6 percent of Vietnam’s total annual FDI. The southeast of the country also saw large-scale investments, with Ho Chi Minh City attracting US$3.1bn total registered investment capital. The ongoing 9,764 foreign invested projects in seven southeastern provinces have a total registered capital of US$114.95bn, 56 percent of Vietnam’s foreign invested projects and 46 percent of registered foreign capital.
Foreign invested companies are fueling Vietnam’s exports boom and creating a trade surplus; in 2014 foreign-invested companies’ exports reached US$101.6bn, 68 percent of all Vietnamese exports in value and an annual increase of 15.2 percent. Foreign-invested companies imported US$84.56bn in goods.
The attraction of Hong Kong as a stepping stone to Vietnam comes from its position as a base for holding companies for investors. Ranked third in the world for ease of doing business, Hong Kong’s 16.5 percent corporate income tax rate undercuts its first place Asian rival Singapore by 0.5 percent.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
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