1. Overview of Vietnam 2. Foreign Direct Investment3. Vietnam – WTO’s member4. Investment – Related cost
CONTENT
1. A glance of VietnamGeography Population (2014): 90,5mil Centre of Southeast Asia Area: 331.698 sq.km Coastline: 3,260 kmSociety Growth rate: 1,2% Over 15 yrs old: >60% Literacy rate: >90%Infrastructure National Highways: 86,327 km Railway:3,219 km Int’l airports: Hanoi, Danang & HCMC Int’l seaports: 11Economy: Real GDP: 171.39 bil US$ Real GDP growth rate (2013): 6.04%,
year 2014e: 6.96% Real GDP per capita (2013): 986.01
US$, year 2014e: 1028.62 US$
1. Overview of Vietnam
2. Why invest in Vietnam Political and socio-economic stability Brisk and steady economic growth Transportation hub of Southeast Asia Abundant young labor force at low price Member of WTO, APEC, ASEAN, ASEM Favorable FDI promotion policies Rapidly improving infrastructure
1. Overview of Vietnam
2. FDI inflows to Vietnam (2003 – end of 2013)
2. Foreign Direct Investment
Sector Investment (million $)
Manufacture and processing 120964.54
Real-estate business 48432.91
Hotel and restaurant 10722.25
Construction 9890.91Manufacture, distribution of electricity, gas, water, air conditioner 9530.18
Information and communication 3988.16
Art and entertainment 3664.48
Warehouse and transportation 3531.26
Agriculture, forestry and fishery 3336.08
Whosales, retail and mainternance service 3296.59
1. Vietnam’s commitments to WTO
3. Vietnam – WTO’s member
Schedule of concession & commitments on goods: Bound rates for 10,600 tariff lines
An average cut from 17.4% to 13.4% phrase over 5-7 years since 2007
Largest reduction applied to garments & textiles, fish& fish products, wood & paper, other manufactured goods
Committed to be member (fully or partially) to initiatives for IT products, garments & textiles, medical equiptments, aircraft, chemicals, construction….
Schedule of specific commitment on trade in services Open door in 11 out of 12 service sectors including: business services, communication, constructions & related engineering, distribution, health, insurance, education, tourism, environment, finance, entertainment, transportation, ect
Commitments put in force right after WTO accession, in some cases, they’re phased over 2-4-6 years since 2007
2. Investment-related obligations
3. Vietnam – WTO’s member
TRIMS (effective from 11 Jan 2007): Eliminate the applicantion of requirements on trade balance, foreign exchange control on imports, export performance, export restrictions, local contents.
Intellectual Property Rights Transparency
3. Investment Opportunities entiled to Incentives:
Preferntial sectors: Manufactures Agriculture Technology Labor intensive industries Infrastructure Education
3. Vietnam – WTO’s member
Regions entitled to Incentives: Regions with specially difficult socio-economic condition
Industrial zones; Export processing zones; High-tech zones
4. Incentives on Corporate Income Tax: Standard rate: 28% Preferential rate of 10%, 15% and 20% for a period of15 years, 12 years, and 10 years are available depending on the scope of activities and location of investment.
Tax holiday Lossers: Carry forward losses for 5 years Other incentives: Exemption or deduction of land use tax, land use fee, land rent, and water surface rent.
3. Vietnam – WTO’s member
5. Forms of Investment 100% foreign-owned enterprise+ Limited liability company+ Joint stock company+ Partnership+Holding company Join venture Business cooperation contract BOT (build-operation-transfer), BTO (build-transfer-operation), BT (build-transfer)
Capital contribution, purchase of shareholding, M&A
3. Vietnam – WTO’s member
2. Comparative Survey of Investment-related cost: Wages and land price/office rent
4. Investment-related cost