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Thứ Ba, 29 tháng 3, 2016

Highlights in Real Estate Investment in Vietnam

invest in real estate in vietnam
Vietnam is attracting interest of investors in both domestic and foreign market. Overall, investor confidence was returning to the Vietnam real estate market. Both buyers and sellers have enhanced activity in recent months.
The real estate market of Vietnam has overcome the recession period within 4 or 5 years ago but in the last 12 months, the market has recovered and noted positive signs as well as confidence in the market in general.
Law on housing and real estate business Law takes effect in July 2015 and has acted quickly and positively on the real estate market in Vietnam. The changes in the Law on housing have significantly eased the regulations on home ownership for foreigners, although there are still some limitations.

“Hot spots” of FDI inflows
According to a recent report of Jones Lang LaSalle Vietnam (JLL), a series of free trade agreements such as TPP, EU and ASEAN will further promote the medium and long term development. Interest rates and inflation rate have declined significantly and became more stable in the past two years, helping the investment activity to occur more positive in bothHo Chi Minh City and Hanoi. With some domestic and foreign investors such as CapitaLand and Keppel Land, they have spurred the construction activities thanks to the growing revenue in the last 12 months.
Accordingly, the amount of disbursed FDI in the period from January to September of 2015 rose by 8.4% compared to the same period last year, reaching 9.7 billion USD. This is the strongest growth since the late 1980s, contrary to the slowdown of the Chinese economy. The amount of registered capital of new investors also rose even more sharply with 11 billion USD, focused primarily on the manufacturing industry, in which the energy and electronics industries are the sectors with the highest registered capital investment in the year, followed by the real estate sector.
According to the Ministry of Planning and Investment, FDI investment in the industrial park in Vietnam accounted for 67% of total FDI in Vietnam with 11 billion USD and accounting for 59% of the total 1,400 projects in the first 9 months of 2015. A notable transaction is the event that Amata Corporation acquired the land worth 279 million USD in Long Thanh (Dong Nai) for the purpose of building residential and industrial areas valued of 500 million USD.
According to JLL, the residential real estate prices in Vietnam maintained an average rate with 2 bedroom apartments, 70 m2, 10 – 15 minutes to reach the central area of Ho Chi Minh City, which are sold at the price of 1,600 – 2,000 USD/m2, equivalent to 112,000 – 140,000 USD/apartment. When compared with the big cities in the region, the price is believed to increase significantly.
Who dominated the real estate market of Vietnam?
JLL’s report showed that domestic investors are boosting investment activity in the real estate market of Vietnam. The largest real estate investors in Vietnam are Vingroup and Novaland Group.
Vingroup is Vietnam’s largest real estate development and management with market capitalization of about 3.4 billion USD. Vingroup’s investment portfolio includes 45 real estate projects spread across many sectors of the real estate market, including Vinhomes luxury apartments and villas; Vincom Center and Vincom Mega Mall; Vincom Office; 5 star Vinpearl resort; Vinpearl Luxury resort….
Novaland Group has participated in the real estate market in 2007 with the first project is Sunrise City with investment capital of 500 million USD located on Nguyen Huu Tho road, district 7. The real estate business of Novaland focused on the apartment complex segment from mid to high classes and the segment of house land with 25 projects that are being implemented throughout the downtown districts.
Vietnam is becoming an attractive place for foreign investment in the medium term than many other countries in Southeast Asia. Data from Real Capital Analytics (RCA) recorded that there are more attention from a number of private investment funds that are allocated foreign capital into Vietnam in an attempt to increase their market presence in Vietnam.
In the 2nd quarter of 2015, a joint venture of Warburg Pincus – a US investment fund, has invested 100 million USD into Vincom Retail, the Vietnam’s largest trade center ownership and management in Vietnam. Also in this quarter, Gaw Capital Partners has received the transfer of 4 real estate projects under various segments from Indochina Land with a total value of 106 million USD. Gamuda Land has also receive the transfer of 40% shares (equivalent to 64.1 million USD) in the Celadon City project, a modern urban area with initial investment by a joint venture between Sacomreal, Thanh Thanh Cong (TTC) and An Phu Gia.
The current real estate profit margin is high
JLL’s analysis shows that investors are now enjoying 6 – 7% profitability rate for residential real estate and 9 – 11% for commercial real estate, depending on location, completion time, quality of the project and the signing time of the tenants.
According to General Director of JLL Vietnam, real estate investment in emerging markets has always been seen as risky investments but with higher potential profits. Investors are willing to engage in joint venture projects in these markets, where they will combine with local investors who wish to have capital supporting – in order to have a foothold in the market before and also experience the exponential growth in the future when the economy of these market growing fast.
Moreover, the emerging markets such as Vietnam will have the potential growth factors, including population growth and high urbanization rate. Investors and project developers can take advantage of these factors.

Thứ Năm, 24 tháng 3, 2016

Korean Investors Interested in Vietnam Stock Market

invest in vietnam stock market
Came to Vietnam this time, the Korea Financial Investment Association included CEOs of many securities companies, fund management companies with managed capital flows of about 350 billion USD.
At the workshop named “Capital market and prospects for investment cooperation between Vietnam – Korea”, organized by Ho Chi Minh Stock Exchange (HOSE) and the Korea Financial Investment Association, many investors expressed their interest in Vietnam’s exchange traded funds (ETF), the obstacles that these funds may be encountered when listed on the Korean stock market, or the opportunities to invest in state owned enterprises (SOE) that are about to be equitized and divested.
According to the Chairman of HOSE, as of the beginning of December 2015, Vietnam financial market has 34 legal entities which are branches and offices of Korean companies that are operating, supplying a variety of services, create excitement and enhance the value added to the market.
In recent years, the authorities have taken many ways to attract foreign investors such as loosening room, promoting the equitization of SOE, launched new products, efforts to improve the market… thereby creating attractiveness and long-term potential for Vietnam stock market, which opens up attractive investment opportunities for these investors.
The workshop is expected to provide more information, introduce potential areas with different views for Korean investors.
According to the President of the Korea Financial Investment Association, annually, the Association often organizes visits to financial agencies in many different countries to learn about investment demand. This year, the delegation come to Vietnam are all the CEOs of the securities companies, fund management companies with managed capital flows of about 350 billion VND.
The reasons for choosing Vietnam of the Association to be the destination to explore investment opportunities because Vietnam is getting more attention from international investors, especially when TPP was signed and Vietnam is also member of Asean Economic Community.
In addition, the Government of Vietnam is making efforts to improve the investment environment, this is the foundation for Vietnam’s economy to develop and become an attractive destination.
Korean investors at the workshop expressed their interest in Vietnam stock market, especially investor structure, the number of listed companies, the number of fund management companies, establishing pension fund, listing the ETF Vietnam on the Korea stock market and investment opportunities to invest in SOE that are about to equitized and divested.

Thứ Tư, 23 tháng 3, 2016

Vietnam Expecting Strong Capital Wave from Apple

apple invest in vietnam
Leaders of Ho Chi Minh City (HCMC), Binh Duong and Bac Ninh will create the most favorable conditions to invite and welcome Apple projects to be invested in Vietnam.
Ho Chi Minh City
Apple has proposed to build a database center serving Asia in Vietnam. The project has a total investment of approximately 1 billion USD. Presently, Apple is looking for place to put on the project construction headquarter.
According to Mr Nguyen Van Hung from HCMC’s Department of Planning and Investment, the leaders of the City have surveyed and contacted with Apple in the United States. The City always ready to welcome the high-tech projects.
Moreover, according to Mr Le Hoai Quoc from HCMC hi tech park, their management board has also actively contact with representatives of Apple in the previous year. The general view of the city as well as the management board is looking forward and welcoming the projects with high technological content. Therefore, the city has been very interested and willing to introduce to the Apple representatives about the preferred location for their investment projects. However, it seems they have chosen Hanoi.

Binh Duong
Similarly, in Binh Duong, Binh Duong People’s Committee also said that they are looking forward to welcome Apple’s projects to Binh Duong.
If their choice is Binh Duong, Apple will enjoy all the best preferential policies according to the criteria of high technology sector.
Binh Duong has favorable conditions, clear mechanisms and policies to attract investment with the most beautiful and modern infrastructure in the country.
In terms of location, Binh Duong is the HCMC’s gateway center. It is just 30 minutes driving from Tan Son Nhat airport to Binh Duong. All the conditions are not inferior to Bac Ninh and Bac Giang.
Binh Duong is the place that gathering most of the supporting technology manufacturing enterprises from Japan and South Korea. Hence, if Apple headquarter is located here, this province certainly can meet part of their business requirements. Binh Duong seems to be the only one area in Vietnam that develops high technology.

Bac Ninh
Bac Ninh is the province that is attracting a lot of high-tech projects, including Samsung as one of Apple’s major competitor.
This seems to be opportunities for both investors to compete with each other because everything is equal.
In addition to the general incentives policy of the Government, Bac Ninh is ready to offer their own incentive policies. In any case that the supporting was not enough, Bac Ninh will looking for further support.
In terms of the incentives policies for high-tech enterprises, Bac Ninh is currently leading the country, other provinces still have to learn from Bac Ninh to develop their policies. Moreover, Samsung and Nokia are still located in Bac Ninh therefore Apple will feel satisfy.

Thứ Ba, 22 tháng 3, 2016

Japanese Enterprises Aimed at Vietnam Textile Industry after TPP

From the beginning of the year, the number of Japanese companies comes to Vietnam to explore investment and business opportunities in Vietnam equal with the same period last year, even slightly increase but not decrease even if the total direct investment from Japan to Vietnam has decreased slightly.
The wave of investment from Japan can be stimulated to rise again if the TPP agreement was signed.
Besides the potential agricultural sector, Japanese firms are also attracted by the textile fibers and garments sectors of Vietnam after TPP. Japan has the advantages of owning multiple weaving technologies that are new in Vietnam such as 3D weaving technology.
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Risk Management in Enterprise

Risk and manage risk
Conceptually, risk is any uncertainty that may be harmful to the ability to successfully implement the business objectives of the enterprise. Businesses can identify potential risks to manage them. Fully understood, risk management is a process of a comprehensive review of the business operations to identify potential risks that may impact adversely to the operational aspects of the business. Based on that, the response solutions will be given corresponding to each risk. We can also understand that the risk management process is a process that is organized in a formal way and ongoing to determine, control and report the risks that can affect the achievement of the business objectives of the enterprise.
 Requirements for operational risk management
To ensure that risk management activities are carried out as planned, the implementation must ensure the following requirements:
• Raising awareness about the risks as well as the ability to cope with risks appropriately throughout the enterprise;
• Formalize the process of risk management;
• Develop unified risk management processes in the enterprise;
• Transparency risks;
• Including risk management process as part of the internal control system;
In fact, well organized and efficient risk management activities will contribute to add value to the enterprise, specifically:
• Help improving operational efficiency and create competitive advantage;
• Contribute to the allocation and efficient use of corporate resources;
• Minimize errors in all aspects of business operations…
Recently, with the powerful impact of high inflation rate and economic recession caused by the global financial crisis to enterprises, people are concerning more about risk management activities. Many experts believe that well organized and effective operated risk management system will help businesses withstand and overcome fluctuations.
However, how to organize a complete risk management system is the fact that not many businesses are well understood. The worrying thing is many businesses supposing that with the use of insurance services, their businesses are making adequate risk management. That is completely incorrect.
Risk management policies and implementation
To establish risk management systems, enterprises should start from the development of risk management policy. This policy will define the approaching and managing of risk. In addition, risk management policies will clearly defined responsibilities for risk management throughout the enterprise to Board of Directors; The subordinate units; Departments; Risk management department (if any); the internal audit department – internal control. The implementation of risk management activities should be tied to business strategy, annual budget plan and the business cycle in the enterprise.
Risk Management Process
Basically, risk management processes typically include basic steps such as: confirmation of the business objectives, identify risks, description and classification of risk, assessment and risk ratings, response planning development, reporting an update on implementation, monitoring the process of implementation, review and improvement of risk management processes. Details of some of the main steps in the risk management process are as follows:
Confirmation of business objectives
Risk management activities are organized and implemented towards ensuring the successful implementation of the enterprise objectives. Therefore, at the begining the risk management process, the first task that business leaders need to do is confirming the operational goals of the business. This will be the base to ensure that risk management activities are held in the right direction.
Identify Risks
There are many methods to identify risk. Each method has different advantages and disadvantages. However, the following methods are considered using to determine the risk:
  • Organize risk assessment workshop;
  • Organize “Brain Attack” meeting;
  • Questionnaire;
  • Audit and inspection;
  • Based on industry norms;
  • Situation analysis
In fact, the method of determining risk that are used most in organizations is organizing risk assessment workshop. Attending the workshop are the Board of Directors and leaders of all departments. Members at the workshop will exchange information to give a list of business risks. In many cases, the result of the risk identification process is a long list of potential risks. However, this should not be too worried, the implementation of the next steps of the risk management process will help identify clearly the risks that are really the great risk to enterprises.
Description and classification of risk
After identifying potential risks, the next step is to describe briefly but specifically about the origin, cause, consequence and impact of each risks to the enterprise.
Next, we will implement the risk classification. There are many different types of potential risks for enterprises. They can originate inside or outside the enterprise. Based on the nature of the risk, they are many way to classify risk. However, the most common way is to classify risk into 4 groups as follows:
  • Financial risk: interest rate, exchange rate, credit source, cash flow and ability to pay…;
  • Strategic risk: competition, customer changes, industry changes, risks for research and development activities, intellectual property…;
  • Operational risk: the leaders, corporate culture, violation of management rules, financial control, information systems…;
  • Dangerous risk: environmental risks, supplier, natural disaster, risks for assets, contracts, products and services…
The classification of risks as above will help enterprises to manage risk in a systematic way.
Assessment and risk rating
Enterprise resources are limited while the number of the risks is great. So, the next step is to organize, evaluate and ranking risks according to priority level of response. Enterprises will analyze, evaluate each risk according to two criteria: the possibility of risk and the extent of the risks affecting the business if happened. The risk that the businesses need to prioritize response and prevent is the risk with high likelihood and degree of influence.
Develop response plans
Develop response plans is an important stage in the process of risk management. At this stage, enterprise should given the preventive measures and specific control should be taken to prevent and minimize damage if the risk occurs. There are 3 contents that must be determined for each specific risk when developing response plans:
  1. Measures that should be implemented to prevent risks;
  2. The completion deadline for those measures;
  3. The person that responsible for managing that risk.
Monitoring the implementation of measures
In the process of implementation of response measures, businesses need to build a system of reporting regularly to ensure strict control of the implementation process. Enterprises also need to ensure that all shortcomings in the implementation of risk control measures must be timely reporting to leaders.
At the same time, business leaders must also build a culture of risk management to every staffs in the enterprise. It is high time that the corporate governance should seriously view the role of risk management activities, consider setting up and maintaining a risk management system in business. Practical experience shows that, once the risks are forecasted, enterprises can fully develop and deploy effective response plans for sustainable development.

Thứ Hai, 21 tháng 3, 2016

Google Shows Interests in Vietnam IT Industry


E-commerce, IT and software development have been developing incredibly fast in Vietnam over the years making it potential for IT business to be set-up.

With more than 93 mil of population which 52% having access to internet.  The average Vietnamese using Google to extract information from internet is three times higher than world average.  Vietnam has been rated top 10 Asian countries with fastest growth rate of internet users. Those are the reasons why Google considers Vietnam as important market for penetration, localization and business development.
Sundar Pichai, CEO of Google will arrive in Hanoi on December 22nd to talk with the start-up technology in Vietnam, showing the practical interests of Google in Vietnam.  Technology so far appears to be one of the most attractive areas for foreign investment.
According to Google’s communications department in Vietnam, the initial interaction of Google CEO with Vietnamese audience including programmers, students and the media, will be held on a small scale in one hour, for the purpose of sharing experiences and inspiration. Sundar Pichai will also meet with three unidentfied individuals of Vietnam whom are supposed to be influencial in Vietnam IT industry.
Sundar Pichai joined Google since 2004, played role as orientation for the Google Toolbar and Google Chrome, the key products of Google that hundreds of millions of consumers are using.
In 2014, Sundar managed the product parts, engineering and research for all products and technology platforms of Google, including Google Search, Maps, Google Play, Advertising and solutions using cloud platforms for consumers, businesses and the education sector, which were known under the name of Google Apps and Cloud Platform. The two most important platforms in the computer industry as Android and Chrome are also within his administration.
After years of closely working with Google’s founders, Larry Page and Sergey Brin, Sundar has been accredited and formally undertaken the CEO position of Google since August 2015.
This is the first time that a senior leader of Google comes to Vietnam. In early December,Apple co-founder Steve Wozniak also came to Ho Chi Minh City to attend an event on social networks, mobile, statistical data and cloud computing in Vietnam.
In previous years, many well-known personalities of the world technology industry visited Vietnam. In 2006, Bill Gates as the Chairman of Microsoft visited Hanoi to launch the project to disseminate information technology.  In May 2010, CEO of Microsoft Steve Ballmer had a talk with students of the Hanoi University of Science and Technology and Vietnam National University, focusing on new technologies such as cloud computing. In 2013, Stephen Elop, head of Nokia’s mobile segment (at that time belonged to Microsoft) also presented in Hanoi and Ho Chi Minh City to meet the domestic software partners.

Thứ Tư, 16 tháng 3, 2016

The Scarcity of IT Workers in Vietnam

Within 3 years, the amount of work in the information technology (IT) sector of Vietnam has increased on average of 47% per year, but the number of worker in this sector rose by only 8% per year.
In recent years, the flows of high quality Vietnamese personnel that go abroad are increasing. In the first 10 months of 2015, total number of Vietnamese personnel that go to work abroad has hit a record of 100,000 people. However, alongside that is the critical shortage of quality human resources of domestic IT sector.
Japan is a large recruiting market for Vietnam IT workers. The declining in the excitement of Japanese young people for natural science professions has appeared for a long time. The technology sector of Japan is lack of about half a million engineers. This is part of the reason for the increasing demand for foreign labor recruitment, including Vietnam engineers.
Within 3 years, the amount of work in the IT sector of Vietnam has increased on average of 47% per year. But the number of workers in this sector increased by only 8% per year. Specifically, till 2020, if the growth rate of IT manpower stayed at 8%, Vietnam will face with a shortage of 78,000 engineers each year.
In the early 2000s, Vietnam has begun upgrading IT labor supply through many technology schools like the University of Science and Technology, University of Science and models of joint ventures with foreign like APTECH (India) or Genetic (Singapore). Just until 2007, the employers and the business sector assessed that the market for IT resources supply has saturated.
Less than a decade later, the shortage is continued to occur. Within the next 4 years, Vietnam would lack more than 500,000 IT engineers, accounting for over 78% of the total workforce that this sector needs.
Recently, the largest information technology event of 2015 titled “Tech Insider Expo” was held in Ho Chi Minh City with the participation of 42 recruiting companies and 12,712 candidates. Worth mentioning, most companies said that the labor supply is never enough.
As many employers sharing at the event, the number of 32,000 IT graduate students each year is still not fully met the needs of businesses. Some large companies like CSC or Lazada said they want to recruit 100 candidates this year, but they can only recruited less than 50% of the target. Furthermore, FPT Software had to come to Philippines, Myanmar… to recruit manpower.
In a recent survey by an online recruitment website specializing in IT, which is, in 61 large companies, 90% of foreign companies operating in this field said the shortage of skilled candidates have made their growth rate slow down. In addition, the main weakness of Vietnamese employees working in the IT sector is their English skill is not good. Hence, even among 32,000 IT graduate students each year, not many of them can satisfy the requirements of technology companies, especially foreign companies.
Obviously, there are four important points that Vietnam IT sector must change to develop the labor market. Firstly, the foreign language skills must be improved. Given that most of the IT companies in the fields of outsourcing are usually work for foreign customers, therefore the ability to communicate in English or Japanese is extremely necessary. It is more urgent when Vietnam joins the AEC and TPP in the near future, which is expected to bring bigger markets.
The next reason is the lack of updates about new technology because it has not integrated into IT curriculum. For example, the concepts such as Big Data, Mobile Programming, breakthrough technology in entrepreneurship and Open Source were very popular in the world but have not been popular in Vietnam.Next is the soft skills shortage. This is always the weaknesses of Vietnam manpower in general, but especially it is more important for the IT industry. The high positions in this sector require more than just technical knowledge. For example, the project management position will require skills in communication, presentation, presenting idea, convincing partner, time and schedule management… Not many IT people in Vietnam can satisfy these skills.
Lastly, the training programs for IT staff must be improved. The figures from VietnamWorks – Vietnam’s large recruitment website show that 75% of jobseekers in the IT industry want a job that gives them the opportunity to be trained. But there is only 14% of IT job offers training opportunities. By meeting the training needs of staff, IT companies can create better quality human resources, along with connecting employees, making them more loyal to their company.
The shortage of senior personnel in the IT industry is hotter than ever when recently in Ho Chi Minh City, the multinational corporation with the soft drink brand that has highest revenue in the world, had to recruit again the Chief Technology Officer in charge of system programming, the position that 4 months ago had to resign due to a disagreement with the Executive Director.

Thứ Hai, 14 tháng 3, 2016

Vietnam Market Research

Vietnam Market Research Service

Market research is an important operation. If the market research is well done, it provides accurate information to help marketers make an appropriate strategy and then, bring high efficiency in business. In other words, if the result of market research is inaccurate information and does not correctly reflect the actual market situation, marketing activities will be inefficient.

Companies would fail if underestimating the importance of market research before entering a new market.
Therefore, market research activity is so important for whomever needing success. Namely, the market research is considered an active approach to enter into the market. The market research also helps you understand the latest development in the target market, thereby making marketing decisions quickly. The international business environment is quite volatile, that‘s why you need a proactive approach like that and it is really your competitive advantage.
Through the market research, you can form the idea of developing a new product and choose the correct strategy for that product in each specific market. Through research, you also do not have to waste money and effort for the false hope, especially when you export the products to oversea for the first time. On the other hand, it should be noted that although the market research does not make sure success in business, it will help you avoid many wrong decisions.
Market research service can:
  • Help find the biggest market for your products, the fastest growing market, trends and prospects of market, conditions, business practices and opportunities for your product on the market.
  • Allow to make efforts effectively in a field or a certain range. After that, you can set the priority for a specific target market and plan for the future market.
  • Help understand the competitors, including strengths and weaknesses, mistakes and their causes of success.
  • Help find ideas to develop new products.
  • Helps strengthen business relationships with partners.

Set-up Branch Office in Vietnam

The Branch of a foreign business entity in Vietnam (referred as “The Branch”).

Means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its license forestablishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.
Set-up Branch Office in Vietnam
Set-up Branch Office in Vietnam
Set-up Branch Office in Vietnam
The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.
The Branch is permitted to conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

Thứ Năm, 10 tháng 3, 2016

Set-up Representative Office in Vietnam

Set-up Representative Office in Vietnam

A foreign business entity or a foreign trader is allowed to establish Representative Office in Vietnam.

Representative office of a foreign business entity in Vietnam (referred as “Representative Office”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to survey markets and to undertake a number of commercial enhancement activities permitted by the law of Vietnam.
Representative Office will need to apply and obtain the establishment license; and have a seal bearing the name of the representative office.
Representative Office is not allowed to directly conduct profit making activities in Vietnam (i.e: the execution of contracts, direct payment or receipt of funds, sale or purchase of goods, or provision of services), but the representative Office is permitted to
  • To operate strictly in accordance with the purposes, scope and duration stated in the license for establishment of such representative office;
  • To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the Representative Office;
  • To recruit Vietnamese and foreign employees to work for the Representative Office in accordance with the law of Vietnam;
  • To open accounts in foreign currency and in Vietnamese Dong sourced from foreign currency at banks which are licensed to operate in Vietnam, and to use such accounts solely for the operation of the Representative Office.

Thứ Tư, 9 tháng 3, 2016

Vietnam is Increasingly Attracting Capital from the US

Vietnam is Increasingly Attracting Capital from the US

Vietnam is taking every opportunity to grow its economy and improve the living standard. This is not a vain dream since Vietnam has young and plentiful work force. That is why multinational companies wish to come and set up company in Vietnam.

The year 2015 marked the 40 years since the war end and the 20 years of normalized the relationship between Vietnam and the US. Vietnam began the process of innovation since 1986 but not until 1995, foreign investment in Vietnam began to flow in when the Government established formal diplomatic relations with the United States and joined the National Association of the South East Asia (ASEAN).
In recent years, foreign investment in Vietnam has accelerated. The Korean company is particularly excited with this market. Samsung Electronics is operating and building three plants at three locations – Ho Chi Minh City, Thai Nguyen and Bac Ninh. In total, this giant electronic corporation has poured more than USD 10 billion in Vietnam.
Vietnam is also expected soon to welcome a “wave” of investment from the US. The Procter & Gamble (P&G) – a consumer goods manufacturer is building a factory in Binh Duong with the cost of 100 million USD. The plant will produce Gillette razors.
Since starting operations in Vietnam in 2008, Intel is also pouring money into this market. This semiconductor giant is planning to manufacture in Vietnam the most of advanced processor for personal computers in the future.
Moreover, other big names come from the US that are expanding operations in Vietnam are Starbucks and McDonald’s. They opened their first store here in December 2013 and February 2014.
There are a number of factors that make foreign investment in Vietnam explode. One of the most important reasons is the low labor cost. Labor cost hikes in China are the reason why many multinational manufacturers turned their attention to Vietnam where the cost is 50% cheaper. Besides, the purchasing power of Vietnam consumer is increasing, inflation has been curbed and many easing regulations to boost growth are also the reason why continuous investments are poured tin..
However, the biggest attraction for most foreign investors is the Trans-Pacific Partnership agreement (TPP) about free trade in which Vietnam is one of 12 countries that participate in negotiations. In mid of this year, General Secretary of Vietnam, Mr. Nguyen Phu Trong will visit the United States. TPP agreement will be the main topic of the conversation with the US officials. If the two countries can reach an agreement, the US will become even more important partner of Vietnam’s economy in the future.
In a press conference in HCM city in January 2015, US Ambassador in Vietnam – Mr. Ted Osius was upbeat about the impact of the TPP to Vietnam economy and the US investment here. TPP agreement “will allow the US to become the number one investor and trading partner of Vietnam” he said.
In about 4.5 million Vietnamese living overseas, about 2 million are living in the US. In particular, many people have made a name in the business world. They are Mr. Henry Nguyen – who brought McDonald’s to Vietnam and Mr. David Thai – founder of Highlands coffee chain.
According to the Ministry of Foreign Affairs of Vietnam, approximately 180,000 companies in the United States are owned by Vietnamese, achieved a total revenue of 20 billion USD. Strengthening ties between the two countries could stimulate greater cash flow stream across the Pacific.
The Ministry of Planning and Investment of Vietnam is estimated to spend 500 billion USD in over 10 years to develop the infrastructure necessary for sustainable growth. However, Vietnam can only able to meet 40% of the above figure, through the Government budget, ODA and private capitals.
That is why the Government wants to attract FDI. The Vietnam Government has set a target to create an industrial economy by 2020. Six priority areas are agriculture, forestry and fisheries processing, agricultural machinery, electronics, shipbuilding, environmental and energy saving, automobile production.
The transition from growth based on FDI into industrial-based growth can be rather difficult. However, Vietnam has shown it is serious and is still on track.

Thứ Ba, 8 tháng 3, 2016

Foreign Capital Poured Strongly into Ho Chi Minh City

Ho-Chi-Minh-Stadt (HCMC) zählt fast 7,7 Millionen Einwohner und erlebt derzeit eine Phase dynamischen Wirtschaftswachstums, industrieller Expansion und veränderter Landnutzung, was die Stadt zu einem attraktiven Geschäftsstandort macht und ihren Reichtum steigert. Siemens ist seit 1979 in Vietnam präsent und dort seit 1993 offiziell niedergelassen.

Ho Chi Minh City (HCMC) with its nearly 7.7 million inhabitants is witnessing a dynamic phase of economic growth, industrial expansion and land use change which is transforming the city's fortunes and attracting business opportunities. Siemens has been present in Vietnam since 1979 and was officially established since 1993.
It has been reported the foreign direct investment (FDI) is strong up to the end of August 2015.  The trend of foreign investors relocating manufacturing site to Vietnam, build factory,and make direct investment through setting up company or business venture has been progressively realized thanks to Vietnam’s policy welcoming FDI and the uncertainties of China.
There are 249 newly registered projects in the form of 100% foreign investment capital, reaching USD 744 million; 78 joint venture projects reaching USD 1,573.6 million.
In terms of investment sector, Vietnam real estate sector topped in the capital pouring in Ho Chi Minh City of Vietnam with 5 projects and the capital reached USD 1,428.4 million, accounting for 61.6% of total newly registered capital, 41 industrial projects with USD 585.7 million (25.3%).  In the third place is the financial and service sector with 90 projects and USD 116 million investment capital (5%); education and training with 8 projects at USD 71.3 million investment capital (3.1%); 53 information and communication projects at 20 million USD investment capital; 17 transport and warehouse projects…
The demographic of investors are diverse.  There are 35 countries and territories having investment projects in Ho Chi Minh City. In particular, United Kingdom following the recent visit of British Prime Minister has 5 projects with investment capital of USD 1,201.4 million (accounting for 51.8% of total investment in Ho Chi Minh City); British Virgin Islands have 7 projects, at USD 306.5 million investment capital (13.2%); South Korea with 71 projects, at USD 232.8 million investment capital (10%); Singapore has 52 projects with USD 107.6 million investment capital (4.6%); Japan has 57 projects, investment capital of 29.9 million USD; Hong Kong has 13 projects, investment capital of 47.8 million USD (2.1%).