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Investing in Vietnam,Approaching the world
VIETNAM HIGHLIGHTS 2017
Ho Chi Minh City
Country snapshot
The climate in Vietnam varies from North to South with three distinctive climatic zones: tropical in the South (rainy from April to September; dry season from October to March); monsoonal with hot and rainy season in the Centre and North (May to September); cold and damp in the highlands and the North (October to March). It is also blessed with plenty of sun throughout the year.
Climate and weather
330,967 sq. km 3,260 kmCoastline
Location
Land area
63
Southeast Asia, bordering with China, Laos, Cambodia, Pacific Ocean and Gulf of Thailand
Municipalities & provinces
Vietnam
Spratly Islands
Paracel IslandsVND
GDP (market exchange rate): USD 201.4 billionGDP (purchasing power parity): USD 595.5 billionGDP per capita: USD 2,215Source: General Statistics Office (GSO), Economist Intelligence Unit
Major cities
Language
North: Hanoi – the capitalCentre: Da NangSouth: Ho Chi Minh City
Approximately 92.7 million peopleRanked 14th in the list of most populated countries
Population
Economy
Vietnamese (official language); English (taught widely at school as a second language)
CurrencyVietnam Dong (VND)
Vietnam
Spratly Islands
Paracel Islands
Southeast Asia
countries
consumption market
Investment Climate
According to the World Bank’s Doing Business 2017 Report , Vietnam has climbed 9 notches to secure the 82nd place from last year’s 91st placeamong countries with the most favorable business environment, which reflects Vietnam’s improvements in implementing infrastructure and regulatory frameworks.
Vietnam recorded strong economic growth over the past decade
GDP growth (%)
(*) targeted data
The economy’s structure is gradually shifting towards industry and services sectors
GDP by sectors (2016)
8.5%
6.2%5.3%
6.8%
5.9%
5.0%
5.4%6.0%
6.7%
6.2%
6.7%
4.0%
6.0%
8.0%
10.0%
16%
33%41%
10% Agriculture, Forestry and Fishery
Industry and Construction
Services
Product taxes lesssubsidies on production
Dynamic country with young and increasingly urbanized population; and over 60% of the population are of working age
Vietnam’s competitive advantages
Why do business in Vietnam
Located at the centre of Southeast Asia with convenient access to commodity and culture exchange
Competitive production cost compared with neighboring
Stable political environment and social security
Strong economic performance and expanding domestic
Enabling investment environment with high incentives
By 2020, Vietnam expects to have free trade relations with 55 partners, 15 members of G20 (2/3 of the world’s population and 3/4 of the global GDP)
RCEP APEC
South Korrea
New Zeland Japan Australia
China Hongkong Taiwan Russia
Thailand Philipines Indonesia United States Papua New Guinea
Singapore
Brunei Malaysia
Vietnam
Canada
Mexico
Chile
Peru
India
Cambodia
Laos
Myanmar
TPP
ASEAN
RCEP: Regional Comprehensive Economic PartnershipAPEC: Asia-Pacific Economic CooperationASEAN: Association of Southeast Asian NationsTPP: The Trans-Pacific Partnership
Ha Long Bay
Source: GSO
Strong export performance has been a key driver for economic growth
Export value (billion USD)
Retail sales expand while Vietnam is increasingly attracting foreign retailers
Retail sales (billion USD)
Source: Vietnam Government Report 2016
The Vietnamese Government upholds its commitments to economic reform. The privatisation of state-owned enterprises (SOEs) in recent years is an example of the government’s efforts to improve the performance of SOEs and drive the economy forward.
Number of privatised SOEs period 2011-2016
0
50
100
150
200
1426
73
175
220
55
2011 2012 2013 2014 2015 2016
0
50
100
150
200
2011 2012 2013 2014 2015 2016
Bill
ion
USD
Bill
ion
USD
Foreign Investment Trends
Higher FDI disbursement throughout the years implies improved investors’ confidence in the economic outlook and their commitment to establish long-term investments in Vietnam.
FDI disbursement
Registered and Disbursed Capital, period 2006-2016
Source: Foreign Investment Agency (FIA)
Ha Giang
Cumulative FDI Inflows by Sector
Cumulative FDI Inflows by Country
Source: FIA, cumulative FDI as of March 20th, 2017
59% 18%
4%
4%
4% 11%
Manufacturing
Real Estate
Production and distribution of electricitygas, water, and air conditioners Accomodation & Food Services
Construction
Others
18%
14%
13% 11%
7% 6%
31%
South Korea
Japan
Singapore
Taiwan-China
British Virgin Islands
Hong Kong-China
Others
-
500
1,000
1,500
2,000
2,500
3,000
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Registered FDI (million USD) Disbursed FDI (million USD)
Number of newly-registered projects
Investor incentives
Land Rental Fee
Corp
orat
e In
com
e
Tax
Import Duty Incentives by
Locations Incentives by
Business Sectors
Corporate Income Tax Incentives Standard rate: 20%
Preferential tax rate: could be 17%, 15% or 10%
Tax holiday: up to 4 years of tax exemptionTax reduction: 50% up to 9 years
Di fficult • fficult/ Specially disocio-economic areas
• Economic Zones
• High-tech Zones
• Certain Industrial Zones
Land Rental Fee
Corp
orat
e In
com
e
Tax
Import Duty Incentives by
Locations Incentives by
Business Sectors
• Socialization projects
• Infrastructure development
• Environmental protection
• High-tech enterprises, supporting industries
Import Duty IncentivesExemption of import duty for import fixed assets for certain projects;05 years of exemption of import duty for goods, which cannot be produced locally, imported for a manufacturing project in encouraged fields and specially difficult socio-economic areas.
Land Rental IncentivesFree land tax and exempted land rental fee for 03 years, 07 years, 11 years or 15 years or for the whole rental period; 50% reduced land tax and exempted land rental fee for 03 years, 07 years or 11 years in agricultural fields.
Projects having capital of at least VND6,000 billion disbursed within 03 years with annual revenue of
VND10,000 billion or regularly employing more than 3,000 labors by the 4th year of operation.
Projects having capital of at least VND12,000 billiondisbursed within 05 years and using hi-technology.
A foreign investor setting up a company or an investment project in Vietnam shall be granted incentives under the regulated incentive schemes, which in summary include Corporate Income Tax (“CIT”) incentives, import duty incentives and land rental fee incentives. These incentives schemes are applied for the businesses set up in the locations and/or sectors which are encouraged for investment in accordance with development policies of the Vietnamese Government.
Incentives by Business Scale
Ha Long Bay
Setting up an investment in VietnamProcedures for new company set-up
Procedures for Branch, Representative Office set-up
Note
The timeline for setting-up projects prioritized by national or provincial government shall be shortened.
IRC: Investment Registration CertificateERC: Enterprise Registration Certificate
Step 1 Step 2 Step 3
15 days 03 days 05-07 days
Step 3 Loca on Selec on
IRC Applica on
ERC Applica on Public No on
123…
Step 1 Step 2 Step 3 Step 4
07 days 05-07 days 05-07 days
Step 3 Step
Location Selection
RO/ Branch License Application
PublicNotification
123…
Seal/ Tax IDRegistration
Relevant licensing authorities
Certificate IRC ERC
Hanoi
Limited-liability CompanyJoint-stock CompanyPartnership
Hanoi
Branches Representative offices Business Cooperation Contracts Public and Private Partnership ContractsMergers and Acquisitions (M&A)
12345678
Purchase of bonds and other types of stock on the securities marketsCapital contribution, transfer of contributed capital in securities investment funds and fund management enterprisesPurchase of other valuable papers in Vietnam dong permitted to be issued within Vietnam’s territory
Principal forms of doing business
Direct Investment
Indirect investment
Ho Chi Minh City
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