VIETNAM INVESTMENT GUIDE

Transcription

1 VIETNAM INVESTMENT GUIDE Yulchon LLC and LS Horizon Limited Copyright c 2013 Yulchon LLC. All Rights Reserved.

2 Table of Contents 1. VIETNAM S OVERVIEW 2. FDI IN VIETNAM 3. INVESTMENT POLICIES

3 1. Vietnam s Overview

4 Vietnam s Overview Capital: Ha Noi GENERAL Area: 331,201 square kilometers Border country: Lao PDR, Cambodia, China Coastline: 3,444 kilometers(excluding islands) Total population: 91, 5 million Climate: Tropical in the south, monsoons in the middle and north Language: Vietnamese, English, French, Chinese, Khmer Religions: Buddhist 9.3%; Catholic 6.7%; None 80.8%; etc Ethnic groups: Kinh(Viet) 85.7%; Tay, Thai, Muong, etc. 4

5 Vietnam s Overview(ctn.) Natural resources: Phosphates, coal, manganese, bauxite, chromate, timer, hydropower Major export: Clothes, shoes, marine products, crude oil, electronics, wooden products, coffee, rice. Main export trading countries: US18%, Japan 11%, China 11%, Germany 3.7% Major import: Machinery and equipment, petroleum products, steel products, raw materials for clothing and shoe industries, plastics, automobiles. Main import trading countries: China 22%, South Korea 13.2%, Japan 10.4%, Taiwan 8.6%, Thailand 6.4%, Singapore 6.4% Politics: Communist party only, stable 5

6 Vietnam s Overview(ctn.) GDP: growth rate reached 5,03%. ECONOMY CPI: 2012 controlled at 6.81%, compared to 18.12% in 2011 Industry production increased 4.52%, service increased 6.42%, agriculture forestry and fishery increased 2.72%. Foreign exchange reserves ensure 12 weeks import; international balance of payments surplus of over USD 8 billion. Strongly restructuring in 3 areas of public investment, financial market, and state-owned enterprises have achieved some positive results; Stabilize macro-economy, reduce inflation and increase GDP growth rate higher than Strengthen implementation of 3 strategic breakthroughs: institution reform, human resource and infrastructure and renovation of growth model. 6

7 2. FDI IN VIETNAM

8 FDI in Vietnam By Sector As of 20 June ,067 effective projects with registered capital million USD 8

9 FDI in Vietnam(ctn.) Top 10 investors 9

10 FDI in Vietnam(ctn.) First 6 months of projects are issued investment certificates with investment capital of USD 5.81 billion. 217 projects expanded investment with investment capital of USD 4.66 billion The total newly licensed capital and expanded capital is USD billion, 64% compared to the amount of Manufacturing sector attracted most FDI capital (89.9 % total investment capital); followed by real estate business (4.0%) and trading (1.7%). Japan ranks the first in terms of investment capital in Vietnam (USD 3.99 billion), followed by Singapore (USD 3.41 billion), Russia (USD 1.01 billion) and Thailand in the ninth (USD billion) 10

11 FDI in Vietnam(ctn.) FDI of Thailand to Vietnam Vietnam and Thailand singed Investment Promotion and Protection Agreement (30 Oct. 1991), and Double Taxation Avoidance Agreements (23/12/1992). As of June 2013, Thailand has invested 310 projects with total investment capital of USD billion; Ranked the 9th out of 100 countries and territories investing in Vietnam. Investment capital mainly focuses on (i) manufacturing and processing sector (153 projects, 87.57% of total investment capital) and (ii) agriculture, forestry and fishery (23 projects, 5.18 % of total investment capital). Investment forms mainly are joint venture (68/310 projects (23%), 72.96% of total investment capital) or 100% foreign owned capital (234 projects (75.67%), 26.77% of total investment capital) 11

12 FDI in Vietnam(ctn.) FDI of Thailand to Vietnam Thailand investors are investing in 38/64 provinces and cities of Viet Nam. Province - City Registered Capital (M USD) % Capital Project 1. Ba Ria Vung Tau 3, % 3 2. Dong Nai % Binh Duong % Ho Chi Minh % 103 Total 4, %

13 FDI in Vietnam(ctn.) FDI of Thailand to Vietnam Big Thailand investors in Vietnam including SCG, Thai Plastic & Chemicals, Siam Pulp and Paper Public Co.,Ltd, Thai Kraft Paper Industry Co.,Ltd, Charoen Pokphan Group, Bangkok FeedMill, Advance Pharma Thailand, PTT Public Company Limited (negotiating 26.7 billion USD project for oil refining and petrochemical) etc. June 2013 Prime Minister of Thailand and General Secretary of Vietnam The relation btw two countries has become strategy partner. Vietnam government encourages Thailand investor to invest in Vietnam. 13

14 3. Investment Policies

15 Investment Policies Conditional /Restricted Sectors Broadcasting & television; Production, publishing and distribution of cultural products; Exploration and exploitation of minerals; Establishment of infrastructure for telecommunications network, transmission and provision of internet and telecommunications services; Establishment of public postal network and provision of postal services and express services; Construction and operation of river ports, sea ports, terminals and airports; Transportation of goods and passengers by railway, airway, roadway and sea and inland waterways; Catching of aquaculture; Production of tobacco; Real estate business; Import, export and distribution business; Education and training; Hospitals and clinics; Other investment sectors under the WTO Commitment. 15

16 Investment Policies(ctn.) Encouraged Sectors 1 Production of new materials and energy; hi-tech products; bio-tech and IT, mechanical manufacturing. 2 Cultivation and processing of agricultural, forestry and aquatic products; creation of new plant and animal varieties; 3 Use of high technology and advanced techniques, protection of ecological environment; research, hi-tech development. 4 Development of infrastructure facilities. 5 Development of education, training, health care, physical education, sports, and traditional sectors 16

17 Investment Policies(ctn.) Forms of Investment 1. Establish Joint Venture Company. 2. Establish 100% foreign owned capital company. 3. Contribute capital or purchase capital share of Vietnamese company. 4. Business Corporation Contract; BT BOT BTO. 5. PPP (Public Private Partnership) 17

18 Investment Policies(ctn.) Encouraged Area Applicable to specific geographical areas including: Areas with especially difficult socio-economic conditions. Areas with difficult socio-economic conditions. Hi-tech Zone, Economic Zone 18

19 Investment Policies(ctn.) Tax Incentives Corporate income tax exemption and reduction Land lease exemption and reduction Import duties exemption 19

20 Investment Policies(ctn.) Corporate Income Tax Standard rate (CIT) : Current As of Jan. 1 st 2014 As of Jan. 1 st % 22% 20% 20% Annual revenue < $1million/Year 20

21 Investment Policies(ctn.) CIT Incentives Tax Rate & Incentives Term Tech. Infras. Soft. Education, vocational training, public health, culture, sports. People s Credit Fund., microfinance institutions Diff. area; Manufacturing high quality product, equip. for agri., feed for livestock Especially difficult area, economic Zone, Hi- tech Zone/ Company. 20% 10 yrs x 20% Whole term x 10% 15 yrs x x 10% Whole term x Exemption 4 yrs 2 yrs 4 yrs Deduction (50%) 9 yrs 4 yrs 9 yrs * Exemption: from first annual taxable income or 4 th year from first annual generated revenue. * Deduction: consecutive years after the exemption period * Tax incentive: also applicable to project expansion 21

22 Investment Policies(ctn.) Land Lease Exemption Investment Project Encouraged Sectors Especially Encouraged Sector Difficult Social eco Area Especially Difficult Social eco Area Exemption (Years) Project 1 x 3 Project 2 x (or) x 7 Project 3 x 11 Project 4 x (and) x 11 Project 5 x (or) x 15 Project 6 x (and) x Whole term 22

23 Investment Policies(ctn.) Import Duty Exemption 01 Machines, materials, dedicated transport imported to create fixed assets of encouraged investment projects. 02 Materials which are not locally produced Commodities are imported for the 1st time according to the Government s List such as projects of hotels, offices, apartments, supermarkets, golf course, hotels, resorts, clinics, training, culture, finance Raw materials, materials, components of encouraged investment projects or projects locate in areas of specially difficult socio-economic conditions are exempted from import tax within 5 yrs from the beginning of operation 23

24 Investment Policies(ctn.) Invest. Certificate Authority 1. Prime Minister s approval: Aviation, seaport, petroleum, mining, broadcasting, casino, tobacco, undergraduate, IPS, EPZS, HTZS, EZS; sea transport, telecommunication and Internet, printing, press, publishing, science research basis. Electricity, mineral processing, metallurgy, railway infrastructure, highway, local waterway; liquor, beer with scale VND 1,500 billion (~70 million USD). 2. Provincial People s Committees: Projects outside IPs, EPZs, HTZs (the Zones ) Projects for developing infrastructure of the Zones 3. Provincial Management Boards of the Zones: Projects inside the Zones and EZs Projects for infrastructure development in the Zones 24

25 Investment Policies(ctn.) Invest. Certificate Procedure 1. Registration Process: (15 working days) Project with investment capital below VND 300 billion (~14 million USD) Not in the conditional investment industries. 2. Evaluation Process (43 working days) Projects with capital VND 300 billion and not in the conditional investment industries Projects in the conditional investment industries 3. Post licensing procedure (3 days) 25

26 Investment Policies(ctn.) Dispute Resolution Mechanism " 1. Negotiation and Conciliation 2. Vietnamese Competent Court ( around 7 months or more) Two levels including (i) First instance, and (ii) Appeal; Time consuming and not preferable Dispute between Foreign Investor & Administrative Body of Vietnam (unless otherwise provided in a contract or in an international treaty); Exclusive jurisdiction: Dispute regarding real estate located in Vietnam, or transportation contract and the head office or breach office of carrier located in Vietnam 3. Vietnamese Arbitration Body (around 2 months) One level; Fast and preferable; Dispute between Foreign Investor & Administrative Body of Vietnam (unless otherwise provided in a contract or in an international treaty);

27 Investment Policies(ctn.) Dispute Resolution Mechanism " 4. Foreign / International Arbitration Body (No foreign/international Court) Must be recognized and allowed to enforce in Vietnam by a Vietnamese court Time consuming 5. Arbitration Body established by the parties 27

28 Thank you for your attention and looking forward to seeing you in Vietnam. Yulchon LLC (Seoul) 518 Teheran-ro, Daechi-dong, Gangnam-gu, Seoul , Korea Tel: Fax: Yulchon LLC (Vietnam, Ho Chi Minh City) Unit 03, 4th Floor, Kumho Asiana Plaza, 39 Le Duan St., Ben Nghe Ward, Dist.1, Ho Chi Minh City, Vietnam Tel: Fax: eyang@yulchon.com Yulchon LLC (Vietnam, Hanoi City) Suite 2502, Keangnam Hanoi Landmark Tower, Pham Hung Street, Tu Liem District, Hanoi, Vietnam Tel: Fax: eyang@yulchon.com Yulchon LLC (China, Beijing) 9F,SK Tower,6A Jianguomenwai Avenue, Chaoyang District,Beijing ,P.R.China Tel: Fax: Beijing@yulchon.com