Wiki Investment

Vietnam

2 Chapter Investment Environment

2.1 Investment environment in Vietnam

Exchange Rate

The currency of Vietnam is Vietnamese Dong (VND). For years, Vietnam has pegged the dong to the US dollar within a limited band of 1 – 2 percent. High inflation rate lowers real national income, results in business failures which mostly are private since they do not have public subsidies or borrowing privileges, personal bankruptcies and so on. Vietnamese inflation also creates a gap between the inflation rates of Vietnam and its trading partners, deteriorates Vietnam’s competitive position, including negative effects on the economy. To prevent a rise in the real exchange rate, the dong has to depreciate relative to the foreign currency in order to reflect the inflation differential.

Since the beginning of 2013, the real exchange rates of VND with USD and RMB have both been larger than one. This was a result in the deterioration of Vietnam’s competitive position in export market with China and United States. In conclusion, Vietnam needs to be patient of decreasing the real exchange rate more to improve competitiveness.

Investment environment in Vietnam

Based on the Worldometers information about

Vietnam

population, there are about one million people are born yearly that makes population reach the number of 92.5 million including 53.7 million of labor force in 2014, which are younger than 35 years of age. Every year, from 1.3 to 1.5 million new workers enters the market and there is the trend of shifting labor from agriculture to industry and service eventually. This large but cheap labor force plus abundant natural resources and wide market have turned

Vietnam

to an attractive investment environment. The monthly low minimum wage of about 118 USD also makes

Vietnam

a competitive investment destination.

Nowadays, there have been a huge number of licensed foreign investment projects in Vietnam mainly from Korea, Japan, Taiwan, Singapore and China with hundreds million USD.

Accumulation of projects having effect as of 31/12/2014

Nation	Number of Projects	Total Registered Capital (Mil. USD)
Korea	4,190	37,726
Japan	2,531	37,335
Taiwan	2,387	28,468
Singapore	1,367	32,937
China	1,102	7,984
Others	6,191	108,266
Total	17,768	252,716

Source: ‘General Statistics Office of Vietnam’

Vietnam is now in a period of golden population structure – 60% of population is working age. It also has an advantage geographical location right at the heart of East Asia – a place to draw a number of large and vibrant economies. Furthermore, the country is a member of the WTO, and a party to multiple frameworks for international economic integration, including free trade agreements with partners both within and outside the region. In particular, the country is part of the Trans-Pacific Partnership negotiations. These factors are the explanations for why many countries investing in Vietnam currently.

More importantly, Vietnamese government commits to create a fair and attractive business environment for foreign investors as well as improve its legal framework and institutions related to business and investment. The government has been working hard on restructuring the economy and its model for growth. In the medium and long term, Vietnam will continue to attract and efficiently use FDI inflows to advance socio-economic development. The country will target “high quality” FDI inflows, focusing on FDI projects that use advanced and environmentally friendly technologies, and use natural resources in a sustainable way. It will also target projects with competitive products that could be part of the global production network and value chain.

Stock market

There are two main stock exchanges in Vietnam: Ho Chi Minh Stock Exchange was established in 2000 (HOSE) and Ha Noi Stock Exchange was established in 2005 (HSX).

HOSE is the largest stock exchange in Vietnam and the main target for foreign investors. It has market capitalization of 1,183,525bio VND (under $56bio USD) and total listed stocks are 305 (as of 17 July 2015). First 6 months of 2015, its average turnover is 34,660bio VND per month (around $1.63bio USD). Trading hours is from 09:00 to 15:00 with a break from 11:30 to 13:00

HSX is the secondary stock exchange in Vietnam. It has market capitalization of 145,366bio VND (under $7bio USD) and total listed stocks are 361 (as of 17 July 2015). First 6 months of 2015, its average turnover is 11,520bio VND per month (around $0.543bio USD). Trading hours is the same as HOSE.

In 2006, a new record of VN-Index was 800 which impressed the world’s stock market. In 2007, VN-Index jumped to an all-time high atop 1,100 and followed by a similar crash. In 2008, the market fell 66%, from 921 to 316 and it was rarely crossed 500 after that. In 2011, Vietnam was the third-worst-performing market in the world, losing 27%.

However, some money managers still believe the market is gaining traction and starting to grow again. Kevin Snowball, CEO of PXP Asset Management, the second-oldest asset-management company in Vietnam, said local conditions suggest the VN-Index could rise to 600 by the end of the year, although he noted that global macro uncertainty is making predictions difficult at this point. And he believes that it is possible for VN-Index to return to the values of 2007 but in two years or five years.

Foreign Direct Investment

Since Foreign Direct Investment law became valid in 1988, FDI has been always a crucial motivation in

Vietnam

’s progress of social economic development. From 1988 to 2013, total FDI in

Vietnam

was 218.8 billion USD which 60% in agriculture area. In the period of 2006 to 2008, after

Vietnam

joint WTO, the capital registration began increasing. FDI has become one of the most dynamic economic sectors in the country. Its capital has primarily flowed into infrastructure although the economic growth slowed down. In the past 25 years, the country has 123 FDI projects which have invested mostly in telecommunications, electricity, petrochemical and steel. Along with industrial infrastructure, transport infrastructure also received strong interests and investments of foreign companies.

Source: ‘General Statistics Office of Vietnam’

Vietnam’s FDI by countries in 2013 and 2014

Country	2013			2014
Country	Project	Registered Capital (million USD)	%	Project	Registered Capital (million USD)	%
Korea	427	3,829	26.4	588	6,283	38.1
Hong Kong	72	631	4.4	112	2,818	17.1
Singapore	130	3,060	21.1	119	2,331	14.1
Japan	352	1,406	9.7	342	1,337	8.1
Taiwan	75	416	2.9	101	545	3.3
British Virgin Islands	17	210	1.4	29	408	2.5
United Kingdom	16	187	1.3	23	341	2.1
China	110	2,310	15.9	112	280	1.7
Belgium	8	3	0.02	7	277	1.7
Canada	7	24	0.2	13	262	1.6
Others	315	2,407	16.6	397	1,622	9.8
Total	1,529	14,483	100	1,843	16,504	100

Source: Foreign Investment AgencyVietnam

Vietnam’s FDI by sectors in 2013 and 2014

Sector	2013			2014
Sector	Project	Registered Capital (mil. USD)	%	Project	Registered Capital (mil. USD)	%
Manufacturing, processing	719	10,087	69.6	880	11,298	68.5
Real-estate	23	757	5.2	44	2,531	15.3
Construction	118	194	1.3	122	964	5.8
Wholesaling, retailing, repairing	236	434	3.0	257	336	2.0
Healthcare, social welfare	9	89	0.6	6	230	1.4
Manufacturing, distributing electricity, gas, water, air conditioner	4	2,026	14.0	6	221	1.3
Specific activities, science, technology	196	388	2.6	171	211	1.3
Warehouse, transportation	29	35	0.2	66	149	0.9
Hotel, restaurant	18	132	0.9	31	137	0.8
Mining	4	37	0.2	5	102	0.6
Agriculture, forestry, fishery	13	72	5.0	28	81	0.5
Total	1,530	14,483	100	1,843	16,504	100

Source: Foreign Investment AgencyVietnam

Infrastructure

Over the past decade,

Vietnam

has made good progress in GDP growth and poverty reduction. Taking part in this success has been a high level of investment in infrastructure. In recent years, around 9-10 percent of GDP has been invested in telecommunications, transport, energy, water and hygiene by high international standards.

■ Electricity

Electricity infrastructure was almost nothing in the past after wars in Vietnam. Nowadays, the country is making a spectacular changing in urbanization and industrialization with a big different scenario comparing to the past. Especially from 2008, Vietnam has made strides in its electricity infrastructure. Business Times Vietnam in a news report state; “Basically, it has met the demand for electricity, which has risen significantly over the last decade and maintained basic services to the customers as well as kept relatively low cost in comparison with that of the world. Electrification at rural area in the period from 1996 to 2004 was one of the most successful programs in the world. The number of households in rural areas using electricity has risen from 50% in 1996 to 88% in 2004 and to approximately 95% in 2007. The current distribution system has 125,000 km medium voltage lines, 220000 km low voltage lines and over 700 intermediary transformer stations with total capacity of 3500 MVA and 160000 distributing transformer stations with total capacity of more than 36000 MVA.”

According to the state-owned Vietnam Electricity Group (EVN) who provides 90% of the total electricity production in the nation, the country’s electricity demand will grow by 15-17 percent per year. To satisfy this demand, this goal needs outside capital investment. To develop Vietnam’s electricity infrastructure and power output, the country will need 156 billion US dollars in the next 20 years meaning approximately 7.8 billion US dollar per year (the investment to include supply, transmission and distribution of electricity).

Historical and expected electric generating capacity in Vietnam (2010 - 2030)

Source: International Atomic Energy Agency, 2013 Vietnam Country Nuclear Power Profile

■ Roadways

Total length of the road network (including the length of the paved and unpaved portions) is 210,000 km, of which 17,300 km is national roads, 17,450 km is provincial roads, 36,400 km is district roads, and 7,000 km is urban roads, 131,500 km left is rural roads.

The percentage of paved national roads is one of crucial evidences of a country’s development quality about road network. From 61 percent in 1997, paved national roads are up to 84 percent recently and it is covered reasonably by regional standards. In stead of maintaining the existing capital stock, new construction played a big part in the road network quality improvement. There is no accurate information about the condition of provincial, district and commune roads but the evidence from on going projects imply about poor condition as well as rural roads.

The administration of the road sector is complex because of different agencies responsible for the financing and implementation and others for investment and maintenance. For national roads, investment finance is approved by the Ministry of Planning and Investment, implementation is the responsibility of the Project Management Units of the Ministry of Transport, and maintenance is undertaken by the Vietnam Roads Administration with funds channeled through the Ministry of Finance. For local roads, the complexity of the institutional arrangements is greater with the involvement of the provincial departments of transport.

Rising of vehicle number which of the major part is motorcycle has caused road traffic on national roads and around the major urban centers. Traffic accident is also a problem of motorization. Thanks for multiform policies to improve traffic safety by the Government such as education, awareness campaigns, driving tests, vehicle examination, monitoring and enforcement of traffic laws and improvement of black spots…, traffic accidents seem to be improved eventually.

■Seaports

According to Vietnam Maritime Administration (Vinamarine), there are 49 sea ports. The government has developed the large ports through Vinamarine and turned over to Vietnam National Shipping Lines for operation (Vinalines). Hai Phong in the north and Sai Gon in the south are the main but estuarine ports, distant respectively 30 and 90 km from the sea with access limited to smaller ships. The annual throughput of the ports has increased rapidly, almost doubling over the last five years, from 56 million tons in 1998 to 114 million tons in 2003. Besides state owned ports, there are some foreign investment in the port sector such as the Vietnam International Container Terminals (VICT) in Ho Chi Minh City is 90 percent foreign owned, Interflour Cai Mep Port in Vung Tau is a 100 percent foreign owned.

Port charges pertaining to vessels are set by the Ministry of Finance and most of them do not vary from one region or port to another. Cargo handling charges are set by port operators, service providers or by negotiation. Although of lower modern ports comparing to the region, port efficiency still has increased and port costs have decreased. According to Vinalines, throughput on container berths ranges from 20 to 25 units per hour in Saigon port and 30 units in the new port of Cai Lan in Quang Ninh province and general cargo throughput is 1,500 tons/gang/day. And the fact about tariff at Sai Gon port is quite competitive with others in ASEAN and China.

Summary of Throughput 2014

Port’s Name	Cargo Throughput (ton)	Over Total (%)
Hai Phong	19,726	9.6
Cam Pha	7,600	3.7
Quang Ninh	6,467	3.2
Dinh Vu	6,276	3.1
Doan Xa	4,150	2.0
Other ports	21,715	10.6
Total in the North	59,658	29.1
Quy Nhon	7,006	3.4
Da Nang	6,022	2.9
Others	13,289	6.5
Total in the Central	26,317	12.8
Tan Cang Sai Gon	45,925	22.4
Sai Gon	11,155	5.4
TCIT	11,075	5.4
VICT	7,004	3.4
Dong Nai	6,483	3.2
Phu My	5,570	2.7
CMIT	4,832	2.4
Ben Nghe	4,475	2.2
Others	22,594	11.0
Total in the South	119,113	58.1
Total	205,088	100.0

Source: Vietnam Seaports Association

■ Air Transport

The Civil Aviation Administration of Vietnam (CAAV) is responsible for civil aviation and belongs to government authority. There are 135 airports/airstrips for civil, military and police use in the country. The CAAV controls 18 airports and air navigation services. Vietnam Airlines and Pacific Airlines are two members of Vietnam Airlines Corporation operated in the country. 37% of international traffic to and from Vietnam and 94% of the domestic demand are supplied from Vietnam Airlines. The Pacific Airline owned by the Vietnam Airlines Corporation was established in 1995 operates mainly between Hanoi and Ho Chi Minh City.

In 1998, there were 2.3 million international air passengers and 3.3 million domestic air passengers, nearly 60,000 and 47,000 ton of air freight were carried by international and domestic flights respectively. In 2002, total of 8 million commercial passengers, of which 4.2 million were international and 3.8 domestic were carried by the Tan San Nhat and Noi Bai airport. Also in this year, both international airports handled a total of 190,000 tons (including 2,000 tons of mail), 110,000 tons of international freight and 78,000 domestic freight.

■Railways

Railways network is combined of 7 lines which is total of 2,632 km long. All lines are single track. There are over 1,800 bridges (57,044 m) and 39 tunnels (11,513 m) and 281 stations. The Vietnam Railway Cooperation (VRC) is the only supplier of rail services in Vietnam with four main business groups: two passenger train operating entities (North and South), a freight train operating company and a looser grouping of regional infrastructure administrations.

The Vietnam Railway Administration is holding the job of planning development for the current sector, new construction and maintenance. The funds of 10 percent from VRC’s gross profit are used for infrastructure maintenance. Although the average passenger train load is high approximately 370 passengers, the average freight load is merely 225 tons due to low infrastructure.

■Internet Communication

On November 19, 1997, Vietnam officially connected to the internet. Nowadays, there are around 31 billion internet users which make up more than 35 percent of population in Vietnam according to Vietnam Internet Network Information Center (VNNIC) in November, 2012, making it one of the fastest growing countries in the world on the internet. The most popular internet service providers in Vietnam are Financing Promoting Technology (FPT), Vietnam Posts and Telecommunications Group (VNPT) and Vietel.

In recent years, internet and communications infrastructure have prospered the nation. By September 2015, the total bandwidth of domestic and international internet connections has reached more than 900 Gbps and 1,400 Gbps, respectively. Currently, Vietnam has about 120 million mobile subscribers, including 35 million 3G users with an average growth rate of over 30%.

Source: International Telecommunication Union ‘Mobile-cellular subscription’

Restrictions on foreign investment and investment incentives

On December 29, 1987, the law on foreign investment was officially promulgated. It has been a quarter of a century since

Vietnam

’s economy received the FDI.

Vietnam

is currently a signatory to certain international treaties and has certain commitments to the World Trade Organization (WTO), each of which mandates foreign ownership restrictions in certain business sectors. In order to expand economic cooperation with foreign countries as well as develop the national economy, the government has reformed and issued provisions for foreign direct investment in

Vietnam

. The law on foreign investment in

Vietnam

includes:

General Provisions
Forms of Investment
Investment Guarantee Measures
Rights and Obligations of Foreign Investors and Enterprises with Foreign Owned Capital
State Management of Foreign Investment
Implementation Provisions

■Restrictions on foreign investment

● Prohibited industries and regulatory industries

Besides encouraging in investment, some sectors of industries are prohibited by the national law. According to ‘Law No. 67/2014/QH13’:

Article 6. Banned business lines’

1. The investments in the activities below are banned:

a) Trade in the narcotic substances specified in Appendix I hereof;

b) Trade in the chemicals and minerals specified in Appendix I of this Law;

c) Trade in specimens of wild flora and fauna specified in Appendix 1 of Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of rare and/or endangered species of wild fauna and flora in Group I of Appendix 3 hereof;

d) Prostitution;

e) Human trafficking; trade in human tissues and body parts;

f) Business pertaining to human cloning.

2. The Government’s regulations shall apply to production and use of products mentioned in Points a, b, and c Clause 1 of this Article during analysis, testing, scientific research, medical research, pharmaceutical production, criminal investigation, national defense and security protection

Regulatory industries are sectors that some certain conditions must be satisfied to be allowed to invest:

Article 7. Conditional business lines

1. Conditional business lines are the business lines in which the investment must satisfy certain conditions for reasons of national defense and security, social order and security, social ethics, or public health.

2. The List of conditional business lines is provided in Appendix 4 hereof.

3. Conditions for making investments in the business lines mentioned in Clause 2 of this Article are specified in the Laws, Ordinances, Decrees, and the international agreements to which the Socialist Republic of Vietnam is a signatory. Ministries, ministerial agencies, the People’s Council, People’s Committees, and other entities must not issue regulations on conditions for making business investments.

4. Conditions for making business investments must be appropriate for the objectives in Clause 1 of this Article, ensure transparency, objectivity, not wasting time or money of investors.

5. The conditional business lines and the corresponding conditions shall be posted on the National Company Registration Portal.

6. The Government shall elaborate the announcement and control of conditions for business investments.

Article 8. Amendments to the Lists of banned business lines and the List of conditional business lines

Depending on the socio-economic conditions and state management requirements in each period, the Government shall review the banned business lines, conditional business lines and propose amendments to Article 6 and Article 7 to the National Assembly.

●The regulation by the investment ratio

Schedule of Specific Commitments in Services

No	Business Sector	Conditions & Ratio for Foreign Investment	Possible time to establish companies by 100% foreign capital
1	Advertising services	Joint Venture (JV) only	No limitation from 1 January 2009
2	Market research services	-	From 1 January 2009
3	Services incidental to agriculture, hunting, forestry	51% JV or Business Corporation Contract	Unknown
4	Services incidental to mining	-	From 11 January 2012
5	Services incidental to manufacturing	-	From 11 January 2015
6	Architectural services	Juridical person of a WTO Member	From 11 January 2009
7	Related scientific & technical consulting services	-	From 11 January 2011
8	Maintenance & repair of equipment	-	From 11 January 2012
9	Courier services	-	From 11 January 2012
10	Motion picture projection services	51% JV or Business Corporation Contracts	Unknown
11	Legal services	- Branches of foreign lawyers organizations - Subsidiaries of foreign lawyers organizations - Foreign law firms - Partnerships between foreign lawyers organizations and Viet Nam's law partnerships	Unknown
12	Veterinary services	Access is granted to natural persons exclusively for the conduct of private professional practice and under the authorization by the veterinary authorities.	Unknown
13	Maintenance and repair of equipment	-	From 11 January 2012
14	Basic telecommunication services	- Non facilities-based services: JV, 51%(from 11 January 2007), 65%(from 11 January 2010) - Facilities-based services: JV, 49%(from 11 January 2007) 51% gives management control of the joint venture	Unknown
15	Value added services	- Non facilities-based services: Business cooperation contracts/ JV 51% (from 11 January 2007), 65% (from 11 January 2010) - Facilities-based services: Business cooperation contracts/ JV 50%(from 11 January 2007) 51% gives management control of the joint venture	Unknown
16	Wholesale trade services/ Retailing services	-	No limitation from 1 January 2009
17	Franchising services	After 11 January 2010, branching is allowed	No limitation from 1 January 2009
18	Sewage Services	-	No limitation from 11 January 2011
19	Refuse disposal services	Only permitted to provide services at the refuse collection points as specified by local municipal and provincial authorities.	No limitation from 11 January 2011
20	Travel agencies and tour operator services	JV or Business Corporation Contracts	No limitation
21	Entertainment services (including theatre, live bands and circus services)	JV 49% (from 11 January 2012)	Unknown
22	Electronic games business	49% JV or Business Corporation Contracts	Unknown
23	Internal Waterways Transport	JV 49% (from 11 January 2007)	Unknown
24	Rail Transport Services	JV 49% (from 11 January 2007)	Unknown

3.5.1.3. The regulation of legal capital for business establishment

Sector of business				Minimum Amount of Capital	Law
Banking Businesses	State commercial banks			3,000 billion VND	Decree No.10/2011/ND-CP & 141/2006/ND-CP
	Joint stock commercial banks			3,000 billion VND
	Join venture banks			3,000 billion VND
	100 % foreign-owned capital banks			3,000 billion VND
	Branches of foreign banks			15 million USD
	Policies banks			5,000 billion USD
	Investment banks			3,000 billion VND
	Development banks			5,000 billion USD
	Co-operative banks			3,000 billion VND
	Central People’s Credit Fund			3,000 billion VND
	Grass roots People’s Credit Fund			100 million VND
Real Estate Businesses				6 billion VND	Decree No.153/2007/ND-CP
Debt Collection Services				2 billion VND	Decree No.104/2007/ND-CP
Security Services				2 billion VND	Decree No.52/2008/ND-CP
Services for Vietnamese Guest Workers				5 billion VND	Decree No.126/2007/ND-CP
Airport Businesses		International airports		100 billion VND	Decree No.83/2007/ND-CP
		Domestic airports		30 billion VND
Aviation port businesses		International airports		30 billion VND
		Domestic airports		10 billion VND
Air transportation businesses		International air transportation		1 to 10 aircraft: 500 billion VND	Decree No.76/2007/ND-CP
				11 to 30 aircraft: 800 billion VND
				Over 30 aircraft: 1,000 billion VND
		Domestic air transportation		1 to 10 aircraft: 200 billion VND
				11 to 30 aircraft: 400 billion VND
				Over 30 aircraft: 500 billion VND
General aviation businesses				50 billion VND
Film production				1 billion VND	Decree No.96/2007/ND-CP
Audit services				5 billion VND	Decree No.17/2012 ND-CP
Set up fixed ground telecommunication networks (without using wireless electric frequency bands, telecommunication subscribers)		Within one province or centrally-affiliated city		5 billion VND	Decree No.25/2011/ND-CP
		2 to 30 provinces and centrally-affiliated cities		30 billion VND
		Over 30 provinces and centrally-affiliated cities		100 billion VND
Set up fixed ground telecommunication networks (uses wireless electric frequency bands, telecommunication subscribers)		15 to 30 provinces and centrally-affiliated cities		100 billion VND
		over 30 provinces and centrally-affiliated cities		300 billion VND
Set up mobile ground telecommunication network		Uses wireless electric frequency channel		20 billion VND
		Without using terrestrial wireless electric frequency band		300 billion VND
		Uses wireless electric frequency bands		500 billion VND
Set up mobile and fixed satellite telecommunication networks				30 billion VND
Securities and fund management companies			Securities brokerage	25 billion VND	Decree No.14/2007/ND-CP)
			Securities dealing	100 billion VND
			Securities issuance underwriting	165 billion VND
			Securities investment consultancy	10 billion VND
Goods Exchange				150 billion VND	Decree No.158/2006/ND-CP
Mutual Insurers				10 billion VND	Decree No.18/2005/ND-CP
Labor Leasing Operation				2 billion VND	Decree No.55/2013/ND-CP
Tourism				250 million VND	Decree No.92/2007/ND-CP
Job-recommending organizations				300 million VND	Decree No.19/2005/ND-CP
Insurers and insurance brokers			Non-life insurance business	300 billion VND	Decree 46/2007/ND-CP
			Life insurance business	600 billion VND

■ Other regulation

●Regulation of land ownership for foreign companies

Based on Article 205 of Civil code, Article 17 of the constitution, the state is responsible for the administration of land on their behalf. Up until now, the state offers the land use right for only Vietnamese individuals or companies. In case of joint venture, a land use right could be granted to a foreign invested enterprise if there is a Vietnamese partner contributed to its share capital.

Otherwise, foreign investors could only lease land use rights for a lump-sum payment or an annual rent. The duration of the lease could not exceed 50 years (or 70 years in special circumstances). A building, house, or apartment constructed on land may be owned where a person has a Certificate of Land Use Right and Ownership of House and Other Assets on the Land. Until the entry in force of the 2014 Housing Law, very limited categories of individual foreigners and foreign entities could be owners of a house.

On 1 July 2015, the Law on Housing No. 65/2014/QH13 and the Law on Real Estate Business No. 66/2014/QH13 passed by the Vietnam National Assembly on 25 November 2014 will come into effect. The new legislation has taken a big step to a developing real estate industry in Vietnam, giving foreign individuals and entities more opportunities to access property and develop businesses in the real estate sector.

Under the 2014 Housing Law implement, foreign individuals who are permitted to enter Vietnam with entry visas will be entitled to buy and own residential houses, as well as use, sell, mortgage, or inherit the residential houses. In addition, foreigners will be permitted to purchase houses for letting. The law does not limit on the number of residential properties that a foreigner can buy in Vietnam. However, a foreigner is limited to ownership of up to 30% of the total number of units in an apartment building and up to 250 residential houses in a ward administrative unit. The period of house ownership is 50 years, with the possibility of an extension. Foreign individuals who are married to a Vietnamese person are entitled to long term home ownership. Also under this law, foreign invested enterprises, branches and representatives of foreign enterprises, foreign investment funds, and branches of foreign banks which are licensed to operate in Vietnam shall be allowed to buy and own houses. The period of house ownership for these foreign companies cannot exceed the period stated in their respective investment certificates.

For real estate business, first, foreign companies (and individuals) are permitted to purchase constructed facilities for use as head offices or working offices, or for production, business, or service functions. Furthermore, developers can now lease out houses and buildings. Second, real estate investors who want to sell or lease out residential houses before the completion of their construction must secure a guarantee from an authorized bank for the sale or lease. Third, any organization or individual who wants to undertake real estate activities must establish an enterprise, and the minimum legal capital requirement for such a company has been increased from 6 billion VND to 20 billion VND.

● Regulation of loan for foreign companies

Foreign investors in Vietnam often need loans from their overseas parent company in order to meet start up or operational costs. Therefore it is important for such investors to understand the different types of foreign loans, conditions and administrative procedures which are set out in Vietnamese law.

In case of loans in Vietnam

There are two cases for a foreign enterprise to borrow money in Vietnam: borrow from Vietnamese banks and borrow from foreign banks.

For the Vietnamese banks, foreign investors can borrow money by VND. On the other hand, they can borrow VND or USD in a foreign bank. But to have a loan, foreign investors need to satisfy some borrowing conditions from the banks.

In case of loans from other countries

Under Circular 12/2014 of the State Bank of Vietnam (SBV), a private company including foreign invested companies in Vietnam can only borrow from a foreign lender if it satisfies the following requirements: foreign loans used to implement the business or projects of borrowers or companies receiving borrowers’ direct capital, foreign loans that serve to restructure the foreign debts incurred by the borrower.

In general, only foreign currencies are allowed, however, Vietnamese currency can be used if the borrower is a microfinance institution, a foreign invested company borrowing from the Vietnamese currency profit of a lender who has made capital contribution to the borrower.

Short term loans for one year

A short term loan can only be used for working capital for production purposes; or other activities related to the enterprise's approved business lines. It is forbidden to obtain a foreign short term loan for the purpose of repaying another preexisting loan. The key terms of the loan can be freely agreed by the parties including duration, interest rate, fees… A short term loan can be extended before its expiration date. However, if the total duration after extension amounts to more than 12 months then the medium and long term loan conditions will apply.

Medium and long term loans for more than one year

Conditions that apply to this kind of loan is must be used for activities related to the enterprise's approved business lines, must be registered with the State Bank of Vietnam. The SBV will send a written approval to the enterprise within 15 days of the date the registration application is submitted. The balance of the enterprise's short, medium and long term loans may not exceed applicable loan limits or the total invested capital as stated in the investment license. Therefore the investor should carefully consider whether they may need to obtain a foreign loan in the future before setting the investment capital amount in the initial licensing application dossier.

● Note

There is an evolving legal framework with frequent changes to law and regulations which called “grey areas” in Vietnamese laws. This may cause difficulties in interpretation, application and compliance for foreign investors to operate business in Vietnam.

Affecting result from parent company

To setup a foreign invested company in Vietnam, it is an advantage for companies which established from a parent company that has a long life business and invest in the same business lines with parent company.

For wholesale and retail business

According to Decision 10/2007/QD-BTM of the Ministry of Trade publicizing roadmaps for good trading and directly related activities, from 1/1/2009, economic organizations with 100% capital of foreign investors will not face any restrictions on the form of investment when performing import - export activities and distribution of goods in Vietnam.

Besides, the Circular No. 08/2013/TT-BCT (on June 7, 2013) provides foreign retailers with an ENT exemption for retail stores which are less than 500 m2 in size and located in areas zoned by provinces and municipalities for activities involving the selling of goods. Furthermore, although an exemption is applicable for FDI firms who wish to open more retail stores, the firms are required to apply for a new business license for every single additional store. And applying for the licenses can be taken for long time because there is no required legislated response time for the licensing authorities.

For restaurants business

Beginning in January 11, 2015, Vietnam’s restaurant business is open to 100 percent foreign ownership. Although it is a potential area with the population of 90 million to do restaurant business, international dining and food chains are still not open widely in Vietnam. There are only some foreign brands exist currently in this potential market such as Mc. Donald (from February 8, 2014), Star Buck (January 2013), KFC (1997)…

HS code needed for selling any product in Vietnam

Every enterprise needs to have Harmonized System Code (HS code) for every product that they want to put on sale. Besides encouraged policies, there is the list HS code of goods discouraged for import (decision 1380/QD-BCT).

Minimum capital requirement

Regulation about minimum capital does not appear in all businesses. Therefore, foreign investors need to search carefully or find a trusted lawyer to know more about minimum capital requirement before setting up any business.

■ Investment incentives

Investors with investment projects (including expand investment projects) in the investment incentive sectors and geographical areas stipulated in the Vietnam investment law shall be entitled to the incentives

● Conditions to apply investment incentives

Investment incentive sectors

The entities eligible for investment incentives of the Law on Investment (Decree No. 118/2015/ND-CP) include:

Investment projects in business lines eligible for investment incentives or special investment incentives
Investment projects in disadvantaged areas or extremely disadvantaged areas
Any investment project whose capital is VND 6,000 billion or over, at least VND 6,000 billion is disbursed within 03 years from the issuance date of the Investment Registration Certificate or the decision on investment policies
Any investment project in a rural area which employs 500 workers or more
High technology enterprises, science and technology enterprises, science and technology organizations defined by regulations of law on high technology, science and technology.

List of industries entitled to investment incentives

A. List of sectors to which special investment incentives shall be given

1. Production of new materials, new energy; production of high-tech products, bio-technology products, info-technology products; production of manufactured mechanical products. (Composite materials, high quality steel, construction of plants using solar energy…)

2. Cultivation and processing of agricultural, forestry and aquatic products; making salt; production of man-made strains, new seeds and breeds of animals. (Afforestation and taking care of forests, catching of marine products at offshore sea…)

3. Use of high-technology; modern technology; protection of ecological environment; research on, development and fostering of high-technology. (Application of high-technology, pollution treatment and environmental protection…)

4. Employment of large number of employees. (Projects regularly employing 5,000 or more employees)

5. Construction and development of infrastructures and important projects. (Construction and operation of infrastructure facilities in industrial zones, export processing zones, and of important projects established under a decision of the Prime Minister…)

6. Development of facilities in educational, training, medical, gymnastic and sports sectors. (Construction of drug detoxification centres or tobacco detoxification centres, establishment of geriatric centres, and relief centres concentrating on care for the disabled and orphans…)

7. Other sectors of production and service. (Investment in research and development (R&D) accounting for 25% or more of turnover, services of salvage in the sea…)

B. List of sectors to which investment incentives shall be given

1. Production of new materials, new energy; production of high-tech products, bio-technology products, info-technology products, manufactured mechanical products. (Production of sonic, electric and thermal highly-insulating materials, non-ferrous metals, cast-iron refining…)

2. Cultivation and processing of agricultural, forestry and aquatic products, making salt; production of man-made strains, seeds and breeds of animals. (Cultivation of medicinal plants, production of bottled or canned juice from fruits…)

3. Use of high technology, modern technologies; protection of ecological environment; research on, development and fostering of high technology. (Production of equipment for dealing with oil-overflow, waste treatment…)

4. Employment of lots of employees. (Projects regularly employing 500 to 5,000 employees…)

5. Construction and development of infrastructure facilities. (Construction of infrastructure facilities in service of production and operation of cooperatives and community life in rural areas, projects for operation of infrastructure facilities and production in complexes of industries and trades in rural areas…)

6. Development of facilities in educational, training, medical, gymnastic, sports and national cultural sectors. (Construction of infrastructure facilities of educational and training establishments, people-founded hospitals and private hospitals…)

7. Development of traditional trades. (Production of fine-art and handicraft products, processing of agricultural products and food…)

8. Other production or service sectors. (Projects for relocation of production establishments out of inner cities, legal consultancy; consultancy on intellectual property and technology transfer, children’s toys, weaving fabric, completing textile products, producing silk and fibres of various kinds…)

List of areas eligible for investment incentives

No.	Province	Extremely disadvantaged areas	Disadvantaged areas
1	Bac Kan	All districts, towns, and Bac Kan city
2	Cao Bang	All districts and Cao Bang city
3	Ha Giang	All districts and Ha Giang city
4	Lai Chau	All districts and Lai Chau city
5	Son La	All districts and Son La city
6	Dien Bien	All districts, towns, and Dien Bien city
7	Lao Cai	All districts	Lao Cai City
8	Tuyen Quang	Na Hang, Chiem Hoa, Lam Binh districts	Ham Yen, Son Duong, Yen Son districts and Tuyen Quang city
9	Bac Giang	Son Dong district	Luc Ngan, Luc Nam, Yen The, Hiep Hoa districts
10	Hoa Binh	Da Bac and Mai Chau districts	Kim Boi, Ky Son, Luong Son, Lac Thuy, Tan Lac, Cao Phong, Lac Son, Yen Thuy districts
11	Lang Son	Binh Gia, Dinh Lap, Cao Loc, Loc Binh, Trang Dinh, Van Lang, Van Quan, Bac Son districts	Chi Lang, Huu Lung districts
12	Phu Tho	Thanh Son, Tan Son, Yen Lap districts	Doan Hung, Ha Hoa, Phu Ninh, Thanh Ba, Tam Nong, Thanh Thuy, Cam Khe districts
13	Thai Nguyen	Vo Nhai, Dinh Hoa, Dai Tu, Phu Luong, Dong Hy districts	Pho Yen, Phu Binh districts
14	Yen Bai	Luc Yen, Mu Cang Chai, Tram Tau districts	Tran Yen, Van Chan, Van Yen, Yen Binh, and Nghia Lo town
15	Quang Ninh	Ba Che, Binh Lieu districts, Co To islands, and other islands in the province	Van Don, Tien Yen, Hai Ha, Dam Ha districts
16	Hai Phong	Bach Long Vi, Cat Hai islands
17	Ha Nam		Ly Nhan, Thanh Liem, Binh Luc districts
18	Nam Dinh		Giao Thuy, Xuan Truong, Hai Hau, Nghia Hung districts
19	Thai Binh		Thai Thuy and Tien Hai districts
20	Ninh Binh		Nho Quan, Gia Vien, Kim Son, Tam Diep, Yen Mo districts
21	Thanh Hoa	Muong Lat, Quan Hoa, Quan Son, Ba Thuoc, Lang Chanh, Thuong Xuan, Cam Thuy, Ngoc Lac, Nhu Thanh, Nhu Xuan districts	Thach Thanh and Nong Cong districts
22	Nghe An	Ky Son, Tuong Duong, Con Cuong, Que Phong, Quy Hop, Quy Chau, Anh Son districts	Tan Ky, Nghia Dan, Thanh Chuong districts, and Thai Hoa town
23	Ha Tinh	Huong Khe, Huong Son, Vu Quang, Loc Ha, Ky Anh districts	Duc Tho, Nghi Xuan, Thach Ha, Cam Xuyen, Can Loc districts
24	Quang Binh	Tuyen Hoa, Minh Hoa, Bo Trach districts	Other districts and Ba Don town
25	Quang Tri	Huong Hoa, Da Krong districts, Con Co island and other islands of the province	Other districts
26	Thua Thien Hue	A Luoi and Nam Dong districts	Phong Dien, Quang Dien, Phu Loc, Phu Vang districts and Huong Tra town
27	Da Nang	Hoang Sa archipelago
28	Quang Nam	Dong Giang, Tay Giang, Nam Giang, Phuoc Son, Bac Tra My, Nam Tra My, Hiep Duc, Tien Phuoc, Nui Thanh, Nong Son, Thang Binh districts and Cu Lao Cham island	Dai Loc, Que Son, Phu Ninh, Duy Xuyen districts
29	Quang Ngai	Ba To, Tra Dong, Son Tay, Son Ha, Minh Long, Binh Son, Tay Tra, Son Tinh districts and Ly Son island	Nghia Hanh district
30	Binh Dinh	An Lao, Vinh Thanh, Van Canh, Phu Cat, Tay Son, Hoai An, Phu My districts	Tuy Phuoc districts
31	Phu Yen	Song Hinh, Dong Xuan, Son Hoa, Phu Hoa, Tay Hoa districts	Song Cau town; Dong Hoa, Tuy An districts
32	Khanh Hoa	Khanh Vinh, Khanh Son districts, Truong Sa archipelago and other islands of the province	Van Ninh, Dien Khanh, Cam Lam districts, Ninh Hoa town, and Cam Ranh city
33	Ninh Thuan	All districts	Phan Rang - Thap Cham city
34	Binh Thuan	Phu Quy district	Bac Binh, Tuy Phong, Duc Linh, Tanh Linh, Ham Thuan Bac, Ham Thuan Nam, Ham Tan districts
35	Dak Lak	All districts and Buon Ho town	Buon Ma Thuot city
36	Gia Lai	All districts and towns	Pleiku city
37	Kon Tum	All districts and cities
38	Dak Nong	All districts and towns
39	Lam Dong	All districts	Bao Loc city
40	Ba Ria - Vung Tau	Con Dao district	Huyen Tan Thanh, Chau Duc, Xuyen Moc
41	Tay Ninh	Tan Bien, Tan Chau, Chau Thanh, Ben Cau districts	Other districts
42	Binh Phuoc	Loc Ninh, Bu Dang, Bu Dop, Bu Gia Map, Phu Rieng districts	Dong Phu, Chon Thanh, Hon Quan districts, Binh Long town, and Phuoc Long town
43	Long An	Duc Hue, Moc Hoa, Vinh Hung, Tan Hung districts	Kien Tuong town; Tan Thanh, Duc Hoa, Thanh Hoa districts
44	Tien Giang	Tan Phuoc, Tan Phu Dong districts	Go Cong Dong, Go Cong Tay districts
45	Ben Tre	Thanh Phu, Ba Tri, Binh Dai districts	Other districts
46	Tra Vinh	Chau Thanh, Tra Cu districts	Cau Ngang, Cau Ke, Tieu Can districts, and Tra Vinh city
47	Dong Thap	Hong Ngu, Tan Hong, Tam Nong, Thap Muoi districts, and Hong Ngu town	Other districts
48	Vinh Long		Tra On, Binh Tan, Vung Liem, Mang Thit, Tam Binh districts
49	Soc Trang	All districts, Vinh Chau town, and Nga Nam town	Soc Trang city
50	Hau Giang	All districts and Nga Bay town	Vi Thanh city
51	An Giang	An Phu, Tri Ton, Thoai Son, Tinh Bien districts, and Tan Chau town	Chau Doc city and other districts
52	Bac Lieu	All districts and towns	Bac Lieu city
53	Ca Mau	All districts and islands of the province	Ca Mau city
54	Kien Giang	All districts, islands of the province, and Ha Tien town	Rach Gia city
55	Other localities	Economic zones, hi-tech zones (including concentrated information technology zones established under regulations of the Government)	Industrial parks, export-processing zones established under regulations of the Government.

Decree No. 118/2015/ND-CP

● Preferential treatment system

Preferential treatment for tax rate of corporate income tax

The standard corporate income tax (CIT) was 25 percent for both domestic and foreign invested enterprises in most industries. To draw more foreign direct investment and support Vietnamese local enterprises, the current CIT rate has been reduced from 25 percent to 22 percent by the Vietnamese lawmakers (January 1, 2014). The CIT rates for small and medium sized enterprises will be also cut by 5 percent (to 20 percent), and by 15 percent (to 10 percent) for developers of low cost housing.

Based on Circular 123/2012/TT-BTC issued by the Ministry of Finance on 27 July 2012, some incentives were established as mentioned in the table below:

Condition	CIT	Applied Period	Exemption	50% Reduction
All enterprises	25%	-	-	-
Projects invested in disadvantaged areas	20%	10 years	2 years	4 years (10%)
Agriculture	20%	No limitation	-	-
Projects invested in extremely disadvantaged areas	10%	15 years	4 years	9 years (5%)
High technology		15 years	4 years	9 years (5%)
Medicare, education, culture, projects related to environment		No limitation	4 years	9 years (5%)

Preferential treatment for tax rate of import custom tax

Vietnam imposes tax on almost every import products. The import tax rates depend on the type of product. Consumer products and luxury goods are highly taxed while machinery, equipment, raw materials, and capital goods for industrial production receive low taxes or even tax exemption. According to Decree No. 87/2010/ND-CP of August 13, 2010, imports are exempt from import duty in the following cases:

Goods temporarily imported for re-export or temporarily exported for re-import for participation in trade fairs, exhibitions or display; machinery, equipment and professional instruments temporarily imported for re-export or temporarily exported for re-import to perform work within a certain period of time. After the end of trade fairs, exhibitions or displays or after the completion of work according to law, temporarily exported goods must be re-imported into Vietnam and temporarily imported goods must be re-exported.
Movable assets brought into or out of Vietnam by Vietnamese or foreign organizations or individuals within allowable quotas.
Imported goods and exported goods of foreign organizations or individuals entitled to diplomatic privileges or immunities in Vietnam.
Goods imported for processing for foreign parties are exempt from import duty (including those allowed to be destroyed in Vietnam under laws after liquidation of processing contracts) and processed products exported back to foreign parties are exempt from export duty. Goods exported to foreign countries for processing for Vietnamese parties are exempt from export duty and when processed products are re-imported, they are exempt from import duty on the value of goods exported to foreign countries for processing under contracts
Imported goods and exported goods within duty-free luggage quotas of persons on entry or exit; postal matters and parcels sent by express delivery services which have the minimum dutiable value prescribed by the Prime Minister
Goods imported to create fixed assets of investment projects in domains entitled to import duty preferences listed in Appendix I to this Decree or in geographical areas entitled to import duty incentives, and investment projects funded with official development assistance (ODA) which are exempted from import duty, including: equipment and machinery, special-use means of transport, components, details, knocked down parts, spare parts, fittings, molds and accessories accompanying machinery, equipment and special-use means of transport, raw materials and supplies, building materials which cannot be domestically produced yet…
Plant varieties and animal breeds permitted to be imported for the execution of investment projects in the sectors of agriculture, forestry and fishery.
Equipment and devices which are imported for the first time to create fixed assets of projects entitled to import duty incentives and investment projects funded with official development assistance (ODA) capital on hotels, office buildings, apartments for lease, housing, trade and technical service centers, department stores, golf courses, tourist resorts, sports facilities, recreation and entertainment centers, medical examination and treatment, training, cultural, financial, banking, insurance, audit, and consultancy service establishments.
Goods imported in service of petroleum activities.
Raw materials and supplies imported to directly serve the production of software products, which cannot be domestically produced yet, are exempt from import duty.
Machinery, equipment and means of transport (excluding under 24-seat cars and cars designed for passenger-cum-cargo transport equivalent to under 24-seat cars) temporarily imported for re-export by foreign contractors for the execution of ODA-funded projects in Vietnam are exempt from import duty upon their temporary import and exempt from export duty upon their re-export.
Goods imported for sale at duty-free shops under decisions of the Prime Minister.

Preferential treatment for using land

Based on the Decree No. 44/2008/ND-CP dated April 09, 2008 of the Government’s law about land, projects in the list of domains in which investment is particularly encouraged and located in geographical areas with exceptionally difficult socio-economic conditions are exempt from land use levy, or a reduction from 20% to 50% of land use levy amounts payable into the state budget will be granted in the following cases:

Investment projects and levy reduction on land

Investment Projects	Levy Reduction
Projects in the domains in which investment is particularly encouraged and located in geographical areas with exceptionally difficult socio-economic conditions.	100%
Projects in the domains in which investment is particularly encouraged and located in geographical areas with difficult socio-economic conditions.	50%
Projects in the domains in which investment is encouraged and located in geographical areas with exceptionally difficult socio-economic conditions.	50%
Projects in the domains in which investment is encouraged and located in geographical areas with difficult socio-economic conditions.	30%
Projects in the domains in which investment is particularly encouraged.
Investment projects located in geographical areas with exceptionally difficult socio-economic conditions.
Projects in the domains in which investment is encouraged.	20%
Investment projects located in geographical areas with difficult socio-economic conditions.	20%

Source: Decree No. 44/2008/ND-CP

Industrial Park

■Current situation:

In 1963, the first industrial park named Bien Hoa 1 was built with 324 ha in Dong Nai province. At present, the number of industrial parks in Vietnam is more than 300 since foreign investment has poured in. Industrial parks mostly locates in Dong Nai, Binh Duong, Long An and Ho Chi Minh city (the South); Ha Noi, Bac Ninh, Hai Duong (the North); Quang Nam, Binh Dinh (the Middle); and Can Tho (Mekong Delta). These parks appropriate almost 84 thousand hectares of natural land which is about 66 percent of the total land area designated as industrial land for leasing.

As of July, all industrial parks in Vietnam cumulatively attracted 5,857 foreign investment projects with total registered capital amounting to US $90.7 billion, including US $53 billion of total investment capital. In the first seven months of 2015, Ho Chi Minh City was on top of the attracting foreign investment list with total newly and additionally registered FDI capital of US $2.4 billion, following is Binh Duong and Dong Nai provinces.

■Main industrial parks of each country

Country	Industrial Park	Company
Japan	Nomura - Hai Phong	Ojitex Hai Phong Co., Ltd. Toyota Boshoku Hai Phong Co., Ltd.
	LOTECO	Suzuki – Vietnam Corp. Harada Industry Vietnam Co., Ltd.
	Viet - Sing	MHI Engine System Vietnam Co., Ltd. Asuzac Co., Ltd.
	Tan Thuan	Chubu Rika Vietnam Co., Ltd. Daiwa Plastics Co., Ltd.
	Linh Trung 1	Kachiboshi Vn Co., Ltd. Fuji Impulse Vn Co., Ltd.
	Linh Trung 2	Did Electronics Vn Co., Ltd. Iwasaki Electric Vn Co., Ltd.
	Noi Bai	Rhythm Precision Vietnam Co., Ltd. Yamaha Motor Vietnam Co., Ltd.
	Thang Long	Nagatsu Vietnam Co., Ltd. Toyoda Van Moppes Vietnam Co., Ltd.
Korea	LOTECO	Yopoong Vietnam Co., Ltd. Deuck Woo Vietnam Co., Ltd.
	Tan Thuan	B&G Co., Ltd. G.R. Vina Textile Co., Ltd.
	Linh Trung 1	Astro Saigon Co., Ltd. Dea Yun Vn Co., Ltd.
	Linh Trung 2	Goonam Vina Co., Ltd. Yesum Vina Co., Ltd.
China	LOTECO	Peaktop Vietnam Co., Ltd. Green World Co., Ltd.
Taiwan	LOTECO	Three Brother Vietnam Co., Ltd. Fu Lien Co., Ltd. Vega Fashion Co., Ltd.
	Tan Thuan	Askey Vietnam Co., Ltd. Bensia Stationery Co., Ltd.
	My Xuan A2	Tong Hong Tannery Vietnam JSC Anchor Fastener Vietnam Co., Ltd. Ting Ray JSC.
	Linh Trung 1	Charm Ming Vn Co., Ltd. Fenix Vn Co., Ltd.
USA	LOTECO	Dong Quan Co., Ltd.
	Tan Thuan	Given Imaging Co., Ltd. KP Jewelry Co., Ltd.
	My Xuan A2	Shing Sheng plastic & cotton package Vietnam Co., Ltd.
UK	Tan Thuan	Always Co., Ltd. CCH Top Vn Co., Ltd.
	Linh Trung 1	Jye Shing Industry Co., Ltd. Minigold Vn Co., Ltd.
	Linh Trung 2	Glentruan Co., Ltd. Quint Major Industrial Vn Co., Ltd.
Singapore	LOTECO	Opam Co., Ltd.
Singapore	My Xuan A2	Leung Kai Fook Medical Vietnam Co., Ltd.
Hong Kong	Tan Thuan	Lancheston Socks Co., Ltd. Unika Vie-pan Co., Ltd.
	Linh Trung 1	Domex Vn Co., Ltd. Hugo Knit Vn Co., Ltd.
	Linh Trung 2	Build-Up Vn Co., Ltd. Freetrend Industrial A Vn Co., Ltd.
Philippines	Linh Trung 2	C & N Co., Ltd. Theodore Alexander HCM Co., Ltd.
Malaysia	Linh Trung 2	Sap Vn Co., Ltd. Super Art Vn Co., Ltd.

■Main industrial parks by province

Area	City / Province	Industrial Park
N O R T H	Ha Noi	Thang Long (Sumitomo Corporation (Japan) - Dong Anh Mechanical Co.) Noi Bai (Renon (Malaysia) - Ha Noi industrial construction Co.) Sai Dong A (Deawoo (Korea) - Ha Noi Electronics Joint Venture) Dai Tu (Taiwan - Hanoi Industrial Park Development Corp.) Quang Minh (Vietnam Investment Development Group)
	Bac Ninh	Dai Dong-Hoan Son (Kinh Bac City Development Share Holding Corp.) Nam Son-Hap Linh (Viglacera Estate Co.) Tien Son (Infrastructure Developent & Investment Co.) Tu Son (Nam Hong Company (VN) & Jababeka Corp. (Indonesia)
	Hai Duong	Viet Hoa-Kenmark (Kenmark Co.,Ltd) Tan Truong (Vietnam Investment Development Group) Nam Sach (PhuThai Land Corp.)
	Hai Phong	Trang Due (Saigon-Hai Phong Share Holding Co.) Nomura (Hai Phong Industrial Development Co.)
	Vinh Phuc	Ba Thien (Vina-CPK Co.,Ltd.)
	Hung Yen	Thang Long 2 (Sumitomo Japan Corporation & Thang Long IP Co.,Ltd) Pho Noi B (Pho Noi B Textile and Garment Infrastructure Development Co.) Minh Duc (VNT Co.,Ltd)
	Quang Ninh	Viet Hung (Viethung Industrial Park Development Joint Stock Co.) Cai Lan (Quang Ninh Construction & Cement JSC)
C E N T R A L	Quang Nam	Thuan Yen (Vinaconex 25 JSC) Tam Hiep (Ky Ha - Chu Lai Investment & Development Co.) Tam Anh (C&N Vina Co. Ltd.) Phu Xuan (Quang Nam Industrial Zones Authority (QIZA)) North Chu Lai ( Quang Nam Industrial park Infrastructure development Co.) Dong Que Son (Prime Que Son Co.) Dien Nam (Quang Nam - Da Nang Industrial park & Urban Development Co.)
	Binh Dinh	Phu Tai (Binh Dinh Industrial parks Infrastructure Development Co.) Nhon Hoi A (Sai Gon - Nhon Hoi Industrial park JSC) Nhon Hoa (Nhon Hoa Industrial park Infrastructure Investment JSC) Long My (Binh Dinh Industrial parks Infrastructure Development Co.) Hoa Hoi (Hoa Hoi JSC)
	Quang Ngai	Tinh Phong (Quang Ngai Industrial zone Authority) Quang Phu (Quang Ngai Industrial zone Authority)
	Da Nang	Widen Hoa Khanh (Sai Gon - Da Nang Investment JSC) Da Nang (Massda Land Co.,Ltd. – Malaysia 70%, Da Nang 30%)
S O U T H	Long An	Vinh Loc 2 (Vinh loc - Ben Luc IZ Construction and Investment J.S Co.) Thuan Dao (Dong Tam IP Joint - Stock Co.) Tan Duc (Tan Duc Investment Joint - Stock Co.) Duc Hoa 3 (Duc Hoa III – Resco Industrial & Town Park Joint Stock Co.) Trans-Asia (Ngoc Phong Construction Trading Co. Ltd.)
	Dong Nai	Nhon Trach 3 (Tin Nghia One – Member Co. Ltd.) Ong Keo (Tin Nghia One – Member Co. Ltd.) Giang Dien (Corporation for The Development of Bien Hoa Industrial Zones (SONADEZI)) Bau Xeo (Thong Nhat Joint - Stock Co.) Amata (Vietnam - Thailand Joint – Venture)
	Binh Duong	Vietnam-Singapore 2 (Vietnam – Singapore Industrial Park Joint – Venture Co. Ltd.) Viet Huong 1 (Viet Huong Joint - Stock Co.) Tan Hiep Dong A (DAPARK Real Estate Business - Construction Joint - Stock Co.) Song Than 3 (Dai Nam Joint - Stock Co.)
	Ho Chi Minh	Hiep Phuoc (Hiep Phuoc Industrial Park Joint - Stock Co.) Le Minh Xuan (Binh Chanh Construction Joint - Stock Co. (BCCI)) Tan Tao ( Tan Tao Industrial Park Joint – Stock Co.) Dong Nam (Saigon VRG Investment Holding Corp.) Vinh Loc (Cho Lon Investment and Import - Export Co. (CHOLIMEX)) Tan Binh (Tan Binh Import Export Corp. (TANIMEX)) Cat Lai (Housing Development and Management Co. of District 2)

■ Key industrial parks in the North and South

●Thang Long Industrial Park in the North

Located along the highway, Thang Long Industrial Park (TLIP) connects central Ha Noi with Noi Bai International Airport. Lying in the strategic position, it is 16 km from the center of Ha Noi City; 14 km from Noi Bai International Airport and 120 km from Hai Phong or Cai Lan port (by car). With the area of 295 hectares and investment of 90.33 million USD, TLIP was established in 1997 by Japanese and Vietnamese owners, 58% of which is from Sumitomo Corporation and 42% is from Dong Anh Mechanic Company.

TLIP was the first industrial park with ISO14001 certified by Bureau Veritas Quality International in Feb 2000 and distributed by big enterprises like Canon, Panasonic, Toto, Ashahi… The special of TLIP is that most of investment in this industrial park comes from foreign direct investment in which major is Japan about manufacturing printing machines, sanitary ceramics, auto parts and cameras. Other investments are from Singapore to produce electrical cables, Malaysia to make precision mechanical equipment…Most of the projects in the park are Japanese owned and land prices are considered as the highest price in Vietnam, but Japanese companies still keep investing in this industrial park.

● Nomura – Hai Phong Industrial Park in the North

Nomura – Hai Phong industrial park (NHIP) was established in 1994 with two investment from Japan (Nomura/JAFCO Investment (Asia) Ltd.) and Vietnam (Nomura-Haiphong IZ Development Corp.). Nomura-Haiphong Industrial Zone is situated in An Duong District, Haiphong City. It has a very convenient position for transport: 85 km from Hanoi by National Highway 5, 13km from the center of Haiphong City, 2km from the railway station, 15km from Haiphong Port and 20km from Cat Bi Airport. Because of strategically important position in the northern economic zone, Hai Phong has been invested adequately in national highway, railway, international port, airport, water and power plants.

Main industries in NHIP are precision metal processing, electrical and electronic products, informatics and telecommunication equipment, machining, plastic molding products, high quality home appliances, automobile parts. Major tenants are Japanese enterprises: Yazaki Haiphong Vietnam Co., Ltd, Hiroshige VN Corporation, Maiko Haiphong Co., others are BT Garment (Hong Kong), Shin Yong Chemical (Korea), Fong Tai Paper (Taiwan)…

● LOTECO Industrial Park in the South

The Long Binh Techno Park Development Company (LOTECO) is a joint venture company of Nissho Iwai Corporation 60% (Japan) and AGTEX 40% (Vietnam) established in 1996 in Bien Hoa City, Dong Nai Province. With area of 100 hectares, LOTECO is located 30 km from HCM City, 30 km from Saigon Port and 35 km from Tan Son Nhat International Airport.

Most of LOTECO tenants are from Japan such as: Mitsuba M-Tech, Shirasaki , Harada… Others are from Hong Kong (Fashion Force No.1 & 2 Factory), Korea (Yopoong, Viko Moolsan), Taiwan (Sposa Hychi), and Malaysia (Emico)...

●AMATA Industrial Park in the South

AMATA was established in 1994 by Amata Corporation Puplic Co., Ltd 70% (Thailand) and Sonadezi Bien Hoa 30% (Vietnam) in Dong Nai Province. This is considered one of the most premier industrial zones in the South of Vietnam. Located 5 km from Bien Hoa City, it is 30 km from HCM City, 3 km from Bien Hoa Airport and 35 km from Tan Son Nhat Airport.

The key industries in this industrial zone are mainly focused by auto parts businesses, construction steel, steel pipes, float glass, , electronic and household appliances, rubber, plastic, food processing, aqua processing, textiles, garments, paints, sanitary ware, chemical products, packaging, agrochemical, ready-mixed and fresh concrete etc. Investors in AMATA are from Japan (Kao, Wacoal, Sanko Mold, Arai…) , Korea (Namyang International), USA (Gannon, VP Components), Holland (Akzo Nobel Coating), Singapore (YKK), British Virgin Island (KMC, Kao-Meng), Taiwan (Plastic Reliable, Starprint)…

References:

http://www.worldometers.info/world-population/vietnam-population/

https://gso.gov.vn/default_en.aspx?tabid=776

http://www.marketwatch.com/story/vietnams-stock-exchange-grows-up-2012-07-10

http://www.investmentfrontier.com/2015/07/20/how-to-invest-in-vietnams-stock-market/

http://www.bloomberg.com/quote/VNINDEX:IND

http://www.eastasiaforum.org/2015/07/04/vietnam-needs-to-bring-the-dong-down/

http://www.vccinews.com/news_detail.asp?news_id=31341

http://etsinsights.com/news/electricity-infrastructure-in-the-vietnam-on-the-verge-of-assisting-rapid-urbanization-and-industrialization/

https://www.eia.gov/todayinenergy/detail.cfm?id=22332

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/EXTEAPREGTOPTRANSPORT/0,,contentMDK:20458737~menuPK:2069374~pagePK:34004173~piPK:34003707~theSitePK:574066,00.html

http://via.org.vn/advanced-internet-technologies-introduced-at-vietnam-internet-day-2015/

http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx

http://www.vpa.org.vn/english/information/info_static2014.html

http://www.vietnamembassy.org.uk/foreignlaw.html

http://www.vietnam-briefing.com/news/restrictions-foreign-direct-investment-vietnam.html/

http://www.itpc.gov.vn/investors/how_to_invest/law/2008-09-18.911215/view

http://vietnamembassy-usa.org/basic-page/list-sectors-entitled-investment-incentives

http://diza.dongnai.gov.vn/Pages/cackhucongnghiep.aspx

http://banqlkcn.baria-vungtau.gov.vn/idz.php?act=detail&id=62

https://sites.google.com/site/khuchexuatlongbinh/danh-sach-cac-khu-che-xuat/cac-dn-trong-kcx-linh-trung-2

http://www.bienhoa.gov.vn/gioi-thieu-chung/CACKHUCONGNGHIEP/loteco

Vietnam

2 Chapter Investment Environment

1 Chapter Basic knowledge

2 Chapter Investment Environment

3 Chapter Economic Policy

4 Chapter Incorporation

5 Chapter M&A

6 Chapter Corporate Laws

7 Chapter Accounting

8 Chapter Tax Laws

9 Chapter International Human Resources Management

Summary of Throughput 2014