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I.Vietnam –Emerging Land for Opportunities
II. Foreign Direct Investment in Vietnam
III. Post-WTO Investment Climate and Legal Frameworks
IV. Investment-Related Costs

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  1. 1. Thank you<br />June 2010<br />VIPC Viet Investment Power<br />1<br />VIETNAM<br />Emerging Land for Opportunities<br />JESSIE LAN VO<br />Deputy CEO Assistant<br />
  2. 2. CONTENT<br />I. Vietnam –Emerging Land for Opportunities<br />II. Foreign Direct Investment in Vietnam<br />III. Post-WTO Investment Climate and Legal Frameworks<br />IV. Investment-Related Costs<br />2<br />June 2010<br />VIPC Viet Investment Power<br />
  3. 3. I. Vietnam –Land for Opportunities<br />1. Vietnam at a glance<br />Geography<br />- Population(‘09): 85.79 mil.<br />- Centre of Southeast Asia<br />- Area: 331,698 sq. km<br />- Coastline: 3,260 km<br />Society <br />- Growth rate (’07): 1.2%<br />- Under 30 yrs old: >60%<br />- Literacy rate: >90%<br />Infrastructure<br />- National highways: 86,327 km<br />- Railways:3,219 km<br />- Int’l airports: Hanoi,Da Nang & HCMC<br />- Int’l seaports: 11( CaiLan, Danang, Van Phong, etc.)<br />- 150 IPs with area of 31,436 ha<br />- 8 EZs with area of 323,940 ha<br />Economy <br />- Real GDP: 94.68 bil. US$<br />- Real GDP growth rate(‘09):5.2%, year 2010e: 8.5% <br />- Real GDP per capita(‘09): US$ 1052,year 2010e:1200 US$<br />- Export turnover( May 2010): US$ 6.1bil.<br />3<br />June 2010<br />VIPC Viet Investment Power<br />
  4. 4. CONTENT<br />2. Why do invest in Vietnam<br /><ul><li>-Political and socio-economic stability
  5. 5. - Brisk and steady economic growth
  6. 6. - Transportation hub of Southeast Asia
  7. 7. - Abundant young labor force at low price
  8. 8. - Member of WTO, APEC, ASEAN, ASEM
  9. 9. - Favorable FDI promotion policies
  10. 10. - Rapidly improving infrastructure</li></ul>4<br /> I. Vietnam – Land for Opportunities<br />June 2010<br />
  11. 11. II. Foreign Direct Investment in Vietnam<br />1. FDI inflows to Vietnam( 1988- May 2010)<br />5<br />June 2010<br />VIPC Viet Investment Power<br />
  12. 12. II. Foreign Direct Investment in Vietnam<br />2. FDI distribution by sector(1988-2007)<br />6<br />June 2010<br />VIPC Viet Investment Power<br />
  13. 13. II. Foreign Direct Investment in Vietnam<br />3. Top ten countries investing to Vietnam<br />7<br />June 2010<br />VIPC Viet Investment Power<br />
  14. 14. IIII. Post-WTO Investment climate & Legal framework<br />1. Vietnam’s commitments to WTO<br />Schedule of concessions & commitments on goods:<br />Bound rates for 10,600 tariff lines<br />An average cut from 17.4% to 13.4% phased over 5-7 years since 2007<br />Largest reduction applied to garments & textiles, fish& fish products, wood & paper, other manufactured goods, machinery, electrical & electronic items<br />Committed to be member(fully or partially) to initiatives for IT products, garments & textiles, medical equipment, aircraft, chemicals, construction, equipment etc. Tariffs cut phased over 3-5 years since 2007<br />Schedule of specific commitments on trade in services<br />Open door in 11 out of 12 service sectors(or 110 out of 115 sub-sectors), including: business services, communication, construction & related engineering, distribution, health, insurance, education, tourism, environment, finance, entertainment, transportation, etc.<br /> Commitments put in force right after WTO accession. In some cases, they’re phased over 2-4-6 years since 2007<br />8<br />VIPC Viet Investment Power<br />
  15. 15. III. Post-WTO Investment climate & Legal framework<br />2. Investment-related obligations<br />TRIMS (effective from 11 Jan 2007): Eliminate the application of requirements on trade balance, foreign exchange control on imports, export performance, export restrictions, local contents <br />Intellectual Property Rights: Comply with TRIPS Agreement upon accession<br /> Transparency: Make public draft WTO-related legal instruments for public comments; Make public all legal documents; Provide WTO members with annual reports on equalization program<br />9<br />June 2010<br />VIPC Viet Investment Power<br />
  16. 16. IIII. Post-WTO Investment climate & Legal framework<br />3. Investment Opportunities entitled to Incentives<br /> Preferential sectors:<br /><ul><li>Manufacture of new material & production of new energy, manufacture of high-tech products, bio-technology, information technology & mechanical manufacturing;
  17. 17. Breeding, rearing, growing & processing of agricultural, forestry & aquaculture products, production of salt, creation of new plant & animal varieties;
  18. 18. Utilization of high technology & advanced techniques, protection of the ecological environment & research, development & creation of high technology
  19. 19. Labor intensive industries;
  20. 20. Construction &development of infrastructure facilities & important industrial large-scale projects;
  21. 21. Professional development of education, training, health, sports, physical education & Vietnamese culture;
  22. 22. Development of traditional crafts & industries; and
  23. 23. Other manufacturing & service sectors which require encouragement</li></ul>Regions entitled to Incentives:<br />- Regions with specially difficult socio-enonomic conditions;<br />- Regions with difficult socio-economic conditions; and<br />- Industrial zones, Export processing zones, High-tech zones & Economic zones<br />
  24. 24. IIII. Post-WTO Investment climate & Legal framework<br />4. Incentives on Corporate Income Tax<br />Standard rate: 28% <br />Preferential rates of 10%, 15% and 20% for a period of 15 years, 12 years and 10 years are available depending on the scope of activities and location of the investment. <br />Tax holidays: A complete exemption from CIT for a certain period( 4 yrs at maximum) followed by a period where tax is charged at half rate ( 9 yrs at maximum)<br /> Losses: Carry forward losses for 5 years <br /> Other incentives: Exemption or deduction of land use tax, land use fee, land rent, and water surface rent <br />11<br />June 2010<br />VIPC Viet Investment Power<br />
  25. 25. IIII. Post-WTO Investment climate & Legal framework<br />5. Import Duty Exemption & Reduction<br />Exemption applied to projects in investment encouraged sectors & regions on:<br />Machinery & equipment, specialized means of transportation & construction materials( which can not be produced in Vietnam) comprising the fixed assets of certain projects<br />Raw materials, spare parts, accessories, other supplies, samples, machinery & equipment imported for the processing of goods for export and finished products imported to stock to the processed goods<br />Preferential ratesapplied to imported goods from countries that enjoy MFN with Vietnam(89 countries).Rates vary by the category of goods.<br />Special preferential rates applied to imported goods from countries that signed special agreement with Vietnam(e.g.ASEAN<br />)<br />Ordinary ratesare 150% of preferential rates<br />VIPC Viet Investment Power<br />
  26. 26. IIII. Post-WTO Investment climate & Legal framework<br />6. Forms of Investment<br />100% foreign-owned enterprise<br /> – Limited liability company<br /> – Joint stock company<br /> – Partnership<br /> – Holding company<br />Joint venture <br />Business cooperation contract <br />BOT, BTO, BT <br />Capital contribution, purchase of shareholding, <br /> M&A<br />13<br />June 2010<br />VIPC Viet Investment Power<br />
  27. 27. 14<br />III. Post-WTO Investment climate & Legal framework<br />7. Licensing & Registration Procedure <br />Projects fall in conditional sectors<br />YES<br />Investment Evaluation Procedures<br />Investment Registration Procedures<br />YES<br />NO<br />Investment capital is more than VND 300 mil.<br />(approx. US$ 19 mil.)<br />Respond within 45 working days<br />Respond within 15 working days<br />June 2010<br />VIPC Viet Investment Power<br />
  28. 28. 15<br />III. Post-WTO Investment climate & Legal framework<br />Provincial <br />People’s Committee<br />Management Boards of IPs,EZs<br />Department of<br />Planning & Investment<br />Projectsoutside IPs & EZs<br />Projects inside IPs & EZs<br />Projects for infrastructure development of IPs, EZs<br />8. Investment Licensing Bodies<br />June 2010<br />VIPC Viet Investment Power<br />
  29. 29. IV. Investment-related cost<br />1. Monthly-wage(Source: JETRO survey, May 2009)<br />16<br />June 2010<br />VIPC Viet Investment Power<br />
  30. 30. IV. Investment-related cost<br />2. Land price, office rent (Source: JETRO survey, May 2009)<br />17<br />June 2010<br />VIPC Viet Investment Power<br />
  31. 31. IV. Investment-related cost<br />3. Public Utility & Transportation expenses(Source: JETRO survey, May 2009)<br />18<br />June 2010<br />VIPC Viet Investment Power<br />
  32. 32. IV. Investment-related cost<br />5. Taxation(Source: JETRO survey, May 2009)<br />19<br />June 2010<br />VIPC Viet Investment Power<br />
  33. 33. Thank you<br />VIPC Viet Investment Power<br />20<br />THANK YOU!<br />VIPC Capital Management Corporation<br />8 Nguyen Hue St., Dist.1, HCMC, Vietnam<br />Tel: (84-8) 38277478/79 – Fax: (84-8) 38277488<br />Email: -<br />June 2010<br />