Vietnam Market Outlook 2021

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VIETNAM MARKET OUTLOOK
Ha Noi, March 2021

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GLOBAL OUTLOOK 2021
VIETNAM ACHIEVEMENTS AND RISING OPPORTUNITIES
FACTORS FOR CHOOSING CONFORMITY ASSESSMENT PARTNER
INTRODUCTION OF VINACONTROL
ASSESSMENT SERVICE FOR INVESTMENT AND MANUFACTURING IN VIETNAM
AGENDA
VIETNAM MARKET OUTLOOK 2021
VINACONTROL GROUP

Vinacontrol Group Vietnam market outlook 2021
GLOBAL MEGA TRENDS 2020-2030
Source: BlackRock, Bloomberg, Deloitte, IFTF, McKinsey, PwC, WEF, World Bank, Peterfisk
Rapid urbanization
The global migration to
megacities and the challenges
and opportunities that emerge
as a result.
5
Demographics and social change
Changes in global demographics (i.e.,
world population, density, education level,
etc.) will bring social change.
4
Technological breakthrough
The rapid advancement of technology,
especially artificial intelligence (AI) and
machine learning, is at the center of all
megatrends
3
Climate change and resource scarcity
The impact of climate change as well as an
increased strain on the world’s resources,
including energy, food, metals, and water.
2
Shifting economic power
The shift of economic might to
emerging markets and developing
economies, including China.
1

GLOBAL ECONOMICS OUTLOOK 2021
GROWTH WILL RETURN BUT BE UNENVEN
3 3
1.9
0.6
6.6
5.2
7.1
2.3 2.2
1.3
0.3
6.1
5
7
-4.3
-3.6
-7.4
-5.3
2
-2.2
2.8
4
3.5 3.6
2.5
7.9
4.4
6.7
3.8
3.3
4
2.3
5.2
4.8
6.5
WORLD UNITED STATES EURO AREA JAPAN CHINA INDONESIA VIETNAM
2018 2019 2020e 2021f 2022f
Source: World Bank, Global Economic Prospects, 2021

GLOBAL ECONOMICS OUTLOOK 2021
Accelerating the transition to lower carbon dependence
Significant investment and policy shifts related to the Paris Climate
Agreement are expected in 2021 in the major trading blocks including
the US, China and the EU.
In 2021, Global green bond issuance is expected to top US$500
billion for the first time with investor appetite expected to continue to
increase in Environmental, Social and Governance (ESG) funds.
Electricity production from renewables continuing to gather
momentum, with solar photovoltaic (PV) capacity likely to grow at
rapid rates.
Solar PV capacity is expected to surpass natural gas in 2023 and coal
in 2024 in the global electricity sector.
SYNCHRONISED PUSH FOR GREEN INFRASTRUCTURE
0
100
200
300
400
500
600
2014 2015 2016 2017 2018 2019 2020 2021
Global green bond issuance ($bn)
Source: Climate Bond initiative and PwC
projections

WHY IS VIETNAM
ONE OF THE TOP DESTINATIONS FOR FOREIGN INVESTMENT?

COVID-19 HAS BEEN UNDER CONTROL IN VIETNAM
Viet Nam is amongst the top
worldwide 20 countries by
COVID-19 safety, according to
the Deep Knowledge Group.
Top 20 safe regions

US – CHINA TRADE WAR
Countless manufacturers have moved or are in the process of moving their manufacturing operations from China to Vietnam.

VIETNAM GEOGRAPHY
VIETNAM IS ONE OF THE TOP DESTINATION FOR FOREIGN INVESTMENT
Cat Lai Port
Hai Phong Port
Port of Singapore
Authority
Bangkok Port
Port of
Hongl Kong
Port of
Kokura
Yokohama Port
Port of
Kokura
Busan Port
Shanghai Port
Port of Kaohsiung
No. Seaport Elemental ports
Max. allowed
DWT
1 Hai Phong (Hai Phong) Hoang Dieu, Dinh Vu, Van Cach, Tan Vu, Lach
Huyen
10,000 – 20,000
2 Vung Tau (Vung Tau) Cai Mep, Phu My, Song Dinh 30,000 – 50,000
3 Van Phong (Khanh Hoa) My Giang. Dot Let 350,000
4 Quy Nhon (Binh Dinh) Thi Nai 50,000
5 Quang Ninh (Quang Ninh) Cai Lan 70,000
6 Sai Gon (HCM City) Tan Cang Cat Lai, Cai Mep, Hiep Phuoc 20,000 – 30,000
7 Cua Lo (Nghe An) No.1, No.2, No.3, No.4 30,000 – 50,000
8 Dung Quat (Quang Ngai) Dung Quat, Sa Ky 20,000 – 70,000
9 Chan May (Thua Thien
Hue)
No.1, No.2, No.3 30,000
10 Da Nang (Da Nang) Tien Sa, Son Tra, Lien Chieu, Tho Quang 30,000 – 50,000
Source: Jones Lang LaSalle (JLL)

VIETNAM FREE TRADE AGREEMENT
ASEAN – AEC
ASEAN – India
Vietnam – Chile
Vietnam – EU
Ratified FTAs ASEAN – Australia/New Zealand
ASEAN – Korea
ASEAN – Japan
ASEAN – China
Vietnam – Korea
Vietnam – Japan
INCREASINGLY INTEGRATION INTO GLOBAL ECONOMY
1986 1995 1998 2007 2010 2015 2016 2035
Doi Moi
Policy
Middle income
country
Industrialized
country
ASEAN APEC WTO AEC
CPTPP
RCEP
EVFTA
VN-ISRAEL

VIETNAM ECONOMY
6.21
6.81
7.08 7.02
2.91
0
1
2
3
4
5
6
7
8
2016 2017 2018 2019 2020
Source: General statistics office of Vietnam, 2020 Source: Investing.com
Mar 2020 July 2020 Sep 2020 Nov 2020 Jan 2021 Mar 2021
23,600
23,400
23,200
23,081
22,800
22,600
VIETNAM'S ECONOMIC GROWTH
GDP growth rate in the period of 2016-2020 Money exchange rate, USD per VND

VIETNAM ECONOMY
GDP PER CAPITAL INCREASES STEADY
SELECTION 2021
Emerging market and developing
economies
5.57 thousand
Advanced economies
50.11
thousand
World
11.77
thousand
Vietnam 3.76 thousand
Source: International Monetary Fund (IMF)

VIETNAM IMPORT AND EXXPORT SECTOR
EXPORT AND IMPORT OF GOODS IN 2020
EXPORT OF GOODS IMPORT OF GOODS
EXPORT OF SERVICES IMPORT OF SERVICES
6.5%
281.5 Bill. USD
3.6%
262.4 Bill. USD
68.4%
6.3 Bill. USD
14.5%
18.3 Bill. USD
TRADE DEFICIT 12 Bill. USD
TOTAL TURNOVER
543.9 Bill. USD
TRADE SURPLUS 19.1 Bill. USD
EXPORT AND IMPORT OF SERVICES IN 2020

VIETNAM IMPORT AND EXXPORT SECTOR
PERCENTAGE OF TOTAL IMPORT AND EXPORT TURNOVER OF GOODS IN 2020
China, PR
24.3%
USA
16.6%
Korea, Rep.
11.9%
ASEAN
9.8%
EU
9.1%
Japan
7.3%
Others
21.0%
Source: General statistics office of Vietnam, 2020
GOODS FOR EXPORTATION IN 2020 (Bill. USD)
GOODS FOR IMPORTATION IN 2020 (Bill. USD)
50.9 44.7 29.5
Phones all of kinds
and their parts
Electronic goods,
computer and
their parts
Textile, sewing
product
64.0
Electronic goods,
computer and
their parts
16.6
Phones all of kinds
and their parts
Machinery,
instruments,
accessory
37.4

VIETNAM INDUSTRIAL PRODUCTION
INDEX OF INDUSTRIAL PRODUCT GROWTH RATE IN 2020 COMPARED TO 2019
7.8%
Mining and quarrying
4.9%
Manufacturing
3.1%
Electricity, gas, steam
and air conditioning supply
4.3%
Water supply, sewerage
waste management remediation activities
3.4%
W H OLE COU NT RY

VIETNAM INDUSTRIAL PRODUCTION
PRODUCTIONS AND GRWOTH RATE OF KEY INDUSTRIAL 2020 COMPARED TO 2019
Production 2020 (Thous. Tons) Compared to 2019
Coal 48,617.4 5.1%
Petrol, oil 11,963.9 4.0%
Processed seafood 2,825.6 5.9%
Powder milk 131.6 9.1%
Refined sugar 995.3 22.9%

VIETNAM FOREIGN DIRECT INVESTMENT (FDI) IN VIETNAM
0
5
10
15
20
25
30
35
40
2014 2015 2016 2017 2018 2019 2020
Total FDI Implemented capital
47.67%
18.03%
14.67%
5.77%
13.86%
The processing and
manufacturing
Electricity production and
distribution
The real estate business
Wholesale and retail
Other sectors
28.53 Bil.USD 19.98 Bil.USD
TOTAL FDI
(As of December 20th, 2020)
IMPLEMENTED CAPITAL TOP 3 COUNTRIES INVESTING IN VIETNAM
1. 2. 3.
~$9 bil.
(31.5%)
$3.9 bil.
(13.8%)
$2.46 bil.
(8.6%)
Source: Ministry of Planning and Investment
GDP growth rate in the period of 2016-2020 Investment registration by sectors

VIETNAM LOGISTICS
LOGISTICS COST TO GDP 2020
12.70%
14.50%
8.50%
15.00%
13.00%
16.80%
8.50%
15.00%
13.40%
8.40%
12.10%
10.70%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
Asia -
Pacific
China Singapore Thailand Malaysia Vietnam EU Africa Middle East
and North
Africa
North
America
South
America
World
Source: Amstrong & Associates and Vietnam Logistics Association

VIETNAM INFRASTRUCTURE
VIETNAM AMONG ASIA’S BIGGEST INFRASTRUCTURE SPENDERS
Source: Asian Development Bank
0%
1%
2%
3%
4%
5%
6%
7%
China Vietnam India Indonesia Myanmar Singapore Philippines Maylaysia Thailand
Spending as a percent of GDP

VIETNAM LEGAL
CHANGES TO THE LAW ON INVESTMENT (LOI)
Source: PwC, Changes to the Law on Investment 2020
The amended Law on Investment (2020) will be generally effective from 1 January 2021 and replace the existing 2014 version
1. Changes to the list of prohibited and conditional business sectors -
applicable to both domestic and foreign investors. Debt collection is
added to the list of prohibited business activities.
Currently, the list of conditional business sectors (where investors must satisfy
various conditions for conducting such activities) comprises nearly 270 items.
Under the new LOI, several items in this list are amended, combined, removed or
added (which results in the list shortening to 227 items), such as:
• ‘Commercial arbitration services’, ‘franchising’ and ‘logistics services’, among
others, are removed from the current list and therefore will no longer be
conditional business sectors.
• ‘Energy auditing’, ‘architectural services’, ‘internet domain name registration
and maintenance services’, ‘data center services’, ‘electronic identification and
authentication services’, ‘imported press distribution services’, ‘trading civil
cryptographic products and services’, ‘fishing vessel registration’, and ‘fishing
vessel crew training’, among others, are now made conditional business
sectors. Besides said conditions, foreign investors are additionally subject to
various market access conditions/restrictions, as discussed below.
2. Market Access Conditions for Foreign Investors.
A foreign investor when making investment into Vietnam must satisfy sets of conditions :
• % foreign ownership,
• form of investment,
• scope of business activities,
• capability of investor(s), and
• other conditions as prescribed in the relevant laws and international treaties to which
Vietnam is a party.
3. New foreign ownership threshold for the purpose of investment procedures.
Article 23 of the current LOI stipulates that a company must carry out the investment
procedures applicable to foreign investors for the establishment, capital contribution,
purchase of shares/equity, or investment under a BCC, if:
• 51% or more of its charter capital is held by foreign investor(s) [F1];
• 51% or more of its charter capital is held by F1 [F2]; or
• 51% or more of its charter capital is held by both foreign investor(s) and F1 [F2’].
Under the new LOI, this 51% threshold is replaced with “more than 50%”.

VIETNAM LEGAL
CHANGES TO THE LAW ON INVESTMENT (LOI)
Source: PwC, Changes to the Law on Investment 2020
The amended Law on Investment (2020) will be generally effective from 1 January 2021 and replace the existing 2014 version
4. Simplification of M&A procedures.
The new LOI provides a welcome change by abolishing the registration
requirement if an M&A transaction does not result in an increase of the % foreign
ownership of the target company.
Accordingly, and due to the new foreign ownership threshold mentioned at Point
3 above, only M&A transactions where the foreign ownership of the target
company is increased or where the foreign investors (including F1, F2, F2’) will
hold more than 50% (rather than 51% currently) of the target company will be
subject to registration/approval.
6. Investment incentives.
The new LOI adds several new projects and business sectors to the list of those entitled
to investment incentives, such as: start-up investment projects, innovative
renovation/R&D centers, investment activities to support SMEs, construction of social
residential housing and tertiary education.
With respect to incentives based on investment size, to align with the Law on Corporate
Income Tax, the new LOI adds various conditions for projects with total capital of
VND6tn and above, disbursed within three years of being licensed. In particular, such
projects must meet either of the following criteria: have a minimum annual revenue of
VND10tn within three years from the first year of generating revenue or headcount of
more than 3000.
The new LOI also introduces the government’s offer of special investment incentives and
support for investment projects with large socio-economic impact as well as criteria to
determine such projects.
7. Escrow deposit obligation guarantee.
A bank guarantee on the obligation to provide an escrow deposit is added (besides the
escrow deposit itself as currently stipulated) as a new form of security for the
performance of investment projects where the government allocates land, leases out
land or permits conversion of the land usage purpose.
5. Investment approval-in-principle.
The National Assembly's authority to grant approvals-in-principle for investment
remains unchanged. The new LOI updates and adds categories of investment
which are under the authority of the Prime Minister and provincial People's
Committees, e.g., eliminating the production of cigarettes or projects with
investment capital of VND5tn or more from the list subject to the Prime Minister’s
approval, while golf courses are devolved to provincial People's Committees.

VIETNAM INDUSTRIAL PROPERTY
VIETNAM INDUSTRIAL PARK – Q1 2020
Major Northern
Industrial Region
Hanoi, Hai Phong, Bac Ninh, Hai
Duong, Hung Yen
Major Southern
Industrial Region
Ho Chi Minh (HCMC), Long An,
Binh Duong, Dong Nai
OPERATING INDUSTRIAL PARKS
330 Industrial Park
97,000 ha Total Land Area
APPROVED BY THE GOVERNMENT
258 Industrial Park
68,800 ha Total Land Area
74.3% Occupancy Rate
Source: Department of Economic Zones Management, Ministry of Planning and Investment of Vietnam; CBRE Research

VIETNAM INDUSTRIAL PROPERTY
MAJOR NORTHERN INDUSTRIAL REGION
Source: CBRE Research
MAJOR SOUTHERN INDUSTRIAL REGION

FACTORS FOR CHOOSING
CONFORMITY ASSESSMENT PARTNER

COMMITMENTS OF PROMOTING QUALITY, SAFETY AND SUBSTAINABILITY LIFE
Services
Conformity
Assessment
Promoting
Safety
Quality
Effectiveness
Sustainability
Responsibility

CHOOSING CONFORMITY ASSESSMENT PARTNER: FACTOR TO CONSIDER
Fast service responding time
Ensuring transaction progress on weekends, public
holidays
Saving on traveling and accommodation expenses for
experts
A Reliable Partner
A Partner with Noble Core Competencies
A network of branches and personnel throughout
Vietnam
An ability of world-wide reaching
1000 surveyors, appraise experts, analysts, ready to
assist upon request
Experts with international certificates in many
commodities
Over 60 years with reputation
Ensuring legal compliance
Meeting international standards
Well understanding local practices and cultures
Partnering with organization that is widely recognized,
trusted in Vietnam, the region and the World by
Authorities, enterprises and community
Abundant solutions for vast demands
Blended of enthusiasm, integrity, qualified staffs and
modern equipment
7 specialized testing laboratories meeting ISO / IEC
17025 and VILAS standards
FACTOR TO CONSIDER VINACONTROL ADVANTAGES

CHOOSING CONFORMITY ASSESSMENT PARTNER: FACTOR TO CONSIDER
MORE THAN ASSESSMENT SERVICES, WE ARE YOUR BUSINESS ASSURANCE PARTNER
Post-Services support
Compliance assessment
with standards and technical
regulations
Supporting enterprises for
enhancing products quality and
business operation
Supporting Authorities for
developing standards, technical
regulations

A GLANCE ABOUT VINACONTROL GROUP

HISTORY OF VINACONTROL – THE FIRST INSPECTION ORGANISATION IN VIETNAM
1957
Established as
the
Department
of
Import-
Export Goods
Inspection
Vietnamese
Ministry of
Commerce
1959
Controlling
100% of
Vietnamese
export goods
1974
Named to
Import and
Export Goods
Inspection
Company
(Vinacontrol)
Vietnamese
Ministry of
Foreign Trade
2005
Successfully
Equitized
2006
Initial Public
Offering
2009
Established
Vinacontrol
Certification
and
Verification
2008
Established
Vinacontrol
Environment
al
Consultancy
and Appraisal
2012
First
Inspection
Body
awarded
Vietnam
Value
2007
Established
Vinacontrol
Property
Valuation
2021
Network of
1,000 Staffs
28 Offices
07
Specialized
Laboratories
Over 60 years as a trusted partner
for conformity assessment
Vinacontrol Group was established in 1957 and performed the function
of quality inspection of import and export goods for the Government.
Vinacontrol is a type A independent inspection body and a provider of a
wide range of solutions and services in conformity assessment.

OFFICES AND WORLD-WIDE PARTNERSHIP NETWORK
Headquarter
54 Tran Nhan Tong Str., Hanoi
1000 Staffs
31 Strategic Partners and Alliances for Worldwide Service Reaching
07 Laboratory
28 Offices
10,551 Clients for 2020
258,568 Certificates for 2020

ACCREDITED INTERNATIONAL STANDARD FOR MANAGEMENT SYSTEM AND OPERATION
I S O 9 0 0 1 : 2 0 1 5
C E R T I F I E D C O M P A N Y

MAJOR SERVICES RANGE AND ENGAGED INDUSTRIES
Agriculture
Foods and
Beverage
Animal Feedstuffs
Forestry
Aquaculture
Organic Products
Retails, Consumer
Goods
Textiles, Garments
Chemicals
Oil, Gas and Fuels
Petroleum and Bi-
Products
Minerals
Coal and Solid
Fuels
Construction
Industrial
Manufacturing
Machinery and
Equipment
Transportations
Maritime
Logistics, Import -
Export
Environment
Investment
Finance,
Insurance
Real Estate
Power
Renewable
Energy
INPECTION
TESTING
VERIFICATION & CALIBRATION
PRODUCT CERTIFICATION
MANAGEMENT SYSTEM CERTIFICATION
SERVICES FOR GOVERNMENT
PROPERTY EVALUATION
FUMIGATION
EVIRONMENTAL CONSULTANT &
APPRAISAL
COLLATERAL MANAGEMENT AGREEMENT
TRAINING & CONSULTANCY

PUBLIC SECTOR – SERVING STATE SPECIALIZED INSPECTION
Vinacontrol is assigned by Vietnamese Authorities to perform inspection, testing, certification, verification to serve in state management of product and
goods quality, ensuring the conformity of products and goods with national laws, decrees, circulars, standards and national technical regulations.
Food safety
Steel
Textile
Napkin and
tissue paper
LPG, oil & gas
Tanks
Measuring
devices
Used machines
Electrical &
Electronic
Appliances
Food safety
Medical
equipment
Clinker, cement,
concrete, and additives
Ceramic, tiles, stone
uPVC, PE, PP pipe
Construction glass
Plywood & wood
products
Imported scrap Imported foods
of plant origin
Animal feeds
Fertilizer
Fumigation
M. Of Industry and Trade M. Of Science and
Technology
M. of Health M. of Labor - Invalids and
Social Affairs
Elevator,
escalator
Lifting
equipment
Respirator mask
Boilers, heaters
Pressure vessel
Cooling systems
Electric
insulation
M. of Natural Resources
and Environment
M. of Construction M. of Agriculture and
Rural Development

LABORATORIES SYSTEM AND TESTING SERVICES - FACILITIES
VINACONTROL’ LABORATORY NETWORK
Accredited
VILAS and ISO/IEC 17025
Fully up-to-date
calibrated equipment
Wide range
of commodities and criteria
TCVN; QCVN
ISO; ASTM; AOAC; EN
Given standards
Vinacontrol Da Nang Lab.
Vinacontrol Hai Phong Lab.
Vinacontrol Quang Ninh Lab.
Vinacontrol Testing and Analysis
Center 1 (Hanoi)
Vinacontrol Testing and Analysis
Center 2 (HCM City)
Vinacontrol Vinh Lab.
Quick testing points

LABORATORIES SYSTEM AND TESTING SERVICES – FEATURED COMMODITIES
Agriculture & Foods
Cereal: Rice, corn, bean,
etc.
Vegetable oil, animal fat
Oilseed: sesame, peanut,
Functional foods
Flour & starch
Fruit & vegetable
Spices: Cinnamon, anise,
pepper,
Sugar & sugar products
Beverage & alcoholic drink
Confectionary
Canned products
Frozen products
Food packaging &
container
Animal feedstuff
Consumer Products
Plastic: PA; PC; PE; PP;
PET; Phenol; Melamine;
Urea; PLA; PMMA; PMP;
PS; PVA; PVC; PVDC
Rubber
Children toys
Handicraft products
Paper, tissue
Textile, footwear and
garment
Chemicals
Chemical products
Fertilizer
Plant protection products
Minerals and Fossil Fuels
Ores
Coal, coke and anthracite
Metals, alloys
Gas & Petroleum
Gas
Jet fuel
Diesel oil
Fuel oil
Lubricant
Constructional Products
Steel
Construction aggregate
(concrete, sand, gravel)
Cement, refractory
Others
Environment: Air, water,
soil
Waste

Vinacontrol
Selective Services
for
Investment
and Manufacturing
in Vietnam

SERVICE FOR INVESTMENT AND MANUFACTURING OPERATION
Investor
Investment
Registration
Certificate
Enterprise
Registration
Certificate
Construction
Permit
Construction
Manufacturing
Operation
Consulting on
developing
investment project
report
Consulting on applying
investment registration
certificate
Consulting environment
impact assessment (EIA),
Environmental protection
plan (EPP)
Meeting Vietnamese State Regulations on Investment
Quality and safety assurance
Environmental monitoring
Developing annual report on
environmental protection
Extension/re-do of permits
Supporting enterprises to
manage their environmental
profiles
Relocate/import machinery and
technological line
Register of hazardous waste source
owners
Certificate of completing environmental
protection structures
Permit for surface/underground water
exploitation
Permit for wastewater discharge
Plan for incident prevention and response
Consulting, designing and
installing environmental
treatment structures
Environmental monitoring
Developing annual report on
environmental protection
Permit for sea dumping
Decision on sea area assignment
Supporting enterprises to mnage
their environmental profiles

QUALITY AND SAFETY ASSURANCE THROUGH VALUE CHAIN
Incoming
material
inspection
(IMI)
First
article
inspection
(FAI)
During
production
inspection
(DPI)
Final
random
inspection
(FRI)
Packing
inspection
(PI)
Pre-
shipment
inspection
(PSI)
(Container)
loading
supervision
(LS)
Fumigation
service
(FuS)
Identifying & control in advnage Quality control before shipping
Authority
specialized
inspection
(ASI)
Dischargin
g
inspection
(DI)
Marine
Survey
(MS)
Quality control before shipping
Certificatio
n
Inspection
of
condition/
damage
survey
(IoC/DaS)
Transportati
on
supervision
(TS)
Installation &
assembly
inspection
(IAI)
Stock inspection
(SI)
% finished production Shipping preparetion Transporting & Loading Oversea shipping
Identifying & control in reality
Arrival/ Discharging
Domestic transportation
Manufacturing & distribution
Oversea shipping
System management certification (SMC)
Safety verification (SV), equipment
verification and calibration (EVC)
Product certification
Draft survey
Origin inspection (OI)
Product certification of conformity
(Pr COC)
Collateral management
agreement (CMA)

Vietnam Market Outlook 2021

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