Ho Chi Minh City Attracted over 4.1 Billion USD FDI Capital

  That is the information released at the meeting on socio-economic situation in the first 6 months of the People's Committee of Ho Chi Minh City, which was held on July 3^rd. Accordingly, HCMC remains an outstanding investment destination for foreign investors to set up company in Vietnam.

Specifically, HCMC has granted investment registration certificates to 483 FDI projects with a total investment capital of 486.53 million USD (equivalent to 128.8% of new projects and 121.8% of investment capital over the same period).

With the newly licensed projects, in terms of sectors, the manufacturing and processing industries attract the most investment capital with 27.2%; followed by real estate business with 25.5%... In terms of the nationality of investors, Korea has the largest proportion of investment capital with 30.3%; followed by Singapore with 22%...

The city also licensed 136 projects to increase capital with total investment capital of 417.21 million USD (equaling 137.4% of adjusted projects and 113.1% of investment capital over the same period).

In addition, the City also approved 1,421 cases where foreign investors implemented procedures to contribute capital, purchase shares, buy back capital contributions from domestic enterprises, with registered capital equivalent to 3.28 billion USD (compared with the same period, equivalent to 134.6% of cases and 153.7% of investment capital).

In this form of investment, in terms of industry/sector, real estate business has the most investment capital with 43%; followed by professional, science and technology activities with 21.5%...

In terms of both capital attracted in the form of granting investment registration certificate and capital attracted through the form of capital contribution, share purchase, capital contribution in the domestic enterprises, HCMC has attracted 4.18 billion USD (equal to 144.1% over the same period).

According to statistics, so far in HCMC, there are 7,910 effective FDI projects with total investment capital including new and capital increase projects of 45.05 billion USD.

In the first half of 2018, the Management Board of the Export Processing and Industrial Zones of HCMC has granted 12 projects; Ho Chi Minh City Hi-tech Park Management Board has granted 3 projects and Ho Chi Minh City Department of Planning and Investment has granted 468 projects.

One noteworthy point is that newly licensed FDI projects in HCMC have increased in terms of number of projects and registered capital compared to the same period last year, but the scale of investment is still small (average only 1 million USD/project).

In particular, the project of Samil Pharmaceutical Co., Ltd. (Korea) in Saigon Hi-Tech Park with registered capital of 40 million USD is one of the largest projects. The project is built on an area of 7,500 m2, with the goal of developing and producing eye drops (single dose and multiple doses); research, development and production of special drugs after eye surgery, stem cell medicine for eye treatment... According to the plan, the project will be built immediately after being licensed and officially started operation from the end of 2021.

ESMO Corporation (Korea) Kicked off The First Automobile Cable Factory in Vietnam

  ESMO Corporation (precursor is NEXEN TECH Corporation - Korea) has just started construction of the first ESMO VINA automobile cable factory in Vietnam.

ESMO VINA automobile cable factory has a total area of 63,500 m2 and total investment capital of 700 billion VND, located in Gia Phu Industrial Complex (Ninh Binh), expected to create jobs for 2,000 employees.

The ESMO VINA factory was established to improve the production capacity of the ESMO Corporation, in order to meet the demands of new orders, as well as enhancing the competitiveness through the systematic production of components and spare parts for hybrid vehicles and electric cars.

The plant will focus on the production of Wiring Harness - the company's flagship product with a production volume of about 450,000 products a year - used in large and small buses, Battery Module Harness, electric vehicle charger cable... with a view to the explosion of hybrid vehicles and hydrogen vehicles from 2020.

In the context of international commitments on reducing emissions are being promoted to combat climate change and the greenhouse effect, reducing emissions from vehicles is also one of the important tasks for Automobile manufacturing enterprises. Electric vehicles and hybrid vehicles are becoming more and more popular, leading to the development of the corresponding spare parts industry that ESMO is one of the pioneers.

Thanks to the strength of experience in production as well as the high-level engineers from both domestic and foreign countries, ESMO Corporation is expected to contribute to promoting economic growth for Ninh Binh in particular and Vietnam in general, at the same time creating more jobs for local people; it not only helps to train human resources but also strengthens local competitiveness compared to other regions of the world.

Currently, the ESMO Corporation is operating two manufacturing plants in Qingdao (China), which are GoHyeon and RaeSeo factories. In order to realize the goal of expanding the business scope of the group into Southeast Asia, besides building a third factory in Vietnam, ESMO has established Global Land Vina Co., Ltd. ESMO is also planning to increase the volume of its supply to the fast-growing and highly-concentrated automobile manufacturers in South East Asia.

Previously, in March 2018, NEXEN TECH (now ESMO) has partnered with Volex - UK-based Power and Connectivity Solutions to expand its business network with manufacturing projects to produce Wiring harness, electric vehicle charger cable; including the exclusive supply of Tesla Model 3 rechargeable electric cables (used in electric vehicles developed by Tesla Motors and Dyson Group equipments), which is scheduled for release later this year.

NEXEN TECH has been renamed ESMO in early May 2018.

Attraction from Industrial Parks in Phu Yen

  Phu Yen is gradually moving its economic structure from a purely agricultural province to industry, tourism and services. In order to achieve this goal, thousands of hectares of industrial parks have been prepared, along with infrastructure investment with full facilities to attract projects and foreign investor to invest in Vietnam and in Phu Yen province.

In May 1974, at the An Phu Industrial Zone in Tuy Hoa, Phu Yen province, the electronic component factory was kicked off, marking the presence of the high-tech industry in Phu Yen. This is the first electronic component factory to be built in Phu Yen, with capacity of 500 million pieces per year, with such main products as RF coils and electromagnets. Total investment for the factory is over 5.7 million USD, 100% of products will be exported. The establishment of a factory in Phu Yen province is part of Coilcraft Corporation's production development in Asia.

Vice Chairman of Phu Yen People's Committee welcomed the Coilcraft Corporation for investing in Phu Yen, contributing significantly to the socio-economic development and the industrialization and modernization process of the province. At the same time, it is suggested that the Management Board of Phu Yen Economic Zone and investors continue to have connections and promote the industrial potential of Phu Yen to other investors.

The appearance of electronic component factory invested in An Phu Industrial Park, besides the glass production factories of Hoang Hai Trading Co., Tan Phat Canned Food Joint Stock Company and the project of CCIPY Vietnam limited liability company, as well as bottled water , soft water plants, and seafood processing plants (in Hoa Hiep 1 Industrial Park) of Xin Bang Co., Ltd have made the investment situation in Phu Yen's industrial zones more diverse and exciting.

Besides implementing the policy of economic restructuring towards industrialization, the Party and Phu Yen authorities have made many appropriate policies in order to mobilize internal resources in the province and attract foreign investment. At the same time, completing investment in infrastructure of approved industrial zones and clusters; promote the efficiency of investment and the role of industrial zones and clusters in economic restructuring of the industry, contributing to the economic restructuring of the province.

Currently, Phu Yen province plans to build industrial parks, attracting hundreds of investment projects. In particular, it is concentrated in Hoa Hiep 1 Industrial Park, Hoa Hiep 2, An Phu, North East Song Cau 1 and North East Song Cau 2.

One of the favorable conditions for the management board of Phu Yen economic zone to carry out the plans of promoting and attracting investment in line with the industries and sectors in the industrial parks. That is Phu Yen Provincial Industrial Development Plan up to 2020, with vision to 2030, which has been approved by the provincial People's Committee.

The plan identifies groups of industries with priority given to development till 2020 with a vision to 2030, including: processing of agricultural, forest and aquatic products; medicine; textile; products from new technology; software industry and digital content; chemistry; energy; electronic equipment, telecommunications equipment and information technology; mechanical engineering; supporting industry.

US Businesses Intend to Move to Vietnam

  Is Vietnam ready for relocation investment?

Answering this question, the flow of foreign investment, particularly the United States to Vietnam will have great changes.

Is Vietnam ready?

This question is again raised, this time from Mrs Marie Diron, Managing Director of the National Credit Risk Group for Asia and the Pacific (Moody's).

Mrs Marie Diron posed this issue at the Seminar on The Indian Ocean - Pacific Strategy and its Economic Impact on Vietnam, seeking solutions to promote sustainable development in Vietnam and other countries in the area (in the framework of the Asian Economic Forum held by the Vietnam Chamber of Commerce and Industry (VCCI) and the American Chamber of Commerce in Vietnam (Amcham) last week in Ho Chi Minh City).

The relationship between the US and China remains complicated, yet it cannot be correctly identified. Foreign manufacturers in China tend to move their investments to Vietnam, but the institutions, human resources, infrastructure, or hardware and software of Vietnam are generally ready to welcome this shift?

Just a few days ago, at the Vietnam Business Forum (VBF) 2018, Mr Michael Kelly, Chairman of the American Chamber of Commerce in Vietnam (AmCham) has mentioned the results of AmCham's recent survey to the US businesses in China, whereby one-third have relocated or are considering relocating some of their manufacturing facilities to overseas. A separate survey of foreign companies from other countries shows that half are considering relocation and Southeast Asia is their top choice.

China will remain an important member of the global supply chain. But with the shift in investment, Vietnam is gaining benefits. The question is how can Vietnam take full advantage of this opportunity to keep up the pace of rapid economic growth?

On the US investors side, according to Chairman of AmCham, they know what they need. Vietnamese businesses and foreign invested enterprises need an equal and supportive environment for development. That means the relationship between investors and the administration needs to be mutual and transparent.

In particular, Chairman of AmCham said that there should be improvements in important areas that have great significance to Vietnam's competitiveness, they are energy (to strengthen Vietnam's future); facilitate trade and flow of goods; creating a more attractive, transparent and stable business environment; fully exploiting the potential of the digital economy in Vietnam; and modernize education, ensuring reasonable labor costs.

AmCham believes that the business environment can be improved by increasing productivity and reducing costs as well as business risks in Vietnam. More importantly, reducing costs and business risks will benefit Vietnamese businesses - many of which are small and medium enterprises - and will also promote entrepreneurship and start-up spirit, ensuring competitiveness and growth in the future of Vietnam.

Banking Sector in Vietnam

  1. Overview

Vietnam’s banking sector has shown significant improvement which results from stable inflation and interested rate, favorable environment for foreign direct investment and a shift from deficit to surplus of the country’s current account. This sector plays a crucial role in Vietnam’s economic development in recent years.

2.Banking system

There are two tiers in banking sector in Vietnam. The first one is State Bank of Vietnam (SBV) which is responsible for monetary policy and supervision/regulation of the banking system in Vietnam. The second one consists of commercial banks, financial companies, credit co-operatives, people's credit funds, and insurance companies. The main activity driving banking system is commercial bank which includes 5 state-owned commercial banks, 33 joint stock commercial banks, 5 joint venture commercial banks and 5 wholly-owned foreign owned bank.

State owned commercial banks (SOCB) account for more than 40% of market share. The largest bank in terms of total assets, network and still 100% state owned share is Agribank. And four other SOCB areVietcom bank, Viettin Bank, BIDV and MHB.

Joint stock commercial banks (JSCB) have small capital/deposit base and more diversified shareholding structured compared to state owned commercial banks. There are currently 33 JSCB, which the leading ones are SaiGon Joint Stock Commercial Bank (SCB), Military Joint Stock Commercial Bank (MBB), Vietnam Export Import Commercial Joint Stock Bank (EIB), Asia Commercial Bank (ACB) and SaiGonThuong Tin Commercial Joint Stock Bank (STB)

Also SBV had granted 5 licences to permit HSBC, Standard Charter Bank, ANZ Bank, Shinhan Bank and Hong Leong Bank to establish as wholly-owned foreign banks

3.Potential opportunities for foreign investment

There are solid evidences to prove that Vietnam’s banking sector has such a huge potential for foreign investment

• Government effort of reforming banking system

SBV suggested that merge and acquisition of loss making and incompetent bank would be necessary to improve efficiency within the industry. For example, in 2015, SBV forced merge of loss making Vietnam Construction Bank to Vietcom bank with purchasing share price for 0 VND. By forcing merge and acquisition of incompetent banks, SBV has increased exploitation of economies of scale and the reduced burden on regulators

• Trade agreements facilitate foreign ownership and investment

Have taken part in variety of trade agreement such as Trans Pacific Strategic Economic Partnership (TTP),  Association of Southeast Asian Nations (ASEAN) and Free Trade Agreement with different countries, Vietnam has made restructuring move to standardize banking system which will be compatible and accessible to other countries. Vietnam is required to have bilateral arrangement which eliminate the challenges of foreign establishment of banking services.

The government also encourages foreign investors to hold shares for five year period and partnering with the local bank to enhance management, capacity or new development. With the 30% limit of oversea ownership to domestic banks, the strategic foreign investors are allowed to acquire up to 15% of share in a bank, and up to 20% with Prime Ministerial approval. HSBC has also invested in a leading local bank, possessing a 20% stake in the Vietnam Technological and Commercial Joint Stock Bank—Techcombank. It is also the sole foreign strategic partner of the BaoViet Finance-Insurance Group, Vietnam’s largest insurance company. In a vote of confidence in the insurer, HSBC increased its stake to 18% in October 2009.

• Vietnam- a destination of foreign investment in South East Asian market

There is a huge untapped market in Vietnam. According to SBV, only 20% of more than 90 million citizens in Vietnam hold bank accounts and 3% of the population have credit cards. With 87% of the population under the age of 54, there is a great opportunity for retail banking activity development in Vietnam.

Also it is agreed that SME and rural areas have had challenges to access bank investment and loan. The data of Asian Development Bank shows that “lack the capacity to assess the risk of investment into SMEs and find bankable projects” and lack of knowledge about loan and lending systems for rural citizens are the main reasons leading to currentunder-banked circumstances.

The stable economic with GDP growth of around 6% to 7%; low wage costs; a large population with a high savings rate and lack of innovative approach to the market are advantages for foreign investors to accelerate financial and industrial development in Vietnam market.

US and North Korea Leaders Will Meet in Hanoi, Vietnam

  President Donald Trump announced that Hanoi, Vietnam will be chosen as the place to hold the second US-North Korea summit on February 27 and 28, 2019.  There are signs of intention of both parties to transform the relationship and create a solid foundation for the de-nuclearization of North Korea and end the Korean War. This is the opportunities for Vietnam to promote the country as a place for foreign investors to trust and invest through setting up factory and companies, and further grow the country through foreign direct investment.

Vietnam has been selected as the place for this important international political event due to a number of reasons, including good relations with the US, South Korea and North Korea, closer to North Korea in distance, and that Vietnam is a country with experience in organizing in high security event i.e. APEC 2017 with leaders from US, Russia, China, Japan, Korea.   Further, the administration of President Trump thinks that Vietnam is a political and economic model that North Korea should pursue in terms of opening the country and attracting foreign investment, allowing foreigners to set up factory, companies in various areas.  From difficult relationship with embargo, the US and Vietnam has now become partners with two-way trade which turnover increased from 451 million USD in 1995 to 52 billion USD in 2016, and that Vietnam has become one of the rising export markets of US.   From North Korea’s perspective, Kim Jong-un will be interested in witnessing the story of Vietnam, which can be an inspiration and a model for the road ahead for North Korea to follow.

This event will be an opportunity for Vietnam to promote the country of peace, opportunity, prosperity and land of foreign investment, growing its role in the international markets in both business and politics, which further attract foreign direct investment, the driver for growth of the country over the decades.

Sustainable development in Vietnam

  Achievement of sustainable development in Vietnam

The sustainable development objectives including economic, social development and environment protection have been integrated into national priority development together with economic growth objective.

With a stable GDP and economic growth, improvement of education, Vietnamese citizens have gained more knowledge about gender quality, environmental and other social issues, thus, creating campaigns to support collective action. For example, the campaign collecting garbage along beaches in Vietnam attracted more than 1000 students to participate in which indicated collective action to mitigate effect of disaster and climate change.

Vietnamese government has significantly improved the rate of hunger eradication, poverty reduction, population, job creation, education and healthcare. Particularly, in 2014, total state budget for hunger eradication and poverty reduction were more than 34 billion VND. Thus, the poverty rate took a nosedive from 14.2% in 2010 to 1.8-2% in 2014, proving average reduction of 2% per year national wide.

The state fund for environmental protection has been increased, thus the policies for environmental protection has put into regular operation. By executing tax exemption for environmental friendly enterprises, businesses in Vietnam have been more aware of coordinating environmental protection policies into long term vision and mission.

Vietnam takes part in international agreement to show commitment to sustainable development such as: WTO, United Nation Framework Convention on Climate Change, United Nation Convention to combat desertification, the convention on International Trade in Endangered Species of Wild Fauna and Flora…

Challenges of sustainable development in Vietnam

There have been some challenges in Vietnam when implementing sustainable development policies. An increase in natural disaster, degenerated natural resource (water and biodiversity resources), wasteful and ineffective production and consumption are causing huge destruction to various local communities.

Even though there have been some supporting policies for enterprises in Vietnam to implement sustainable development policies, they have not obtained full awareness of the link between good environmental, social, and governance performance and the ability of companies to be profitable and survive in turbulent times. Therefore, most of the firms succeeded in promoting sustainable development practices are international businesses.

Sustainable development in business

Since Vietnam takes part in international trade agreements, there will be more international and institutional investors need the information of material environmental, social and governance information about company performance to decide whether to make investment decision.

Sustainable development of the business should be proven by social factors (employee compensation, benefits, staff turnover, safety practices, diversity and local community) and environmental factors (energy efficiency, GHS emissions, biodiversity conservation, water usage, natural resource use, waste to energy and recycling practices). These factors are crucial for investors as they indicates how the company takes into account risks, opportunities, management approach, stakeholder value and long term development.

Sustainability report has been strongly recommended by Vietnamese government. Vietnam Brewery Ltd is one of a few leading companies taking this report seriously. Their report in 2014 stated that the company switched from diesel to biomass as boiler fuel, reducing direct CO₂ emissions as a result. In addition to reducing our carbon footprint and mitigating the effects of global warming, the local community has also benefited from the programme with an additional income from the sale of rice husks. The company also highlighted the code of conduct which allowed the employees to voice their opinions. There have been also other big cooperation taking part in the trend for example Bao Viet Corporation, Vinamilk, Hau Giang Pharmacy…

In conclusion, in order for enterprises in Vietnam to actively engage in sustainable development and voluntarily adopt sustainability as common practice, Vietnamese government should take more urgent actions.

Vietnam exempts visas for citizens of 13 countries

  In order to encourage international tourists to return Vietnam after a long pause due to the pandemic and quickly adapt to the new situation of recovering the tourism industry, gradually bringing the tourism industry back to life, Vietnam Government has issued Resolution No. 32/NQ-CP visa exemption for citizens of 13 countries. This policy is an appropriate solution to bring international tourists to travel to Vietnam and also an opportunity for Vietnam's tourism to recover.

Subjects exempt from visas are citizens of the following countries: Germany, France, Italy, Spain, UK, Northern Ireland, Russian Federation, Japan, South Korea, Denmark, Sweden, Norway, Finland and Belarus. Accordingly, citizens of these countries will be exempted from visas for 15 days from the date of entry, regardless of passport type, entry purpose, on the basis of meeting all conditions as prescribed by Vietnam immigration law.

 Regarding the application period of the visa exemption policy, the visa exemption on entry to Vietnam for citizens of the above countries will be implemented for a period of 3 years, from March 15th, 2022 to the end of March 14th, 2025. Besides, this policy may be considered for extension in accordance with Vietnamese law.

 In addition, to enter Vietnam, visitors need to comply with the requirements on epidemic prevention and control for people on entry. Specifically, visitors must have a negative test result for SARS-CoV-2, must make a medical declaration before entry and monitor their health and apply Covid-19 prevention measures.

 Therefore, it can be seen that Vietnam has created favorable conditions for tourism to gradually approach international tourists in an effective and safe manner. These would gradually improve the economic environment, and bring more potential investors to Vietnam to set up company and make investment.

Hanoi Leads the Whole Country in Attracting FDI in the First 2 Months

  According to the Foreign Investment Agency (Ministry of Planning and Investment), in the first 2 months of 2019, many foreign investors have set up business in Hanoi. In fact, Hanoi is the locality that attracts the most FDI in 44 provinces with 4 billion USD, accounting for 47.3%, followed by Ho Chi Minh City with 1 billion USD, accounting for 12%, the third is Bac Ninh with 54 million USD, accounting for 6.3%.

Specifically, among the investment projects in Hanoi in the first 2 months of the year, the largest project is the Indochina Energy Development Project of Thai investors with a total registered capital of 10 million USD.

This is a project operating in the fields of expertise, science and technology, using 100% foreign investment with the aim of providing management consultancy activities (except business tax); Investment consultancy (except financial, legal, tax, securities, insurance consultancy); Construction and installation of electrical systems; Technical consultancy activities.

The second largest registered investment project is the project of Super Gold Moon Co., Ltd. (Korea) on accommodation and catering services with a total registered capital of 3.448 million USD, of which contributed capital is 0.86 million USD, loan is 2.586 million USD. The project uses 100% foreign investment.

The third is EB Nguyen Xien Supermarket Project of Big C Thang Long International Trade and Service Co., Ltd (Thailand) with a total registered investment capital of 2.5 million USD in the form of joint venture.

Also according to the Foreign Investment Agency, as of February 20th 2019, the total newly registered capital, increased and contributed capital to buy shares of foreign investors reached 8.47 billion USD, increase by 2.5 times compared to the same period in 2018.

There are 66 countries and territories with investment projects in Vietnam, led by Hong Kong with a total investment of 4.3 billion USD, accounting for 51% of total investment. Right after that at the 2nd and 3rd positions are Singapore and Korea respectively.

In addition, there are a number of large projects in the first 2 months of 2019 such as: Capital contribution, share purchase of Beerco Limited (Hong Kong) into Vietnam Beverage Company Limited, the value of contributed capital is 3.85 billion USD with the main goal of brewing beer and malt brewing beer in Hanoi; Project of factory manufacturing electronic equipment, network equipment and multimedia products, total registered investment capital of 260 million USD invested by Goertek (Hongkong) Co., Ltd in Bac Ninh...

Establishing Distribution Company In Danang

  Da Nang is a city in the Central of Vietnam, with the advantage of being a trading place of many countries in the world. Danang has a large seaport in the top 10 large seaports of Vietnam, facilitating trading activities with many countries around the world.

At the present, Da Nang is promoting foreign investment into Da Nang, and many investors have chosen Da Nang to do business in the distribution business line. For this business line, Vietnam has committed to open up to attract 100% foreign investment. As committed, foreign-invested companies in the distribution sector will be allowed to provide commission agents, wholesalers and retailers of all products manufactured in Vietnam and legally imported products into Vietnam. Therefore, the investors can import or produce goods, then they distribute the goods in accordance with regulations.

In addition, with the increasing in the number of tourists coming to Da Nang in recent years, the demand for consumer products, fashion and other items for tourists has increased. This triggers demand that many companies to provide essential goods for tourists, and this is a great investment opportunity for investors both domestically and abroad. The investors could explore this opportunity to set up company in Da Nang and fill the market’s demand.

In addition, with many policies to support enterprises in administrative procedures, as well as management, investors can easily carry out procedures as well as manage and control their business better. Enterprises investing in Da Nang are now very satisfied with the way public services are handled in the city's administrative procedures, therefore more and more investors are choosing Da Nang as a destination for investment when targeting in Vietnam.

M&A Due Diligence and Execution in Vietnam

  Merger and Acquisition (M&A) activities in Vietnam have been rapidly increasing over the the years in value and number of transactions when Vietnam's opening policies to attract foreign investments loosen up.  The M&A due diligence and execution are therefore important steps to ensure a successful transaction.

For foreign investors wishing to take advantage with a certain level of risks in Vietnam where the cost of labour are cheap, mid-income populations are growing, and the need of capital are high, it is important to find the right target companies to invest.  Challenges might arise when approaching the right local companies, locating the right decision makers within the local companies, encountering differences in languages and cultures.

It is important that the local consultants with the understanding of the business and legal environment in Vietnam where the local companies are incorporated could be involved at an initial stage to monitor and minimize the risks, improve the effectiveness of the M&A process in Vietnam.

The Vietnam consulting company could also provide corporate intelligence and insights of the Vietnam targeted companies to have an overall evaluation of the compliance of the Vietnam companies, possible risks involved and growth potential.  Financial forensic services might also be needed before other further steps.  Then, the following will need to be considered when undertaking the M&A in Vietnam.

Due diligence

M&A due diligence in Vietnam is a vital step because it determines whether the M&A will succeed or not. There are some aspects that must be carefully considered:

• Financial reports

Review all the financial reports of the Vietnam targeted companies within 3 to 5 years to assess the current and future financial situation. These data needs to be audited by a reputable independent auditing company. Evaluating financial situation targets on many aspects such as the reasonable connection between the financial statements, operating and sales margin of the business in relation to the average in that industry.  These data allow valuation real value of the target business.

• The cash flow

Checking the dates on invoices showing that whether targeted businesses have paid promptly or not. Term of payment may vary from industry to industry, but generally 30 to 60 days. If the money order is paid after the billing date period of 90 days or more, it means that the business owner may be struggling with cash flow. Finding out that if the clients’ inability to pay bills or not is very important.

• The staff

Determining the importance of staff for the success of the business considering work habits of employees, working time of key employees; ability to remain working after a change of the owner occurs; the incentives necessary to keep key employees; ability to easily replace key employees; the relationship of key employees with the company's customers.

• The customers

This is the most important assets of the Vietnam targeted company. Make sure that clients are as the other tangible assets of the business. Evaluating customers on some primary aspects: the relationship with the current owner of the business, customer history with business relations and the contribution of each customer to the profits of the company; assessing that customer will leave or stay when the business having new owners; customer services and dispute of the company, the relationship of the former owner of the business with the community or the industry.

• Business location

This is especially important if the targeted company is a retail company. Does the importance of business location play a crucial role for the success of the company? How is the location of the company you plan to acquire? Is there sufficient parking lot for customers? How does the company depend on sales in the region? How is the prospects of the business in this area? Does this place have been in the process of rapid change from new residential district office building or not? Has business location become more or less desirable because of contemplated changes in surrounding area or not?

• Competitors

Considering this aspect in order to define the capacity of the targeted business in the industry, the following questions would help: who are its competitor and what are their strategies? Does the price war happen frequently? How has the competitive environment changed?

• Business registration, permits and zoning

It’s necessary to make sure that business registration certificate and other legal documents can be easily given to the buyer. It would be better to acknowledge the procedures to transfer these documents and its fee with the help of local management consulting company in Vietnam. If the targeted company is a joint-stocks company, what is the procedure for the business registration? Can foreigners own the company 100% according to Vietnam laws?  Conditional investments in Vietnam need to be considered carefully by lawyers in Vietnam to avoid mishaps.

• The company image

Company image can be a significant asset and that cannot be assessed in the financial report. There are many intangible factors to consider when evaluating a company: how to serve customers, how employees answer the phone and the level of support the community or the industry.

Negotiate the price

It is important to understand the purpose and motivation of both parties. The sellers’ motivation are formed and affected by value drivers. There are two main value drivers which are approach value and avoidance value. Approach value is our purpose such as prosperity and avoidance value is the negative effect that we need to eliminate. Normally, the buyers try to find out what are the reasons why the owner wish to sell the companies. This will help the buyers plan a reasonable strategy beforehand.

A research analyzes the general aspects that the buyers seeking for via conducting surveys companies’ owner who have sold or transformed their enterprises. The research results are focus on profit maximization (79%), minimization of tax payable (73%), protection of viability of the company (71%)...(Source: Acquisition Marketplace Review, 2007).

The motivation of the buyer in most cases is similar to the motivation of the seller, which is to maximize profits, expand markets, increase revenue, operating areas, areas of activity, minimize taxes...

Risks in Business Activities of Enterprise: The Arising Causes

 Risk is something that nobody expected but we have to accept to live together with it. Identifying risks and creating solutions to prevent it and also minimize losses when it happens are what businesses should do. That is positive solution instead of accepting risks.

So what "risk" is? There are many definitions of risk, in which there are two main points. First, risks are unexpected events. Second, when risk occurs, it causes losses to people and society. The business operations of enterprises are very diverse. In theory, such operations are always come with risk. Instead of statistic the risks (very difficult), we should approach the issue from the step of identification the causes of risk. It will help businesses to have better prevention against the risk. Here are some common causes of risks that businesses often encounter.

There are 8 main causes of risk. First, that is the natural environment, such as storm, flood, drought, earthquake, volcano, tsunami, sea level rising and the earth "hot" up... These risks often have some common characteristics: the ability to forecast and predict is low, happen suddenly, cause damages on a massive scale, not just for one region, one industry, one community but for the whole economy, a number of countries or the whole world. The prediction and forecast of these natural disasters are difficult but they active as a rule. Hence, enterprises can proactively prevent or choose appropriate solutions.

The second risk is the risks from social environment, social structure and population. That is the change of value, standard, human behavior, the scale of values in society and the social characteristics... They are source of risk for commercial operations and investment activities of enterprises. However, a society that encourages nurturing the creative values and the inspiration investment would certainly the good protective shield for businesses.

Thirdly, there are risks come from the environment where the cultural background is low... A society where there is low literacy, lack of cultural norms, morality is not enhanced then how well the law will be enforce? Once the laws are not enforced effectively, a thousand risks may occur. There will be a stunning political rights, the rising of kinds of crimes such as theft, looting, rioting, economic fraud underground, reneged contract, counterfeiting, piracy, inciting religion, ethnicity and hatred... As a result, the kind of snatching, fraud and deceptive business will dominate.

Fourth are the risks from political environment, where lack of institutions to protect the freedom, democracy, property rights of people in general and businesses in particular. Political environment includes the stability in politics, security and safety for enterprises and people. A country that usually has national policy changes, coups, wars, riots, ethnic and religious conflicts, intervention in markets that lack of standards, policies were dominated by the interest groups, discrimination, corruption... are causing serious risks to businesses, causing them to lack of business confidence, lose investment momentum and can harm the economy and society.

Fifth are the risks come from economic environment. A strong economy is an economy that has high resistance with the ability to resolve the crisis in the best way in the direction of transparency, low cost, high sustainability. An economic environment where there are often crisis, inflation, erratic pricing, instable supply and demand, exchange rate changes frequently, shortage of goods and services, uncontrollable monopoly, fair competition is only on paper... along with the lack of technocratic skills shall be considered to be major risks for enterprises. Furthermore, on the other hand, the challenges come from an economy with high competitiveness, the drastic changes of technical science and information technology would also be the risk for enterprises that lack of the ability to adapt to changes.

Sixth are the risks that resulting from the regulatory environment that lack of transparency in three fields of legislative, executive and judicial. This is also the danger of healthy businesses. A system of legal documents should be issued with the effective participation of the business community, according to the criteria of sustainable, friendly, fair and easy to apply. An effective law enforcement system should be operated under the motto support, promote and facilitate business. A system of reliable justice, respect for justice and ensuring effective law enforcement with a society that respect for ethic and law would be an ideal environment to encourage investment and development of business. Conversely, a business environment where the law is inconsistent, contradictory, overlapping, change suddenly and shady, law enforcement lacks transparency, openness and efficiency, the application of the law lacks fairness, property ownership right and the right to protect the contract are not only abused but also the cost is too high... are sources of risk, causing severe damage to the business.

Seventh is the risk coming from business partners. They can be investors, joint ventures, cooperation or customers of the business. Have you ever questioning that where do they come from and are they reliable in terms of skills, experience, financial strength, legal and corporate governance. When establishing a relationship in business, both parties should understand and trust each other before coming to the steps of negotiating, signing and implementing contracts. Regarding business contract, it should be made very carefully because each paragraph stalking the risks that businesses need to take into consideration such as terms, payment, tax, limitation of liability, termination of the contract ahead of time and contract dispute resolution...Hence, the contract should be made carefully by a professional unit.

Eighth is the risk coming from the enterprise itself such as business attitudes towards risk, mistakes in business strategy and enterprise management, the weakness of the managers and employees, lack of ethics and business culture, lack of motivation, lack of internal unity...The most important thing is to regularly inspect and test the control systems of corporate is effective or not. Corporate governance is the whole system of rules and regulations. Good corporate governance will help the strategic decisions of the enterprise to be issued in the most enlightened and effective way, along with the best elimination of risk. Good corporate governance ensures utilizing all resources of business.

Before conducting business operations, businesses have to conduct risk analysis from at least 8 reasons above, then who dares to ensure that doing business is easy.

Ha Nam: Granting Investment Registration Certificate to Capella Real Estate JSC and Teijin Group (Japan)

  On May 15^th 2019, Ha Nam Provincial People's Committee held a ceremony to grant Investment Registration Certificate for the Project of construction investment and infrastructure business of Thanh Liem industrial zone, phase II for Capella Real Estate Joint Stock Company, which has a total investment of nearly 950 billion VND and Teijin Carbon Vietnam Factory Project for Teijin Group with a total investment of 12 million USD.

Over the past years, with the viewpoint of always trying to improve the investment environment, Ha Nam's leaders always support and create the most favorable conditions for investors, focusing on strong resources to build infrastructure, especially transport infrastructure, industrial zones and clusters. Drastically direct the implementation of solutions to improve the business investment environment, administrative reform...

Up to now, Ha Nam province has 8 industrial parks approved by the Prime Minister, of which 7 industrial parks have been put into operation, 1 Thai Ha Industrial Zone has completed the documents and procedures. 887 projects have been attracted, including 260 FDI projects and 627 domestic projects with registered capital of nearly 3,000 million USD and nearly 110,000 billion VND. In the first 4 months of 2019, the province granted 40 investment projects, including 16 FDI projects and 24 domestic projects with total registered and adjusted investment capital of 200 million USD and nearly 3,500 billion VND.

In the ceremony, Ha Nam province granted the Investment Certificate to the investment project of construction and business of Thanh Liem Industrial Park Phase II invested by Capella Real Estate Joint Stock Company. With a scale of 143 ha and total investment of nearly 950 billion VND. This is one of the most capable, reputable and experienced investors, has been very successful in the field of infrastructure development and attracting investment in industrial parks and industrial clusters in some localities all over the country.

Also at the conference, leaders of Ha Nam province granted the Investment Registration Certificate of Teijin Carbon Vietnam Factory Project to Teijin Group (Japan). This is an enterprise with more than 100 years of experience in the field of materials, health care and information technology. One of the leading enterprises developing core technologies including polymer chemistry, nanotechnology, biotechnology and synthetic technology.

Teijin Group (Japan) built Teijin Carbon Vietnam Factory with a total investment of 12 million USD, on an area of 15,300 m2, producing carbon fiber products used for the aerospace industry, automotive industry, plastic engineering, health, sports... to meet the demand of domestic and foreign markets.

At the conference, Chairman of Ha Nam Provincial People's Committee welcomed the leaders of Teijin Group and Capella Company to trust and choose Ha Nam as the project investment location. At the same time, he also believed in the construction process, production and business activities, businesses will achieve high revenue and efficiency.

Many Large Businesses in Norway Want to Invest in Hanoi

  7 leading corporations and enterprises from Norway include ITS Noway, Pixii AS, Ruter, Avfall Norge, Cambi, Host, Tomra want to set up business in Hanoi, at the same time cooperate, invest and transfer the most advanced technology in Hanoi city.

Chairman of the Hanoi City People's Committee has just had a meeting with Innovation Norway and 7 leading Norwegian corporations and enterprises operating in the fields of: Developing smart traffic system, energy and energy storage, management and development of public transport systems, providing solutions for waste and waste sludge management, recovery and recycling of plastic and waste materials.

At the meeting, leaders of corporations exchanged views with the Chairman of Hanoi People's Committee on Norway's strengths, experiences and the most advanced technology such as waste and sludge treatment technology and recycling into fertilizer preparations for agriculture; technology to use clean energy in waste treatment; technology to collect, process and recycle hazardous plastic wastes; payment technology and smart transportation applications that encouraging people to use the City's public transport system; experiences and management mechanisms that encourage corporate cooperation in waste and wastewater treatment and development of public transport.

At the same time, the leading corporations in Norway also expressed their desire to cooperate, invest and transfer advanced technology into Hanoi.

On the side of Hanoi, the Chairman of the city thanked the leaders of the corporations for exchanging and introducing valuable experiences in management as well as advanced technologies in areas that Hanoi is very in need of, serving for the construction and development of Hanoi towards smart, sustainable and effective urban.

At the same time, the city leaders also expressed that Hanoi is willing to create the most favorable conditions for Norwegian corporations and businesses to research, survey and seek investment and business cooperation opportunities in Hanoi.

Notably, representatives of the Innovation Norway, corporations and companies committed to organize Norwegian business delegations to Hanoi as soon as possible to implement the discussed plans.

British Investors Proposed to Invest in Wholesale Market in Gia Lai

 Chairman of Gia Lai Provincial People's Committee has just had a meeting and worked with Chairman of the Board of Directors of TKV Holdings International (United Kingdom), coming to survey and find out investment opportunities to set up business in Vietnam and in particular set up wholesale market project in Gia Lai province.

At the meeting, representatives of TKV Holding International Cooperation Joint Stock Company expressed their interest in building wholesale market; electronic portal of wholesale market without managers; strategic product identification; advising on the province's strategic product identification in the global value chain (building national product images) and Gia Lai province's product consumption plans.

The representative of the company also assessed that Gia Lai is a potential province and if implemented, the wholesale market model in Gia Lai will also have its own characteristics; At the same time, asking the province to provide additional issues related to regional planning and sector planning; local determination and orientation of Gia Lai province for the participation of enterprises in implementing this wholesale market model.

At the meeting, Chairman of Gia Lai Provincial People's Committee Vo Ngoc Thanh also raised a number of issues for the unit to learn investment such as the project scale of the wholesale market, the need to connect between the wholesale market and the people. production if the model is deployed in Gia Lai.

Chairman Vo Ngoc Thanh expects TKV Holdings International Cooperation Joint Stock Company will soon agree with the province on how to do as well as speed up the implementation plans of this project. At the same time affirmed Gia Lai's determination and will create favorable conditions for the unit through the Department of Planning and Investment to promote investment in implementing the wholesale market project in Gia Lai province in the early period. Best.

At the meeting, Chairman of Gia Lai Provincial People's Committee also raised a number of issues for investors such as the project scale of the wholesale market, the need to connect between wholesale market and producers if the model is implemented in Gia Lai.

Chairman of the province expects TKV Holdings International Cooperation Joint Stock Company will soon agree with the province on how to do as well as speed up the implementation plans of this project. At the same time affirmed Gia Lai's determination and will create favorable conditions for the unit through the Department of Planning and Investment to promote investment in implementing the wholesale market project in Gia Lai province in the shortest time.

Quang Ninh Calls for Investors in Tourism Real Estate

  Quang Ninh is becoming an open destination for tourism investors to come and set up business in Vietnam.

With the land area and sea surface of over 12,000 square kilometers, the topography of more than 2,000 islands spread over 250 kilometers of coastal lines, Quang Ninh is considered as a "small Vietnam" with the potential to develop green tourism. Therefore, it is not surprising that many travel experts perceive Quang Ninh is blessed with special values.

The first highlight of the Quang Ninh tourism journey is Ha Long Bay - the world natural heritage, the most typical and unique island in the island's integrated marine tourism system. This system stretches 250 kilometers of sea route, linking Ha Long - Bai Tu Long - Van Don island - Bai Tu Long National Park - Co To island - Vinh Thuc island - Tra Co beach with Cat Ba National Forest (the World Biosphere Reserve) and the marine resources system of Hai Phong city. These remarkable advantages make Ha Long Bay along with Cat Ba, Do Son (Hai Phong) are prioritized to develop into national tourist area.

Along with Ha Long Bay, places like Quan Lan, Minh Chau, Ngoc Vung, Bai Dai, Van Hai white sand mine... (in Van Don island district); or Tra Co, Vinh Thuc (in Mong Cai city) … with beautiful beaches, natural forests, intact coral reefs around the islands, offshore locations, have created special values of Quang Ninh tourism.

In addition to natural advantages, Quang Ninh is the only province with land and sea borders with China, an important and vibrant trade gateway between Vietnam, China and ASEAN countries. That is why large investors want to choose Quang Ninh. From the end of 2013 up to now, Quang Ninh has attracted more than 100 projects with total investment capital of more than 5.5 billion USD, nearly half of capital concentrated in Ha Long city, of which the strong investment waves mostly focus on the field of tourism.

There is not only the presence of Vietnamese investors such as Tuan Chau, Vingroup, Sun Group, FLC…, the attractiveness of Quang Ninh is also reflected in the presence of billion-dollar-super-projects of giants investors from United States, China, Thailand, United Arab Emirates... The famous names such as Wyndham, Starwood, ISC Corp, Amata, Nakheel... have landed in Ha Long with huge investment plan.

In the development plan, Quang Ninh is calling for investment in 14 large-scale eco-tourism real estate projects (period 2016 - 2020) and many other projects to develop 4 major tourism centers: Ha Long; Mong Cai - Tra Co; Van Don - Co To; Uong Bi - Dong Trieu - Quang Yen.

Standing in the top on tourism investment attraction, the keys that help Quang Ninh to balance its economic benefits and resource conservation are unified planning, consistent development and a clear view on investment attraction.

Why background check is needed when applying for second passport?

  Nowadays, it is popular for individuals to have a second passport. It can be seen that in many countries, individuals are restricted to travel freely between countries. Typically, such nationals whom wish to travel abroad are required to apply for a visa which takes a lot of paper preparation for proof of financial status, legitimate reasons and waiting time.

The investment for second citizenship will help investors get a more powerful passport, less limited mobility, especially in European countries. This is also an invaluable advantage for those who wish to expand their business opportunities internationally. Different countries will have different citizenship investment programs, the most common forms of contribution to national funds and investing in real estate in that country.

However, in addition to the mandatory conditions for the investment, in order to be able to receive the passport, the investor also needs to go through a certain application review process. Normally, the countries that grant citizenship to foreign citizens will conduct judicial background verification, background check, criminal record, and the investor's health status such as Cyprus, Montenegro, Bulgaria, Hungary.  In particular, the applicant will have to be qualified for civil liability.  There are countries that are particularly concerned about the investor's health such as Malta, which requires the individual applying to have global health insurance, investors and families need to prove that they purchased health insurance in their immigration application.  In Cyprus, in order to pass the document check, investors also need to provide proof of the investment money source. Similar in Malta, Montenegro the investors need to present documents proving that the money has legal origin.  Sometime, there are needs to verify the legitimate of the documents provided by the applicants.

Further, verification of employment, salary, income, assets are also important for the review process.  To some extents, the investors and their companies are also assessed for reputation and adverse media impact.  In some countries, investors need to have documents certifying that they have resided there for a specific period of time at the request of the Government. In Malta, for example, the investor needs to reside here for 12 months before applying. In Bulgaria or Antigua & Barbuda, after being granted citizenship, investors need to reside in these countries for a certain period of time. For the citizenship by investment program in Montenegro, the application will only be accepted when it is submitted through a government-licensed agent under the program.