SCG (Thailand) Pours Capital into Vietnam Petrochemical Sector

  With the acquisition of 25% shares from Qatar Petroleum at Long Son Petrochemical Refinery Complex project, SCG Group (Thailand) continues to strengthen its position as a major investor in Viet Nam petrochemical sector.

Previously, Vina SCG Chemicals (VSCG), a wholly-owned subsidiary of SCG in Vietnam, has signed contract to acquire shares of QPI Vietnam Limited (QPIV), a subsidiary of Qatar Petroleum to receive all 25% shares in Long Son Petrochemical Co., Ltd - the investor of Long Son petrochemical complex, according to a press release posted on SCG's website.

This 36.1 million USD deal (approximately 1.100 million Thai bath), which raised SCG's direct and indirect shares in Long Son Petrochemical Co., Ltd from 46% to 71%. Meanwhile, the remaining 29% of the joint venture to develop this project is held by PetroVietnam (PVN).

This project is a major oil and gas project, the first petrochemical complex in Vietnam with production capacity of up to 1.6 million tons of olefins per year, total investment estimated at 5.4 billion USD, applying modern and advanced technologies and techniques, operating safely and meeting the requirements of environmental protection, ensuring high quality petrochemical products such as PP, PE...

The project will create about 15,000 - 20,000 jobs during construction and more than 1,000 jobs when go into commercial operations.

Moreover, the project is estimated to contribute to Ba Ria - Vung Tau and the national budget 115 million USD per year (about 2.5 trillion VND per year) during 30 years since its inception.

The successful negotiation and signing of documents and transfer of funds among partners are important milestone in the project implementation, ensuring that the project is put into operation by 2021.

The Siam Cement Group (SCG) is a leading corporation in the ASEAN region with many efforts to establish competitiveness in the global market. SCG has entered the Vietnam market since 1992.

SCG has also invested heavily in Vietnam in such core business lines as: construction materials, petrochemicals and packaging. In addition to direct capital inflows, in recent years, SCG has also expanded its investment in Vietnam through mergers and acquisitions (M&A).

SCG's companies in Vietnam are mainly operating in the fields of cement - construction materials, chemicals and packaging. By the end of 2016, total assets of SCG in Vietnam are about 943 million USD.

We, ANT Consulting company, support you with the service of setting up a company in Vietnam, Risk management in Vietnam, Employee background check in Vietnam... to help you shorten the implementation time.

Quang Nam Province Welcomes Foreign Investors

  In 2017, Quang Nam province is expected to continue to become the bright spot of the central region on investment attraction, welcoming foreign enterprises to come and invest in Vietnam.

In fact, Quang Nam province is an ideal destination for investors at home and abroad. There were presence and long-term commitment of the major investors such as Truong Hai Auto, Suntory - Pepsico, Vietnam Brewery VBL, Inax sanitary equipment, Groz-Beckert textile equipment and famous travel brands such as The Nam Hai, Montgomerie Links golf course, Victoria, GoldenSand, Palm Garden...

Compared to many localities, Quang Nam has great advantages in attracting investment. Firstly, the province has strategic geographical location with an area of 10,438 km2, located in the middle of Vietnam, belongs to the key economic zone in central Vietnam. The north bordering on Da Nang – the commercial, services and training centers of Central region; the south bordering on Quang Ngai province; the west bordering on Laos; located on the East – West Economic Corridor, convenient for road transportation to Laos, Cambodia, Thailand, Myanmar and sea transportation to other countries of the ASEAN region.

The strategic location, plus complete transportation infrastructure with many kinds of road, railway, airline, sea belong to the national and international traffic routes, creating favorable conditions for Quang Nam province to attract major investors in the world.

As reported by the People's Committee of Quang Nam province, the province currently has 8 industrial zones and 50 industrial clusters. The industrial parks and industrial clusters are located on the main traffic routes, with large area. The infrastructure and telecommunications utility are fully meet the needs of investment projects. As for waste water treatment system, most industrial zones in the province of Quang Nam have wastewater treatment systems; solid waste treatment collection systems as prescribed.

In addition, the social infrastructure and other utility services such as schools, hospitals, hotels, restaurants, amusement parks in the province of Quang Nam are basically meet the needs of investors and citizens. As reported by the Department of Culture - Sports and Tourism of Quang Nam province, there are more than 5,436 hotel rooms that satisfy international standard, including many major brands (concentrated in coastal areas), contributing to bring Quang Nam to become an attractive tourism destination of the central region.

So far, Quang Nam has attracted 126 FDI projects with total registered capital of 5.5 billion USD from investors from around the world such as Korea, Japan, Singapore, US, China, France, Germany, Italy...

In the long term, Quang Nam focus on attracting investment projects in economic sectors that the province has many advantages such as supporting industries (mechanical manufacturing, automobile, electronics...); processing industry of consumer goods, household goods, agriculture, forestry and fisheries products, construction materials; the agricultural sector (high-tech agriculture, cultivation and processing of agricultural products ...); the field of tourism, services, urban (ecology urban areas, coastal and riverside luxury resorts, hotels, restaurants, supermarkets...), training of human resources; the investment, construction and trading of infrastructure of industrial parks, industrial clusters.

Another highlight of the investment attraction policies of the province is that the investors have the full right to choose and decide to implement the project in the appropriate investment model. Moreover, investors are given the investment incentives stipulated by the Government, including the Chu Lai Open Economic Zone and 15/18 districts in the list of investment incentives stipulated by the Government on the premises, corporate income tax and import tax...

According to the Public Administration and Investment Promotion Center of Quang Nam Province, the newly established enterprises from investment projects in difficult economic condition areas in Chu Lai Open Economic Zone; investment projects in the fields of high-tech agriculture, scientific research, technological development, education and training, vocational training, environment... will be applied the corporate income tax rate of 10% for 15 years since the taxable income arises; ; are exempt from corporate income tax for 4 years and reduce 50% of the tax payable in the next 9 years.

Enterprises investing in the industrial zones in such districts as Duy Xuyen, Dai Loc, Que Son and Phu Ninh are applied the corporate income tax rate of 17% for 10 years, are exempt from corporate income tax and reduction of 50% tax payable in the next 4 years.

Also, Quang Nam also apply competitive prices and depending on land investment sectors, projects may be exempted from land rent during 11 years, 15 years or during the term of the project. In addition to the general provisions, the large-scale projects with important implications and will be coordinated with your PPC investment research applied to the Government for specific policies.

Also, Quang Nam province also apply competitive land prices and depending on investment sectors, projects may be exempted from land rent for 11 years, 15 years or during the implementation of the project. In addition to the general provisions, for the large-scale projects with important implications, the Provincial People's Committees will coordinate with investors to study and submit to the Government for specific policies.

According to the Quang Nam People's Committee Chairman, in the trend of deeper integration, Quang Nam is constantly developing, changing appearance, became the land of potential and investment opportunities. Many synchronous solutions are being implemented to improve the investment environment, which focused on administrative reform. In particular, the introduction of the Public Administration and Investment Promotion Center of Quang Nam Province, with flexible and quick mechanisms, have demonstrated the determination to build friendly image of Quang Nam province, becoming the reliable destination for investors.

We, ANT Consulting company, support you with the service of setting up a company in Vietnam, Risk management in Vietnam, Employee background check in Vietnam... to help you shorten the implementation time.

Education Startup Will Flourish in Vietnam

  Education startup will become great opportunity for foreign investors to invest in Vietnam as well as the Vietnam startup community.

GotIt!, a Startup, a Mobile App which is built on the question – answer foundation for a long time has been presented in the top 10 educational apps on App Store in the US. GotIt! has received 9 million USD from Capricorn Investment Group. Investors of GotIt! are also the people who invest in companies creating products that have changed the world such as Tesla Motor, SpaceX, and PlanetLabs. They believe that GotIt! will become "the next big thing" when GotIt! provides services in the areas beyond education.

One other education startup which is ELSA - teaching English pronunciation, has just passed 1,200 competitors to win first prize at SXSWedu - a competition in education technology startup, organized in the United States. This application uses artificial intelligence technology to help users improve their English pronunciation.

And yet, a different startup which is Monkey Junior, specializing in foreign language teaching has won the competition “GIST Tech-I 2016” held in the US after passing more than 1,000 competitors from 104 countries in the world. This is the startup contest initiated by the US government and received the backing of Mark Zuckerberg – CEO of Facebook - as well as many powerful individuals in Silicon Valley.

Belongs to the EdTech field, which is attracting the attention of Vietnamese startup community, Monkey Junior application is available on App Store, Google Play and Amazon with a large number of users from the US (accounted for 43%), Vietnam ( 10-20%), Canada, France... Although this app aims to teach foreign languages, the point to make up the difference for Monkey Junior is that the teaching contents are directed at children, especially children under 6 years old.

We have to mention one other EdTech which is Code4Startup. Code4Startup is the online training website. Although training on programming is not new, the basic difference of Code4Startup is that it is not theoretical teaching, Code4Startup goes straight into practice by guiding learners to build real applications. Hence, Code4Startup has successfully calling for capital on KickStarter.

The common point of this 4 startups is that the project have high applicability, developing towards EdTech (educational technology) and "father" of them are all Vietnamese: GotIt! Of Dr Tran Viet Hung; Elsa was founded by Van Dinh Hong Vu Ngo Thuy Ngoc Tu; Monkey Junior of Dao Xuan Hoang and Code4Startup of Leo Trieu (Trieu Quang Anh).

Movement for startup towards EdTech (educational technology) are blooming and the fund as well as foreign investors are increasingly appreciating Edtech in Vietnam.

Every year, Vietnamese spent 3-4 billion USD to send their children to study abroad and the market for online education is very potential on a large scale. Vietnam is a country of more than 22 million pupils and students, is the large customer market that many education companies want to explore. On the other hand, the introduction of this community-based projects to apply in reality is very consistent with preference and development trend of modern education, easy to be welcomed by parents and students in Vietnam.

In addition to the potential of the market, international investors believe that the Vietnam startups in general and EdTech startups in particular have been contributed actively to the social advancement, improve community knowledge and update the world’s new trends in Vietnam; while also contributing to the economic development of the country. Similarly, in the world, such EdTech startups as the Knewton, Coursera, Udemy, Duolingo... are the clear proof of this.

The million dollars online training market has been receiving special attention of foreign investors. By the end of 2016, Vietnam had 309 investment projects in the fields of education and training with total registered capital of over 767 million USD.

Apax English is an example. Recently, ChungDahm Learning Education Corporation (Korea) and Egroup Education JSC have signed a memorandum of cooperation for an additional investment of of 10 million USD for English training in Vietnam. Earlier, ChungDahm Learning and Egroup have brought the Asian’s leading children English program to Vietnam with the brand “Apax”.

From the success of Apax English, many cooperation and investment projects in education are increasingly powerful. Next, there will be the project of SK Telecom (under the SK Group, one of the 3 largest Korean group), bringing the school of programming using intelligent robot to Vietnam. It will become the first cooperation in the education sector with Egroup.

With the above positive signals, hopefully that in the coming time, Vietnam education market will continue to receive "new wind" from the funds and foreign investors.

We, ANT Consulting company, support you with the service of setting up a company in Vietnam, Risk management in Vietnam, Employee background check in Vietnam... to help you shorten the implementation time.

Surpassing Korea, China’s Capital Flowing Strongly into Vietnam

  Only in the first two months of 2017, China investment capital is pouring strongly into Vietnam market through indirect investment for acquiring shares or direct investment for set up business in Vietnam.

The Foreign Investment Department (Ministry of Planning and Investment) has announced the situation of attracting foreign investment.

Accordingly, in the first 2 months of 2017, there were 313 new projects were granted investment certificates with a total registered capital of 2,028 billion USD, increased by 6.5% over the same period; 137 projects register to increase capital with 759 million USD, decreased by 15.5% over the same period.

In addition, foreign investors have spent 619 million USD to buy share or contribute capital to Vietnam enterprises, 4 times higher than the same period in 2016. Generally, in the first 2 months of 2017, the total newly, additional capital and contribute to purchase share reach 3.4 billion USD, increase by 21.5% over the same period in 2016.

In particular, foreign investors have invested in 18 sectors, in which the processing industry and manufacturing are attracting the attention of foreign investors with total capital of 2.5 billion USD, accounting for 73.4% of total registered investment capital in two months.

The real estate business sector ranked second with a total investment of 345.5 million USD, accounting for 10.1% of total investment capital.

Standing at the third position are the wholesale and retail sectors with total registered investment capital of 222.6 million USD, accounting for 6.5% of total registered capital.

In the first 2 months of 2017, there are 61 countries and territories having investment projects in Vietnam.

Singapore ranked first with total investment of 881.6 million USD, China ranked second with total investment of 721.7 million USD, Korea ranked third with total registered investment capital of 637.1 million USD.

If as every year, Korea ranked first in terms of investment capital into Vietnam, this year the ranking has changed as China took place.

The ranking of top 5 largest investors into Vietnam hardly have the participation of China investors. But this year, this country has increased investment into Vietnam through two forms that are pouring fund to implement the project or purchase share of Vietnam enterprises. China investors usually focus on textile and plastic projects...

In 2 months, China investors have registered to implement 123 projects in Vietnam and 174 turns of purchasing share, accounting for 21.1% of total investment in Vietnam

Some major projects of China investors are Billion Vietnam polyester factory project, with total investment of 220 million USD in Tay Ninh. Besides there are Lan Son industrial zone infrastructure investment project and Khai Hong Viet plastics factory, with total investment capital 150 million USD, invested by Wenzhou Hendy Mechanism and Plastics Co., Ltd in Bac Giang.

In the first two months of 2017, foreign investors have invested in 47 provinces, in which Binh Duong attracted the most FDI with total registered capital of 791 million USD. Hanoi ranks 2nd with total registered capital of 519 million USD. Ho Chi Minh City ranks 3rd with total registered capital of 464.2 million USD accounted for 13.6% of total investment capital.

Also according to the Foreign Investment Department, as of February 20^th 2017, there were 22,904 projects that are still valid with total registered capital of 297 billion USD.

The accumulated capital of foreign investment projects is estimated to reach 156.35 billion USD, with total valid registered capital of 52.6%.

Cargill (USA) Will Build Factory in Bac Ninh

  Cargill Company (USA) is planning to build a factory specializing in producing livestock feed in Bac Ninh. It shows the attraction of Vietnam market, which makes foreign enterprises to come and invest in Vietnam.

On January 6^th 2017, Chairman of Bac Ninh province had a meeting with Mr. Jorge – CEO of Cargill Vietnam came to survey and explore Bac Ninh province. Cargill is the US leading company in the fields of agriculture, food, industrial products and financial services. With more than 150,000 employees working in over 100 countries in the world, the revenues of the Company reached 150 billion USD a year.

In Vietnam, Cargill has 11 factories manufacturing and processing livestock feed in many localities across the country, such as Dong Nai, Hung Yen, Long An, Can Tho, Binh Dinh, Dong Thap and Nghe An..., creating jobs for thousands of workers.

Through surveys, Mr. Jorge impressed with the favorable investment environment, infrastructure, drastic and flexible management system of Bac Ninh province. Hence, the Company intends to build a factory manufacturing livestock feed in Que Vo 3 Industrial Zone in the first quarter of 2017.

It is expected that the Cargill factory has a total investment of 60 million USD, with the area of land to be used is 11 - 13 ha, capacity of 70,000 tons/month. This will be the largest factory of the Company in Vietnam, applying modern technology and equipment with a closed and environmental friendly deodorizing process.

The Chairman of Bac Ninh province welcomes Cargill Company has trusted and choose Bac Ninh as investment destination to invest in stable and long-term production. He also assigned the Management Board of Industrial Zones in coordination with the VID Group – the infrastructure investor of Que Vo 3 Industrial Park and other offices complete the legal procedures and creating all necessary conditions for the project of Cargill Company.

Bac Ninh is one of the leading provinces in attracting FDI, with nearly 1,000 projects with total registered capital of over 12.26 billion USD. In which there are many projects of large companies such as Microsoft, Samsung, Pepsico and Canon...

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

New Solar Power Plant Project in Binh Dinh

  Solar energy is encouraged to invest by Vietnam Government. Therefore, there were many foreign business delegations come to Vietnam to find out opportunities in this area.

On January 11^th 2017, Chairman of Binh Dinh Province has met and worked with the President of Truong Thanh Investment and Development Co., Ltd (Vietnam) and Truong Thanh's partners from Japan and Spain to find out opportunities to invest in solar energy plant project in Binh Dinh, Vietnam.

According to representatives of Truong Thanh, in recent time, the Company has made the solar power plant investment project proposal in Cat Hiep commune, Phu Cat district, Binh Dinh province. The project capacity is 95mW, using land area of about 150 hectares.

The expected investment capital for plant construction is 4,000 billion VND. Tuong Thanh Company wants to be supported by leaders in Binh Dinh Province and relevant local Government agencies with the investment procedures.

According to Chairman of Binh Dinh Province, they are always welcome and encourage enterprises to invest in power plant using renewable energy, which is very environmentally friendly.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Potential of Vietnam’s Renewable Energy

  Vietnam territory is located in the tropical climate zone with over 3,200 km long coastline. Therefore, there is great potential for renewable energy development. The available renewable energy sources in Vietnam are: solar energy, wind energy, biological energy, hydropower and energy from the sea.

Vietnam has great potential for hydroelectric power, with total theor

etical capacity of about 35 GW, the technical potential is about 26 GW, annually it can produce more than 100 GWh; in which the small hydropower (the installed machine capacity <30 MW) has the potential to produce about 15-20 GWh of electricity.

Until 2013, the total number of projects have been put into operation is 268 projects, with a total installed machine capacity of 14,240.5 MW. As planned, until 2017, there will be 473 projects will be put into operation with a total installed machine capacity of 21,229.3 MW. In addition, according to the Electricity Corporation of Vietnam, the potential of small hydropower has installed machine capacity of about 4,000 MW.

In a report of the World Bank in 2001, the wind energy potential of Vietnam is estimated at 512 GW, much higher compared to other countries such as Thailand, Laos and Cambodia.

Vietnam has great potential for solar energy, particularly in the Central and South of the country, with the average intensity of solar radiation of about 5 kWh/m2. The total theoretical potential of solar energy in Vietnam is estimated at 43.9 billion TOE (TOE – tons of oil equivalent).

With the advantage of being an agricultural country, Vietnam has a large and diverse biomass sources, including wood, firewood, rice husk, rice straw, sugarcane bagasse and other kind of agricultural residues. Annually, Vietnam is estimated to have over 60 million tons of biomass from agricultural waste. The biomass energy sources mentioned above can be used to produce bio-fuel (ethanol), fuel pellet, biogas and various other products.

Vietnam livestock industry is now quite developed, released to the environment annually a large amount of livestock waste in the form of solid and liquid.

According to the statistic data from national environmental status by 2014, the amount of solid waste from livestock in 2013 in Vietnam includes: 18.5 million tons from raising cows, 13.8 million tons from raising buffalo, 18.9 million tons from raising pig, 22.6 million tons from raising poultry. Part of livestock waste in rural area of Vietnam provides raw material for more than half a million active biogas in three regions of the country.

With a population of nearly 90 million people, the annually amount of domestic waste generated due to activities of the population is very huge. Domestic waste after being collected and classified can be recycled, reused and recovered energy from waste incineration or landfills.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

FDI Status in 11 Months of 2016

  Vietnam has become an ideal destination for foreign investors from many countries to come and invest in Vietnam. Generally in the first 11 months of 2016, total newly registered and additional capital reach 18.103 billion USD, equivalent to 89.5% compared with the same period in 2015.

Operational status:

Implemented capital:

As of November 20^th 2016, it is estimated that the foreign direct investment (FDI) projects have disbursed 14.3 billion USD, increased by 8.3% over the same period in 2015.

Exports and imports:

Exports of the foreign investment sector (including crude oil) in the first 11 months of 2016 reached 114.076 billion USD, increased by 8.6% over the same period in 2015 and accounted for 71.5% of export turnover in 2015. Exports excluding crude oil in the first 11 months of 2016 reached 111.979 billion USD, increasing by 10.3% over the same period in 2015 and accounted for 70.2% of export turnover.

Imports of the foreign investment sector in the first 11 months of 2016 reached 92.831 billion USD, increased by 3.6% over the same period in 2015 and accounted for 59.2% of import turnover. Generally in the first 11 months of 2016, foreign investment sector has export surplus 21.245 billion USD including crude oil and 19.148 billion USD excluding crude oil.

The investment certificate granting status:

According to the data from the information system on foreign investments, as of November 20^th 2016, there were 2,240 new projects were granted the investment certificates with total registered capital of 13.028 billion USD, equal 96.1% over the same period in 2015. Till November 20^th 2016, there were 1,075 projects register to adjust the capital with the total registered additional capital of 5.075 billion USD, increased by 76.1% over the same period in 2015.

Generally in the first 11 months of 2016, the total newly registered and additional capital reached 18.103 billion USD, equal 89.5% over the same period in 2015.

According to the investment areas:

In the first 11 months of 2016, foreign investors have invested in 19 areas, in which the processing and manufacturing industries are areas attracting more attention of foreign investors with 907 newly registered investment projects and 766 adjusting capital projects, the total newly registered and additional capital reached 13.41 billion US dollars, accounting for 74.1% of total registered capital in 11 months.

The real estate sector ranks 2^nd with 49 newly licensed projects, with the total newly registered and additional capital reached 740.93 million USD, accounting for 4.1% of total registered capital. The professional activities, scientific and technological sectors ranks 3^rd with 684.84 million USD, accounting for 3.8% of total investment capital.

According to the investment partners:

In the first 11 months of 2016, there are 68 countries and territories having investment projects in Vietnam. Korea leds with total newly registered and additional capital of 5.29 billion USD, accounting for 29.2% of total investment capital in Vietnam; Singapore ranked 2^nd with total newly registered and additional capital of 2.05 billion USD, accounting for 11.3% of total registered capital; Japan ranked 3^rd with total newly registered and additional capital of 1.95 billion USD, accounting for 10.8% of total investment capital.

According to the investment location:

In the first 11 months of 2016, foreign investors have invested in 54 provinces and cities. In which Hai Phong attracted the largest foreign investment with 45 newly licensed projects and 35 projects register to adjust capital. The total newly registered and additional capital reached 2.74 billion USD, accounting for 15.2% of total investment capital.

Binh Duong ranked 2^nd with total newly registered and additional capital reached 1.93 billion USD, accounting for 10.7%. Followed by Dong Nai, Hanoi, Ho Chi Minh City with total newly registered and additional capital reached 1.87 billion USD, 1.84 billion USD and 1.32 billion USD respectively.

Some large projects that are licensed in the first 11 months of 2016:

- LG Display Hai Phong project, licensed on April 15^th 2016, the total registered capital is 1.5 billion USD, which is invested by LG Display Co., Ltd (Korea) to manufacture and produce plastic OLED display products for mobile devices such as cell phones, smart watches, tablets...

- LG Innotek plant project in Hai Phong, the total registered investment capital is 550 million USD, invested by LG Innotek Co., Ltd. (Korea) to produce camera module.

- The project to develop the port and industrial parks complexes in Dam Nha Mac area, Quang Yen Town, Quang Ninh province, invested by CDC International Corporation (Cayman Islands) with total registered investment capital of 315.46 million USD.

- Amata Long Thanh City project, with total investment capital of 309.3 million USD, invested by Thailand investors to build urban area in Dong Nai.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Many Foreign Brands Are Coming to Vietnam

  Realizing that Vietnam is a promising market, foreign enterprises want to do business in Vietnam through the form of franchising. Recently, many consumer goods, fashion and cosmetics brands from Japan and Thailand are promoting the franchise with Vietnamese partners and enterprises.

In the framework of the program "Vietnam - Thailand Enterprises Interaction in The Field of Franchising" which was held in Ho Chi Minh City (HCMC) recently, there were 40 Thailand enterprises operating in the food, beverage, restaurant, supermarket, health care, cosmetic sectors joined to find partners in Vietnam.

According Mr Nupartpat Sutthitham, Director of the MP Mart convenience store chain (Thailand), currently in Thailand there are 3 MP Mart stores, in which the model is not the same as Family Mart or Circle K. While Family Mart sells mainly food (80%), MP Mart sells mainly fast moving consumer goods, which are produced in Thailand (70%).

According to representatives of MP Mart, the cost to open a store in Thailand with an average area of 150 m2 is approximately 50,000 USD. Realizing the Vietnam market has many opportunities, MP Mart wants to explore and this is the first time this brand comes to Vietnam. The criteria for selection of investors, partners of MP Mart are having financial resources to be able to scaling this model in large numbers in Vietnam.

Meanwhile, according to representatives of Kokekokko - a well-known chicken fast food brand in Thailand with 5 stores, using Japanese spices to marinate chicken. Representatives of this brand also did not hide their intention to find partners with business understanding and financial resources to open stores in Vietnam.

Also in late November of 2016, there were 9 Japan enterprises with 14 fashion brands came to Vietnam to find partners to open franchise stores or distribute products in the domestic market.

According to Mr Akira Kaise, representatives of I Am Company Limited, this fashion brand has been presented in many markets around the world such as Hong Kong, Shanghai, Korea, Taiwan, Spain, UK, Netherlands... and this is the first time he comes to Vietnam to study the market.

Representative of I Am Co., Ltd commented that young population, good economic development, increasing people's incomes... are factors to make Vietnam becoming a potential market for fashion items. In addition to the market penetration, the Company is also interested in outsourcing or investing in Vietnam to take advantage of low labor costs and highly skilled labors.

At the Vietnam market, Japanese businesses are often mentioned in the culinary field, meanwhile, the fashion, cosmetics or beauty brands are not widely known by consumers. Thus, recently, many Japanese cosmetic brands have decided to enter the market of Vietnam and looking for official distributors.

In an activity operated by the Esuhai Company of Vietnam recently in HCMC, there were nearly 10 cosmetic brands of Japan participated. Among them, the brand Kose is well known by many consumers.

According to the representative of Kose, this enterprise has been established since 1946, global sales reached 2.1 billion USD a year and has been presented in 18 countries. However, so far, this brand does not have official distribution channel in Vietnam market. Therefore, along with the promotion of market presence and product introduction, on this occasion, Kose desires to find agents and official partner in Vietnam.

Meanwhile, according to representatives of Nippon Menard Cosmetic Company, owner of the brand Menard, the Company is fully confident to introduce their products to consumers in Vietnam and wanted to find good partners to be able to access to more consumers.

According to the representatives of the Japan External Trade Organization (JETRO) in HCMC, Vietnam currently has more than 93 million populations, of which half are women who want to become more beautiful as earnings are improving and willing to spend the budget for beauty and body care. Therefore, this is a favorable time and good opportunity for the Japanese cosmetics brand to penetrate the market of Vietnam.

However, there is the fact that the Japanese cosmetic and fashion products are priced relatively high compared to the average income of local consumers. In addition, the Japanese fashion is not common in Vietnam market. Therefore, this is seen as the first step for the fashion and cosmetic brands of Japan to explore the market and find partners.

Forms of Public Private Partnership Investment in Vietnam

  Public investment in Vietnam is not just limited to the transportation infrastructure, electricity, renewable energy, water, health and environment, but also in areas such as education, training, vocational training, culture, sports, commercial infrastructure complex, science and technology, economic zones, industrial zones...

Vietnam is in the development stage that needs significant investment in infrastructure.  However, the state budget is limited, and donor funds have been reduced and limited. Therefore, the investment pattern in the form of public-private partnership (also known as PPP) is an effective solution to this problem. PPP has been expected to mobilize resources for investment in infrastructure from the private sector, from both domestic and foreign investment.

Investments in the form of public-private partnership investment is made on the basis of contracts between competent state agencies and investors or project company for the implementation, management and operation of the project in infrastructure, or providing public services. Accordingly, investors, project company shall be authorized to implement investment projects on construction or renovation, upgrading, expansion, management and operation of infrastructure projects or providing public services.

The investment contracts in the form of public-private partnership are defined in Vietnam as following.

BOT Contract

“Build – Operate – Transfer contract” (referred to as BOT contract) means a type of contract to build an infrastructure project between a competent state agency and an investor; after completing the construction, the investor shall be entitled to operate it for a specified period of time; eventually, the investor shall transfer it to the Vietnam competent state agency.

BTO Contract

“Build – Transfer – Operate contract” (referred to as BTO contract) means a type of contract to build an infrastructure project between a competent state agency and an investor; after completing the construction, the investor shall transfer it to the competent agency, and shall be entitled to operate it for an agreed period of time.

BT Contract

“Build – Transfer contract” (referred to as BT contract) means a type of contract to build an infrastructure project between a regulatory agency and an investor; after completing the construction, the investor shall transfer it to the competent agency, and then the investor will be allotted a land parcel used for carrying out another project.

BOO Contract

“Build – Own – Operate contract” (referred to as BOO contract) is a type of contract to build an infrastructure project between a competent agency and an investor; after completing the construction, the investor shall take ownership of this project and have the right to operate it for a specified period of time.

BTL Contract

The Build – Transfer – Lease contract (referred to as BTL contract) means a type of contract to build an infrastructure project between a competent agency and an investor; after completing the construction, the investor shall transfer it to the regulatory agency and shall be entitled to provide services on the basis of operation of such project for a specified period of time; the competent agency shall lease and make payment for the investor’s services.

BLT Contract

“Build – Lease – Transfer contract” (referred to as BLT contract) means a type of contract to build an infrastructure project between a competent agency and an investor; after completing the construction, the investor shall have the right to provide services on the basis of operation of such projector a specified period of time; the competent agency shall lease and make payment for the investor’s services according to the regulation; when the lease term expires, such project shall be transferred to the competent agency.

O&M Contract

“Operation & Management contract” (hereinafter referred to as O&M contract) means a type of contract to operate the project between a competent agency and an investor for a specified period of time.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Vietjet Air Had 26 Foreign Investors

  The total number of shares that foreign shareholders are holding at Vietjet Air accounting for more than 24% of charter capital.

Recently, Vietnam’s Deputy Minister of Transport has signed a written approval for Vietjet’s 5 shareholders to transfer 66,506,870 shares, equivalent to 22.169% of the charter capital of 3,000 billion VND to 23 foreign investors.

Earlier, in December 2016, the Ministry of Transport has also agreed for 1 Vietjet’s shareholder to transfer 6.566 million shares, equivalent to 2.626% of charter capital for 3 foreign investors, who are: Wareham Group Limited (British Virgin Island), Dragon Capital Markets Limited (Cayman Island) and DC Developing Markets Strategies Public Company (Ireland). The amount of transferred money was not revealed, but ranged from 65 billion VND to 788 billion VND. The transfer has been completed and aproved by the Department of Planning and Investment of Hanoi on December 22^nd 2016.

In total, the transfer of shares to foreign investors has reached 24.358% of charter capital.

According to Vietnam Civil Aviation Administration, the transfer of shares to foreign investors of Vietjet is valid. The transfer does not increase the charter capital of Vietjet, foreign investors do not participate in the executive apparatus, management operations and administration works of Vietjet and therefore it does not alter the business plan and development strategy of Vietjet.

Relating to the transfer of shares to foreign investors, according to Decree 92, the foreign parties cannot occupy more than 30% of charter capital and foreign members shall not exceed 1/3 of the total number of members participating in the executive apparatus.

Vietjet Air is the first airline in Vietnam operating under the model of the new generation airline, with low cost and provides a variety of services for customers to select. Vietjet is an official member of the International Air Transport Association (IATA) with IOSA safety operation certificate. Besides the position of "Top 500 Leading Brands in Asia in 2016", Vietjet is voted as "Best Asian Low Cost Carrier” in 2015 by the TTG Travel Awards and Top 3 airlines that have fastest growth facebook fanpage in the world, evaluated by SocialBakers.

Currently, Vietjet is operating 42 A320 and A321 aircrafts, performed about 350 flights a day and has transported nearly 35 million passengers, with 60 routes covering destinations in Vietnam and international routes to Hong Kong, Singapore, Korea, Taiwan, China, Thailand, Myanmar, Malaysia, Cambodia...

Vietjet has planned to develop extensive flight network throughout Asia - Pacific region. Moreover, they are studying for further expansion of routes in the region and has signed procurement contracts to purchase new generation aircrafts.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Why Japan Investors Invest in Vietnam

  The depreciation of yen against dollar, more available funds for loans from Japanese banks, and the fast aging population make Japanese corporations increasing investment in foreign markets including Vietnam through setting up business venture.

In a morning of Jan 22^nd 2015, the office of Ministry of Planning and Investment and Foreign Investment Agency have met and worked with small and medium business delegation of Japan to explore investment opportunities in Vietnam.  The Japanese business delegation led by Mr. Shuichi Kageyama, vice president of Sumitomo Mitsui Banking, are representative of 21 companies operating in the area of construction, real estate, electronics, manufacturing, chemicals, pharmaceuticals products, medical devices.  The visit has shown interests of Japanese investors in various sectors in the socio-economic development, environmental and investment policies of the government of Vietnam in attracting foreign investment. The Vietnam government also shows effort to support Japanese investor through improving on administrative procedures, and transparency.

The visit of Japanese delegation to Vietnam should be noted amid the strongest wave of Japanese corporations’ investment into foreign markets since 2006 after building up record cash on hands.  The yen has been at weak level making M&A into foreign market expensive.  However it is expected that yen will depreciate further against dollar over the year to come due to the policy of Mr. Shinzo Abe. In the meantime, Japanese banks are also ready to make more funds available for loans.  Another fact is that Japanese population is aging faster. Those combined reasons together with Vietnam's attractiveness for investors make Japanese corporations increase investment through making direct investment or acquiring other corporations in foreign markets including Vietnam.

According to the Foreign Investment Agency, as of Oct 2014, Vietnam has attracted more than USD 36.5 billion from Japan with more than 2,434 FDI projects. Japan ranks first in the number of countries and territories that have investment projects in Vietnam, in which, the first 10 months of the year 2014, total investment of newly registered and increased capital from Japan reached USD 1.66 billion.  Thanh Hoa has 9 projects with a total investment of USD 9.68 billion; Hanoi has 607 projects at nearly USD 4 billion; Binh Duong province has 241 projects at USD 3.8 billion.

Japanese corporations invest in various area including retail, food processing, IT, manufacturing, constructions.  Several prominent Japanese investors have been successful in Vietnam are Cannon, Isuzu Motors, Ajinomoto, Toyota Corporations, Logitem Logistics, Mitsubishi Corp, Kotobuki Holdings, Taisei Corp, Sumitomo Corp, Itochu Corp. The list will continue to grow as the time to come as Japan diversifies from China and Vietnam continues to emerge as an attractive destination.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Highlights in Real Estate Investment in Vietnam

  Vietnam is attracting interest of investors in both domestic and foreign market. Overall, investor confidence was returning to the Vietnam real estate market. Both buyers and sellers have enhanced activity in recent months.

The real estate market of Vietnam has overcome the recession period within 4 or 5 years ago but in the last 12 months, the market has recovered and noted positive signs as well as confidence in the market in general.

Law on housing and real estate business Law takes effect in July 2015 and has acted quickly and positively on the real estate market in Vietnam. The changes in the Law on housing have significantly eased the regulations on home ownership for foreigners, although there are still some limitations.

"Hot spots" of FDI inflows

According to a recent report of Jones Lang LaSalle Vietnam (JLL), a series of free trade agreements such as TPP, EU and ASEAN will further promote the medium and long term development. Interest rates and inflation rate have declined significantly and became more stable in the past two years, helping the investment activity to occur more positive in both Ho Chi Minh City and Hanoi. With some domestic and foreign investors such as CapitaLand and Keppel Land, they have spurred the construction activities thanks to the growing revenue in the last 12 months.

Accordingly, the amount of disbursed FDI in the period from January to September of 2015 rose by 8.4% compared to the same period last year, reaching 9.7 billion USD. This is the strongest growth since the late 1980s, contrary to the slowdown of the Chinese economy. The amount of registered capital of new investors also rose even more sharply with 11 billion USD, focused primarily on the manufacturing industry, in which the energy and electronics industries are the sectors with the highest registered capital investment in the year, followed by the real estate sector.

According to the Ministry of Planning and Investment, FDI investment in the industrial park in Vietnam accounted for 67% of total FDI in Vietnam with 11 billion USD and accounting for 59% of the total 1,400 projects in the first 9 months of 2015. A notable transaction is the event that Amata Corporation acquired the land worth 279 million USD in Long Thanh (Dong Nai) for the purpose of building residential and industrial areas valued of 500 million USD.

According to JLL, the residential real estate prices in Vietnam maintained an average rate with 2 bedroom apartments, 70 m2, 10 - 15 minutes to reach the central area of Ho Chi Minh City, which are sold at the price of 1,600 - 2,000 USD/m2, equivalent to 112,000 – 140,000 USD/apartment. When compared with the big cities in the region, the price is believed to increase significantly.

Who dominated the real estate market of Vietnam?

JLL's report showed that domestic investors are boosting investment activity in the real estate market of Vietnam. The largest real estate investors in Vietnam are Vingroup and Novaland Group.

Vingroup is Vietnam’s largest real estate development and management with market capitalization of about 3.4 billion USD. Vingroup’s investment portfolio includes 45 real estate projects spread across many sectors of the real estate market, including Vinhomes luxury apartments and villas; Vincom Center and Vincom Mega Mall; Vincom Office; 5 star Vinpearl resort; Vinpearl Luxury resort....

Novaland Group has participated in the real estate market in 2007 with the first project is Sunrise City with investment capital of 500 million USD located on Nguyen Huu Tho road, district 7. The real estate business of Novaland focused on the apartment complex segment from mid to high classes and the segment of house land with 25 projects that are being implemented throughout the downtown districts.

Vietnam is becoming an attractive place for foreign investment in the medium term than many other countries in Southeast Asia. Data from Real Capital Analytics (RCA) recorded that there are more attention from a number of private investment funds that are allocated foreign capital into Vietnam in an attempt to increase their market presence in Vietnam.

In the 2^nd quarter of 2015, a joint venture of Warburg Pincus - a US investment fund, has invested 100 million USD into Vincom Retail, the Vietnam’s largest trade center ownership and management in Vietnam. Also in this quarter, Gaw Capital Partners has received the transfer of 4 real estate projects under various segments from Indochina Land with a total value of 106 million USD. Gamuda Land has also receive the transfer of 40% shares (equivalent to 64.1 million USD) in the Celadon City project, a modern urban area with initial investment by a joint venture between Sacomreal, Thanh Thanh Cong (TTC) and An Phu Gia.

The current real estate profit margin is high

JLL's analysis shows that investors are now enjoying 6 - 7% profitability rate for residential real estate and 9 - 11% for commercial real estate, depending on location, completion time, quality of the project and the signing time of the tenants.

According to General Director of JLL Vietnam, real estate investment in emerging markets has always been seen as risky investments but with higher potential profits. Investors are willing to engage in joint venture projects in these markets, where they will combine with local investors who wish to have capital supporting - in order to have a foothold in the market before and also experience the exponential growth in the future when the economy of these market growing fast.

Moreover, the emerging markets such as Vietnam will have the potential growth factors, including population growth and high urbanization rate. Investors and project developers can take advantage of these factors.

Risk Management: A Vital Element When Doing Business

  Risk management is a vital element when doing business but so far, not many enterprises concern about it.

According to a recent survey with 522 companies, there are only 43 companies, accounting for about 8%, have the independent risk management department in their business. More noteworthy, the majority of these 43 companies operating in the banking and financial sector, which has nothing new to risk management. In fact, not all banks have independent and effective risk management departments. The negative problems related to the banking system in recent times somewhat showed the picture about the risk management of this sector.

Risk is understood as any events and situations that could harmful to the ability to achieve the business objectives of the enterprise. Risk management is organized in a formal way and is conducted continuously to identify, control and report the risks that may affect the achievement of the business objectives of the enterprise.

So why businesses are not interested in risk management? Part of this problem stems from the awareness of the leaders. In order to build and operate the risk management system in the enterprise, it needs the commitment of the senior leaders. If senior leaders do not aware of this problem, the administration process will be difficult to achieve the desired effectiveness.

Recently, there are many theories and systems of risk management but small and medium enterprises should be cautious when apply because system and theory are just general and they should be adjusted when applying to each business.

In order to form the culture of risk management, the leaders must along with the employees to implement it regularly and for each project. In theory, the risk management process is carried out in 5 steps: identify risk; evaluate its impact; determine the likelihood; action and measures; monitoring and evaluation.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Vietnam Real Estate Sector Review

  Real estate is one of the sector with important position and role for the national economy, have a direct relationship with the financial and monetary market, the construction market, building materials market and the labor market... The sustainable development and effective management of this sector will contribute significantly to promoting economic-social development, creating the ability to attract investment capital, contributing to the development, industrialization and modernization of the country.

There have been more favorable developments for the country's economy in 2015 and 2015. The prices of oil continued to fall; GDP grows at stable rate around 6%. The inflation rate was controlled at 4.09% average; reduced deposit rates, lending rates were adjusted down to 10%. Foreign direct investment in Vietnam reached US $ 20.23 billion, exceeding 19% compared to the target (17 billion dollars) and expected in increase in 2016.

Mr. Nguyen Tran Nam, Former Deputy Minister of Construction, president of the Vietnam Real Estate Association, said the real estate market has been recovering, particularly in 2015. There were 40,000 successful transactions, increased 75% compared to 2014 in only Hanoi and HCM. In addition, the Vietnamese laws have changed which allow foreigners and Vietnamese people living abroad to own real estate in Vietnam from January 7/2015. The metro construction projects in Hanoi and HCMC, modern road system construction suchas Nhat Tan Bridge,  Long Thanh - DauGiay highway ...  are also factors contributing to boost the real estate market.

Along with these positive factors, the volatility of the financial markets due to the impact of political issues and global movement (the gold market, securities, forex have reduce the lending rate) has turned the property into a safe place for investment at the moment.

In the current favorable environment, the property becomesa channel to attract investors who want to own property not to live but to invest in. This is an appropriate time for investment after nearly 7 years. In a report, Mr. Marc Townsend, Managing Director of CBRE Vietnam, saidthat ” in 2015 the real estate market will witness the spectacular comeback of property speculators”

According this report, if in 2014, cheap apartment was considered as the hottest segment of the market, in 2015, the segment of medium and high-end apartments returned to be the hottest attraction. According to data from CBRE, yielding from investing in luxury apartments in Vietnam is quite high compared to other countries in the region (7- 8% compared to 3% in Singapore, 4-6% Bangkok and 4% in Hong Kong). With a minimum profit margin of 7-8% a year and the highest one at 15-20%, this segment is attracting the attention of real estate speculators.

The project with big scale which delayed during freezing period such as Goldmark City, Sapphire Palace, Gemek Tower in Hanoi, Vista Verde, the Park Residence, Le Meridien, City Gate Towers, has been released to sell up.

As reported by CBRE, in the quarter 4/2014, in HCM, it was recorded that 6670 apartments were offered, increased 117.8% from the previous quarter and 150.2% over the same period last year. For the whole 2014, it was sated that 60% of 14 807 apartments from 37 projects were offered while this figure was 47% in Hanoi of total 16,200 units from 31 projects.

In terms of price, the projects inside the city and surrounding areas with developed infrastructure continue to attract buyers and tends to keep the price high. The average selling price luxury apartments in Hanoi and Ho Chi Minh City are in the range of US $ 1500-1700 / m2, apartment Range US $ 1,000 / m2, the budget - US $ 700 / m2.

The companies with foreign investors are allowed to sublet the property which has been leased or acquire buildings which has been built. This contributes to dynamic of office properties in Vietnam. According to CBRE’s report, in 2014, many office buildings have adopted methods of long-term lease or buy off the area. In 2015, this trend will be more popular in terms of office building.

In the segment of real estate retail, restructuring the dynamics of retail businesses such as Parkson Hanoi Co. and the close of Parkson shopping center in Keangnam Landmark Tower Complex (Hanoi) showed very strong pressure this segment due to increase in supply and competition. With more than 90 million people, Vietnam is a leading nations in the Asia - Pacific region in terms of growth of retail market (9.3% versus 6.3% in Hong Kong, 4.5 1.7% of Malaysia and Singapore). Thus, the segment of retail market is still promising.

A series of big brand to expand the retail network such as as Aeon Group (Japan) plans to open 20 hypermarkets in Vietnam. Vinmart plans to build 9 shopping center, 100 supermarkets and 1,000 Vinmart convenience stores in 2017. Lotte Group (Korea) announced that it would open 60 supermarkets in Vietnam in 2020...

However, in 2015, the new game will be very intensed. According to the CBRE, in 2015-2016, the market will welcome nearly 800.000m2 retail space from 24 projects. Therefore, retailer market will be faced a new challenges. Rising operating costs, the development of electronic commerce and improved knowledge of consumer in purchase decision will be the factors that led to high level of market competition.

Also in 2015-2016, villa projects seem to become very attractive investment in Vietnam. In 2016, Vingroup will launch the resort in Da Nang, Nha Trang, Quy Nhon, PhuQuoc that combines financial investment to attract investors. Especially, at the beginning of March, the Group will launch VingroupVinpearl Resort & Villas project in Long Beach - Nha Trang.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Trade Promotion in The Integration Period

  In the past 5 years from 2011 to 2015, trade promotion activities at home and abroad have achieved much progress, contributing significantly to the growth of the country's export. However, when Vietnam integrates deeper into the world market, the role of trade promotion will become more significant.

In recent years, trade promotion has been implemented uniformly and efficiently, maximizes the resources at home and abroad to support the businesses and contribute to the economic and social development of the country.

Typical is the national trade promotion program. With the support from the program, the presence of Vietnam export products in many traditional markets such as the US, EU, China, Japan, South Korea is expanding. At the same time, the program has supported the business to come back to such markets as Russia and Eastern Europe, strengthening the operation in Myanmar, Laos, the Middle East, Africa and Latin America...

According to statistics, the activities of the national trade promotion program in the period of 2010 - 2014 have attracted the participation of more than 21,000 businesses. In particular, the companies have directly deal and signed contracts with a total contract value of export goods and sales reached nearly 5.3 billion USD and more than 1,000 billion VND.

The participation in the multilateral free trade agreements such as the Trans-Pacific Partnership (TPP) and bilateral agreements, in addition to the benefits that it can bring to the export of strategic goods Vietnam, the domestic manufacturing sector is forecasted to face with negative impacts if there are no timely and appropriate measures to support.

In order to effectively effectively support companies and take advantage of the opportunities offered by the new generation FTAs, Ministry of Industry and Trade has directed the relevant agencies to deploy more practical trade promotion activities, focusing on activities to tapping and opening the markets that Vietnam has signed and under FTA negotiation.

In particular, focus on supporting the export promotion in overseas market with such activities as: Organize and participate in specialized trade fair abroad, organize trade delegations to help maintain export turnover in the key markets, expand export market in new and potential markets.

Promote export through activities organized right in Vietnam: Organize international exhibition in Vietnam; organize international conference; organize and welcome the foreign delegations to Vietnam; mobilize the commercial counselors in countries around the world to introduce business opportunities, connect businesses and provide updated market information for businesses.

Coordinating agencies, related organizations and multinational corporations bring Vietnamese goods to international supermarkets: Organize Vietnam goods week in supermarket system in France, Japan and Korea...

Improve the performance of the trade promotion office that have been established in the United States and China; completing the establishment of trade promotion offices in China; finishing the scheme to set up trade promotion office in foreign country.

In order for the trade promotion activities to operate effectively and bring good opportunities for businesses, apart from the support of the State, companies need to improve technological content, added value to their goods, building and developing brands and participate in global supply chains.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Textile Industry in Vietnam

  Vietnam textile industry for many years has always been one of the major export sectors of Vietnam. With the development in technology, the number of skilled worker is growing along with many preferential policies from the Government, the textile industry has obtained encouraging results, creating the value of goods, ensuring domestic demand and export.

1.Overview of the industry

According to the General Department of Customs, in 2014, the value of exports textiles reached 20.91 billion dollars, increasing 16.6% compared to 2013. The value of textile exported was the second largest export industry in Vietnam.

Vietnam's textile industry has a high production capacity: 4,424 enterprises (as of 31/12/2013) with 2.5 million workers, growth rate of 14% annually. There are 1.2% of enterprises reaching $100 million export revenue, 3.25% of them reaching 50 million and 30% reaching over $1 million. There been several textile products including 8000 tons of cotton fiber, yarn 900 thousand tons, 1.5 billion m2 fabric. Localization ratio of the whole industry was 50% in 2014.

Export capacity of the textile industry is also very impressive. Particularly in 2014, the export value reached 20.91 billion US dollars, accounting for nearly 14% of total turnover exporting ones in the country­­ - No. 1 export industry of Vietnam until 2012, No. 2 in 2013 onwards (after the mobile phone). Vietnam is the 4^th largest exporting country, accounting for 4.92% of global textile exports in 2014, after China, Bangladesh, Italy.

Vietnam's textile sector has yet to master generating raw material. The high-quality raw material required depends heavily on importing (around 60-70%). Mainly imported raw materials are from China, Taiwan and Korea. Vietnam's textile industry has currently imported 90% of raw cotton, 100% synthetic fibre and 80% cotton fabric.

According to research by the Ministry of Labour, every $1 billion of Vietnam textile export created extra 250,000 jobs. Currently, Vietnam has a population of over 90 million people which 49% of the population of working age worked in the textile industry. Moreover, the labour cost in Vietnam is relatively low compared to many countries in the region. The advantage of the lower labour cost will resulted in lower production cost, thus being price competitive. However, in this sector, there is a shortage of skilled labour leading to difficulties to develop the industry.

2.Opportunities for textile industry

TPP is a great opportunity for many industries including textile. According to economic experts, TPP will have a huge influence in the global textile industry. TPP opens investment opportunities (FDI) into developing materials and supporting industries. When joining the TPP, textile tax rate reduced to 0% which indicates a huge profits for Vietnam's textile sector.

Besides, FTAs (The free trade agreements) also opens up further export opportunities for Vietnam’s textile industry to the market European Union, Korea, Asian Economic Union - Europe ...  Vietnam will benefit from free tariff agreement from EU . Besides, the Vietnamese enterprises will be supported in terms of access to high technology from other countries, thus enhancing value of products.

3.Challenges

Other than opportunities, the textile industry will be facing many challenges. The domestic textile enterprises are mainly operating in small and medium scale with low capital investment and financial resources, limited technology, equipment and innovation capabilities. This lead to inability to achieve economic efficiency and compete with other countries. After all trade agreements take effect, Vietnam’s textile industry must meet strict rules and requirements such as origination of raw material (fabric). Meanwhile, most of raw materials (fabrics) was imported from other countries such as China (not a member of TPP). Therefore, if Vietnamese enterprises do not use raw materials from Vietnam or other countries in the TPP, it will be difficult for them to enjoy free tariff when exporting to the US and other countries in the TPP. Therefore, Vietnamese enterprises are highly recommended to learn about TPP and other free trade agreements. Besides, Vietnamese enterprises should prepare for qualified workforce, equipment and new technologies and intellectual property. The state and agencies functions have created specific guidance on the provisions of the tax, customs to help Vietnamese enterprises to utilise export opportunities with the advantages of tariff.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

Game on Mobile Phone Industry in Vietnam

  About 3-4 years ago, the world's game industry is undergoing a very big transformation, witnessing the rise of mobile gaming which outperformed the traditional platforms such as PC or console. In Vietnam, the gaming industry also falls in line with the world trend, many new companies or even large organization had developed mobile game.

In 2015, internet users in Vietnam reached 45 million, accounting for 48.4% of the total population of 93 million. The smartphone users reached 24 million, accounting for 25.8% of the total population, of which 9.3 million of mobile gamers and players loaded fee rate was 45%, reaching ARPPU index (average revenue average per player) is $ 27.71 (619.000 VND).

Until the end of 2015, the number of smartphone devices in Vietnam has reached $37 million, accounting for 52% the total number of mobile devices in the country. It can be seen from the General Statistic Office that from 2012 to 2015, 10 million devices have entered Vietnam’s market each year. Besides, Vietnam's market has not come to saturation, so the potential growth for mobile gaming devices will continue to stay strong for at least 5-10 more years.

In terms of proportion of smartphone users based on age, the largest groups is from the age of 16-34 years old which accounted for 80% in 2015. In this group, the users from 16 - 24 years old take up to 45%. Besides, it can be noticed a remarkable rise of user groups of the age of 16-24 since this percentage rose from 20% in 2013 to 45% in 2015, indicating a huge change of demand of smartphone and purchasing power of smartphone.

If classifying users according to operating system, Android is still the most popular operating system in Vietnam in 2015 which accounted for 60% of users, followed by the 25% of iOS and Windows phone has the smallest market share of 15%. However, Windows phone showed significant change in 2015 when compared to 2014 (4%).  It indicates the development of a new market alongside iOS and Android. This is a unique point in the Vietnam mobile gaming market compared to other countries.

In terms classification depending on by device users and gender, smartphone devices still dominated completely with 90.3%, while tablet only accounted for 9.7%. In terms of gender, the rate does not differ hugely with 58% male and 42% female.

Smartphone game market value in Vietnam in 2015 reach $ 116 million (2,592 billion VND), the growth rate was 39.75% compared with 83 million dollars (1,854 billion VND) in 2014.

In terms of marketing channel for mobile gamers, social network such as Facebook channel remains an ideal place to promote game which accounted for 45%, followed by the local ad network (Admicro, Nova Ads ...) accounting 30%, while Google and PR normally accounts for respectively 15% and 10%. Thus, both domestic companies that wish to penetrate the market will be highly recommended to use the ad unit local to achieve optimum efficiency.

In a paid form of payment, Vietnamese users can mainly use the phone (85%) to pay for the mobile gaming, followed by domestic bank card (10%) and Visa / MasterCard (5%). Thus, the mobile game usually have good links with the network provider of mobile phones in Vietnam. It is due to the fact that the users have not had the habit of using cards.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.