Quang Nam promotes and attracts foreign investment in 2021

  At earlier of 2021, the representative of Quang Nam province proposed the province’s investment promotion program in 2021. Accordingly, the objective of Quang Nam province is to promote investment promotion in the following fields: supporting industries; agro-forestry-fishery processing industry, building materials; agricultural production towards high efficiency; field of investment, construction and business of infrastructure of industrial zones, industrial zones, airport infrastructure, seaports, urban transport infrastructure.

In the industrial structure, focus on investment promotion projects in supporting industries for mechanical engineering, automobiles, supporting industries for electricity, electronics and textiles – footwear, processing of products which use the local material.

The representative of Quang Nam province committed to promoting the improvement of the investment environment, administrative reform, and improving the efficiency of investment promotion. Quang Nam recognized the importance of investment promotion on the spot through increasing support for projects that have been licensed for investment; directly work with investors to determine the portfolio of projects to expand production and business in accordance with the capacity of the investor and the potential and strength of the province.  The province also focuses on dialogue activities with businesses and investors to promptly solve difficulties, problems, proposals and recommendations of investors.

However, Quang Nam will resolutely refuse to attract projects with high risk of causing environmental pollution, wasteful exploitation of resources, outdated technology, etc.

In addition, Quang Nam will cooperate with research institutes, domestic and foreign investment consulting companies to conduct research activities, evaluate investment potentials and trends of investment partners. foreign countries such as Japan, Korea, the US, Europe… and large domestic enterprises and investors. Also, the province intends to organize overseas investment promotion in the target markets of the following countries: Japan, Korea, Russia, Dubai, Hong Kong, Taiwan… Continue to review, update and build the list project calling for investment in Quang Nam province. In particular, it will review the status of projects that have been implemented, projects that have had an investor or issued an investment policy but are slow to implement, projects that have had their investment registration certificates revoked, collected land recovery … to avoid the situation of “hanging” projects, attracting and calling for qualified investors to implement the project.

According to statistics from the Department of Planning and Investment of Quang Nam province, in 2020, the province has granted 50 new domestic projects with a total investment of VND 8,140 billion. Regarding foreign investment projects (FDI), in 2020, Quang Nam province has granted 7 new foreign investment projects, with a total registered investment capital of more than USD 33 million by investors from the following countries: Korea China, Singapore, Macau, Hong Kong, France, Germany.

The total number of valid projects in the province so far is 197 projects with a total investment of more than USD 5.93 billion.

With efforts to attract FDI, Quang Nam hopes to be an investment destination for domestic and foreign investors to set up company, to contribute to the province’s socio-economic development and to maximize profits for investors. fourth in the future.

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Vietnam attends APEC Ministers Responsible for Trade Conference

  The 27th APEC Ministers Responsible for Trade (MRT) took place online on June 5, 2021 with the participation of 21 APEC member economies and observers including the Association of Southeast Asian Nations (ASEAN), the Asia-Pacific Economic Cooperation Council (PECC) and the Pacific Islands Forum (PIF).  Measures to open market will be discussed to facilitate trade and investment, including the smooth policy from Vietnam to support the setting up company.

In 2020, due to the impact of the Covid-19 pandemic, the global economy shrank 3.3%. However, because of strong efforts in the introduction of vaccine production and vaccination, financial support programs in some countries, as well as more effective disease containment measures in many countries, this year’s global economy is forecasted to achieve marked improvements compared to 2020. According to a report by the International Monetary Fund (IMF) published in April 2021, the global economy is forecast to reach 6% in 2021 and 4.4% in 2022.

At this meeting, APEC Ministers focused on discussing trade policies to respond to the COVID-19 pandemic. Measures taken include ensuring open markets, promoting the smooth flow of trade in essential goods and services, and facilitating safe and effective vaccine supply chains.

Another important content of the 27th MRT Conference is to support the multilateral trading system, including the progress of implementing reforms of the World Trade Organization (WTO) and updating the progress of negotiations in many fields, such as fisheries subsidies, special and differential treatment, industrial subsidies, market access, agriculture, etc. The APEC Ministers expressed their hope that reform and progress in WTO negotiations will bring positive results, contributing to strengthening the role of the multilateral trading system as well as global and regional economic integration.

At the Conference, the Vietnamese representative also affirmed that Vietnam would actively participate in negotiations and discussions to resolve current issues in the WTO to contribute to the success of the 12th WTO Ministerial Conference. In addition, Vietnam also supports initiatives to promote the movement of goods and services in the region, both to help prevent the epidemic and to develop the economy.

Through the meeting, the participants hoped that in the coming time, in parallel with fighting the epidemic, the parties would also take measures to promote trade and investment to achieve the goal of economic development in the world.  Vietnam commits to support the global trade and policy to smooth investment into Vietnam through setting up company.

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Da Nang to boost investment attraction in high-tech projects, electronics industry, information technology

  Da Nang is a developed locality in central Vietnam which has 6 industrial parks in operation, with more than 500 investment project and Da Nang hi-tech park has attracted more than 21 investment projects in There are 10 FDI projects.

Industrial zones in Da Nang have attracted investment capital flows, especially FDI, contributing to promoting industrial development and accelerating the process of economic restructuring of the city towards industry and services. The industrial structure of the city has been transformed in the direction of increasing the proportion of clean industries with high levels of engineering and technology.

At present, the industrial production in the city is still stable but there is no breakthrough due to the failure to attract large-scale projects, production of products with high technology content and added value. Up to now, FDI projects that have attracted are mostly outsourcing, assembling, and using many unskilled labour. Therefore, the impact in source technology transfer is not high, the spillover effect and the connectivity between FDI and domestic enterprises is limited.

In addition, due to limited capital sources, the slow implementation of the High-Tech Park and IT Park leads to low business efficiency, then Da Nang always gives priority to attracting and giving incentives to set up company to invest in projects in high technology, information technology and electronics industries. Besides, the city encourages and supports investment projects to establish business in Da Nang, Vietnam the fields of supporting industries, machinery and equipment manufacturing, automobile production and assembly, means of transport, production of high value-added consumer goods (pharmaceuticals, cosmetics, functional foods, etc.), environmental industries. For the fields of production and processing, the city encourages investment projects to set up business in Da Nang, Vietnam with clean raw materials, economical use of resources and fuels, using clean technology, creating safe products with consumers, friendly with the environment. The city does not attract energy-intensive manufacturing projects, raw processing, using outdated technology, high risk of environmental pollution and projects that affect national security.

In addition to urgently implementing procedures for the establishment of new industrial zones and clusters, the city focuses on attracting investment in construction, completing technical infrastructure, functional areas especially essential works, housing for workers, cultural institutions, landscapes, the environment to promote attracting domestic and foreign investment into industries. At the same time, the city also speeds up the project of upgrading Lien Chieu Port, developing logistics service centers, building a convenient transport network for industrial development.

Regarding human resources, the city has implemented many policies to support and train human resources to meet the requirements of developing key industries such as: supporting enterprises to train managers and technicians, skilled workers both at Vietnam and abroad, supporting attract good managers, leading scientific and technical experts, highly skilled workers in the high-tech industries, information technology, supporting industries etc. In which, linking with major training centers in Vietnam and abroad for professions requiring high technical qualifications, long training periods. In particular, the city encourages company to set up in Da Nang, Vietnam with technology incubation activities, start-ups, investment in research and development activities, provide credit and provide credit guarantees for investment in the application of new and advanced technologies productivity, product quality, energy saving, cleaner.

With its policies to attract and develop, Da Nang hopes that many investors with economic potential in the fields above will invest in Da Nang in order to take advantage of their resources, bring the highest benefits to both investors and the city in the future.

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Background Check Service in Vietnam

  Vietnam is working on improving on the level of transparency. It is advisable that foreign investors take effort to learn about their partners before cooperating with them. In other words, it is important to understand an individual or enterprise before joining venture with them  in Vietnam so that  the investors may reduce the minimum risks that may occur as well as evaluating the possibility of cooperation in the future.

Despite the high risks of fraud, there are good opportunities in Vietnam. Namely, at the present, Vietnam has been strongly attracting direct investment capital from foreign investors. This leads to the demands of investigation as above - mentioned.

If the investors ignore this step of investigation, they may take heavy consequences because of their subjective. It may be a loss of money, time, effort and reputation.

Normally, most of the investors investing in Vietnam for the first time are using survey results from third parties, that is, the companies specializing in the investigation of market information.

Because, first, when investing in a whole new market, the investors do not understand clearly about the investment environment as well as the operating subjects in this new market. If the investors conduct the investigations themselves, the result may be inaccurate and not objective.

Second, the investors can save time as well as money to focus on other professional activities. With a team of experienced professionals, the companies specializing in this investigation field have full of capacity to meet all requests from the investors. Besides, time for the investigation is quick, and the price shall be much cheaper than the cost that the investors use to do their own investigation.

Therefore, if you are going to invest in Vietnam, we recommend you to conduct a thorough Vietnam background check, which includes the followings:

• Research for records of enterprises or record of individuals in Vietnam;
• Research for the reputation of the company or individual who shall be your business partners in Vietnam;
• Research for the history of public information about the company or individual.

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Some of commodities with growth potential in Vietnam through UKVFTA Agreement

  Since 2021, the UKVFTA Agreement is the Agreement between Vietnam and the European Union (EVFTA) had been come into force.

After the UKVFTA Agreement is signed, some goods in Vietnam, when exported to the UK market, if they meet the conditions, will enjoy tariff preferences from the Agreement, this is a good opportunity to Vietnamese goods are imported to the UK market.

In 2019, the UK imports mainly from Vietnam garment products. In which, the 10 largest garment products exported to the UK include: suits, jackets, blazers for women or girls, outerwear, gowns for women or girl; Jerseys, pullovers, cardigans, men’s or girls’ blouses, shirts and blouses, and other bras. Vietnamese garments entering the UK had to compete with those of other countries with tariff reduction schemes/agreements with the UK such as Bangladesh, China, Pakistan, and Cambodia, however, after UKVFTA takes effect, garment products from Vietnam will enjoy equivalent tariff benefits, thereby enhancing the competitiveness of textile and garment products from Vietnam.

Previously, with a double-digit export turnover for many consecutive years, Vietnam currently ranks 2nd in the world in footwear exports. Footwear export turnover of Vietnam continuously increased in the period 2010 – 2019, from 5.1 billion USD in 2010 increased by more than 3.5 times, reaching 18.3 billion USD in 2019.

Despite ranking 2nd in the world, Vietnam’s footwear exports account for only 8% of global exports. The UK market is a footwear export market with great potential but very competitive. However, compared to competitors such as China, the Netherlands, Italy, Belgium, and Germany, in 2019, Vietnam is still subject to the 2nd highest tariff among the 15 most footwear exporting countries to the UK, with average tax of 6.7%. Since the UKVFTA Agreement is implemented, the tax rate will be reduced according to the schedule and will be down to 0% depending on each item, thereby helping Vietnam’s footwear products to compete with products of other countries.

Besides, the seafood product is Vietnam’s key export industry, we have the advantage of both experience, production capacity and abundant supply. Import demand for seafood products of the UK is quite large, about 4.4 billion USD/year, in which the export value of Vietnam accounts for only about 6.7%. The main seafood export markets to the UK are: China, Ireland, Sweden …

The Covid-19 pandemic changed the trend of consumption and import from the UK. Consumers find seafood products that are easy to consume at home, easy to store, easy to process, convenient and with average low prices. Vietnamese frozen pangasius is a great advantage and a bright spot for the seafood industry to export to the UK today, as a leading supplier with the possible price and processing process of many Vietnamese enterprises is accepted by EU and UK market.

However, in order to bring Vietnamese products into the UK market, Vietnamese goods need to meet high standards of quality, aesthetics, hygiene and environment at competitive prices, ensuring the standards of origin, to be able to take the best use of the incentives provided by the Agreement. In addition, the choice of using the British pound or USD in negotiating and signing commercial contracts requires the company to closely monitor the exchange rate fluctuation between the British pound and the USD, from which to consider, and sign economic contracts that are most beneficial to their businesses.

Finding the right business partner in Vietnam is equally important as choosing the right products to export to the UK market to compete. It is suggested to undertake the research for the reputation of the company and each shareholders being corporate or individual, obtain public information of the company, and undertake background check for key personnel to access potential risks for cooperation.  Working with a reliable partner can help achieve economic benefits, save time and costs in business.

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Why foreign company should undertake policy and regulatory research before entering Vietnam market?

  Currently, with Vietnam’s investment attraction policies, annual foreign direct investment (FDI) into Vietnam is constantly increasing, after Covid time. According to the report on foreign direct investment in nine months of 2021 of the Ministry of Planning and Investment, as of September 20th, 2021, the total newly registered capital, adjusted and contributed capital to buy shares, purchase capital contribution (GVMCP) of foreign investors reached 22.15 billion USD, up 4.4% over the same period last year 2020. Realized capital of foreign investment projects is estimated at 13.28 billion USD, down 3.5% over the same period in 2020.

However, when entering a new market, especially the business environment of a developing country like Vietnam, foreign company always have to be cautious and should undertake research investment environment and target company for M&A, or business cooperation carefully. Besides socio-cultural factors, the differences in political and legal factors are important issues. In particular, it is really necessary to study policies and legal regulations before investing in order to mitigate risks when operating in the Vietnam market.

Each country has its own policies and independent legal system to manage domestic company as well as foreign company. Therefore, when foreign investors wish to invest in Vietnam, they need to learn about legal policies that affect their expected business activities. Specifically, through the study of laws, economic policies… investors will identify constraints as well as incentives for their expected type of investment. Foreign investors will have more proactive preparation steps and have a basis to consider the benefits and potential risks when making an investment in Vietnam.

Firstly, on the legal system related to investment activities, Vietnam has a fairly complete but complex regulatory legal system. Due to too many types of legal documents being issued, overlapping, inconsistent and inconsistent jurisdictions are quite difficult obstacles for foreign investors when penetrating the Vietnamese market. Therefore, studying the regulatory is necessary and really a big challenge for foreign investors.

Specifically, for the investment, Vietnam law only allows foreign investors to do business in a number of industries that satisfy market access conditions. Therefore, foreign investors need to learn specific regulations on conditions of establishment, capital contribution, capital contribution ratio, etc. to have a plan to prepare capital, and to choose the type of investment in accordance with the regulations of Vietnam law and expected investment scale.

In addition, foreign investors also need to learn about the regulations on the organization of different types of businesses in Vietnam. It will be the basis for foreign investors to determine the level of capital contribution, rights and obligations when participating in investment. From there, foreign investors will have reasonable considerations and considerations in line with the investment plan, avoiding passive situations or the establishment and capital contribution not achieving the set goals before investing.

Second, about policies for foreign investors, investors need to study policies related to tax i.e. corporate income tax rates, tax rates for personal income taxes, and policies. avoid double taxation between Vietnam and other countries in order to comply with tax obligations and ensure its interests in the process of conducting investment in Vietnam.

Furthermore, to ensure cash flow transactions, foreign investors need to have an understanding of Vietnam’s foreign exchange policy. Understanding the bank’s foreign currency buying and selling policies will help foreign investors flexible in implementing project activities. Policies and regulatory understanding in international bidding or bidding or goods or service supply service for state owned company are also matter of concern.  Labor policy is also an information that foreign investors need to know to ensure that the recruitment and payment of salaries and benefits are consistent with the policies of the state. Economic and financial policies are regulated by the State in each period such as policy on funding or lending capital, tax policy of the State, economic policy on foreign relations, foreign policy.

Policies, laws and politics have a great influence on investment activities in Vietnam. Through legislation, the state institutionalizes economic undertakings and policies into law, with provisions that are universally binding for all business activities.  The legal regulations and policies related to foreign investors in Vietnam are very complicated and changing over different periods. Therefore, before investing in Vietnam, investors need to learn, check the information and the authenticity of the information collected to ensure the authenticity and validity of those regulations and policies.

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.

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Vietnam and Japan cooperate for mutual development

  On November 25th, 2021, within the framework of Japan visit of Vietnamese Prime Minister – Mr. Pham Minh Chinh, the Prime Minister met the President of the Japan External Trade Organization (JETRO). During the meeting, the Prime Minister met leaders of many large Japanese corporations, businesses and banks and signed many investment cooperation agreements between Vietnam and Japan.

The parties highly appreciated JETRO’s practical and effective contributions to Vietnam in recent years in promoting investment cooperation. In the 10 months of 2021, Japan ranked 3rd among countries making investments in Vietnam, with a total registered investment capital of nearly USD 3.4 billion. Up to now, Japan is the second largest investor in Vietnam with over USD 63.9 billion (accounting for 15.8% of total FDI investment).

Vietnam encourages Japanese businesses to invest and set up company in Vietnam, apply investment registration certificates in Vietnam, expand investment cooperation in infrastructure, energy, manufacturing industry, high-quality agriculture, information technology, smart cities, financial and banking services, and banking, innovation. The Government is committed to accompanying the business community, supporting and creating all favorable conditions for business investment activities on establishment of company in Vietnam, bringing about more benefits for the parties, contributing to bringing Vietnam-Japan relations to a new level.

During this visit, the two countries signed more than 40 cooperation agreements with a total investment value of more than USD 3 billion. In addition to investment commitments, during this visit, there were many cooperation agreements on human resource training or other environmental protection solutions signed between ministries, sectors and businesses.

In the meeting, the Prime Minister of Vietnam also met and discussed with leaders of Nippon Foundation, MUFG Group, INFRONEER Group, JBIC Bank, Idemitsu Group and Mizuho Bank on market development, business, human resource training.

The Prime Minister shared with the difficulties of Japanese businesses in Vietnam over the past time, he said that Vietnam has changed to a safe and flexible adaptation, effectively controlling the epidemic. The competent authorities at all levels must discuss with businesses and citizen to deploy solutions appropriate to the situation, bring life back to normal, both open production and business, and effectively prevent epidemics. Vietnam also suggested that Japanese businesses corporate with Vietnamese in epidemic prevention and control, continue to contribute to improving institutions, training human resources, investing in hard and soft infrastructure, and cooperating in areas such as: climate change response, digital economy, green economy, circular economy…

In addition, to ensure investment and trade, Vietnam is expected to start reopening international flights in early December, including flights to Japan. This will make it easier for Japanese investors to make investment, market surveys, and deploy their investment projects.

By the visit, Vietnam wishes to further develop cooperation in investment, human resources and diplomacy with Japan, thereby creating favorable conditions for investors of the two countries to expand their business, form company in Vietnam and contribute to national economic development.

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