Set up business in Vietnam or invest in contractual forms?

Foreign investors could make direct investment in Vietnam through different ways.  They could set up business in Vietnam or invest in the contractual forms of: BCC, BO, BTO, and BT.

Types of enterprise for foreign investors to invest and set up business in Vietnam are as following:

Set up Limited Liability Company in Vietnam

Limited Liability Company is a form of enterprise which is established by contributing of members.  A member shall be liable for the debts and other property obligations of the enterprise within the amount of capital that it has undertaken to contribute to the enterprise.

Limited liability companies are regulated by two types:

–    One member Limited Liability Company is an enterprise owned by one organization or individual;

–   Limited Liability Company with two or more members is an enterprise owned by organizations or individuals, in which the number of members shall not less than two members and not exceed fifty.

Organizational and management structure of Limited Liability Company normally comprise of a Member’s Council, General Director or Director.

                                Set up business in Vietnam or invest in contractual forms?

Set up Joint Stock Company in Vietnam

Joint Stock Company is an enterprise which has charter capital divided into equal portions called shares.   The minimum number of shareholders shall be three and there shall be no restriction on the maximum number.

Shareholders shall be liable for the debts and other property obligations of the enterprise only within the amount of capital contributed to the enterprise.

Joint Stock Companies may issue all types of securities to raise funds.  Founding shareholders must together register to subscribe at least twenty per cent (20%) of the number of ordinary shares which may be offered for sale.

The main difference between Joint Stock Company and Limited Liability Company is the Joint Stock Company can raise funds by offering shares or securities.  In addition, an enterprise tends to join the Stock exchanges or public company must be a Joint Stock Company. Management system of Joint Stock Company is more complicated than Liability Company.

Set up Partnership in Vietnam

A partnership is an enterprise which must be at least two members being co-owners of the company jointly conducting business under one common name.  In addition to unlimited liability partners, there may be limited liability partners.

Unlimited liability partners must be individuals who shall be liable for the obligations of the company to the extent of all of their assets.  Limited liability partners shall only be liable for the debts of the company to the extent of the amount of capital they have contributed to the company.

Set up Representative Office of Foreign Trader in Vietnam

A foreign business entity or a foreign trader is allowed to establish Representative Office in Vietnam.

Representative office of a foreign business entity in Vietnam (referred as “Representative Office”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to survey markets and to undertake a number of commercial enhancement activities permitted by the law of Vietnam.

Representative Office will need to apply and obtain the establishment license; and have a seal bearing the name of the representative office.

Representative Office is not allowed to directly conduct profit making activities in Vietnam (i.e: the execution of contracts, direct payment or receipt of funds, sale or purchase of goods, or provision of services), but the representative Office is permitted to

- To operate strictly in accordance with the purposes, scope and duration stated in the license for establishment of such representative office;

- To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the Representative Office;

- To recruit Vietnamese and foreign employees to work for the Representative Office in accordance with the law of Vietnam;

- To open accounts in foreign currency and in Vietnamese Dong sourced from foreign currency at banks which are licensed to operate in Vietnam, and to use such accounts solely for the operation of the Representative Office.

Set up Branch of Foreign Trader in Vietnam

The Branch of a foreign business entity in Vietnam (referred as “The Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.

The Branch is permitted to conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

Investment by Signing Contracts in Vietnam

Beside having the options to set up business in Vietnam, investors could also choose to invest by not setting up a new entity.  Business co-operation contract (BCC) means the investment form signed between investors in order to co-operate in business and to share profits or products without creating a legal entity.

Build-operate-transfer contract (BOT) means the investment form signed by a competent State body and an investor in order to construct and operate commercially an infrastructure facility for a fixed duration; and, upon expiry of the duration, the investor shall, without compensation, transfer such facility to the State of Vietnam.

Build-transfer-operate contract (BTO) means the investment form signed by a competent State body and an investor in order to construct an infrastructure facility; and, upon completion of construction, the investor shall transfer the facility to the State of Vietnam and the Government shall grant the investor the right to operate commercially such facility for a fixed duration in order to recover the invested capital and gain profits.

Build-transfer contract (BT) means the investment form signed by a competent State body and an investor in order to construct an infrastructure facility; and, upon completion of construction, the investor shall transfer the facility to the State of Vietnam and the Government shall create conditions for the investor to implement another project in order to recover the invested capital and gain profits or to make a payment to the investor in accordance with an agreement in the BT contract.

Foreign investors may sign BOT, BT and BTO contracts with a competent State body to implement infrastructure construction projects in Vietnam. Typically, the contracts are for projects in the fields of transportation, electricity production, water supply, drainage and waste treatment.

The rights and obligations of the foreign investor will be regulated by the signed BOT, BT and BTO contract. The Government encourages both public- and private-sector investors to participate in BOT, BTO and BT in the following sectors:

(i)  Construction, operation and management of brand-new infrastructure facilities; and

(ii) Renovation, expansion, modernization, operation and management of the existing infrastructure facilities such as:

• Roads, bridges, tunnels, and ferry landings;

• Railway bridges and railway tunnels;

• Airports, seaports and river ports;

• Clean water supply systems; sewage systems;

• Wastewater, waste collecting and handling systems;

• Power plants and power transmission lines;

• Infrastructure works of health service, education, training, career training, culture, sport and offices of State agencies; and

• Other projects as may be determined by the Prime Minister

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French Businesses Build Earth Observation Station in Vietnam

French companies will exploit highway and building earth observation station in Vietnam. Moreover, many important cooperation agreements in the economic field have been signed this morning with the witness of heads of two countries.

On the sidelines of the talk between President Tran Dai Quang and President of France – Francois Hollande on September 6th 2016, representatives of FPT Joint Stock Company and Telespazio France (France’s leading company in the field of satellite system management and exploiting) have signed cooperation agreements with many important commitments.

Accordingly, the two sides will jointly collect and handle the data related to sea and land environmental monitoring, which are obtained from satellites and other facilities in order to create products and services on the platform of cloud computing. FPT and Telespazio France will also look towards the establishment of an EarthLab center in Vietnam, which is an Earth observation center from satellite. If established, this will be the 4th EarthLab center of Telespazio France in the world after France, the Republic of Gabon and Luxembourg.

A memorandum on the concession of exploitation right of the two projects Cau Gie – Ninh Binh and Long Thanh – Dau Giay is also signed between Vietnam Expressway Corporation (VEC) and Vinci Concessions Corporation (France). In addition to the concession of exploitation right of the two above highways, the two partners will also exchange experiences, consider opportunities for technology transfer, management, operation and exploiting of the highway. At the same time, both parties will jointly research, develop and propose plan to invest in new highway projects in Vietnam in the future.

Also on September 6th, 3 airlines of Vietnam that are Jetstar Pacific, Vietnam Airlines and Vietjet Air have also signed with Airbus – French aviation corporation the deals worth 6.5 billion USD for the purchase of aircraft.

Earlier, in Quang Ninh Province, Linagora Company (France) and Hanel DTT Company have signed cooperation memorandum on e-government development, training human resources on software at the localities. On the basis of technology platform and experience of Linagora, this company will cooperate with DTT Hanel to support Quang Ninh province evaluate e-government model, consulting on solutions to improve operational efficiency of this system; as well as help Quang Ninh to build e-mail system with more than 20,000 users and the international tourism and foreign affair portals.

Do not just stop at the building of e-government, the two parties also towards building an information-based urban based on open source platform of Vietnam and France.

The above activities took place within the framework of the visit of President Francois Hollande. He was the 3rd President of France to visit Vietnam after the visit of President François Mitterrand in 1993 and President Jacques Chirac in 1997 and 2004.

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.

Readmore: http://www.antconsult.vn/news/french-businesses-build-earth-observation-station-vietnam.html

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WSJ: “Made in Vietnam” Goods will Soon Popular Globally

Numerous foreign investors relocating factorties to Long An (Vietnam) to set up business and take advantage of young and low cost workforce.

This province has a dozen industrial zones. As of May 2015, they have attracted 3.67 billion USD foreign investments, 40% of which is poured into textiles sector.

The economists said that this process could accelerate if the Trans-Pacific Partnership agreement (TPP) is agreed. This agreement will reduce import tariffs on many goods exchanged between member states, mainly to benefit the developing country like Vietnam or Malaysia – countries where growth rate depends heavily on exports.

Wages soared and labor shortages in China are making Vietnam become more attractive. Last year, FDI into Vietnam have reached 12.4 billion USD, increase by nearly 25% compared to 2009. One of the largest investors as Samsung Electronics of South Korea whom have plan to double investment in electronics manufacturing in Vietnam.

If TPP takes effect, Vietnam economy will be the biggest beneficiaries because this country has more opportunities to access the large consumer market. TPP will give member countries privileged access to the US and Japan.

The Government of Vietnam is estimated that TPP could bring the economy 33.5 billion USD over the next decade, equivalent to a fifth of current GDP. The export turnover of the main industries, such as textiles and footwear, will increase by 46% to 165 billion USD in 2025 due to tax-free imports into other countries.

In Long An, the 3-storey factory of Avery Dennison is preparing for the influx of orders on clothing labels and price tags. Dozens of concrete houses for workers are also being built – a signal that many other manufacturers are also coming here.

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.

Readmore: http://www.antconsult.vn/news/industry/manufacturing/wsj-made-in-vietnam-goods-will-soon-popular-globally.html

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Vietnam Is the Focus of Foreign Investors

 

With favorable conditions in macroeconomic, political and social, Vietnam is a potential destination for setting up company and conduct the M&A activity.

In Vietnam, the growth of the retail market and the entry of international brands, while the average income of consumers is increasing along with stable economic conditions are creating motivation for retail market. In addition, e-commerce sector is growing and accounts for a large part of total retail sales, although traditional forms of shopping still being preferred by consumers.

Moreover, the liberalization of the retail market in 2009 created favorable condition for foreign brands to join and domestic brands are constantly expanding in order to maintain market presence. The most developing sectors of the retail segment are food & beverage (F&B) and consumer products.

Vietnam Retail Market

Prospect for the Asian retail market is very positive, the average growth rate in retail sales is 8.5% in the last 5 years. The number of tourist increases is promoting retail activity in the shopping venues with a prime and convenient location. Although the development of e-commerce in the region is now very noticeable, but the traditional forms of shopping still has an important position in the market. The store owner will need to focus on improving the shopping environment and concerning about the customer experience in order to increase competitiveness.

According to Cushman & Wakefield, in the next 5 to 7 years, approximately 1.5 million m2 of retail floor space will enter the Ho Chi Minh City market of retail space, bringing the total number of retail area to nearly 2.5 million m2. The retail market will be busy, especially in the affordable and intermediate segments. The powerful foreign retail corporations will consider Vietnam as potential market in the region, demonstrating that in the period 2014 – 2015, the retail and consumer goods are the mainstream of M&A activity in the world, accounting for 36% of the total value of M&A activity in Vietnam.

In addition, Vietnam ranked 32nd in the list of nations that have the shopping streets with the most expensive rent cost in the world, in the context of Vietnam is preparing to join a series of free trade agreements such as AEC and TPP, then this will cause domestic retailers to face with many difficulties because rent cost plays the 2nd important role (after the location) in business strategy. When foreign retailers have strong financial resources, they can afford to hire premises with the most favorable location in the market.

Vietnam Tourism Real Estate Market

Many promient investors have visited Vietnam to explore the market potential. In the real estate segment, Kevin Green, one of British’s leading millionaires has just come to Vietnam to experience the market. He interested in tourism real estate and especially Sapa when the Hanoi – Lao Cai highway has completed. Moreover, the Fansipan cable car when completed will attract huge number of tourists to come here. Convenient transportation is a golden opportunity for tourism real estate.

Sapa is currently attracting around 2.5 million visitors. This figure is expected to rise to 5 million in 2020 due to infrastructure connections between Sapa and other areas are increasingly improved.

When talking about investment opportunities in tourism real estate in Sapa, Kevin Green said that Sapa has a lot of potentials for investment. He interested in the resort project “Sapa Jade Hill”, which is currently being developed. He also works with investors to be able to offer this product to abroad market, while completing the procedure to purchase Sapa Jade Hill villa for long term investment.

Reportedly, Sapa Jade Hill is a key project in Sapa, developed by Truong Giang Sapa and by Dai Hung Investment and International Trade JSC (GBI Land) with a total investment of nearly 2,000 billion USD. This project has completed Phase 1 with 19 service villas, which was sold out and handed over the red book to customer.

In addition, in the Property Expo Conference was held in Hanoi, Kevin Green and enrichment experts have shown a huge shift of capital flow from foreign companies, factories to Vietnam, then this is the most ideal place for real estate investment within the next 5 -10 years. The employment index is an indicator of the increase in value of real estate, as the number of workers in the industrial zone of Vietnam is on the rise.

Readmore: http://www.antconsult.vn/set-up-business-venture-in-vietnam/vietnam-is-the-focus-of-foreign-investors.html

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Vietnam Prepares for Wave of Russian Tourist

Vietnam is preparing to welcome waves of Russian to enter Vietnam tourism market, set up tour operator company and also conduct M&A activity in tourism industry.

Currently, there were complicated situations occurred in the favorite destinations of Russian tourists such as Egypt, Turkey and Goa of India, the Russian Government recommend, forbid or even stop the tours and flights to these destinations. Vietnam, Cuba and China have been recommended as safe destinations for Russian citizens to travel.

The A321 of Kogalymavia Airlines (Russia) had an accident in the Sinai Peninsula (Egypt) on October 31st killed 224 people on the flight. The Security Agency of the Russian Federation determined that this is a terrorist attack after finding traces of explosives in the debris. Soon after, Russian President Vladimir Putin ordered the suspension of all flights from Russia to Egypt.

On November 11th, Russia officially banned all aircraft of the national airline of Egypt (Egypt Air) and advised their citizens should not come here. This led the Egyptian tourism industry hit hard. According to Al-Ahram newspaper in Arabic of Egypt, there were 72,000 Russian tourists have left this country after the tragedy. Egyptian Tourism Minister predicted that in the last 3 months of 2015, their tourism industry could suffer over 820 million USD losses.

Goa, a state in India is the favorite destination of Russians in the new year holiday continues to go to “blacklist” due to threats to local security problems as well as the increase in prices at tourist sites.

The crisis started in 2014 when the Ruble devaluation, the number of Russian tourists travel to Goa halved. The number of 2016 will continue to decline. The negative impacts caused Transaero Airlines, which often serving 50% of guests are Russians goes bankruptcy. According to statistics, Russian tourists accounted for nearly 50% of foreign visitors to Goa, with nearly 250,000 visitors in 2013.

According to the Wall Street Journal, the House of Russia published a list of the safe destinations, which encouraging its citizens to come after a series of favorite destinations are included in the “blacklist”. In the three alternative candidates, there was Vietnam.

At the Russia – Vietnam business forum occurred last November in Moscow, Russia suggested that Vietnam should prepare to welcome waves of tourist to come here after many difficulties in Egypt. Moreover, Vietnam should improve the mechanisms to support the Russian tour operators to enter the Vietnam tour market.

This is good sign for Vietnam’s tourism industry after the number of Russian tourists has reduced from the end of 2014 due to the Ruble devaluation causing them to tighten spending. According to the Vietnam National Administration of Tourism, as of November 2015, there are 297,384 Russian visitors come to Vietnam, reached only 90% compared to the same period last year. However, from October, the number of Russian arrivals to Vietnam has increased slightly.

The high season of Russian for traditional wintering lasts from October to the end of March next year. Therefore, it is time for Vietnam to attract the large number of tourists coming from Russia. Moreover, it is particularly advantageous in the context of many favorite destinations of the Russian are no longer safe and Vietnam is recommended by the Russian Government.

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.

Readmore: http://www.antconsult.vn/news/industry/aviation/vietnam-prepares-for-wave-of-russian-tourist.html

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Numerous Furniture Companies Moved from Indonesia to Vietnam

 

Since early 2015, there were 6 foreign furniture companies moved their factories from Indonesia to Vietnam.

There is a large furniture company invested by Taiwan in Sidoarjo – East Java has decided to move their factory to Vietnam. This company was started dismantling and will move in early 2016.

Companies from Taiwan have been operating for 3 years in Indonesia then want to switch to manufacturing in Vietnam because of the labor cost and the minimum wage. The minimum wage in Vietnam has increased by 150% in the past 3 years. After considering the costs, they decided to move to Vietnam to operate more efficiently. Moreover, manufacturing in Vietnam is 35% more efficient than in Indonesia.

Readmore: http://www.antconsult.vn/set-up-company-in-vietnam/numerous-furniture-companies-moved-from-indonesia-to-vietnam.html

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Signing of TPP in 2016 Will Promote FDI into Vietnam

The investment flow will be strong into Vietnam for setting up company, factory once the commitments in the TPP agreement takes effect.

The Trans-Pacific Partnership (TPP) agreement will be signed on February 4th 2016 in New Zealand. In order to capture the opportunities that it will bring, many foreign companies have invested in Vietnam.

The parties have also agreed to a term of 2 years for national parliaments to ratify the agreement. Thus, the TPP can be effective in 2018.

12 members of TPP include: US, Japan, Vietnam, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Canada, Peru and Singapore. The current country members of TPP accounted for 40% of the world GDP and 26% of global trade merchandise. The agreement will not be effective without the participation of both the US and Japan.

To this point, it is probably not debatable about the opportunities that the TPP brings to Vietnam, especially in trade development and investment attraction. When the trade is opened thanks to the commitment to eliminate tariff barriers between the 12 country members, it will impact to investment, not only in internal, but also from other investment markets.

Manufacturing Companies Set up Business in Vietnam

HanesBrands (NYSE: HBI), US’s leading textile corporation has recently announced raising total investment in Vietnam market to nearly 55 million USD, increase by more than 11 million USD compared to 2014. After 8 years of operation in Vietnam, they have 3 factories located in Hung Yen and Hue.

HanesBrands is not the only business that can see these opportunities in Vietnam when the TPP was signed. Many large enterprises of textile industry have decided to expand investment in Vietnam to capture the opportunities brought by the TPP.

And it is not only the textile industry, there are a lot of examples to prove that foreign investors are looking at Vietnam as a tremendous opportunity to invest in. The appearance of high-tech giants such as Samsung, LG, Microsoft, Jabil… with investment capital of up to tens of billions USD, of which only the capital of Samsung has reached over 14 billion USD is the clearest evidence. The presence and moreover the expansion of the foreign retail giants such as Aeon, Auchan, Metro Cash & Carry, Big C, Lotte… are also the typical examples. More than 290 billion USD of FDI capital has been committed to pour into Vietnam during the past years.

According to Nikkei news agency, Pou Chen Company, which is the world’s largest footwear manufacturer, specializing in providing goods for two famous brands that are Nike, Adidas and many other major brands, are planning to move their factories to Vietnam to take advantage of TPP.

By the end of September 2015, the number of footwear manufacturing by Pou Chen in Vietnam accounted for 42%, increase by 39% compared to the same period in 2014. The total annual production of Pou Chen (headquartered in Taiwan) is more than 300 million pairs of footwear, sales from footwear and garment accounted for 75% of total revenues of the company.

According to the representative of Pou Chen, the company has gradually shifted production bases to Vietnam since 2012 as the labor costs in China are rising rapidly in recent years. They see the long-term stability in Vietnam in both economic and politics.

Pou Chen is not the only company that moving production bases to Vietnam. Currently, many Taiwanese companies are actively investing in Vietnam, including competitor of Pou Chen that is Feng Tay (over 50% of Feng Tay’s production is concentrated in Vietnam).

Besides, Far Eastern New Century Company (FENC) has also planned to pour 307 million USD to a new factory in Vietnam in June 2015 and is expected to start production in the second half of 2016.

It is clear that footwear suppliers are actively moving their factories to Vietnam to capture the opportunities that the TPP will bring. Once the TPP is approved, the goods from the members in TPP export to the US market will enjoy preferential tariffs. As a result, the famous international brands like Nike and Adidas will prefer Vietnam as the location of their factory.

In this context, the TPP would be a “catalyst” for this capital flow to flow stronger. The catalyst is not just come from the opportunity of an open trade market, but also from the commitments of the TPP members relating to investment.

According to Mr. Hoang Manh Phuong, Deputy Director of Legal Affairs (Ministry of Planning and Investment) – the one who participating in the TPP’s negotiating session related to investment – said that there are a lot of commitments bringing big advantages for foreign investors in Vietnam. TPP allows investors to invest and do business in all sectors, except the one that is still in the reserved category.

Readmore: http://www.antconsult.vn/set-up-business-venture-in-vietnam/signing-of-tpp-in-2016-will-promote-fdi-into-vietnam.html

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Vietnamese Restaurant Chain Attracts Foreign Funds

To meet the demand of growing of young consumer, the food and beverage services in Vietnam have been attracting investment in setting up business, M&A activity.

The Vietnam business community recently is not out of surprise when a series of Vietnamese restaurant chains are invested by famous overseas funds with millions of USD.

The start-up project with the restaurant chain named “Kafe Group” by Chi Anh Dao, a female chef and businesswoman born in 1984 has just got the attention by receiving an investment amount of 5.5 million USD (over 120 billion VND) from Cassia Investments – an investment fund from Hong Kong (China).

Previously at the end of 2014, the chain of 100 restaurants named “Mon Hue” (Hue Dishes) of Huy Vietnam Food Processing Co., Ltd has been invested by Franklin Templeton fund, a fund managed by billionaire Mark Mobius with 11 million USD investment capitals.

According to the owner of “Mon Hue” restaurant, this food chain also receives investment capital from 4 other investors from Singapore, Hong Kong (China)… Currently, this chain includes 3 brands: Mon Hue, Rice Express and Mr. Hung Noodles.

Before KAfe Group and Huy Vietnam, Golden Gate – including such brands as Kichi Kichi, Sumo BBQ, Ashima, Vuvuzela… received the investment flow with 2.6 million USD from Mekong Capital Fund in 2009. Next, Standard Chartered Private Equity Fund from Standard Chartered Bank has spent 35 million USD to repurchase these shares.

Besides buying shares of Vietnam companies, the culinary market has continuously welcome many foreign brands opening restaurant in Vietnam such as Tokyo Deli, Coca Suki, Sakura, Oshima…

According to experts, investing in culinary market is the trend of modern business model. In particular, food chains seem to be less affected by the economic downturn as they meet the indispensable needs of life. Therefore, this food and beverage service sector in Vietnam is always attractive to funds.

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.

Readmore: http://www.antconsult.vn/investor/us-investor/vietnamese-restaurant-chain-attracts-foreign-funds.html

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M&A in Vietnam: Strong Flow from Thailand

 

It is expected to have a strong capital flow from Thailand to Vietnam in the coming time to through M&A activities.

According to a research, the main trend of the M&A market Vietnam in the period of 2015 – 2016 and subsequent years have been focusing on some key sectors: retail, consumer goods, real estate, finance – banking. Notably, in the coming time, investors from Thailand will become “dual key” in its role as the acquisition of the project, and incorporation in Vietnam.

Not until now, it has been realized that Thai is serious rival in the M&A market. From the period of 2010 – 2011 till now, the Thai people through their corporations like Charoen Pokphand, TCC Group, PTT, Siam Cement (SCG), BJC, Central Group… by the way of M&A or direct investment have quietly entered in Vietnam’s retailing, building materials, gas sectors.

M&A Trend from Thai Investors in Vietnam

In 2012, SCG has spent 240 million USD to acquire 85% stake in Prime Group. Currently, SCG has nearly 20 subsidiaries and associated companies in Vietnam. As of June 30th 2015, the total asset value of SCG in Vietnam reached approximately 716 million USD… In the next 5 years, SCG will spend 6-8 billion USD for countries in the region, in which a large part will be poured into Vietnam.

At the end of 2014, Berli Jucker Pcl (BJC) announced to spend 879 million USD to acquire Metro Cash & Carry Vietnam. Earlier, in 2013, BJC has acquired 60 stores of Family Mart and buy 65% ​​stake in Thai An Group, who owns a network of 200 distributors, 2,500 wholesalers and thousands of retailers in traditional markets.

In 2014, F&N Dairy Investments Pte Ltd (F&N), a subsidiary of BJC bought shares of Vinamilk, raising the percentage of ownership in Vinamilk to 11.04%, reaching a value of about 591 million USD. The owner of BJC also offered to hold 40% stake in Sabeco and pricing SABECO at approximately 2.4 billion USD.

In addition, the Central Group through its subsidiaries – Power Buy bought 49% stake in NKT technology development and new solution JSC – the owner of Nguyen Kim Trading Company, which was priced at 200 million USD.

According to a statistics from HSBC Thailand, the Thai companies were involved in at least 377 projects in Vietnam with a total registered capital of 6.7 billion USD, becoming the 10th largest investors in Vietnam market and their ranking are improved quickly. In particular, Vietnam and Thailand have set a target of raising bilateral trade to 15 billion USD by 2020.

The M&A trend of Thai corporations are clearly showed in 2014 – 2015 with the typical deals of PowerBuy – Nguyen Kim and BJC – Metro. Through M&A activities in the retail sector, Thai investors want to reach and grasp the distribution market of Vietnam.

M&A in Retail, Consumer Goods, and Distribution Services in Vietnam

The areas interested by Thai investors from 2011 to now are the retail and consumer goods sectors. The reason is Vietnam is a vast potential market for the retail sector and consumers goods. According to the research from Statista (Germany), Vietnam’s retail market sales could reach 100 billion USD/year in 2016.

The wave of M&A from Thai investors to acquire retail and consumer goods sector are to capture the opportunities when Vietnam participated in the agreements of free trade, as well as the formation of the ASEAN Economic Community (AEC) at the end of 2015.

Thai investors are increasingly buying supermarket chains, making every effort to catch the opportunities brought by AEC when Thailand goods imported into Vietnam with the tax rate equal 0%.

According to CEO of HSBC in Vietnam, in the next 5 years, major corporations of Thailand will turn Vietnam into a production center for re-export of Thai products to other countries because Vietnam has a cheap and skilled labor force.

It can be seen that Vietnam has welcomed a strong capital flow coming from large corporations of Thailand with fast and powerful acquisition speed. Thai investors show no sign of stopage. In addition to the retail and consumer goods sectors, some other sectors are also getting the attention of investors from Thailand as oil and gas, infrastructure, transportation, agriculture…

These signals indicate that Vietnam is still an attractive destination for the capital inflow from Thailand. In the short term, M&A market will continue to witness the M&A activities that Thai investors continued to act as the purchaser. M&A due diligence assessment on Vietnam targets will be needed to ensure the success post-merger intergration.

Readmore: http://www.antconsult.vn/foreign-investor-in-vietnam/ma-in-vietnam-strong-flow-from-thailand.html

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Business Formation

ANT Consulting provide the advice and service to assist during the market entry.

Vietnam encourages investors to invest in Vietnam through setting up economic organization, contributing capital or acquiring contribution capital, shares in economic organization, invest under Public Private Partnership (PPP) agreement, Business Cooperation Cooperation (BCC).

Under each form, the investors have to follow the regulations and procedures under the law on investment with specific on investment conditions, timeline to exploit best of opportunities.

Limited Liability Company

Joint Stock Company

Partnership

Representative Office of Foreign Trader

Branch of Foreign Trader

Investing By Signing Contracts

Let ANT Consulting help your business in Vietnam.

Read more: https://www.antconsult.vn/what-we-do/market-entry/business-formation

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Vietnam and Japan cooperate for mutual development | ANT Consulting

 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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Many “American eagles” expressed their desire to invest and expand into Vietnam | ANT Consulting

 After the Covid-19 pandemic with unremitting efforts, Vietnam has affirmed its capacity in all aspects with other countries, especially the capability to fight against Covid and quick return focus to business. Therefore, Vietnam is becoming an attractive investment destination for global investors including American companies. With the stable political situation, young and abundant human resources and commitment to investment facilitation from the Vietnam Government, it has become a great motivation for American investors to choose Vietnam as a safe and effective investment destination to set up company and expand business in Vietnam.

On the occasion of Vietnam Prime Minister Pham Minh Chinh’s business trip to attend the Special Summit to celebrate the 45th anniversary of ASEAN- America relations, many big American enterprises such as Intel, Apple and Google have shared their desire to expand the supply chain, cooperate in technology and move production to Vietnam by coordinating with Vietnamese enterprises that have suitable capability to participate. This is also considered a great opportunity for Vietnam to interact with the world’s leading advanced economy to improve its labor capacity and is a potential market for workers to learn and demonstrate their abilities.

Specifically, Apple wants the Vietnamese Government to continue to have preferential policies to encourage high-tech American enterprises to develop business and invest in Vietnam. On the other hand, Apple also affirmed that it will actively consider the Prime Minister’s proposal on increasing the number of domestic suppliers and raising the rate of using domestic services and goods higher in Apple products in the near future.

In addition, Intel also showed its interest in the Vietnamese market by emphasizing the very important role of Vietnam and Vietnamese factories in Intel’s production chain. Moreover, Intel also highly appreciates Vietnam’s infrastructure and human resources as potential conditions for technology enterprises to continue to expand their operations. Especially in today’s volatile world, Intel’s expansion of investment in Vietnam is a strategic solution.

Currently, Microsoft is working with Vietnam’s Ministry of Information and Communications to deploy digital skills programs both private and public sector, and data science development in Vietnam. Accordingly, technology will help enhance transparency and trust, prevent and fight corruption. Vietnam has a young population, a dynamic country, ready to receive new technologies Microsoft wishes to strengthen cooperation with Vietnam in the fields of digital transformation, ensuring network security, helping Vietnam achieve the goal of reducing emissions to zero by 2050 and contribute to helping Vietnam build a green economy, digital economy, and sustainable development.

In addition, in order to attract foreign investment, the Prime Minister emphasized that the “sincerity, trust and responsibility” stance, “harmonious benefits, shared risks” between big American and Vietnamese enterprises will help the relationship between the parties is stable and good. In addition, to implement the commitments it has joined, Vietnam is continuing to build and perfect institutions suitable to Vietnam’s conditions and circumstances. Moreover, the development of strategic infrastructure such as digital transformation infrastructure, transport infrastructure, energy infrastructure, healthcare infrastructure… will also be the focus of completion to attract foreign investors to establish business in Vietnam.

Besides, Vietnam continues to improve the open and stable business environment, and effectively handle administrative procedures. In particular, digital transformation will help reduce direct transactions, fight negativity, trouble, corruption, save time and costs for people and businesses. Therefore, Vietnamese businesses need to innovate in both capacity and organization to capture this opportunity well.

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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Business Formation

 ANT Consulting provides the advice and service to assist during the market entry.

Vietnam encourages investors to invest in Vietnam through setting up economic organization, contributing capital or acquiring contribution capital, shares in economic organization, and investing under Public Private Partnership (PPP) agreement, Business Cooperation Cooperation (BCC).

Under each form, the investors have to follow the regulations and procedures under the law on investment with specific investment conditions, timeline to exploit best of opportunities.

Limited Liability Company

Joint Stock Company

Partnership

Representative Office of Foreign Trader

Branch of Foreign Trader

Investing By Signing Contracts

Let ANT Consulting help your business in Vietnam.

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Quang Ninh Is About to Receive 40 Million USD of FDI From Korean Investors | ANT Consulting

Recently, Chairman of Bumjin Electronic Company from Korea had a meeting with Chairman of Quang Ninh People’s Committee on the implementation of the project in Quang Yen town.

Accordingly, the Company is preparing to deploy the investment project to build audio equipment factory in Dong Mai Industrial Park, Quang Yen Town, Quang Ninh Province with a total investment of 40 million USD. It is expected that the project will be started construction and go into production in December 2019.

Chairman of Quang Ninh People’s Committee affirmed that the investment project of Bumjin Electronic Company is the area that Quang Ninh province is prioritizing to attract investment. To ensure on time schedule that the company has set, Quang Ninh province confirmed to provide maximum support during project implementation.

He also shared with investors that Quang Ninh province is proposing the Government to allow the establishment of Quang Yen coastal economic zone with better preferential policies. At the same time, Chairman of Quang Ninh People’s Committee expressed his desire that besides the project implementation, Bumjin Electronic Company will become a bridge to connect Quang Ninh and Korean investors, contributing to promote investment activities of Korean businesses in Quang Ninh in the future.

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Vietnam could become the seventh largest exporter to the US in 2019 if it can maintain the growth rate of 40.2% as in the first quarter.

According to the data announced by the US Bureau of Statistics, in the first three months of 2019, the export speed of goods from Vietnam to the US increased by 40.2% over the same period last year. This is the fastest growth rate among the 12 largest exporters to the US in 2018. Behind Vietnam is Korea with a growth rate of 18.4%. On the other hand, Chinese goods to the US fell 13.9% amid increasing trade tension between the two countries.

If maintaining the growth rate in the first quarter for the rest of 2019, Vietnam could surpass the big ones like France, England, Italy and India to become the 7th largest commodity exporter for the world’s largest economy, with an estimated value of nearly 69 billion USD. Last year, Vietnam ranked 12th with the value of goods exported to the US reached more than 49.2 billion USD.

According to the statistics of the General Department of Customs, in the first 4 months of this year, the US continued to be the largest importer of Vietnamese goods such as textiles and garments with value of 4.42 billion USD, increase by 9.1% compared to the same period last year; footwear (2 billion USD), increase by 13.5%; machinery, equipment, tools and spare parts increase by more than 54% (1.3 billion USD); wood and wood products (1.42 billion USD), increase by 34.7%.

In early May, US President Donald Trump also mentioned that producers could choose Vietnam as a destination after leaving China. According to the Fitch credit rating agency, there were signs that Vietnam could benefit from the impact of trade tension from the flow of trade out of China.

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