When Wealth Management service in Vietnam will start

 

Why wealth management service in Vietnam is needed now?

Wealth management service in Vietnam is essential for individuals and families seeking to effectively manage and grow their financial assets. Here are several reasons why such services are needed:

Tailored Financial Planning: Wealth management services provide personalized financial planning that takes into account an individual’s unique financial goals, risk tolerance, and investment preferences. These services help clients create comprehensive wealth management strategies that align with their long-term objectives, whether it’s wealth preservation, retirement planning, estate planning, or funding education for future generations. Wealth managers have the expertise to navigate complex financial landscapes, ensuring that clients make informed decisions and optimize their financial resources.

                       When Wealth Management service in Vietnam will start?

Diverse Investment Opportunities: Vietnam’s economy offers a range of investment opportunities, including the stock market, real estate, bonds, mutual funds, and more. Wealth managers possess in-depth knowledge of these investment avenues and can help clients identify suitable opportunities based on their risk profiles and financial goals. They conduct thorough research, monitor market trends, and provide insights into potential investment options. By leveraging wealth management services, individuals can access a diverse range of investment opportunities that align with their financial objectives.

Risk Management and Asset Protection: Wealth managers play a crucial role in mitigating risks associated with investments. They provide guidance on portfolio diversification, asset allocation, and risk management strategies to minimize potential losses. Wealth managers also stay updated on regulatory changes, economic trends, and geopolitical factors that may impact investments. Through proactive risk management, they aim to protect and preserve the wealth of their clients, ensuring a secure financial future.

Tax Planning and Optimization: Wealth management service in Vietnam encompasses comprehensive tax planning strategies. Wealth managers have a deep understanding of the tax landscape and can identify tax-efficient solutions to optimize clients’ financial positions. They help clients navigate tax regulations, utilize available tax incentives, and minimize tax liabilities. By implementing effective tax planning strategies, individuals can maximize their after-tax returns and preserve their wealth.

Estate and Legacy Planning: Wealth managers assist clients in structuring their estates and developing comprehensive succession plans. They provide guidance on wealth transfer, philanthropy, and establishing trusts to protect assets for future generations. Wealth managers work closely with clients’ legal advisors to ensure that estate planning documents align with their financial goals and comply with applicable laws and regulations. By addressing estate planning early on, individuals can secure their legacies and ensure the smooth transition of wealth.

When Wealth Management service in Vietnam will start?

The private banking market serving the super-rich is relatively new in Vietnam, although the growth rate of the rich in our country ranks third in the world. Private Banking is a specialized banking service model for customers with large assets, including asset management solutions and all financial and non-financial needs of customers such as investment, inheritance plan, residency procedure, health care, insurance.  This could be considered wealth management service in Vietnam for high net-worth individuals in Vietnam.

With the specificity of serving high net-worth individuals (HNWI) (in some Vietnam banks’ definition, those with net assets of over one million USD), the implementation and operation of Private Banking comes with many challenges.

Banks implementing Private Banking in Vietnam need to possess strong financial potential and the ability to connect to a global partner network. Moreover, the bank also has to build a team of highly specialized and experienced advisors in many fields to accompany customers in important financial decisions.

Serving the rich requires strict and thoroughness, hence Private Banking is still a relatively new playground in Vietnam, even though the growth rate of HNWIs in our country is currently 12.7% per year, ranking 3rd in the world, based on data from Wealth Report 2021.

Currently, some banks have initially provided high-end customer service products, but mainly stopped at priority service, premier service.  The motivation for the bank to start deploying Private Banking service comes from the intrinsic strength i.e. history of the brand, client base, service level…together with the global investment ecosystem in many fields and experience.

The development of international standard Private Banking service in Vietnam requires the pool of staff of highly qualified asset management directors and investment consultants, well-trained by the world’s leading consulting company, and accredited by international financial institutions i.e. Fitch accredition.

The Private banking service and its ecosystem of global partners provide a diverse product portfolio and utility system to meet the needs of financial transactions and specialized investments for HNWI customers.  In addition to specialized financial transactions, intensive investment with advice from experts, the Private Banking also offers exclusive privileges for high-class customers such as healthcare, high-class personal assistant, providing information, consulting support and connecting to use services around the world, enjoy diverse lifestyle privileges, outstanding class such as golf, lounge, quick check-in at the airport, spa, fine-dining, vacation.

Only a limited bank in Vietnam now could really claim themselves providing Private Banking service in Vietnam market, however this playground will soon join players due to its market potential and the growing of the number of HNWI in Vietnam.  It is important to promote this service so as the super rich in Vietnam would be able to access to service that meet their needs in Vietnam instead of going abroad to be served.

How professional consultants in Vietnam could help grow wealth management service in Vietnam?

In summary, wealth management service in Vietnam is crucial for individuals and families looking to navigate complex financial landscapes, optimize their investments, manage risks, minimize taxes, and secure their financial legacies. By partnering with experienced wealth managers, professional consultants in Vietnam with understanding of business and law, individuals can benefit from personalized strategies tailored to their unique circumstances, enabling them to achieve their long-term financial objectives with confidence.

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Banking Sector in Vietnam

 

1. Overview

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

2.Banking system

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

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

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

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

3.Potential opportunities for foreign investment

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

- Government effort of reforming banking system

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

- Trade agreements facilitate foreign ownership and investment

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

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

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

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

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

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

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Vietnam attracts Korean investment in research and development

 

In recent times, the investment shift out of China is being carried out by many international investors. Vietnam is a country that has enough factors to receive investment shift, especially in the manufacturing sector with low-cost labor and low expenses. However, at present, Vietnam has changed its method of attracting FDI, instead of taking advantage of low expenses and low-cost labor, Vietnam now aims to take advantage of highly skilled workers and many incentives in research and development activities.

Recently, many Korean investors have plans to change production lines, invest in research and development (R&D) company in Vietnam. Previously, Korean businesses mainly invested in industries such as apparel, bags, and footwear, however, recently many Korean investors have made investments in industries such as high electronics, information technology, automotive and construction equipment, distribution and service industries.

Currently, Korea is the leading country in the list of countries investing in Vietnam. Previously, a joint venture between Korean and Vietnamese businesses proposed to the Dong Nai province government to invest and build a Vietnam-Korea Hi-Tech Park with an area of ​​300 hectares, total investment capital of 150 million USD. The project aims to attract high-tech enterprises from Korea as well as other developed countries to set up company in Dong Nai in order to create quality product values ​​in the fields that shape the industrial revolution 4.0. The project is expected to attract 2 to 3 billion USD of investment capital in about 6 – 9 years after it is put into operation.

In addition, Korean investors have also cooperated with Vietnamese partners to build a Science and Technology Industrial Park with an area of ​​900 hectares in Binh Duong. In addition, many Vietnamese investors have actively worked with high-tech manufacturing partners to promote the participation of key partners as well as prepare the first customers.

With the policy of attracting investment in high technology and in particular the Investment law 2020, there are special investment incentives for newly established investment projects (including the expansion of the establishment project), the centers for innovation, research and development centers with total investment capital of 3,000 billion VND (about USD 150 million) or more, disbursing at least 1,000 billion VND within first 03 years from the date of issuance of the Investment Registration Certificate or the approval of the investment policy; a national innovation center established by decision of the Prime Minister; Investment projects in sectors or trades specially given investment incentives with an investment capital of VND 30,000 billion (about USD 1.5 billion) or more, with a minimum disbursement of VND 10,000 billion within 03 years from the date of issuance of the Investment Registration Certificate or the approval of the investment policy” will be given special incentives in accordance with the provisions of corporate income tax and land law.

As the investment attraction and investment shift preparation of Korean R&D enterprises, Vietnam hopes to become an investment destination for Korean high-tech enterprises in the future to establish company.

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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Why should you need to research the partner before signing the contract?

 

It is important to find and work with a capable and long-term partner to build confidence doing business in a safely and effectively way for all parties, and avoid potential risks. In order to be guaranteed their legitimate rights and interests, individuals and organizations conducting business need to have a clear understanding of their partner before cooperating, in order to start their business cooperation most effectively.

In cooperation with a partner lawfully established in Vietnam, individuals and enterprises could find out information that has been registered at the competent state agencies. Accordingly, information about the owner, legal representative, business lines, head office address, tax code, charter capital, founding shareholder, business registration certificate, corporate history of the last three to five years, the latest business registration information, etc. could be checked on the National business registration information system. The registered information is the official information, valuable to determine the authority, position and responsibility of organizations and individuals if there is a mistake in the operation.

In addition, to find out if an individual is an owner, manager or capital contributor of one or more enterprises in Vietnam, organizations and individuals can also check the information registered in the National business registration information system. If an individual owns, manages, or contribute capital to any business lawfully established in Vietnam within 3 years, it will be recorded. This is the information which helps the organization and individual to verify the truth of information provided by their partner.

In addition, information related to the protection of trademarks of enterprises that have been protected in Vietnam, enterprises and individuals can also be found on the website of NOIP before cooperating.

The information that has been registered at the competent authority, these are basic and public information, so businesses and individuals can search. However, in the course of operation, a number of enterprises have been carrying out illegal activities that are not recorded on the registered information. Therefore, fact checking or finding out at other sources of information for an enterprise is essential to avoid cooperating with a party who is not capable of doing business.

Many businesses and individuals neglect their partner information before signing contracts. During the implementation of the contract, these partners were not able to continue to perform the contract, leading to many negative impacts on the business of the business. In addition, there are partners that commit fraud, provide inaccurate information, in order to appropriate assets of businesses and individuals through the signing of sales contracts. This makes businesses and individuals take a lot of time and effort to reclaim lost assets, affecting their business.

Searching the information of the partners before cooperating is very essential when doing business in any case so that businesses and individuals can cooperate in a long term. Cooperation with a good partner can help businesses and individuals achieve economic benefits, save time and costs in business, thereby bringing the best profit for themselves.

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Investors need to choose the right enterprise for cooperation

 

Why undertake background check on company in Vietnam?

Profitable investment is the legitimate aim of every investor. However, to be able to make an overall assessment of an enterprise that investors can trust is really a difficult choice. Especially for foreign investors who do not have much experience in the Vietnam market whom wish to enter Vietnam market for making investment through M&A.  It is very important for the foreign investors to undertake the background check on company in Vietnam, conduct research for the reputation of the company and each shareholders being corporate or individual, obtain public information of the company, and key personnel under take brief due diligence to access potential risks for cooperation.

According to the data reported as of March 20, 2021 by the Foreign Investment Department (Ministry of Planning and Investment), the total foreign investment capital registered for new, adjusted and contributed capital, purchased shares of investors foreign investment amounted to 10.13 billion USD, an increase of 18.5% over the same period in 2020. This data shows that the demand of foreign investors to invest in Vietnam is still gradually increasing. So, how can foreign investors choose businesses to invest with peace of mind?  They might need to be assured by having further information, and hence need to undertake background check on company in Vietnam

In addition to choosing an enterprise with an appropriate industry and intended investment capital, the fact that that enterprise has capability, and experience in the market in the business field is a criterion that investors should consider and can be trusted. Moreover, investors should take the time to learn information from official sources by looking up the company’s name, grasping basic information such as: owner’s name, representative, capital status, influential individual being shareholders,… and compare such to the company’s website to know if the company provides full information, images, updates on the company’s operations regularly, accurately or are not.

Risks when doing business with a wrong enterprise

Many cases of “virtual” businesses taking advantage of investment needs and the lack of information about the Vietnam market have taken advantage of and defrauded foreign investors. On the other hand, the enterprise will be the one to make decisions that directly affect the investment results of the investor; therefore, the foreign investors should understand, consider and choose a reputable and safe enterprise entirely to invest capital.

In addition, what is the name and influence of that enterprise in the investment field? What is experience and enterprise performance in recent years? It is also the actual evidence that proves the capability of that enterprise. An important note for investors is that in addition to information about enterprise achievements, negative information about the company such as violations in business practice, errors in service provision, etc. causing disputes, compensation with customers is less public information and difficult to find.

In many cases, investors do not have a thorough understanding of their partners, but only decide based on virtual commitments, the display of capability beyond the capabilities of the business. From there, putting your investment capital on a risky way lead to potential unnecessary disputes with the target enterprise.

Furthermore, understanding the Vietnamese legal regulations on rights and obligations for foreign investors, although not related to the selection of enterprises to invest in, is also necessary information for investors to have projection of the problems that may arise during the process of participating in investing in the business.

After all, what investors are looking for are “clean” enterprises that have the capability to grow quickly but at the same time must be able to maintain stability and develop sustainably. However, every business environment has certain potential risks and it is the job of foreign investors to always be alert and learn exactly the information of enterprises to minimize risks potential.

How the service of background check on company in Vietnam would help?

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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Unlocking 8% Vietnam’s GDP Growth in 2025: A Golden Opportunity for Foreign Investors

 Vietnam has set an ambitious target to achieve an 8% GDP growth rate in 2025, a significant increase from its previous goal of 6.5% to 7%.  The target of Vietnam’s GDP growth in 2025 is a bold move which is part of the country’s strategic plan to solidify its position as a leading economy in Southeast Asia and to attract substantial foreign investment. For international investors looking to set up companies in Vietnam, expand business to Vietnam, Vietnam’s dynamic economic landscape offers a great opportunities.

                       Unlocking 8% Vietnam’s GDP Growth in 2025: A Golden Opportunity for Foreign Investors

Vietnam’s Economic Resilience and Growth Trajectory

Over the past decade, Vietnam has demonstrated remarkable economic resilience and growth. In 2024, the country’s GDP grew by 7.09%, driven by robust exports and significant foreign direct investment (FDI) inflows. The government’s decision to elevate the GDP growth target to 8% in 2025 reflects its confidence in sustaining this momentum and its commitment to economic advancement.  

Strategic Initiatives Driving Economic Expansion

To realize this ambitious growth target, Vietnam has outlined several strategic initiatives:

Infrastructure Development to Achieve Vietnam’s GDP growth in 2025

Vietnam is investing heavily in infrastructure to enhance connectivity and support economic activities. Notable projects include the construction of the country’s first nuclear power plants and an $8.3 billion rail link connecting northern Vietnam’s major seaport to China. These projects aim to improve logistics, reduce transportation costs, and facilitate trade.  

Digital Transformation and Technology Adoption 

Recognizing the importance of digitalization, Vietnam is promoting the adoption of advanced technologies across various sectors. The government plans to allow foreign investors to provide satellite internet services in Vietnam, enhancing internet accessibility and supporting digital businesses.  

Regulatory Reforms to Achieve Vietnam’s GDP growth in 2025

To create a more conducive environment for business, Vietnam is implementing regulatory reforms aimed at reducing bureaucracy and enhancing administrative efficiency. The National Assembly has approved a plan to reduce up to 20% of government bodies, streamlining processes and cutting costs.  

Investment Opportunities for Foreign Businesses

Vietnam’s ambitious growth plan opens up numerous opportunities for foreign investors across various sectors:

Manufacturing and Supply Chain Diversification

As global companies seek to diversify their supply chains, Vietnam has emerged as a favorable destination due to its strategic location and competitive labor costs. The country’s expanding chip packaging and testing industry, bolstered by investments from companies like Hana Micron and Amkor Technology, presents opportunities in the semiconductor sector.  

Real Estate and Infrastructure

The government’s focus on infrastructure development has a positive ripple effect on the real estate market. Projects like the Long Thanh International Airport and the North-South Express Railway are expected to boost demand for commercial and residential properties, offering lucrative prospects for real estate investors.  

Renewable Energy

Vietnam is actively pursuing renewable energy projects to meet its growing energy demands sustainably. The country has seen significant growth in wind energy capacity, with plans to further expand this sector, providing opportunities for investment in green energy projects.  

Digital Economy and E-Commerce

With a young, tech-savvy population, Vietnam’s digital economy is burgeoning. The government’s initiatives to enhance internet infrastructure and digital services create a fertile ground for investments in e-commerce, fintech, and IT services.

Government Support and Incentives to Achieve Vietnam’s GDP growth in 2025

Vietnam offers a range of incentives to attract foreign investment, including tax breaks, reduced land lease fees, and support in administrative procedures. The government’s proactive approach in signing free trade agreements and improving the business environment underscores its commitment to integrating into the global economy and providing a stable investment climate.  

Navigating Challenges

While the prospects are promising, investors should be mindful of potential challenges:

- Regulatory Environment: Understanding and navigating local regulations require due diligence and, often, local partnerships.

- Infrastructure Gaps: Despite ongoing projects, certain areas may still face infrastructure limitations.

- Skilled Labor Shortage: There may be a need for investment in training programs to ensure a skilled workforce.

Conclusion

The ambitious 8% Vietnam’s GDP growth in 2025 reflects a nation on the rise, offering a dynamic and promising environment for foreign investors. With strategic initiatives in infrastructure, digital transformation, and regulatory reforms, Vietnam is paving the way for sustained economic growth. For investors ready to navigate the challenges, the Vietnamese market presents a golden opportunity to be part of an exciting growth story in Southeast Asia.

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Why Market Research and Risk Evaluation Are Important for Foreign Investment

 

Market research and risks assessment before investing or having any business cooperation, especially in the period of integration, trade between countries, have become very popular. When entering Vietnam, the new market with different cultures, market mechanism, the first and indispensable step is to do market research, evaluate the risks to know the strengths, weaknesses of business, in order to bring the best profit on investment.

Market research and risk evaluation require a high level of expertise and a deep knowledge of a particular market. The team of research and risk evaluation services are also people with professional capacity, good research, analysis and judgment ability. Consulting service companies have also been established with an increasing number and quality are also specialized and professionalized to meet the high requirements of foreign investors.

There are many areas to look into for market research and risk evaluation, i.e. general market research services, customer research services, buying behaviour, supply and demand rend, reputation of company being buyer or seller, reputation of the individual managing the company, reputation of key employee for hiring, work records of employee, criminal record of individual stakeholders. These diverse research fields have solved the obstacles of foreign investors and become an effective channel to exploit information in a reputable, fast and accurate way.

Today, with the development of information technology, a foreign investor can access information and data of a market, of an enterprise or information of a business or production field which are not too difficult. However, it is not easy to use data and link information together to make an accurate assessment for investors’ purposes. Many investors have decided to do their own research. However, participating in a completely strange field and market is a risky decision. Accordingly, in addition to the information collected, foreign individuals and organizations need to have realistic analysis reports, in-depth research enough to grasp the potential and risks of that market before choosing to invest in.

Besides the cost, the research and risk evaluation service of professional consultant have helped investors to know the information of the market and the expected business field without having to spend time and money to go in person to the country in other to research. Moreover, the research and risk service can provide results from the measurement that make an assessment of the prospects, potential, and suitability of the investment orientation thanks to the understanding of the characteristics and business practices… It will therefore be possible to give useful and reliable advice on investment opportunities.

Research and risk evaluation services also help investors narrow the vision and effective investment scope to avoid risks. From there, investors can work towards a specific goal and plan the next steps. As a consulting channel, the research and evaluation service also provides useful information such as the strengths and weaknesses of competitors, the risks they have encountered, and the trends they are deploying so the investors can consult and note. Based on that information to create for a suitable strategy such as a unique promotion tactic, a special, impressive product, hiring strategy…

Research and risk evaluation services also help analyze the legal matters that have significant impact that investors gain more legal knowledge in the expected field and have the most general picture of the field. On the other hand, it helps investors when implementing launch programs and entering the market to comply with the provisions of the law, as well as in accordance with the local culture.

It can be seen that in today’s investment market, research and risk evaluation services are not only useful, but it is an initial factor to determine the possibility of success. Therefore, foreign investors do not forget to choose for themselves a reputable and experienced research and risk evaluation service provider to successfully implement investment projects together in Vietnam.

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