Japan Increases Investment in Vietnam in Finance and Services

Japanese investors have switched from setting up business in Vietnam in manufacturing into financial investment, retail.

Why Japanese Investors Invest in Vietnam?

Three Reasons Japan Invests in Vietnam

Why Japan Will Increase Investment in Vietnam

Til end of Jan 2015, Japan is the second largest foreign investors in Vietnam in direct investment form with 2,494 projects, and total registered capital of nearly 36.9 billion USD however there have been changes in the structure of the investment capital in Vietnam. In particular, the manufacturing sector once accounted for the largest proportion of investment in Vietnam drops 30% from nearly $ 1.2 billion in 2013 to nearly 830 million 2014. In fact, the projects in the manufacturing sector often require huge capital during a long-term investment. In the context that Japan’s economy faces difficulties as well as the global economy is not bright, the reduction of investment in the manufacturing sector is also understandable.

In indirect foreign investment in Vietnam, Japan ranks sixth in the list of countries conducting M&A in Vietnam with more focus on small or medium but long-term and potential large area. The field of production only accounts for 10% of the total value.

However, the recent survey has shown there is a new wave of Japanese investment in other sectors such as construction, real estate, transportation or financial investment. The report of The Japan External Trade Organization, or JETRO, a Japanese government-related organization that promotes trade and investment reflects the proportion of new investment projects in the construction, real estate increased from 3% in 2013 to 6% in 2014, while the capital had risen to 13%, compared with 2 % of a year ago.

In real estate sector, Tokyu Corporation has joined invested with Becamex IDC to develop Tokyu Binh Duong Garden City in an area of ​​over 110 hectares with a total investment of about USD 1.2 billion. Daibiru Corporation also acquired the office building Corner Stone in Hanoi with value of the deal at USD 60.1 mil. These are example that Japanese investors recognizing the potential development of Vietnam’s changes in real estate market as the land ownership have been approved and effective from Jul 2015. As reported, M&A deals in real estate in 2014 accounted for 61% of M&A deals.

In financial investment, in 2014, Daiwa PI Partners and Vietnam Opportunity Fund of Vina Capital invested USD 45 million in the International Dairy Joint Stock Company, making foreign ownership increase to 70%.

In retail sector, Vietnam is also considered as an attractive market with growing mid-income consumer group. The largest retailer Aeon Japan after years of market research has poured more than USD 500 million for two commercial centers were opened in Ho Chi Minh City, Binh Duong and a new center in Long Bien (Hanoi). The group also plans to expand through acquiring shares of two local supermarket being Fivimart and Citimart.

It appears that Japan is holding strong among the leading investors in Vietnam, together with Korea and Singapore.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

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US Textile and Footwear Enterprises Seek Opportunities in Vietnam

In the context of the absence of the Trans-Pacific Partnership (TPP), US textile and garment companies are finding their own opportunities to invest in Vietnam.In late October, the American Apparel and Footwear Association (AAFA) and the American Chamber of Commerce in Vietnam (AmCham Vietnam) organized a series of activities in Ho Chi Minh City.

According to the information shared at the program, the growth rate of exports from Vietnam to the US continues to outstrip competitors, although not benefiting from any preferential trade programs or free trade agreement.

According to the AAFA, garment imports into the United States from Vietnam increased by 8.74%, footwear increased by 11.83% in the last 12 months, and Vietnam is the second largest exporter to this market, after China. Retailers and consumers in the United States see the strengths in quality, price and delivery commitment of Vietnam. This is also the reason that AAFA and US businesses come to Vietnam.

According to the regional director of Hanes Brands (USA), after 10 years of presence in Vietnam, the total investment of this group is about 55 million USD, with 3 factories in Thua Thien Hue and Hung Yen. Production capacity of Hanes Brands Vietnam currently accounts for about 20% of the Group’s total global production. Vietnam is identified as Hanes Brands’ manufacturing base in South East Asia, in which the Hue factory is equipped with the most modern technology and equipment.

According to a senior adviser at Alston & Bird LLP, despite the absence of TPP, there are other opportunities for Vietnamese textiles and footwear. Accordingly, the programs that businesses should pay attention to are: the Regional Comprehensive Economic Partnership (RCEP), the European Union – Vietnam Free Trade Agreement (EVFTA), the Belt Road Initiative (BRI), the Vietnam – China Strategic Partnership (Two Corridors and one Economic Belt)…

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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Quang Binh Calls for Investment in 48 Projects

According to Chairman of Quang Binh Provincial People’s Committee – Mr Nguyen Huu Hoai, the provincial People’s Committee has just issued a decision to call for investment in 48 projects in the fields of industry, agriculture, tourism, services and trade… in the period from 2018 to 2020.

Accordingly, the People’s Committee of Quang Binh province has approved the list of projects calling for investment with the total capital of more than 50,000 billion VND in the period of 2018 – 2020. The decision was issued by the province on June 5th, listing 48 projects calling for investment with a total land area of 8,000 hectares.

In the above 48 projects, there are 17 projects in the field of tourism, services and trade: including 6 coastal resort projects, 8 ecological resort projects, 3 commercial center projects, with a total investment of over 37,000 billion VND, the land area for the projects is over 1,500 ha. For such projects as tourism complex, coastal resort and ecotourism and resort complex, Quang Binh province has paid special attention to and dedicated the land fund for each project up to hundreds of hectares.

In the field of industry, Quang Binh province has listed 5 projects calling for investment, including: Quang Binh wind power development; Quang Binh solar power development; factory manufacturing and assembling electrical appliances, electronics, telecommunications and industry; factory producing energy saving lighting equipment and factory producing components and assembling cars… with the total investment capital of over 8,000 billion VND.

In addition, Quang Binh province also approved invitations to invest in 8 agricultural projects; 3 projects in the field of health and training; 8 residential and urban infrastructure projects and 5 industrial zone infrastructure projects. These projects are highly valued to attract investors to this locality.

According to the head of the Quang Binh Government, together with the approval of the plan to call for investment in the period 2018 – 2020, Quang Binh province also strengthens the direction of the functional units, localities in the province to urgently build content of project information. Quang Binh province is committed to providing the best support to investors when coming to this locality based on the available resources that Quang Binh is considered to be very rich.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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Da Nang Calling for Investment in 7 Strategic Projects

In the international conference “Investing in Sustainable Urbanization” organized by Danang People’s Committee in collaboration with the regional network of local authorities on human capital management (CityNet), Da Nang has called for investment in 7 strategic projects.

At the workshop, Danang People’s Committee announced the list of 7 projects calling for investment in the form of PPP (public-private partnership): Lien Chieu port; solid waste treatment complex; new railway station and integrated urban area; infrastructure development and technology for non-motorized transport solutions; Da Nang – Hoi An metro; smart city construction and industrial park construction projects.

In particular, the project of Lien Chieu port is calling for investment with the aim of becoming the main wharf of the international gateway to the Central region, accommodating ships up to 100,000 tons. The relocation and construction of Da Nang Railway Station calls for investors to pay attention and implement the project in the form of PPP, which might be through BOT contract.

Da Nang Integrated Urban Renovation Project has a total budget of more than 345 million USD (over 7,900 billion VND). Project on development of vehicles and application of smart traffic management system in the form of ODA or PPP with a total capital of about 3.300 billion VND. The project to build metro connecting Da Nang with Hoi An city (Quang Nam) with a length of 33 km, along the coastal road, this project needs funding from 7,000 to 14,000 billion VND.

According to the Vice Chairman of Danang People’s Committee, sustainable urban development is one of the priorities of the city. Da Nang has set the orientation and guidelines for sustainable development. Since 2014, the city has approved a smarter city plan with priority areas of transportation, water supply, sewerage, food safety and building better city connections. Hence, Da Nang calling for investment in 7 key projects to address sustainable issues related to transport, urban.

Mr Vijay Jagannathan, Secretary General, of CityNet said that the workshop “Investing in Sustainable Urbanization” in Da Nang is seeking financial investment in urban infrastructure in a sustainable manner, overall and resistant to climate change. He also emphasized that infrastructure is a major challenge for urbanization as demand grows. Urban communities depend largely on effective urban planning as well as access to affordable public services.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 730 86 529 or email us ant@antconsult.vn

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