US Investors Invest in Ho Chi Minh City

set-up business in Vietnam

Ho Chi Minh City (HCMC) is an exciting investment destination with total FDI capital reached 40 billion USD. With many advantages in economic development and business environment, foreign investors have been coming to set up business in Ho Chi Minh City.

Mr Dinh La Thang, Party Secretary of Ho Chi Minh City (HCMC) has met group of United States (US) investors led by Mr Howard Lutnick, Chairman and CEO of Cantor Fitzgerald Financial Group come to explore investment opportunities in HCMC.

Highly appreciated the US investors have chosen HCMC to invest in Financial Tower project, Mr Dinh La Thang committed that the city would create the most favorable conditions for US businesses as well as other international investors, bringing benefits to the enterprise and also the city.

At the same time, the city desires Cantor Fitzgerald Group and US investors will soon implement the Financial Tower project in Thu Thiem urban area, bringing Thu Thiem into a financial center in the region, attracting more investors and large financial corporations of the US and the world.

The city also believes that with the visit of US President Barack Obama to Vietnam, a new wave of investment from US will increase rapidly, especially when the Trans-Pacific Partnership (TPP) Agreement takes effect.

With its dynamic, HCMC is training human resources to be able to meet the needs of development and investment.

According to Cantor Fitzgerald Group, the reason for choosing Vietnam as investment destination was calculated very carefully, because Vietnam is an important destination for the circulation of financial flows in Southeast Asia in the coming time. Moreover, Ho Chi Minh City is a vibrant and dynamic place with strong entrepreneurship, especially among the young.

With great financial strength, the Cantor Fitzgerald Group wants to invest and along with HCMC to grow prosperously.

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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Alibaba from China Acquires Lazada Vietnam

Buy a company in Vietnam

Recently, there is a trend that foreign company comes and buy company in Vietnam, in order to expand their business operation and also set foot in Vietnam market, where is emerging as a potential market of the area.

Alibaba Group – China’s giant technology corporation has spent 1 billion USD to acquire Lazada, thereby officially set foot in the online sales market of Vietnam.

On April 12th 2016, the China’s giant technology group named Alibaba Group announced that it has reached an agreement to acquire the control of e-commerce platform in Southeast Asia, which is Lazada with an amount of 1 billion USD , thereby officially set foot in Vietnam.

The transaction includes an investment of 500 million USD in Lazada’s newly issued equity and the repurchase of shares of some Lazada’s shareholders include Rocket Internet SE, Tesco Plc and Investment AB Kinnevik with a total investment value of Alibaba reach approximately 1 billion USD.

This acquisition is expected to help worldwide brands and distributors that are trading on the platform of Alibaba, as well as local vendors can reach the consumer market of Southeast Asia. In addition, Alibaba deal with a certain number of shareholders of Lazada, giving Alibaba the right to purchase and shareholders the right to sell its remaining shares in Lazada at the market prices in 12-18 months after the completion of the transaction.

Lazada is headquartered in Singapore, which was founded and operated by Rocket Internet SE from Germany. The company carries out e-commercial activities in Indonesia, Singapore, Malaysia, Philippines, Thailand and Vietnam.

According to Bloomberg, the deal came from the objectives set by the billionaire cum Alibaba’s chairman Jack Ma, targeting at least half of company revenue comes from markets outside of China.

Through the deal with Lazada, Alibaba generate more revenue from sale of clothing and electronics in 6 regional markets in Southeast Asia where Lazada if operating, including Vietnam.

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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FDI Status in 11 Months of 2016

Vietnam company formation

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

Operational status:

Implemented capital:

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

Exports and imports:

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

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

The investment certificate granting status:

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

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

According to the investment areas:

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

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

According to the investment partners:

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

According to the investment location:

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

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

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

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

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

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

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

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 3520 2779 or email us ant@antconsult.vn

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Fast-moving Consumer Goods Market in Vietnam

FMCG intelligence in Vietnam

1.Overview

With increasing disposable income, rising living standard, stable GDP and economic growth, young population and low inflation, Vietnam is one of the most dynamic emerging market in Southeast Asia region. Fast moving consumer goods industry has promised a robust development.

2. FMCG in Vietnam

FMCG growth

The MoIT forecast that total revenue of the consumer goods-related sectors in Vietnam will hit 140 billion USD in 2016, thus creating great opportunities for FMCG businesses at home to boost production and expand the market. There is a significant volume growth from -1,6% in 2014 to 2,7% in 2015 in terms of demand for FMCG and the figure is expected to continue increasing in 2016 and 2017 (Nielsen, 2015). Vietnam’s volume growth in 2015 in only behind Thailand and the Philippines in South East Asian religion. In short term, urban citizens remain positive value growth of 3,6% whereas value of growth in rural areas grow at weak pace. The latest statistics released by the Ministry of Industry and Trade show that after China, Thailand is Vietnam’s second biggest suppliers of consumer goods with its garments and household utensils present in nearly 8,600 markets across the country. Besides, Japan and the Republic of Korea are also penetrating into the Vietnamese market through chains of convenience stores.

Value contribution in FMCG

It can be seen from the chart beverage contribute the largest value to FMCG industry while baby care products remain the lowest value contribution. Interestingly, urban prefers liquid tonic food drink with the rise of 4,4 PTS when the most popular beverage in rural is soya milk with the increase of 8,7 PTS.

Distribution channel

The data of Kantar research shows that traditional trade outlet such as wet markets and grocery stores is still one of the most popular channel for FMCG. Convenient stores/mini market is a new rising star in distribution channel which experience 60% growth from 2014 to 2015. For example, VinMart + have appeared from 100 to 200 store in 2015, Circle K from 97 to 129 stores, and Shop & Go from 103 to 130 stores. E-commerce also will be a big trend which reaches steady growth of 13%.

Consumer behaviour patterns

Consumer confidence index also experiences positive trend since Vietnam is the 6th most optimistic country globally. Despite of the increase of 6,3% CPI in 2015 compared to 2014, Vietnamese consumer is prudent, still prefer saving than spending. Pricing has also been one of the most important decision making factor during purchase. Additionally, dropping shopping frequency proves that Vietnamese consumer has been lessen spending

The demand for high end FMCG is still week regard to relatively low income of majority of Vietnamese consumers in rural areas. Compared to other South East Asian countries, Vietnam’s per-capital expenditure on food and non-alcoholic beverages was US$200 in 2011 while this figure is US$900 in Thai Land and US$1000 in Malaysia.

3. Future trend and potential investment

Booming of foreign investment in FMCG

Vietnam has emerged as a popular destination for multinational and regional retailers. It is allegedly agreed that Vietnamese consumers are more likely to prefer foreign brands. In addition, 57% of Vietnam’s population below 35 years old, 44% monthly increasing income, 30% urbanisation rate with 3,4% growth rate per year; and 1.6 times more college and university graduate (Nielsen) result in the shift toward modern trade outlets such as shopping mall and supermarket. Some of well-known foreign retailers are AEON (Japan), Lotte (Korea), Central Group (Thailand), Mark and Spencer (UK). In additional to strong foreign competitors, Vinmart and Citimart are the most popular domestic rising stars in FMCG/retail market in Vietnam.

Shopper get smarter and more purchasing power

In 2015, 48% of Vietnamese consumers stated that “staying fit and healthy” is the top concern (Nielsen). Therefore, Vietnamese consumers have become more concerned about the quality, hygiene and safety of the products. Due to high competition in FMCG industry in terms of manufactures and retail outlets, Vietnamese consumer have more purchase power decision. This implies that manufactures as well as retailers also need to be more selective with the products that provide to customers.

The emergence of new online channel

According to Nielson report in 2 big cities: Hanoi and HCMC, 92% of internet users are online shopper and 93% of shopper are middle class and millennial. Additionally, in such a busy world, on-the-go lifestyle will become a big trend in Vietnam. Thus, it indicates the high demand for online platform that conveniently host information and acquire interaction between online and offline store choices. Also lack of innovative approach and strategy to attract online shoppers is a huge issue in Vietnam market at the moment. Also there has been a huge lack of accessibility to online channel in rural areas and other smaller cities. E-commerce in FMCG promises high potential for investment

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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FDI in Real Estate Reached 1 Billion USD in 2016

Real Estate regulatory in Vietnam

The area of real estate business attracted total FDI capital reached 1 billion USD in the first 9 months of 2016.

Foreign Investment Department (Ministry of Planning and Investment) has announced FDI report for the first 9 months of 2016. Accordingly, there were 1,820 newly licensed projects with total registered capital of 11.02 billion USD, increased by 1.1% over the same period. Meanwhile, there are 851 projects registered to adjust capital with the added value of 5.3 billion USD, decreased by 13.9% over the same period.

Generally in the first 9 months of 2016, total newly registered and additional capital reached 16.4 billion USD, decreased by 4.2% over the same period in 2015.

In 9 months, foreign investors have invested in 19 sectorsin which the field of processing industry, manufacturing is the sector attracting more attention of foreign investors with 767 new projects and 608 respectively adjust capital projects.

In 9 months, foreign investors have invested in 19 sectors, in which the field of processing industry and manufacturing are the sectors attracting more attention of foreign investors with 767 new projects and 608 projects register to adjust capital.

Total new and increasing capital to processing industry and manufacturing reached 12.15 billion USD, accounting for 73.9% of total registered capital in 9 months.

In particular, the field of real estate business ranks 2nd with 34 newly registered projects, total capital reached 1 billion USD. The field of professional activities, science and technology ranks 3rd with 649 million USD, accounting for 3.9% of total investment capital…

In the first 9 months of 2016, there are 65 countries and territories have investment projects in Vietnam. Korea leads the way with a total investment capital reached 5.58 billion USD. Singapore ranked 2ndwith total investment of 1.84 billion USD. Japan ranked 3rd with total investment capital of 1.7 billion USD.

Foreign investors have invested in 54 provinces and cities in which Hai Phong attracted the most investment capital with 37 new projects and 28 projects register to adjust capital, corresponding to 2.74 billion USD. Followed by Hanoi and Dong Nai with total investment capital of 1.97 and 1.89 billion USD respectively.

Some large projects that are licensed in the first 9 months of 2016 including LG Display Hai Phong with total registered investment capital of 1.5 billion USD, invested by LG Display Co., Ltd (Korea). The goal of the project is producing and processing plastic OLED display products for mobile devices such as cell phones, smart watches, tablets.

LG Innotek plant project in Hai Phong with total registered investment capital of 550 million, invested by LG Innotek Co., Ltd. (Korea) with the goal of producing camera modules.

Amata City project in Long Thanh has a total investment of 309.3 million USD, invested by Thai investor with the goal of building service urban in Dong Nai.

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 3520 2779 or email us ant@antconsult.vn

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Invest in Real Estate of Vietnam in 2016?

Real Estate regulatory in Vietnam

The real estate market in 2016 will continue to recover. Vietnam real estate sector had signs of recovery in late of 2013 and lasted until 2015. Up to now, there were not any signs showed that development flow will be slowed in 2016.

In general, as recorded, real estate price is increasing and the actual increase amplitude ranging from 5 – 15%, certainly not with every market segment and every project. According to experts, the price increasing is also consistent with the rule that the market is starting to come up from the bottom but not yet peaked.

If we look at the profit of the real estate businesses in 2014, businesses that operated efficiently in 2014 have achieved profit in the range of 5 – 15%. In 2015, the number has increased to 15 – 20%. However, a common project construction time is about 3 – 4 years so the profit margin is not too high. Compared with the period of the real estate bubble, this is still sustainable growth rate.

Also in 2016, the property was evaluated as a safe investment channel and promising to create added value. If the national economy continues to grow, along with a series of extensive integration opportunities that we are, can hope 2016 will form the opportunity to create added value for real estate Vietnam.

The important thing is the final price when reaching home buyers is still in the acceptable range. According to the real estate consultants, if buyer has financial capability, they should buy or invest in real estate right now because the price in the next year is likely to rise.

In 2016, real estate is evaluated as a safe investment channel and promising to create value added. If the national economy continues to grow along with a series of extensive integration opportunities that Vietnam had, it is hoped that 2016 will form many opportunities to create value added for Vietnam real estate market.

When investing in real estate market at this time, investors can easier to buy at cheaper price and more options. Market supply is abundant only with the apartment segment with prices more than 20 million VND/m2, while the segment with prices below 20 million VND/m2, there are not enough houses to sell to buyers.

There are many projects that products are sold out within a month. Hence, small and medium class segments are having greater certainty and especially never being affected by the financial crisis. It also demonstrates two issues: consumer confidence has begun to return to Vietnam real estate market and real estate market of Vietnam always have really secure segment.

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 3520 2779 or email us ant@antconsult.vn

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Potentials of Vietnam Logistics Industry

Logistics market entry into Vietnam

When Vietnam joins the TPP, Vietnam logistics industry has many opportunities to develop and engage more deeply into the world’s logistics centers…

According to the report of World Bank, the forecasted growth rate between 2015 and 2020 is 12%/year and import export turnover reached 623 billion USD in 2020, Vietnam is a promising destination for investors.

According to the statistics from the Vietnam Logistics Business Association (VLA), Vietnam’s logistics costs accounted for about 25% of GDP per year, much higher than countries such as the US, China or Thailand.

In the coming time when TPP agreement takes effect with many tariffs equal 0%, the export-import operations in Vietnam will promise to develop strongly. This is considered a great opportunity for the logistics industry to “boom”.

As an important link of the economy, the logistics activities help the goods to reach consumers and ensure the materials for the production process.

Despite facing strong competition from foreign rivals, many experts still appreciate the future prospects of the domestic logistics enterprises, especially in the context of free trade agreements (FTAs, TPP) boosted FDI inflows pouring into Vietnam industries.

On the other hand, the increasingly improved infrastructure in Vietnam will strengthen connectivity between logistics facilities and production areas; planning and supporting from the State, along with customs procedures are gradually improving in a positive direction.

In the recent two years, a series of key infrastructure projects have been started and completed as Long Thanh – Dau Giay highway, Noi Bai – Lao Cai highway, Ha Noi – Hai Phong highway, Ben Luc – Long Thanh highway Highway 51 connecting industrial park with the ports and Soai Rap channel dredging works (in Hiep Phuoc port) and Thi Vai – Cai Mep channel…

In addition, the Government and the Ministry of Transport have launched a number of policies to guide, support and stimulate the sustainable development of the domestic logistics industry such as: policy to control road loading, preferential policies for Vietnam ships on domestic routes, the draft to establish port authorities to develop ports and port services, Decision No. 1037/QD-TTg on the port development plan till 2020…

Moreover, according to the General Department of Vietnam Customs, Vietnam is also actively developing and implementing the ASEAN Single Window mechanism. The implementation of this process will benefit the business community, including logistics businesses such as reducing the time taken for administrative procedures and also cost reduction.

However, in order to develop logistics industry, the State should build and complete the legal framework, standardized service processes, upgrading infrastructure and human resources for the field of logistics.

Government should also take measures to guide and promote logistics companies to link together, formed the company with strong capabilities, able to compete with foreign companies.

With the above subjective and objective elements, Vietnam’s logistics industry still have great potential to develop and first of all, they will have conditions to advance to move towards to same level with foreign logistics businesses in the region.

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 3520 2779 or email us ant@antconsult.vn

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