Ministry of planning and investment (MPI) Investment Climate in VIET NAM By Le Huu Quang Huy, M.A D.D.General & Executive Director INVESTMENT PROMOTION CENTER FOR CENTRAL VIETNAM Bangkok, 28 May, 2007

Investment climate in Viet Nam Investment climate in Viet Nam I.Vietnam - Key facts at a glance II.Why investing in Vietnam? III.New Law on Investment IV.Investment Opportunities to Vietnam and Its Central Region

Vietnam Key facts at a glance Vietnam Key facts at a glance Vietnam Key facts at a glance Investment Climate in Viet Nam

Vietnam in the region

Vietnam - Key facts at a glance Location: Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and South China Sea, alongside China, Laos, and Cambodia. Area: total: 329,560 sq km, land: 325,360 sq km, water: 4,200 sq km. Climate: tropical in south; monsoonal in north with hot, rainy season (mid-May to mid- September) and warm, dry season (mid-October to mid-March). Population: 84 million (2006),60% of the population is below the age of 30. GDP real growth rate: 8.2% (2006). GDP by sector: Agriculture (20.8%), Industry and Construction (41%), Services (38%). GDP per Capita: around $ 740 (2006). Labor Force: 42.5 million. Main Exports: crude oil, coffee & cashew; textiles & garments, footwear; fishery products; electronic products & components. Main Imports: machinery, equipment & parts, refined petroleum, steel, textile industry materials, cloth

Socio-economic achivements

After 20 years of implementing the “ Doi moi ” policy (Renovation) -Rapid economic growth -Technical material basis strengthened -Better living standard of people -Stable socio-political situation maintained -External relation expanded and so on. -The annual average GDP: 8% (in 2006, 8.2%))

GDP growth rate ,

Foreign Direct Investment in Vietnam

Over view of FDI in Vietnam May, 2007 * 7,086 projects in operation over $ 64 billion of registered capital over $ 29 billion disbursement * Accounting for: –16 % of GDP –56% of export value * Creating 1,2 million direct jobs; Thailand ranks number 12: with 145 projects, US$ 1.6 billion (disbursement of US$ 832 Mil or 52% of total registered capital) FDI in 1 st 5 months of 2007 * 372 projects with registered capital of $ 4.3 billion (18.7% higher same period of 2006) In which, Thailand, 7 projects with registered capital of $ 301 mil accounting for 8,6 % of whole country and 33,7 % compared with ASEAN countries

TOP 10 FOREIGN INVESTORS IN VIETNAM 1988 – May, 2007 (projects in operation only) TOP 10 FOREIGN INVESTORS IN VIETNAM 1988 – May, 2007 (projects in operation only) Source :mpi vietnam Table 1 Singapore Taiwan Korean Japan Hong Kong British Holland USA France Cayman V. Islands Islands - Registered Capital - Disbursement

ASEAN FDI TO VIETNAM ( )

THAILAND’S FDI TO VIETNAM BY OWNERSHIP AND SECTORS MAY, 2007 Source : MPI

Vietnam - Thailand two way business - In 2006, import-export turnover : US$ 3.93 billion - The 7th trade partner of Vietnam (number 11 as importer from and number 6 as exporter to Vietnam). - 3 major merchandises exported to Thailand : Computers and electronic products, crude oil and aqua- products. - 4 major merchandises imported from Thailand : various kinds of oil and gasoline, plastic materials, motorbike spare-parts, equipments and machineries.

Why Invest in Vietnam?

Vietnam’s Competitive Advantages - Political and socio-economic stability; - Fast economic growth (recently more than 8% per year, next to China); - Potential for domestic and export markets (84 million population, easy access to some 2 billion population of ASEAN and China markets); - Strategic geographic location (located in the most dynamic development region in the World);

Vietnam’s Competitive Advantages - Low cost and skilled labor force for new and hi- tech; - Abundant natural resource; - Successful integration into regional and world economies (member of ASEAN, APEC, ASEM and the 150th member of WTO in late of 2006) and; - Open and friendly policies to foreign investors.

Source : The Business Times 15 April 02 Good potential market …its 2 main brands Tiger & Heineken have cornered 85% of the premium market…despite the fact that a Tiger costs 3 to 4 four times the local brew Vietnam is currently the world’s fastest growing beer markets. The potential is tremendous given its large population and that current beer consumption in Vietnam is only about 10l or 30 cans per person. Opportunities in Vietnam

Impressive human resources potential Vietnam’s Competitive Advantages  60% below 30 years old (Asia’s youngest)  94% literacy rate (Among the highest in Asia)  Productive & diligent workforce Well educated and low cost labor

Competitive Labour Costs Monthly Workers Wages US$/month Source: Japan External Trade Organization, 2003 Vietnam & Central Vietnam HCMC Jakarta Manila Bangkok Shanghai Kuala Lumpur Seoul Hanoi Batam Shenyang Shenzhen Singapore Vietnam’s Competitive Advantages

Source : The Business Times 18 October 1001 Vietnam stood out as the country believed to have the least risk of unrest as it is not really exposed to social problems of its neighbours. Safest place for business Vietnam’s Competitive Advantages

A most investment attractive country Report by UNCTAD, 2006 A most investment attractive country Report by UNCTAD, 2006 * One of 8 most investment attractive countries in the Asian region, namely China, India, Thailand, Korea, Malaysia, Indonesia, Vietnam and Singapore * Vietnam has the best environment for attracting electrical/electronic projects and the 2 nd competitive place for transportation, mechanism and plastic field (JETRO )

1997 : Member of ASEAN 1998 : Member of APEC APEC 2006 is taking place in Vietnam 2001 : Vietnam-US Bilateral Trade Agreement 2006 : Full realization of AFTA 2006 : 150 th Official Member of WTO Integrating into World Economy

new Law on Investment - open and transparent Effect as from1 st July, 2006 INVESTMENT CLIMATE IN VIETNAM

New points of the Law New points of the Law - Passed by The National Assembly of S.R.Vietnam on 29 November 2005 and comes to effect as from 1 st July Making a break-through in improving and completing system of laws and polices on investment with main new basic contents as below : 1. Large scope of application 2. Opening market related to Vietnam’s accession to WTO 3. Variety of forms of investment 4. Guarantee

New points of Law ( continued ) 5. Dispute resolution and application of international laws 6. Simple investment procedures, two categories: (i) investment registration (ii) investment evaluation 7. Procedures for implementation of investment incentive 8. Business, investments funded by State capital 9. State administration of investment

Investment Partners -All countries and territories -Especially, investors from industrialized countries as USA, EU, Japan -Investors from Asian region: China, Korea, Singapore, Taiwan and Thailand, etc. Investment sectors: High technology and IT industry; New materials and new energy; Supporting industries; Investing in vegetation and livestock breeding; Farming and processing of agricultural, afforestation and aquaculture products; Infrastructure developments; Healthcare and education INTERESTING AND ENCOURAGING SECTORS TO INVEST IN VIETNAM

A growing region for investments… Central Vietnam

WELCOME TO CENTRAL VIETNAM Endowed with a strategic gateway for East Sea of the Greater Mekong Sub-region countries and rich in natural resources, tourism potential, Central Vietnam is keen for calling foreign investors, Thai investors in particular, come to invest in the following sectors: - Infrastructure (highway, airport and seaport); - High quality and light construction materials; - Ship-building, ship and aircraft repair; - Financial, banking and insurance sectors; - Education with international standard; - Hotel, resort, trade center and eco-tourism; - Cultivation and processing aquaculture, agro-product; and - Environmental treatment factory.

DIRECTOR IPCC’S DOMESTIC AND FOREIGN PARTNERS ADMINISTRATIVE DIVISION CONSULTANT DIVISION INVESTMENT PROMOTION DIVISION What is IPCC? Located in Danang city - Vietnam, IPCC is an organization under Foreign Investment Agency (FIA), Ministry of Planning and Investment (MPI). Its function is to promote investment activities over provinces and cities in Central and High Lands from Thua Thien Hue to Khanh Hoa province Organizational chart of IPCC

INVESTMENT PROMOTION CENTER FOR CENTRAL VIETNAM (IPCC) Address: 102 Quang Trung Str., Danang city, Vietnam Tel.: ( ) / ~ Fax: ( ) Welcome to Vietnam !

Thank you! IPC CENTRAL VIETNAM