A Guide To Investment and Trade in Vietnam 2020

VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
HO CHI MINH CITY BRANCH
2020
HONG DUC
PUBLISHING HOUSE
Address: Tan Thuan EPZ, Tan Thuan Dong Ward, District 7, HCMC
Tel: (84 -28) 3770 – 1777; 3770 – 1888 – Marketing Department
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Content
19-61
11-17 77-90
CHAPTER II
Business
62-75
Landscape
20. Looking back on the

CHAPTER I last year 2019
CHAPTER IV
Vietnam CHAPTER III Business Guide
n Macroeconomic
At A Glance Ho Chi Minh City
n Vietnam Economic
integration process - A Land where n Introduction to new
12. Geography, and free trade Birds will Come investment law and
landscape and Agreements to Build Their law on enterprise
climate Nest 2014 (Negative List)
32. Vietnam’s
13. Country and n Investment
Positioning - Where
people does Vietnam stand screening and
n Ho Chi Minh City
16. Vietnam political compared to others licensing authority
Stays true to itself
structure n Overal Vietnam’s n Company
n The cosmopolitan
Global Ranking incorporation
city
process
n Global n Smart City
competitiveness index n Investment
development plan
n Global Innovation incentives
n HCM City
Index n Taxation regime
investment
n Ease of Doing Business autonomy n Profit remittance
Index - Repatriation of
n The Driving Growth
n The Global Talent Contributed Capital
force & Economic
competitiveness index and Loans
Hub of the Country
n Credit rating n Labour regulations
n Key infrastructure
37. Looking Forward n Market Access
n The city of Pioneers
Restriction
n Prospects for n TOP TEN Reasons to Related to WTO
Vietnamese economy Invest in HCMC Commitment
in 2019 and beyond
n Appendix and Free Trade
n Looking further into
Agreement
the Future
n Reference cost
n TOP TEN Reasons to
of living, Utilities
invest in Vietnam
Charges, minimum
n Investmnet wage rates
Opportunities in
Industries & Sectors
Disclaimer
All materials presented in this report, unless specifically indicated
otherwise, are under copyright and proprietary to VCCI-HCMC.
Information contained herein, including projections, have been obtained
from materials and sources reliable at the date of publication. While
VCCI-HCMC is confident in the accuracy of the information set forth,
VCCI-HCMC does not always verify the sources and therefore, make no
guarantee, warranty, or representation concerning it or them. Readers
are solely responsible for assessing the relevance, accuracy, completeness
and currency of the information within this publication. This report
is written exclusively for VCCI-HCMC partners and professionals for
information purposes only. It is not to be used or considered as an offer
or the solicitation of an offer to sell, buy, or subscribe for securities or
other financial instruments. All rights to the material are reserved and
none of the material, its content, or any copy of it, may be altered in any
way, transmitted, copied or distributed to any other party without prior
written permission of VCCI-HCMC. VCCI-HCMC will not be liable for any
loss, damage, cost or expense incurred by any party using or relying on
information in this publication.
Second Edition published in 2020 by:
Vietnam Chamber of Commerce and Industry, Responsible for Publication

HCMC Branch (VCCI-HCM) Director Bui Viet BAc
171 Vo Thi Sau, Ward 7, District 3, HCMC, Vietnam
Tel: +84-28 3932 6598 - Fax: +84-28 3932 5472 Responsible for Content
Email: info@vcci-hcm.org.vn Chief editor Ly Ba Toan
Editor-in-chief: Mr. Nguyen Thanh Binh Editors

Director, Business Information Centre, VCCI-HCM Ngo Thi Hong Tu
Email: ngthanhbinh@vcci-hcm.org.vn;
thanhbinhvcci@yahoo.com Affiliate Partner
MZ Media Co., Ltd
Compiler of chapters I, II and III: Mr. Nguyen
Thanh Binh, Director of Business Information Publishment license number:
Center of VCCI-HCMC No. 1383/QĐ-NXBHĐ, issued on October 8,
2020 - Decision of publication No. 3715-2020/
Compilers of chapter IV: Mr. Thomas McClelland - CXBIPH/25-64/HĐ
Tax Partner of Deloitte Vietnam and Mr. Tran Van ISBN: 978-604-302-833-1
Tho - Tax Director of Deloitte Vietnam
Printed 2,000 copies, size 21 x 29,5 cm, Printed at
Mat Troi Moi Co., Ltd - 09 Ta Quang Buu St., Ward 6,
Principal Designer: MZ Media District 8, HCMC - Printing completed and copyright
Designer of chapter IV: Deloitte deposited in quarter 4, 2020

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Foreword
This is the second year that the new edition of the “Doing
business in Vietnam” guide will be made available by Vietnam
Chamber of Commerce and Industry, Ho Chi Minh City branch
(VCCI-HCMC) for Vietnam’s business community, including
foreign investors, organizations, and individuals who are
potentially interested in learning more about the Vietnamese
market and thus, exploring investment opportunities here.
This edition will encompass key features from the first edition.
Components that will be kept constant include the overall
presentation of chapters and sections, highlights on the role
and position of a national organization for trade promotion
aimed to promote and introduce the country’s business
environment for investors to explore investment opportunities,
find business partners, undertake long-term projects for
mutual benefits and growth, and become part of the national
economy.
This year’s publication is also notably different for it features

the product of cooperation between VCCI-HCMC and Deloitte
Mr. VO TAN THANH Vietnam, a global consulting services provider, which should
Vice President of Vietnam ensure that the guidance on business and investment in terms
Chamber of Commerce and of taxation regimes, forms of business and investment, market
Industry, General Director of access strategies, opportunities of access to infrastructure
Vietnam Chamber of Commerce markets, services and other necessary reference data will be
and Industry - HCMC Branch provided in professional and practical manner.
Like the first edition, this one will similarly provide an

introduction of the overarching topics followed by a detailed
compendium of several issues, particularly the latest
developments in the business environment, to further readers’
apprehension of market development in relation to the global
market.
These two editions will also display similarities in the aspect

whereby visuals and user-friendly languages will still be utilized
to represent and contribute to the local image and perception
of Vietnam and Ho Chi Minh City.
6 Vietnam Chamber of Commerce and Industry

Ho Chi Minh City Branch
I would like to take this opportunity to express my sincere
gratitude to Deloitte Vietnam for their willingness to cooperate
and share resources with VCCI-HCMC, specifically, by sending
its team of experts to work directly with the staff members
of VCCI-HCMC Business Information Center. The clear
assignment of responsibilities expedited the activity progress
and completion as scheduled while promoting the strengths of
each side, which made it possible for wide circulation of this
guide among the business community so as to promote the
business reputation and environment in Vietnam and fulfill our
social obligation to share information with the public.
Lastly, I would like to express my appreciation for the

individuals and organizations who have contributed,
especially Mr. Mousa Kassis, and Mrs. Nataly Nikokosheva,
Mr. Paul Cleves who provided assistance through various
stages of editing and feedback to ensure that this guide
reflects the notable concerns of the business community
and international investors. Finally, a special thank you to Mr.
Thomas McClelland, Tax Partner of Deloitte Vietnam, who
has consulted, meticulously proofread and edited this entire
guidebook to ensure its completeness and we highly appreciate
their effort.
No matter how much effort is put forth, flaws are inevitable. To

that, we wholeheartedly welcome constructive comments from
our readers for us to make further improvements in future
editions.
Best regards,
VO TAN THANH
Vice President of VCCI and Director of VCCI-HCMC
Vietnam Chamber of Commerce and Industry

Ho Chi Minh City Branch 7
“The Voice of Business in Southern Vietnam”
VIETNAM CHAMBER OF COMMERCE AND INDUSTRY

HO CHI MINH CITY BRANCH
About us What we do - What we offer

Vietnam Chamber of Commerce and Industry l Trade promotion: Trade promotion event
(VCCI) is a national organization that assembles arrangement such as business briefing, B2B
and represents the business community, matching, seminar, conference, outbound trade
entrepreneurs, employers and business mission overseas.
associations in Vietnam. The purpose of the
Chamber is to develop, protect and support the l Policy advocacy; legal & investment consultancy;
business community, contribute to national socio- trade document certification & certificate of
economic development. VCCI was established in origin (C/O) issuance.
1963 in Hanoi as a non-governmental, non-profit
l Trade facilitation: business & investment
organization.
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Vietnam Chamber of Commerce and Industry, Ho l Industrial/labor relations consultation,
Chi Minh City Branch (VCCI-HCMC) is the largest productivity improvement and skill development
branch of VCCI. Based in Ho Chi Minh City, we
l Membership development & capacity
also cover the operation of 6 other provinces
including Binh Duong, Binh Phuoc, Dong Nai, Long building including short term training course
An, Lam Dong and Tay Ninh, altogether forming arrangement
the southern key economic region. l Others: Office and conference rooms for rent.
Vision
l To be the leading representative organization for
the business community in Southern Vietnam.
Mission Contact us
l Enhance the competitiveness of the business VIETNAM CHAMBER OF COMMERCE
community through representation, promotion AND INDUSTRY HO CHI MINH CITY
and capacity building activities.
BRANCH (VCCI-HCMC)
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District 3, HCMC
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T. (84-28) 3932 6598
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CHAPTER I
VIETNAM
AT A GLANCE
- VIETNAM
COUNTRY
AND PEOPLE
Reproduced from Sy Hoang’s lotus pattern

Graphic designer: Nguyen Quang Tu
I. GEOGRAPHY, LANDSCAPE AND CLIMATE
Located on the Indochinese Peninsula in Southeast Asia, Vietnam overlooks the Pacific Ocean and for
that reason, has been nicknamed the “balcony over the Pacific”.
From a bird’s eye view, Vietnam is shaped like the letter S. A single mountain range called Truong Son
stretches along Vietnam’s western border from the North to South, often likened to the shoulder pole
that carries the two ‘rice baskets’, the Red River Delta rice basket on the one end and Mekong River
Delta one on the other.
1 Geography, landscape and climate

With an area of 331,070 square kilometers,
Vietnam is roughly the same size as Italy, Ha Giang
Cao Bang
slightly smaller than Germany, and a bit Lai Chau Lao Cai Bac Can
larger than the US state of New Mexico. Tuyen

Quang
Lang Son
Vietnam borders China to the north, Laos

Yen Bai Thai
Dien Nguyen
Bien
Vinh Phuc
and Cambodia to the west, and the Pacific Son La

Phu Tho
Ha Noi
Bac Giang
Quang Ninh
Ocean to the east. Running along the east of Ha Tay
Hoa Binh Hung Yen

Hai Phong
the Indochina peninsula, the country boasts Ha Nam
Ninh Binh
3,260 kilometers of coastline, territorial, Thanh Hoa

Nam Dinh
and inland waters (vùng nội thủy và vùng

lãnh hải).There is also an exclusive, 500,000 Nghe An
square kilometers economic zone located

approximately 200 miles from shore. Last but Ha Tinh
not least, a 100,000 square kilometers area

occupied by more than 4,000 islands and Quang Binh
islets, including Paracel (Hoang sa) islands

and Spratly (Truong sa) archipelago. Quang Tri
Thua Thien Hue
Da Nang Hoang Sa
Paracel Islands
(Vietnam)
2. Climate Quang Nam
Laying within the tropical rain belt, Vietnam Quang Ngai
experiences high temperature and humidity Kon Tum
all year round. Binh Dinh
Gia Lai
The weather in the Northern part of Vietnam

(from Hai Van pass northwards) is divided Phu Yen
Dak Lak
into four seasons (spring, summer, autumn

and winter). Meanwhile, weather in the South Dak Nong
Khanh Hoa
(from Hai Van Pass southwards) consists of Binh Phuoc Ninh Thuan
a tropical monsoon with two seasons - the

Lam Dong
Tay
Ninh
Binh
rainy season spanning from May to November
Dong Nai
Duong Binh Thuan
and the dry season from December to the Dong Long An

Ho Chi Minh City
Ba Ria - Vung Tau

An Giang Thap
end of April. There also exists microclimates Tien Giang
Ben Tre
engendered by Vietnamese topographical Phu Quoc Kien Giang

Can Tho
Vinh Long
Truong Sa
features that support agricultural

Tra Vinh
Soc Trang
Spratly Islands
(Vietnam)
diversification and enhances landscape

Bac Lieu
Ca Mau
aesthetic. Con Dao
Figure 1: Map of the Socialist Republic of Vietnam

Hoang Sa
Paracel Islands
(Vietnam)
Truong Sa
Spratly Islands
(Vietnam)
Figure 2: Vietnam is known as the “balcony over the Pacific”
3. Landscape
Mountains and hills account for about three thirds of Vietnam’s territory. Terrains extend from northwest
to southwest, helping to direct the flow of rivers and position hydropower plants, dams, and reservoirs.
The two largest granaries are North red river delta covering about 16,700 square kilometers and Mekong
river delta covering about 40,000 square kilometers. While in the north, the dyke system has been
established and reinforced to prevent flood for hundreds years, in the south, the terrain is crisscrossed by
a maze of rivers and canals. The famers have learned to coexist with floods and maximize deposits of silt
for rice cultivation and water for aquaculture.
II. COUNTRY AND PEOPLE
As a market economy with a socialist orientation, legends, festivals and celebrations. As a result,
Vietnam is proactively integrating into the global Vietnam has rapidly become a favored destination
economy. During its transition into the modern for both social scientists and travelers alike.
era, Vietnam seamlessly incorporates traditional
cultures and foreign influences, Another element that has immensely influenced
the country’s foundation is a historical one.
Demographically, Vietnam features a mix of 54 Vietnam’s heroes and history are often celebrated
ethnic groups led by the “Kinh” Vietnamese group through festivals and holidays. For instance,
representing approximately 85% of the population. the Hung Kings, founders of the first Van Lang
Other ethnic groups such as the Tay, Thai, Muong kingdom (from 2879 BC to 258 BC) are honored
and Khmer each represent 2% of the population. on Hung Kings Commemoration day, annually
This multi-ethnicity has resulted in the emergence held on 10 March of the Lunar calendar. Another
of a vibrant culture of rich and diverse heritage renowned Vietnamese individual who changed the
manifested in Vietnamese cuisine, literature, course of history is King Ly Thai To, who decided

to isolate the kingdom from Hoa Lu citadel from
Dai La citadel in 1010 and renamed it to what is
currently known as Thang Long, Ha Noi.
Vietnamese history is also closely associated with

a continual fight for independence against foreign
enemies. Generations after, descendants will not
only remember the founders and the builders
of the country, but also the national heroes who
established the glorious feats of fighting against
foreign invaders, to whom the country will pay
tribute to forever. One quintessential example
is Tran Hung Dao, The Great Prince and military
Commander of the Dai Viet (Great Viet) armies that
successfully resisted three major Mongol invasions
in the 13th century. To this day, he is steadfastly
worshipped. There are temples established in his
honor alongside other national heroes. The culture
of historical commemoration also extends to the
king’s envoys who were sent to foreign land for
the purpose of paying tribute and they were able
to preserve the national prestige and honor and at
the same time, these journeys allowed envoys to
bring back newfound knowledge to the homeland
where they were re-taught to locals. The Temple
of Literature, the first national university, built in
1070 in Thang Long, Ha Noi, perfectly accredits
the value and endurance of knowledge through
generations. Here, stone stelae stand on stone
turtles, inscribed with the names and academic
PISA RANKING IN THE LATEST PUBLICATION careers of those who ranked first in the royal
IN 2015 national examinations. This act immortalizes
distinguished individuals. It was once the royal
Science Reading Mathematics method of upholding meritocracy, irrespective
Singapore Singapore Singapore Norway of social cast and stock. Quoting a famous saying
Japan
Hong Kong Hong Kong
Austria by Than Nhan Trung, who is inscribed in one of
(China) (China)
Estonia Canada Macau (China) New Zealand
the Doctor’s stele at this Temple: “The righteous
Taiwan Finland Taiwan Vietnam talents are the vitality of a nation…”.
Finland Ireland Japan Russia
Macau (China) Estonia China * Sweden The veneration of ancestors and national heroes
Canada South Korea South Korea Australia will long continue to inspire modern Vietnamese
Vietnam Japan Switzerland France as they develop their society, culture and economy.
Hong Kong United
Norway Estonia
(China) Kingdom
Vietnam is at the crossroads of the Pacific Ocean
Czech
China * New Zealand Canada
Republic and the Indian Ocean with great exposure to
Soulth Korea Germany Netherlands Portugal international sea lines, with ports of call like
OECD Hoi An or Pho Hien. Appointed the meeting
New Zealand Macau (China) Denmark
AVERAGE
place between the east and west, Viet Nam is
Slovenia Poland Finland Italy
constantly acquiring and adopting new knowledge
Australia Slovenia Slovenia Iceland
and cultures to further enrich its own. Eastern
United
Kingdom
Belgium Spain traditions and cultures including “Tam Giao
Germany Germany Luxembourg - Three religions - Buddhism, Taoism and
Netherlands Poland Latvia Confucianism” have long influenced and guided
Switzerland Ireland Malta Vietnamese behavior and thought. Meanwhile,
Lithuania the Western Latin alphabet has modernized the
Vietnamese language into becoming a cultural

Vietnamese National Assembly Building in Hanoi Capital The government of 2016-2021 term of office
medium, facilitating learning processes and groundbreaking investment capital for its first
comprehension of global cultures and sciences. phase (until 2030), a fund equating to 5000 billion
Instances of the melding of past and present are VND and equivalent to 215 million million USD.
present in the myriad of Buddhist temples and Enrollment is then scheduled for 2020 with the
Christian churches, the still-influential Feng shui first rector coming from Cornell University. In
practices in modern architecture, and the co- the event that educational platforms continue
existence of herbal and western medicines. The to expand and strengthen to underpin future
most notable illustration of a culture’s influence on economic forces and scale up on the global value
Vietnam, however, remains Vietnam under French chain, Vietnam has the capacity to become a
Colonialism. Despite their departure from Vietnam powerhouse in the era of the knowledge economy.
in 1954, the French still managed to establish
a lasting imprint on Vietnamese arts, medical
practices, and cuisine. In Ho Chi Minh City, there
still exist street names or medical institutes in
honor of French persons such as Louis Pasteur,
Alexander Yersin or Alexander de Rhode. In an
effort to continue the envoy’s tradition of growth
through knowledge, many Vietnamese families
nowadays will encourage their children to pursue
an education abroad in honor of their families and
country. For these reasons, Vietnam has become
a cultural melting pot that withstood the test of
time.
In the latest PISA (The Program for International

Student Assessment) ranking in 2015, Vietnam
was one of the countries that stood out as doing
remarkably well.
Vietnam was ranked 8th out of all participating

countries on the subject of science, with an
average score of 525 test points.
Vietnam’s high PISA scores suggest that the

potential for development exists. In order to
actualize these potentials, more investment in
tertiary education and vocational training at an
internationally accredited level need to be made.
In recent years, more international universities
have been established in Vietnam (Vietnam-
German University, RMIT, etc.). Among them,
VinUni, the private university has dedicated a

III. VIETNAM POLITICAL STRUCTURE
Every year, on Vietnam’s National Day citizens are 1. Legislature branch - the Vietnam
reminded of the instance when President Ho Chi National Assembly
Minh delivered the Proclamation on September 2,
The National Assembly is the highest law-making
1945, quoting the U.S. Declaration of Independence
body, the highest-level representative body of
that states: “All men are created equal. They are
people and the highest organ of state power of the
endowed by their Creator with certain inalienable
Socialist Republic of Vietnam. It is a unicameral
rights; among them are Life, Liberty, and the
body comprising of 498 delegates from various
pursuit of Happiness”.
strata of society and different ethnic groups from
across the country elected to serve a five-year
These universal values have since remained with
term. The National Assembly exercises three main
the Vietnamese people all through their fight
functions: creating, exercising, and supervising
for national independence, reunification and
legal activities. The National Assembly meets bi-
international integration.
annually. The latest election of the 14th National
Assembly took place on 22 May 2016 under the
Now, Vietnam is a socialist country operating
supervision of chairperson, Mrs. Nguyen Thi Kim
under the leadership of the Communist Party.
Ngan.
A nation-wide congressional vote (National
Congress) of Vietnam’s Communist Party is
On 12 November 2018, the National Assembly
held every five years to determine the country’s
gathered a 100 percent vote for the ratification of
orientation, strategies, and adoption of policies on
CPTPP.
solutions for socio-economic development. The
National Congress elects a Central Committee,
The Standing Committee within the National
which in turn elects the Politburo.
Assembly is the permanent executive body of
the National Assembly. Its principal functions
At Congress X in 2006, the slogan “Wealthy people,
are the interpretation of the Constitution, Laws
strong country, just and civilized society” was
and Ordinances, the degree to which they are
presented.
implemented, and the supervision of activities
from the Government, the Supreme People’s Court
The latest National Communist Party Congress
and the Supreme People’s Procuracy.
(Congress XII) took place in Ha Noi City during
20-28 January 2016. The next National Communist
Party Congress is scheduled to be held in the first
2. The Executive Branch
quarter of 2021. It is expected that during this
convention, Vietnam’s vision of the future will be Generally, the function of the executive branch is
charted and delineated to establish a new course to enforce laws and rules. The executive branch
of development. comprises of the state president, the prime
minister and the government.
2.1. The State President

is the Head of State, elected by members of the
for a five-year tenure to represent the Socialist
Republic of Vietnam in domestic and foreign
affairs. The President has the right to proclaim

Laws and Ordinances passed by the National The Prime Minister is the leader of the
Assembly and the Standing Committee. The Government. The Prime Minister is responsible
President is the commander-in-chief of the armed for the day-to-day operations of the Government.
forces and Chairman of the Council for Defense The Vietnamese Government currently has 18
and Security. In foreign affairs, the President has ministries and 4 ministerial-level bodies.
the authority to appoint ambassadors and to sign
international agreements and treaties. On 27 July 2016, at the session 1 of the National
Assembly XIV, the new government has been
The President appoints and dismisses the Prime consolidated with Mr. Nguyen Xuan Phuc as the
Minister and the members of the Government elected Prime Minister. The government’s slogan
based on resolutions of the National Assembly for the upcoming term highlights “the government
or its Standing Committee. Furthermore, the of development, action and integrity”.
President has the right to nominate key officials
such as the Chief Justice of the Supreme Court and
the Chief Procurator of the Supreme Procuracy,
subject to the National Assembly’s approval. 2.3. The Judicial Branch
The general function of the judicial branch is to
On 23 October, at the sixth session of a plenum of
interpret laws. The Supreme People’s Court is the
the National Assembly, Party General Secretary,
highest judicial organ of the Socialist republic of
Nguyen Phu Trong, was elected as State President
Vietnam. It supervises and directs the judicial work
for the 2016 - 2021 tenure. This occasion marked
of local People’s Courts, Military Tribunals.
the consolidation of the title of the General
Secretary of the Party and the State President.
2.2. The Government

is the highest executive organ of the state. The
Government has the same term of office as the
National Assembly. In reality, the Government
administers the implementation of the state’s
affairs in the fields of politics, economics, culture,
society, national defense and security, and foreign
relations.

CHAPTER II
BUSINESS
LANDSCAPE
Reproduced from lotus paintings in Noi Bai int’l

airport, designed by artist Nguyen Thu Thuy and
Tan Ha Noi group

I. LOOKING BACK ON THE LAST YEAR 2018
VIETNAM’S MACROECONOMIC ENVIRONMENT 2018
Socialist republic of Vietnam
Area 331,698km2
(63 provinces & cities)
Population 94.64 million population (2018)
Population growth rate 1.06%
Labor force 55.7 million (2018)

Hoang Sa
Paracel Islands
(Vietnam) Unemployment rate 2.0% (2018)
GDP growth rate 7.08% (2018)
GDP per capita 2.587 USD (2018)
Inflation rate (CPI) 3.54% (2018)

Truong Sa
Minimum wage rate 2.9 million - 4.2 million VND

Spratly Islands
(Vietnam)
~ 124- 180 USD/month

(16/11/2018)
1986 1995 1998 2007 2010 2015 2018 2035
Open door ASEAN APEC WTO Surpassed AEC Signed Upper-Middle

policy member member member the Low Income CPTPP Income Country
threshold
1. Macroeconomic
Performance
In response to a volatile external
environment and signs of
decelerating global economic
growth, International institutions
such as the IMF, World Bank
and OECD have simultaneously
decreased the growth outlook
of the global economy by one
percentage point from the
initial 2019 forecast. However,
Vietnamese companies have
recorded fairly promising
results mirrored in the following
dimensions:

1.1 Growth rate
Vietnam’s economy in 2018 recorded a growth of 7.08%, its highest in a decade. The FDI sector continued
to be a major contributor to the country’s trade, which accounted for 20% of GDP in 2018. In addition,
70% of Vietnam’s export turnover came from FDI sector, from which Samsung Vietnam solely contributed
roughly 25% of total exports in 2018. Increased social investment capital and credit growth remain as
drivers of economic growth. On the demand side, robust domestic spending was a primary driver of
growth.
OVERVIEW OF VIETNAM ECONOMY 2018

22.97
GDP GROWTH AND CPI BY YEAR (%)
15.58
GDP CPI
9.19 9.21
6.88 6.78 6.81 7.08

6.23 6.6 6.68
5.89 5.98 6.21
5.32 5.03 5.42
4.09
2.66 3.53 3.54
0.63
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: GSO
A breakdown by sector shows that the agricultural industry grew by 3.76% and contributed to 8.7% of
GDP growth. Industry and construction expanded by 8.85% and contributed 48.6% to the overall growth.
Lastly, the services sector grew by 7.03% and contributed 42.7% to GDP growth.
GDP COMPOSITION BY SECTOR GDP COMPOSITION BY ECONOMIC FORM
Agro-Forestry-Fishery
Agro-Forestry-Fishery
Industry-Construction
Industry-Construction State State Non stateNon state
Service Service Indirect
Indirect tax minustax minus subsidies
subsidies FDI FDI Indirect tax minustax
Indirect subsidies
minus subsidies
10% 10% 15% 15% 10% 10%

10% 10%17% 10% 10%
17% 28% 28%
13% 13%
18% 18% 2010 13% 13% 29% 29%
29% 29%
2015 20% 20%
18% 18% 2010
2018 15% 15%
37% 37%
40% 40% 2015
34% 34%
41% 41% 33% 33%
32% 32% 2018
43% 43%
43% 43%
42% 42%
Source: General Statistics Office of Vietnam

Manufacturing sector:
Manufacturing sector continued to be one of the main growth drivers of the Vietnamese economy,
growing by a strong 12.98%. Although the 2018 growth rate witnessed a decrease from the prior year, it
was still notably higher than the 2012 - 2016 period.
In 2018, the industrial and construction

sector grew by a relatively high rate MANUFACTURING PMI RANKINGS IN 2018
of 8.85% (yoy), these figures show a
significant increase compared to the Manufacturing PMI, 50 = no change on prior month
same period from previous years (2016: (2018 full year averages)
7.57%; 2017: 8.00 %). This same sector
contributed the most to the economic Vietnam
growth in 2018. Manufacturing industry Japan
with flagship Samsung continued to be
Taiwan
the main driving force of this sector with a
high growth rate of 12.98%. Philippines
Indonesia
According to the official figures on Myanmar
manufacturing PMI provided by Nikkei China
Vietnam Manufacturing PMI and compiled
Thailand
by IHS Markit, manufacturing sector
continues to lead growth as PMI sees best S Korea
annual average since survey’s inception. Malaysia
The survey saw a steady monthly rise in 49 50 51 52 53 54
all throughout 2018. Not only did Vietnam
rank highest of all countries in Asia in
2018, it also held the highest recorded Source: IHS Markit, Caixin, Nikei
annual average since the establishment of
the PMI surveys in 2011.
According to General Statistics Office of Agricultural-forestry-fishery sector:

Vietnam (GSO), the Industrial Production
The growth rate of 3.76% (yoy) of the agricultural
Index (IIP) in 2018 recorded a growth rate
sector was its highest in the period of 2012-2018,
of 10.2% compared to 2017 and again, the
partly due to restructuring efforts in recent years,
key role which the manufacturing sector
especially in plant cultivation and aquaculture.
plays in promoting growth recorded a rate
Agricultural producers had a good year in
of 12.3%.
2018 as a result of higher export orders. While
rice exporters are busy, fruit and fish exports
HP INCREASE OVER THE YEARS (%) display signs of strength. Vietnam’s fish sector
in particular seems to benefit from the bilateral
10.20
9.80 9.40 trade tensions between US and China, enjoying
7.50
7.60
lax US regulations and taxes and reduced Chinese
tariffs on foreign imports. Within this sector,
local fisheries especially Pangasius farming,
continued to be a well-recognized and respectable
Vietnamese brand.
Service sector:
2014 2015 2016 2017 2018
The service sector grew by 7.03%, higher than the
growth rate from 2012-2016, with retail, wholesale,
Source: General Statistics Office of Vietnam financial services, accommodation, catering

services and transports all posting decent growth. 4% set by the National Assembly.
Total goods and service retail value this year The GSO stated that core inflation in 2018,
accumulated to 4,395.7 trillion VND (approximately excluding food, energy and government-regulated
190 billion USD at current exchange rate), up by goods, rose by 1.48% compared to the previous
11.7%from the previous year. year.
The pattern of headline inflation outpacing core

1.2. Inflation
inflation indicates that price increases mainly
In 2018, the consumer price index increased by stemmed from higher food and energy prices and
3.54% due to the government’s efforts to curb the government’s upward adjustment of medical
prices; however, it is slightly below the target of and educational costs.
1.3. External economic performance

a) Foreign trade
The year of 2018 is marked by the total import and export value reaching nearly 480 billion USD. The trade
surplus approximated to 7.21 billion USD. The collective efforts of a favorable trade balance and SBV’s
monetary policy contributed greatly to enhance the country’s foreign exchange reserves in the first half of
2018 and prevent exchange rates from drastic fluctuations in the second half of the year.
IMPORT - EXPORT TURNOVER IN 2018 BY COUNTRIES - TERRITORIES

(Unit: billion USD)
Import Export
Import Export
65.8
65.8
47.5
42.5 47.5
41.9 47.9 42.5
41.9 47.9
24.7
32 24.7
32
18.3 19
18.3 19
19.3
19.3
13.8
13.8 12.8
12.8
China
China Korea
Korea ASEAN
ASEAN Japan
Japan EU
EU USA
USA
Source: General Department of Vietnam Custome
Export
Vietnam’s export turnover in 2018 reached 244.72 billion USD. Of the total, exports from FDI sector
accounted for 71.7%, posting 175.52 billion USD. These figures indicate an increase by 13.1% over the same
period in 2017. Notably, exports from the domestic sector also improved significantly by 18.2% (yoy).
Regarding exported goods in 2018, there were 29 classified goods, each recording an export turnover of

47.5
42.5
41.9 47.9
24.7
32
19
billions of dollars. Altogether,
18.3
they account for 91.7% of total export turnover. Several commodities
19.3
experiencing the highest growth rate were phones 13.8 and mobile components with 50 billion USD (mainly
12.8
from Samsung as aforementioned), up by 10.5%; textiles and garments with 30.4 billion USD, up by
16.6%; electronics, computers and technological components with 29.4 billion USD, up by 13.4%; and
footwear with 16.3 billion USD, up by 11%. Meanwhile, crude oil exports accumulated only 2.3 billion
China Korea ASEAN Japan EU USA
USD, decreasing by 21.2% in value and 39.5% in volume. This observed volatility in oil prices suggests
that dependency on resource exploitation is likely unsustainable.
EXPORTS OF GOODS IN 2018 IMPORTS OF GOODS IN 2018

(Billion USD) (Billion USD)
Camera and accessories 5.2 Plastic products 5.7
Paper and paper products 6.3 Other base metals 5.8
other means of transportation

parts and accessories
8 Petroleum products 7.2
Textile, leather and foot-wear

Wood and wooden products 8.8 materials and auxillaries 7.6
Fishery products 8.9 Plastics 9.1
Machine, equiment, tools

and instruments
16.2 Iron and Steel 9.9
Foot-wears 16.5 Fabrics 12.8
Computers, electrical products, Telephones, mobile phones

spare-parts and components 29.3 and parts 15.9
Machine, equipment, tools

Textiles and garments 30.5 and instruments
33.7
Telephones, mobile phones Computers electrical products,

and parts 49.1 spare-parts and components 42.2
01 02 03 04 05 06 01 02 03 04 05 06
Sources: General Department of Vietnam Custome
Lastly, no discussion about exportation can omit the importance of partnerships. The US continued to
be Vietnam’s largest export market with a turnover of 47.5 billion USD (up by 14.2% compared to the
same period in 2017). These affirmative outcomes can be partially attributed to the US-China trade
war as more US orders relocate from China to Vietnam. In 2018, China has risen to be Vietnam’s third
largest export market, just after the US and EU, leaving the position of highest trade deficit partner.
China’s higher per capita income justifies its increasing efforts to become Vietnam’s primary consumer
market, especially for agricultural products. As a result, events that affect the Chinese market can also
significantly influence Vietnam.

Import
Machineries, equipment, spare parts and raw
Total imports in 2018 grew by 12.5%, equivalent to materials ranked second with the import
237.51 billion USD. Of the total, imports of the FDI turnovers of 101 and 116 billion USD, respectively.
sector accounted for 142.71 billion USD and the
domestic sector accounted for 94.80 billion USD. China remained the largest import market with
This led to a trade surplus of 32.81 billion USD in import value of 65.8 billion USD (up by 12.3%)
the FDI sector and a trade deficit of 25.60 billion The depreciation of CNY may be the cause, as
USD in the domestic sector in 2018. Exports of we hypothesized in mid-2018 (in VEPR’s Viet
the FDI sector were dominated by a number of Nam Macroeconomic Report Quarter 2), making
large enterprises such as Samsung whereby the imported goods from China cheaper and more
export turnover of phones and its components attractive to the Vietnamese market.
alone accounted for 20% of the total annual export
turnover. Meanwhile, South Korea replaced China as
Vietnam’s largest trade deficit partner with 29.6
Top of the list constituting imported goods in billion USD. China follows closely with 23.9 billion
2018 were materials relating to the manufacturing USD. A high trade deficit with Korea can be
industry, which reached 217 billion USD and attributed to the frequent import of materials from
accounted for 91.4% of total import turnover. South Korean enterprises (i.e Samsung).
Investment
FDI ATTRACTION TO VIETNAM OVER YEARS

(Unit: billion US$) 35.9 35.5
Registered capital Realised capital
24.1 24.4
22 22.3
20.2
18.6 19.1
17.5
15.8
14.7 14.5
13 12.3
11 11 11.5
10 10.5
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Foreign Investment Agency
a. Granting of investment certificate

Updates from December 20, 2018 reported 3,046 new projects granted investment certificates, accruing
a newly registered capital of nearly 18 billion USD. 84.5% compared to the same period of 2017. Also,
additional registered capital reached 7.59 billion USD, 90% of the aggregate from 2017, despite an increase
of 17% in the number of projects registering to adjust capital. In 2018, Vietnam enjoyed an increase of 64%
in capital contribution and share purchase by foreign investors over the same period last year, totaling 9.89
billion USD.
The total of new and additional registered capital and capital contribution and shares purchased by foreign
investors in 2018 averaged 35.46 billion USD, estimably 98.8% of the total from the same period in 2017.

b. FDI in terms of countries and territories c. FDI in terms of localities
In 2018, there were 112 countries and territories Among Vietnam’s 59 cities and provinces, Hanoi
operating investment projects in Vietnam. Japan attracted the greatest FDI interest in 2018,
ranked highest with a total investment capital accumulating a total registered capital of 7.5
of 8.59 billion USD, making up 24.2% of total billion USD, making up 21.2% of the nation’s total
investment capital; South Korea ranked second investment capital. Ho Chi Minh City ranked
with a total registered investment capital of second with a total registered capital of 5.9 billion
7.2 billion USD, accounting for 20.3% of total USD, accounting for 16.7% of total investment
investment capital; and Singapore ranked third capital. Hai Phong ranked third with a total
with a total investment capital of 5 billion USD, registered capital of 3.1 billion USD, accounting for
accounting for 14.2% of total investment capital. 8.7% of total investment capital.
TOP TEN FOREIGN DIRECT INVESTORS TOP TEN LOCALITIES RECEIVING MOST FDI
IN VIETNAM 2018 INFLOW IN 2018
(Billion $USD) (Billion $USD)
France 0.6 Long An 0.7

Australia 0.6 Tay Ninh 0.8
Thailand 0.8 Bac Ninh 1.1
Taiwan (China) 1.1 Thua Thien Hue 1.3
British Virgin Islands 1.9 Dong Nai 1.5
China 2.5 Ba Ria - Vung Tau 2.1
HongKong (China) 3.2 Binh Duong 2.3
Singapore 5.1 Hai Phong 3.1
South Korea 7.2 Ho Chi Minh City 5.9
Japan 8.6 Ha Noi 7.5
Source: Foreign Investment Agency Source: Foreign Investment Agency
d. FDI in terms of sectors

THE MOST ATTRACTIVE SECTORS FOR FDI IN 2018
In 2018, 18 fields were invested
by foreign investors, in which,
processing and manufacturing
sector attracted much attention
Other
from foreign investors with
the total capital of USD16.58 24.40%
billion, accounting for 46.7% of 16.58$
the total registered investment billion USD
capital. Real estate business TOTAL Manufacturing
INVESTMENT 46.70%
ranked second with total
investment capital of USD6.6 10.30% CAPITAL
3,67$
billion, accounting for 18.6%
billion USD
of total registered investment
Wholesale,
capital. Wholesale and retail field
retail 18.60%
ranked third with total registered
investment capital of USD3.67
billion, capturing 10.3% of total 6.6$ billion USD
registered investment capital... Real estate business Source: MPI
operations

e. Latest FDI Development
+ FDI in terms of countries and territories
In the first 5 months of 2019, there were 88 countries and territories operating investment projects
in Vietnam. Hong Kong ranked highest with the total investment capital of 5.08 billion USD (including
3.85 billion USD of shares purchase in Vietnam Beverage Co., Ltd. in Hanoi), making up 30.4% of total
investment capital. Korea ranked second with a total registered investment capital of 2.62 billion USD,
accounting for 15.7% of total investment capital into Vietnam. Singapore ranked third with a total
registered investment capital of 2.09 billion USD, accounting for 12.5% of total investment capital. China
and Japan ranked fourth and fifth with a total registered capital of 2.02 billion USD and 1.52 billion USD,
respectively.
3 TOP NATIONAL FID INVESTORS IN VIETNAM TOP 3 LOCALITIES ATTRACTING MOST FDI
IN 5 EARLY MONTHS 2019 INFLOWS IN 5 EARLY MONTHS 2019
30.4% 29%
4.8 billion
5.08 billion
43.5% USD
41.4% USD
n Hong Kong n Ha Noi

n South Korea n Ho Chi Minh City
n Singapore n Binh Duong
n Other n Other 17%
15.7% 7.4% 2.8 billion
12.5% 2.6 billion 1.25 billion USD USD
2.09 billion USD USD
Source: Foreign Investment Agency Source: Foreign Investment Agency
+ FDI in terms of localities

3 SECTORS ATTRACTING MOST FDI
INFLOW IN 5 EARLY MONTHS 2019
Within the first 5 months of 2019, there
had already been 55 provinces and cities
securing FDI investments. Of all recipients,
Hanoi attracted the highest FDI inflow per 5.2% 14.6%
individual state with a total registered capital 0.9 billion USD
of more than 4.79 billion USD, accounting
8.2%
for 28.6% of total investment capital. Ho
1.14 billion USD
Chi Minh City ranked second with a total
registered capital of 2.78 billion USD, 72.0%
accounting for 16.6% of total investment n Manufacturing 12 billion USD
capital. Binh Duong ranked third with a total n Real estate
registered capital of more than 1.25 billion n Wholesale, retail
USD, accounting for 7.4% of total investment n Other
capital.
Source: Foreign Investment Agency
In the first 5 months of 2019, data had recorded foreign investments in 19 domestic fields, with a majority
of funding directed towards the processing and manufacturing sector with the total capital of 12 billion
USD, accounting for 71.8% of the total registered investment capital. Real estate ranked second with total
investment capital of 1.38 billion USD, accounting for 8.2% of total registered investment capital. Wholesale
and retail ranked third with a total registered investment capital of 864 million USD, accounting for 5.2% of
total registered investment capital

f. Offshore investment
The latest report from the Ministry of Planning and other motor vehicles gaining 82.9 million USD,
and Investment (MPI) showed that 149 new accounting for 19.2% of total investment capital
projects were granted investment certificates for
Vietnamese enterprises in 2018 with a total capital Agriculture, forestry and fishery gained 52.3
of 376.2 million USD and 35 capital adjustment million USD, accounting for 12.1% of total
projects with additional capital of 56 million USD. investment capital and the processing and
manufacturing industry gained 52.1 million USD,
Overall, the total investment capital of Vietnam accounting for 12% of total investment capital.
abroad in 2018 (new and additional capital)
reached 432.2 million USD. In 2018, Vietnamese enterprises invested in 38
countries and territories Investment in Laos
Finance and banking sectors gained the greatest accounted for the largest proportion with 81.5
interest from investors with 105.8 million USD, million USD, accounting for 18.9% of the total
accounting for 24.5% of total investment capital. investment capital, followed by Australia with 55.5
million USD, accounting for 12.8% and the United
The second is the wholesale and retail sectors; States with 53 million USD, accounting for 12.3%.
repair of automobiles, motorcycles, motorbikes
Exchange rate
The exchange rate rose sharply in 2018 due to the impact of the US-China trade war and FED’s tight
financial policy. As of December 27, the interbank exchange rate increased sharply by 3.26% YTD, while
the unofficial rate also increased by 2.27% YTD. The rise of the unofficial USD/VND exchange rate has
decreased quite sharply in the last month of the year thanks to a lot of remittances, which helped reduce
the USD rallied pressure. Influence of FED’s rate hike activities continued to boost the overall increase of
the exchange rate.
International visitors to Vietnam in 2018

According the report of Vietnam National Administration of Tourism, total international visitors in 2018
reached 15,497,791 arrivals, increase 19.9% over the same period last year.
THE AMOUNT OF INTERNATIONAL

VISITORS COMING TO VIETNAM
(million people)
15.5
12.92
10.01
7.57
6.25
5.05
4.23
3.48
1.35 2.14
Source: General Statistics Office of Vietnam A Golden Bridge on Ba Na hill resort, Danang

1.4. Employment & Human resource
Labor force is the engine of economic growth. Among input factors to contribute to GDP growth, such
as natural resources, capital, science-technology and labor, labor is the most important factor. In output
perspective, labor generates income, final consumption, which is the important element of aggregate
demand that is together with accumulation and export react back upon growth rate.
POPULATION PYRAMID, 2018 - 2030
100+ 0.0% 100+ 0.0%

95-99 0.10% 0.0% 95-99 0.10% 0.0%
90-94 0.20% 0.1% 90-94 0.30% 0.1%
85-89 0.50% 0.2% 85-89 0.40% 0.2%
80-84 0.60% 0.3% 80-84 0.70% 0.4%
75-79 0.70% 0.4% 75-79 1.30% 0.9%
70-74 1.00% 0.6% 70-74 2.00% 1.5%
65-69 1.60% 1.3% 65-69 2.40% 2.0%
60-64 2.30% 2.0% 60-64 2.70% 2.4%
55-59 2.80% 2.5% 55-59 3.10% 2.8%
50-54 3.00% 2.9% 50-54 3.30% 3.2%
45-49 3.30% 3.3% 45-49 3.70% 3.6%
40-44 3.60% 3.5% 40-44 4.00% 4.0%
35-39 4.00% 3.9% 35-39 4.00% 4.1%
30-34 4.30% 4.4% 30-34 3.20% 3.3%
25-29 4.50% 4.6% 25-29 3.00% 3.1%
20-24 3.60% 3.8% 20-24 3.20% 3.5%
15-19 3.30% 3.5% 15-19 3.40% 3.8%
10-14 3.50% 3.8% 10-14 3.40% 3.7%
5-9 3.70% 4.1% 5-9 3.20% 3.5%
0-4 3.80% 4.1% 0-4 3.10% 3.2%
5.00%3 .00% 1.00%1 .00% 3.00%5 .00% 5.00%3 .00% 1.00%1 .00% 3.00%5 .00%
Female Male Female Male
Source: Unite Nations

Source: United Nations
a) Golden population structure

POPULATION STRUCTURE (%)
The golden population structure alongPopulation
with the structure(%)
growing of the middle class will actively bolster n Under 15 aged n 15 - 64 aged
Under
national economic 15 aged
growth 15-64 aged
in thenext decade. Over 65 aged Aging index
n Over 65 aged
aging index
According to the United Nations, Vietnam’s
population is estimated at 96.87 million, 23 17.722.9 17.7
increasing24.2 23.5
by 0.85 million 23
people compared 23.1 24.2 23 23.5 23
22.923.1
65.7
to 2017, ranking 14th globally and accounting 68.5 69.4 70.1 69.7 70 69.8
for about 1.27% of the world’s population.

65.7 59.5
Million people
68.5 69.4
Currently, the middle-class accounts70.1for
69.7 43.5 70 43.3 43.2 69.8 43.4 42.7 43.6
roughly 13% of the population. It undergoes an

59.5
16.6
annual increase
43.5 of upward43.31.5 million43.2
people 43.4 7.3
42.77.1 6.9
43.6
7.2 7 7.3
and an urbanization rate of 35%. The World 2013 2014 2015 2016 2017 2018 2040f
Bank expects this class to account for 26% of
the population
7.3 structure7.1by 2026. Notably,
6.9 the 7 Statistics7.3
7.2 Source: General 16.6
nation’s primary labor force boasts a mean Office
age group 2013 2014
of 32-years-old 2015of
whereby 67.1% 2016 of Vietnam 2017, Vietnam Credit
2018 2040f
the population or 67.13 million people are
placed within the 15-64 age range. A growing
workforce in addition to competitive wages will
robustly support and establish production and
consumption sectors as the main economic
growth drivers in the years to come.

b) Unemployment rate & Underemployment rate
3.5 Urban
UNEMPLOYMENT unemployment
RATE & rate, 2.95
UNDEREMPLOYMENT 3
RATE IN 2017 (%)
2.5 Overal
unemployment General
underemployment
rate, 2 Rural
Source: General Statistics
2 unemployment General rate, 1.85
Office of Vietnam underemployment
rate, 1.55
rate, 1.46
1.5
General
underemployment
1
rate, 0.69
0.5
c) Labour structure d) The shift from labor-intensive advantage

to efficiency-driven pattern based on skilled
In 2018, the working population aged 15 and over
and trained labors
was 54.3 million, those employed in agriculture,
forestry and fishery accounted for 38.1% of the Experts from the World Bank and the International
total (down by 2.1 % from the previous year). There Corporation (IFC) recently proposed that in order
are 14.4 million employees operating in industry to attract more high-quality FDI, Vietnam should
and construction, accounting for 26.6% (up by 0.8 do many things, including the implementation of a
%); and there are 19.2 million employees in the major skills supply push to enable next-generation
service sector, accounting for 35% of the total (up FDI. These experts stated that investors cite lack
by 1.3 % from the previous year) of industry-ready skills (technical, language, and
soft skills) as the greatest barriers to growth.
The snapshot picture of the labour composition
in major economic sectors is presented in the According to the 2018 Global Talent
following graph: Competitiveness Index (GTCI), which assesses
countries in terms of their ability to attract,
develop, and retain talent, Vietnam ranked 87th
LABOUR COMPOSITION BY SECTOR amongst 119 countries. Major challenges include
the lack of technology infrastructure, R&D
n Agro-Forestry-Fishery spending, vocational and technical skills.
n Industry-Construction
n Service The status of the trained workforce is presented in
the following table:
29.5 33.2 38.1 SHARE OF TRAINED EMPLOYEES AGED 15

AND OVER (%)
21
22.8 26.6
target 2019 24
*2018 21.9
49.5 44 38.1 2017 21.4
2015 19.9
2010 2015* 2018 2010 14.8
Source: General Statistics Office of Vietnam 2005 12.5
2000 10.3
Source: General Statistics Office of Vietnam

2. VIETNAM ECONOMIC INTEGRATION PROCESS
AND FREE TRADE AGREEMENTS
VIETNAM INTEGRATION FREE TRADE AGREEMENTS
AANZFTA VKFTA
ACFTA WTO AIFTA VN-EAEU FTA CPTPP

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
VJEPA
VCFTA EVFTA
AJCEP
AKFTA
ATIGA ASEAN Trade in Goods VCFTA Vietnam - Chile

Agreement Free Trade Agreement
ACFTA ASEAN - China VKFTA Vietnam - Korea
Free Trade Agreement Free Trade Agreement
AKFTA ASEAN - Korea VN-EAEU FTA Vietnam-Eurasian Economic
Free Trade Agreement Union Free Trade Agreement
AJCEP ASEAN - Japan Comprehensive CPTPP Comprehensive and
Economic Partnership Progressive Agreement for
Trans-Pacific Partnership
AANZFTA ASEAN - Australia-New Zealand
Free Trade Agreement EVFTA EU - Vietnam Free Trade
Agreement in 2020
AIFTA ASEAN - India
Free Trade Agreement
INTERFACE OF FTAS RCEP CPTPP
• ASEAN FTA 1999

• ASEAN - China FTA 2005 China South Korea Japan
Canada
• ASEAN FTA
• ASEAN Japan FTA 2008 AEC
• ASEAN - Australia & Newzealand Chile
FTA 2009 Thailand Indonesia Malaysia New Zealand
• ASEAN India FTA 2010

India Brunei
• Vietnam - Japan FTA 2008
• Vietnam - Chile FTA 2014 Laos Singapore Australia
Cambodia Mexico
• Vietnam - South Korea FTA 2016
• Vietnam - EAEU FTA 2016
• CPTPP 2018
Philippines Myanmar Vietmam Peru
• EVFTA to be ratified in 2020
• ASEAN - Hong Kong (to be signed
• RCEP to be signed in 2020
• Vietnam - EFTA FTA under negotiation
+
• Vietnam - Israel FTA under negotiation VN-EAEU FTA VN-EFTA
… VN-EU EFTA

When examining the progress of Vietnam’s of the new generation will pose grave challenges
integration into the global economy through Free for the Vietnamese economy.Starting from a low
Trade Agreements, it is pertinent to recognize level, Vietnam will be forced to find solutions
Vietnam’s leadership in the process of promoting for weak competition, establish structure for an
international cooperation and linkage. This international-level legal institution, and develop
effort is manifested by the nation’s admission to strategies of supervision for legal enforcement,
the WTO through enforcing the common rule intellectual property, labor relations…etc.
of the game or rule of law. Amid theresurgence
of protectionism, Vietnam instead advocates On the other hand, Vietnam’s commitment
for a multinational trading system and opts for to certain FTAs assures foreign investors that
joining the new generation’s trade agreement Vietnamese businesses will comply with the rule
and most recently, signed and ratified the CPTPP. of law when delineating long-term strategic
In Asia, only Vietnam, Japan and Singapore have investment plans.
collaborated on negotiations with the EU to
formulate a new FTA Initially, participation in FTAs
II. VIETNAM’S POSITIONING - WHERE DOES VIETNAM

STAND COMPARED TO OTHERS
1. OVERAL VIETNAM’S GLOBAL RANKING
Source: World Economic Forum

To project tomorrow’s goal, it is necessary to first
locate today’s position. VIETNAM’S GLOBAL RANKING
According to the World Bank’s country

classification, Vietnam’s per capita income Global Competitiveness (2018)
averages 2.587 USD. Vietnam therefore falls into 55th among 137 economies #55
the lower middle-income bracket. However, the
Vietnamese economy is steadily transitioning from A.T.Keamey Global Service Location
a factor-driven economy into an efficiency-driven Index (2017) 6th out 55 countries #6
economy. The growth drivers for this stage have
been the labor intensive and capital intensive Ease of Doing Business (2018)
factors that require harnessing from foreign 69th out of 190 countries #69
investors.
Global Manufacturing Competitiveness
The following list of reference on Vietnam’s index Index (2016) 18th out of 40 economies #18
ranking provides a snapshot of Vietnam’s standing
compared to other economies in 2018. Human Capital Index (2018)
49th out of 127 economies #48
According to the World Bank’s Doing Business 2018
report, Vietnam was ranked 69th of 190 economies Average Score of PISA mathematics,
in the factor measuring the Ease of Doing science & Reading (OECD 2015 - 2016) #22
Business, increasing by 14 ranks from 2017 and 30
ranks from 2012. Similarly, the World Economic Global Innovation Index (GII) (2018)
Forum’s (WEF) Global Competitiveness Report 45th out of 127 countries #45
2017-2018ranked Vietnam 55th of 137 economies,
increasing by 5 ranks from the previous year.
2. GLOBAL COMPETITIVENESS GLOBAL COMPETITIVENESS RANKINGS

INDEX OF ASIA-PACIFIC COUNTRIES - REGIONS IN 2018
Vietnam decreased by 3 ranks in the Global

Competitiveness Index 4.0 2018 edition to 77th of Ranking within Global Ranking
140 economies according to the World Economic Asia-Pacific
Forum’s Global Competitiveness Report released 2017 2018
on October 17. Although Vietnam has attained
great achievements in factors such as Health, 11 Indonesia 47 (36) s 45
Market Size, Infrastructure, Skills, Labor Market,
12 Philippines 68 (56) s 56
and ICT Adoption; indicators such as Business
Dynamism, Product Market, Institutions, 13 India 63 (40) s 58
Infrastructure, Financial System, and Innovation
Capacity fell short. Only Macroeconomic Stability 14 Brunei 64 (46) s 62
remained unchanged.
15 Vietnam 74 (55) t 77
16 Sri Lanka 81 (85) t 85
17 Mongolia 95 (101) t 99
18 Bangladesh 102 (99) t 103
19 Pakistan 106 (115) t 107
20 Nepal 108 (88) t 109
* Numbers in paren these indicate 2017 ranking using

previous ranking system
Source: World Economic Forum

3. GLOBAL INNOVATION INDEX
Vietnam rose by 2 ranks on the Gil Report’s Global Innovation Index 2018 (GII) to place 45th of 126
economies. The sub-indices in which the country saw the greatest ranking improvements pertain
to Institutions, increasing from rank 87 to 78; Business Sophistication from 73 to 66 and Creative
Outputs from 52 to 46. Gross Expenditure on Research and Development by businesses also rose in
rank, from 36 to 13. Finally, collaboration between university and industry rose from 76 to 59.
GLOBAL INNOVATION INDEX 2018
VIETNAM
2018
rank 45 2
CAMBODIA
2018
rank 98 3
PHILIPPINES
Hoang Sa
Paracel Islands
(Vietnam)
2018
rank 73
Truong Sa
Spratly Islands
(Vietnam)
THAILAND
2018
rank 44 7
MALAYSIA
2018
rank 35 2
BRUNEI
2018
67 4
INDONESIA
rank
2018
rank 85 22 SINGAPORE
2018
rank 5 2
RANKING OF VIETNAM IN THE SEVEN GII AREAS GLOBAL TOP 10

(1 is highest possible ranking) Changed in ranking from 2017
Institutions 56.20% 1 Switzerland

Human capital 2 Netherlands 1
& research 30%
Infrastructure 3 Sweden 1
40.40%
Market 4 United Kingdom 1
sophistication 54.30%
5 Singapore 2
Business sophistication 30.30%
6 USA 2
Knowledge
& Technology outputs 32.40%
7 Finland 1
Creative output 35% 2
8 Denmark
9 Germany
Source: Global Innovation Index 2018 by Cornell SD Johnson
College of Business, Insead, and World Intellectual Property 10 Ireland
Organization
In the measures of the human capital index (HCI), Vietnam was ranked 2nd in the ASEAN region behind
Singapore and 48th out of 157 countries globally. A Vietnamese child born today will be 67% as productive
when she grows up as she could be if provided a complete education and health support.

4. EASE OF DOING BUSINESS INDEX
1. Status of Vietnam’s Ease of Doing Business Score:
The latest Vietnam ranking of Ease of doing business index is presented in the below table.
EASE OF DOING BUSINESS SCORE
25 27 25
64 68
97 104
115 109
112
Starting a Dealing with Getting Registering Getting Protecting Paying Trading Enforcing Resolving
Business Construction Electricity Property Credit Minority Taxes across Contracts Insolvency
Permits Investors Borders
Source: Ease of doing business report 2019 by World Bank
Based on the “Ease of doing business” report by 2. Vietnam’s Ease of Doing business in
World Bank and its own analysis, IMF has recently comparison: The Vietnam’s investors friendly
stated that: “The ease of doing business in Vietnam index in comparison with other regional
continues to improve” as illustrated in the below countries is presented in the following table:
table.
The latest Vietnam ranking of Ease of doing
business index is presented in the below table.
DOING BETTER
The ease of doing business in Vietnam continues WORLD BANK’S “EASE OF DOING” BUSINESS
to improve. RANKINGS
(The Southeast Asian Countries)
INTERNATIONAL MONETARY FUND World Bank Country

2 Singapore
90
15 Malaysia
80 n 2017 n 2019
70
27 Thailand
60
50 55 Brunei
40
30 69 Vietnam
20
10 73 Indonesia
0
LIDC EMDE ASEAN Vietnam AE 124 Philippines
138 Campodia
Source: Doing Business, World Bank.
154 Laos
Notes: The ease of doing business score measures
the gap between a particular economy’s performance 171 Myanmar
and the best practice. o represents the lowest and 100
represents the best performance. LIDC = low-income 178 Timor-Leste
developing countries. EMDE = emerging and developing
economies. AE = advanced economies. ASEAN =
Association of South Asian Nationas. Source: World Bank 2019 Report

40
5. THE GLOBAL
20 TALENT COMPETITIVENESS INDEX
The latest Global Talent Competitiveness Index of Vietnam is presented in the below graph.
0
Myanmar
THE GLOBAL TALENT COMPETITIVENESS INDEX OF VIETNAM 2019
(Entrepreneurial Talent and Global Competitiveness)
Enable
VIETNAM 2019
100
90
80
70
Global
Key indicators 60 Attract
knowledge 50
Rank (out of 125) 92 skills 40
30
Income group Lower-middle income 20
10
Regional group Eastern, Southeastern 0
Asia and Oceania
Population 95.54
(millions)
Vocational and
Grow
technical skills
Retain
Vietnam income group average
6. CREDIT RATING VIETNAM CREDIT RATING, 2018

On Standard & Poor’s credit rating
scale, Vietnam earned a BB score,
S&P RATING MOODY’S RATING MOODY’S RATING
indicating a stable outlook. On
Moody’s credit rating, Vietnam was A+ A+ A+
last set at Ba3, indicating a positive
outlook. Finally, on Fitch’s credit A A-1 A F-1 A F-1
rating, Vietnam was last reported
A- A- A-
with a score of BB indicating a
positive outlook. A credit rating BBB+ A-2 BBB+ F-2 BBB+ F-2
is generally used by sovereign
wealth funds, pension funds and BBB BBB BBB
other investors to assess credit
BBB- A-3 BBB- F-3 BBB- F-3
worthiness. It has a notable impact
on the country’s ability to borrow BB+ BB+ BB+
and the interests to be applied.
Therefore, Vietnam’s overall stable BB Stable Ba3 Positive BB Positive
to positive credit rating signifies a BB- B1 BB-
relatively good credit worthiness.
This page also includes the B+ B+ B+
Vietnamese government debt credit
B B B
rating as reported by major credit
rating agencies. B- B B- B- B

III. LOOKING FORWARD
1. Prospects for Vietnamese 1.2. Targets set by the domestic

macroeconomic authorities:
economy in 2019 and beyond
At the macro level, the National Assembly had just
Vietnam boasts a highly receptive economy adopted the government’s proposed economic
with an interconnection to major international targets for 2019, outlined as follows:
markets through global and regional supply
chains. Therefore, in the event that uncertainty ECONOMIC TARGETS FOR 2019 SET BY
and fluctuation arise, the Vietnamese economy THE NATIONAL ASSEMBLY
will inevitably be affected to certain extents.
For example, when the IMF forecasted a slight
decrease in the 2019 growth rate of major markets 6.6-6.8% 7-8%
such as the US, the EU, and many other markets,
GDP Total export
domestic economic experts also predicted GDP,
Grows 6.6 - 6.8% turnover
exports, and FDI to slightly decrease in 2019
Up 7 - 8% on-year
through analysis of external economic conditions
as well as the internal economic force.
33-34% 4%
Total development Consumer price
1.1. Forecast of economic growth rate &
investment capital index
inflation rate of Vietnamese economy in
33 - 34% of GDP or About 4%
2019 as well as the development prospect
VND 2.036 - 2.097
The table below provides data of Vietnam’s GDP quadrillion ($88.52 -
growth and inflation forecasts for 2019 by world’s $91.17 billion) 3.6% OF GDP
leading financial institutions and banks as the IMF, Total budget deficit
World Bank, HSBC, etc. VND222 trillion
($9.65 billion),
equivalent to about
WB IMF ADB HDB ANZ 3.6% of GDP
GDP 6.6% 6.5% 6.8% 6.5% 7.0%

3% Total budget
Inflation 4.0% 4.0% 4.5% 3.4% 4.2% Trade deficit revenue
Below 3% of total VND1.411 quadrillion
export turnover ($61.36 billion)
1.3. New FDI attraction strategy

With the support of the International Finance Corporation (IFC), a member of the World Bank Group, The
Ministry of Planning and Investment (MPI) released a report on 9 July 2018 delineating the 2020-2030
strategy and orientation for attracting a new generation of foreign direct investments (FDI). This initiative
is key for socio-economic development in the upcoming decade.
This report was prepared with the support of the International Finance Corporation (IFC), a member of the
World Bank Group.
The Draft of Strategy & Strategic Orientation to attract FDI of new generation, stage 2018 - 2030 has
identified four major sectors in focus. The four major sectors in focus are:
l Manufacturing - It includes high-grade metals, minerals, chemicals, electronic components, plastics
and high-tech;
l Services - Includes MRO (maintenance, repair, and overhaul) along with logistics;
l Agriculture - Includes innovative agricultural products i.e. high-value products such as rice, coffee,
seafood and;
l Travel - High-value tourism services.

In the draft, the sectors identified as priority for development in short term and long term perspective as
summarized in the following table:
SECTOR PRIORITIES TO PROMOTE AND SUPPORT INVESTMENT PROACTIVELY
Immediate priorities - cretical to value added Short-term priorities - Industries with limited
as well as enhancing domestic competitiveness opportunities for competition
Manufacturing Manufacturing
1. High grade metals/ minerals/ chemicals/ 1. OEM as well as suppliers transport equipments & auto
plastics & electronics components/ high-tech 2. Environmental technology (water concervation
2. Machinery & Industrial equipments equipments, solar & wind technology, etc.)
Services
1. Logistics & MRO Medium-term priority - parallel to opening and skill
(maintenance, repair & overhaul) development
Agriculture
1. Innovative-high value agricultural products, Manufacturing
(rice, specialty coffee, qua-products etc.) 1. Pharmaceuticals & Medical equipments
Travel Service
1. High-value toristic services 1. Health & Education services
2. Financial service/ financial technology (Fintech)
3. Information technology & intellectual services [KPO
(Knowledge Process Outsourcing) - accounting,
Source: The Draft of Strategy & Strategic Orientation designing, etc.]
to attract FDI of new generation, stage 2018-2030. MPI
MOTIVATION TO EXPAND BUSINESS IN CHINA INCREASES, VIETNAM MAINTAINS 2ND PLACE

Regarding the countries and regions where firms aim to expand business overseas, China’s ratio rose to
55.4%, compared with 49.4% the previous year, out of firms who answered “currently have an overseas
base and planning to further expand operations”. This is the first rise in China as an answer since data
began being cllected in FY2011. Vietnam saw a decrease from 37.5% to 35.5% compared to the previous
year, but still maintained its ranking as 2nd place.
OVERSEAS EXPANSION BY COUNTRY AND REGION (top 20 countries and regions)

FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 FY 2011
Country/region
(n=1,050) Rank (n=938) Rank (n=992) Rank (n=895) Rank (n=1,001) Rank (n=1,119) (n=1,149) (n=1,602)
China 55.4 (1) 49.4 (1) 52.3 (1) 53.7 (1) 56.5 (1) 56.9 59.2 67.9
Vietnam 35.5 (2) 37.5 (2) 34.1 (3) 32.4 (4) 28.7 (5) 29.6 25.9 20.3
Thailand 34.8 (3) 36.7 (3) 38.6 (2) 41.7 (2) 44.0 (2) 47.0 41.2 27.9
US 32.3 (4) 29.0 (4) 33.5 (4) 33.7 (3) 31.3 (4) 25.4 26.0 21.1
Indonesia 23.4 (5) 24.8 (5) 26.8 (5) 31.8 (5) 34.4 (3) 35.0 32.0 24.7
Western Europe 21.9 (6) 21.5 (6) 19.7 (7) 20.6 (7) 18.1 (8) 15.7 15.9 15.7
Taiwan 21.3 (7) 20.0 (7) 20.6 (6) 21.6 (6) 21.0 (6) 20.0 21.8 18.5
India 20.9 (8) 18.2 (8) 18.5 (8) 20.1 (8) 16.1 (9) 19.2 19.4 21.8
Singapore 15.0 (9) 17.1 (9) 17.7 (9) 16.1 (10) 19.3 (7) 18.3 17.8 14.0
Malaysia 14.2 (10) 14.0 (10) 14.7 (11) 15.5 (11) 14.8 (12) 15.4 15.7 12.2
Korea 13.6 (11) 12.6 (13) 15.0 (10) 16.5 (9) 15.9 (11) 17.2 18.8 18.8
Hong Kong 13.5 (12) 13.6 (11) 14.1 (12) 14.2 (12) 16.1 (9) 15.4 15.8 14.2
Philippines 9.9 (13) 13.1 (12) 13.4 (13) 11.3 (14) 10.8 (13) 10.9 7.5 5.1
Myanmar 8.7 (14) 10.2 (14) 12.7 (14) 11.5 (13) 10.1 (14) 10.9 - -
Australia 5.5 (15) 4.3 (18) 4.6 (19) 4.6 (19) 2.8 (21) 3.3 3.7 4.0
Mexico 4.6 (16) 6.9 (15) 8.5 (15) 10.9 (15) 10.1 (14) 7.6 5.6 3.1
Central-Eastern
4.5 (17) 5.2 (16) 5.9 (16) 7.0 (16) 6.1 (18) 3.3 4.2 4.7
Europe
Russia & CIS 4.1 (18) 4.1 (19) 4.9 (18) 4.1 (20) 6.2 (17) 6.5 5.8 6.9
Cambodia 3.3 (19) 4.8 (17) 5.2 (17) 6.0 (17) 5.3 (19) 5.4 - -
Canada 3.2 (20) 2.2 (23) 3.2 (22) 3.4 (21) 2.3 (24) 2.5 2.8 2.9
ASEAN6 67.3 69.2 70.5 73.2 73.5 74.8 69.0 56.3
Source: JETRO

At the microeconomic level, how can businesses According the result of JETRO Vietnam’s recent
promptly identify the next tenable destination for survey conducted amongst Japanese companies
a business venture? Results from the “Outlook operating in Vietnam, the Chief Representative
for Japanese Foreign Direct Investment” survey office of JETRO Vietnam, Mr. Hironomu Kitagawa,
created by JBIC in 2018 can provide a partial stated that “up to 70% of Japanese corporations
answer to the question above. Here, Vietnam’s plan to expand their operations and this
ranking rose from the previous year to become the indicates the fact that Vietnam continues to be
second most promising countries & regions for the destination of interest for many Japanese
overseas business over the medium term. investors”.
2. LOOKING FURTHER INTO THE FUTURE

LONG TERM DEVELOPMENT GOALS Size (USD billion) and structure of the
economy
Average per capita GDP growth during 2016 -
2035:
By 2035 Upper middle
income country, GDP per capita
6.8% (corresponding to an annual GDP Growth
USD 10,000 rate of 7.5%)
Economic Social equity Increased state

prosperity and and inclusion capacity and
environmental accountability SIZE (USD BILLION) AND STRUCTURE
sustainability
OF THE ECONOMY
Focus of reform
USD 193 billion USD 290 billion USD 440 billion
1 2 3 4 5 6 17% 15% 12%
Economic Development Improved Environment Promotion Modern

modernization
and private
of the national
innovation
economic
efficiency of
sustainability
and enhanced
of social
equity and
institutions
and effective
44% 45% 48%
sector capacity urbanization climate change inclusiveness state 39% 40% 40%
development and special reliance
planning
2015 2020 2025

Industrial Revolution 4.0; Modern, integrated,
fully-developed market institutions
USD 290 billion USD 290 billion
According to economic policy framework for 10% 9%

2035 constructed by the Ministry of Planning and
Investment (MPI) on 5 December 2018, Vietnam 50% 50%
40% 41%
has set a 6,500 USD target for per capita GDP
by the year 2030; and that value is projected to
increase to 10,000 USD after 5 years, 4 times
2030 2035
higher than the current value. This estimated
increase in income level will allow Vietnam to
acquire the status of a high middle-income PER CAPITA GDP (USD)
country. If Vietnam’s economy (measured in GDP)
reaches 290 billion USD in 2020, this number will 12000
be more likely to reach 440 billion USD in the 10000
10000
following 5 years, then 670 billion USD in 2030 and 8500
1,050 billion USD in 2035. 8000
6000
Private sector’s new growth model will capitalize 4500
on opportunities presented by the Industrial 4000
3000
Revolution 4.0 through emphasis on two crucial 2100
2000
aspects: strong development in both innovations
and human resources. In the medium term up 0
until 2020, Vietnam intends to have upward of 2 2015 2020 2025 2030 2035
million operating private enterprises contributing
50% to the national GDP, the contribution rate is Source: Ministry of Planning and Investment,
expected to increase to 60-65% after 10 years. World Bank

TOP TEN REASONS
TO INVEST IN VIETNAM
Photographer: Duong Truong
01 STRATEGICLY POSITIONED IN THE DYNAMIC

ASIAN PACIFIC REGION
Vietnam is located in the center of the dynamic ASEAN region; it is also close to other major
markets in Asia, the most notable neighbor being China.
Thanks to Vietnam’s strategic location at the crossroads of regional supply chains, the country has
become an ideal destination for investment and international event organization.
At the regional cooperative level, in 2017, Vietnam successfully hosted groups of political leaders
from the US, China, Russia, Japan and other countries in ASEAN region at the APEC summit with
the purpose of finding possible ways to promote regional cooperation and development.
At a business grassroot level, Samsung Corporation decided to establish its manufacturing bases
in Bac Ninh, Thai Nguyen and Ho Chi Minh City. Here, more than 60 billion USD worth of products
have been assembled and exported in 2018.
02 BRIGHT & POSITIVE OUTLOOK AS WELL AS FDI

FRIENDLY ENVIRONMENT
The latest assessment of the World Bank states, “Vietnam now is one of the most dynamic emerging
countries in East Asia region”. “In the medium-term, Vietnam’s economic outlook is positive, despite
signs of cyclical moderation in growth”. (World Bank Overview (Oct 18, 2019).
The Vietnam Country Forecast compiled by EIU (The Economic Intelligence Unit) forecasted, “In
2020-24 the business environment will improve, owing to better access to financing, more favorable
policies for foreign investors and lower barriers to trade”. In terms of policies directed towards
foreign investment during 2020-2021, “Tax incentives for foreign investment in strategic sectors
remain generous”.

03 A GOLDEN POPULATION STRUCTURE WITH YOUNG LABOR
FORCE AND COST COMPETITIVE
Vietnam is experiencing rapid demographic and social change. Its population reached to about 97
million in 2018 (up from about 60 million in 1986) and is expected to expand to 120 million before
moderating around 2050. Currently, 70% of the population is under 35 years of age and enjoys an
average life expectancy of 73 years.
MINIMUM 400
WAGES 348.88
350 331.58
COMPARISON 293
300 285.39
FOR VIETNAM 233.83
AND CHINA 250 233.83
140.26
AND OTHER 200
COUNTRIES IN 147.76
SOUTHEAST 150 114.29 122.27 109.2
99.8
ASIA 100
Minimum wages 50
(USD/month) 0
China Vietnam Philippines Thailand Malaysia Indonesia
n 2017 331.58 114.29 140.26 285.39 233.83 99.8
n 2018 348.88 122.27 147.76 293 233.83 109.2
Vietnam has a population approaching 100 million inhabitants, more than 60% of who are under
the age of 35. Therefore, Vietnam is capable of providing a young, abundant and quality work force
at competitive cost. (Source: Vietnam Briefing June 2018)
The labour costs in Vietnam are competitive compared not only to China, but also to other
manufacturing hubs in South East Asia. Vietnam’s minimum wage was recorded at 114.29 USD/
month in 2017, being one-third the figure for China and one of the lowest in the region. In 2018m,
this figure rose slightly to 122.27 USD/month, while those of Thailand and China are 293 USD/
month and 348.88 USD/month respectively. (Source: by Koushan Das - Vietnam Briefing. June 2018)
04 HUMAN RESOURCE POTENTIALITY
A recent assessment by the World Bank finds that “Vietnam is today a significantly more educated
and healthy society than 20 years ago, and these qualities are equitably distributed. Coverage and
learning outcomes are high and equitably achieved in primary school-evidenced by remarkably
high scores in the Program for International Student Assessment (PISA), where the performance of
Vietnamese students exceeds that of many OECD countries”.

05 SOUND INFRASTRUCTURE IN THE
SERVICE OF INVESTORS
According to a report of the Department of Economic Zone Management, MPI, nationwide, by the
end of 2018, 326 industrial parks have been established. Cumulatively, to the end of 2018, industrial
parks and economic zones attracted about 7,500 domestic investment projects with a total
registered capital of nearly 970 trillion VND (about 42 billion USD) and about 8,000 foreign invested
projects with a total registered capital estimated at over 195 billion USD. The occupancy rate of
industrial parks that have been put into operation is over 73%.
06 STRONGLY ADVOCATES FOR TRADE LIBERALIZATION

AND FREE TRADE AGREEMENTS OF THE NEW GENERATION
The CPTPP Comprehensive Progressive Trans-Pacific Partnership has been signed, ratified, and
implemented. The EU-Vietnam Free Trade Agreement (EVFTA) has passed through the legal review
process and is awaiting ratification.
07 HIGHER TREND OF FDI INFLOWS INTO THE COUNTRY

THAN REGIONAL PEERS
”Vietnam is a FDI success story. Through time, FDI has become a major driver in Vietnam’s
economic development. Competitive wages, stable political and economic environments, sound
infrastructure, a favorable geographic location as well as a robust investment and trade policy
framework have led to dramatic increases in FDI inflows. By any measure, the country’s FDI
attraction achievements have been exceptional” quoting Kyle Kelhofer, International Finance
Corporation (IFC) country manager for Cambodia, Lao PDR and Vietnam.
08 ONGOING URBANIZATION & A GROWING MIDDLE CLASS

ENSURE AN ACTIVE DEMAND FORCE
Leading international wholesale and retail corporations such as Aeon from Japan, Lotte from South
Korea and others have been rapidly expanding their supermarket networkss to tap and anticipate
the growing consumer power. According to a World Bank’s Press release on 5th April 2018, there
has been a steady increase of1.5 million people joining the middle class annually since 2014.

09 ON-GOING EQUITIZATION OF STATE-OWNED ENTERPRISES AS WELL
AS M&A OPPORTUNITIES FOR ACQUIRING STRATEGIC ASSETS
On-going equalization of state-owned enterprises as well as lifting foreign-ownership cap in major

sectors and industries enable foreign investors to acquire strategic assets.
10 PLENTY OF INVESTMENT OPPORTUNITIES IN INFRASTRUCTURAL

PROJECTS (roads, airports, power plants etc.)
FORECAST ON VIETNAM’S INFRASTRUCTURE INVESTMENT DEMAND
According to a report from the Global Infarastructure Outlook, Vietnam will meet 83 percent of its
infrastruture investment needs by 2040 if the current investment trend is maintained. Road sector
is said to face largest gap to fulfill targeted investment needs.
TOTAL INFRASTRUCTURE INVESTMENT FORECAST IN 2016-2040
Billion USD % GDP

ENERGY 256 2.64
265 2.73
99 1.02
TELECOMMUNICATIONS 99 1.02
Billion USD % GDP
3.8 ENERGY 256 0.01
265
2.64
2.73
TRANSPORT: AIR 5.2 0.06
99 1.02
0.414
TELECOMMUNICATIONS 99 0.01 1.02
TRANSPORT: SEA PORT 8.5
TRANSPORT: AIR
3.8 0.10.01
5.2 0.06
15 0.414 0.15
0.01
TRANSPORT: RAILWAY 21 SEA PORT
TRANSPORT: 8.5 0.22
0.1
15 0.15
79
TRANSPORT: RAILWAY 21 0.81
0.22
TRANSPORT: ROAD 134 79 0.811.38
134
0.52 1.38
TRANSPORT: ROAD
50
CLEAN WATER 72 50 0.75
0.52
CLEAN WATER 72 0.75
0 0 0 0
INFRASTRUCTURE INVESTMENT
FORECAST THROUGH YEARS - BILLION USD 32
29 32
26
25 24 29
22
19 19
21
25 26
17 16
24
15 22 21
19 19
17 10
16
15 2017 2020 2035 2030 2035 2040
10
2017 2020 2035 2030 2035 2040

IV. INVESTMENT OPPORTUNITIES IN INDUSTRIES & SECTORS
1. INFRASTRUCTURE INVESTMENT OPPORTUNITIES IN VIETNAM
a) The role of infrastructure development & local context
a. The role and significance of infrastructural and services at competitive prices”. (Highways
development: the lifeline of the national economy. infrastructure and the economy – Howards J. Shatz
Infrastructure is often likened to a lifeline as at al. RAND Corporation).
it acts as the lifeline of the national economy.
Infrastructure is defined as “the physical At the macro level, the Vietnamese government set
framework of facilities through which goods and great store by the contribution of infrastructure
services are provided to the public” to the growth development. According to Vu
Dai Thang, Deputy Minister of the Ministry of
“Highway infrastructure can affect the economy Planning and Investment (MPI), developing the
in numerous ways, whereby most appertain to infrastructure system has been identified as one of
increasing mobility. It enables producers to reach three breakthroughs in Vietnam’s socio-economic
markets at a lower cost, increases the size of their development strategy, beside from institutional
market area, and grants them a broader choice reforms and human resource development.
of input suppliers. It can increase the speed with
which producers can reach markets or inputs, b. Sketch of natural conditions
allowing them to hold fewer inventories and carry Natural conditions such as geographical and
out timely production. Highway infrastructure can climate factors help shape the development
also enable workers to choose among a wider array potentialities of Vietnam’s infrastructure
of employment opportunities and to live farther configuration.
from their workplace. Similarly, it can enable
consumers to access a greater variety of goods + Long coastline: ports & maritime transport
RESORTS & RECREATION COMPLEXES ALONG THE COASTAL TOWNS AND ISLANDS
Sun Grand City Palace - Resort

& recreation complex Quang Ninh province. JW Marriott Phu Quoc Emerald Bay resort & spa ranks
Total area: 2,500 ha. Total capital: 2 billions USD. 6th out of TOP 100 hotels with score 98,56 by Travel and
Designer: Dark Horse Architecture Leisure (T+L) magazine
Inter Continental Danang Sun Peninsula resort

Shophouse Mediterranean Project - Phu Quoc ranks 77th out of top 100 hotels with 95.66 score
Investment owner: Sun Group by Travel and Leisure (T+L) magazine

+ Tropical sunshine zone: potential for renewable wind and solar energy
NATURAL RESOURCES POTENTIALITIES NATURAL RESOURCES POTENTIALITIES

- HYDRO POWER - SOLAR POWER
SOLAR POWER
PLANNED SOLAR
Hoang Sa
Hoang Sa
Coal-fired power plant Paracel Islands
Paracel Islands
PROJECTS IN
(Vietnam)
(Vietnam)
Gas-fired power plant VIETNAM

Hydropower plant
Source: Challenges
and Opportunities
DISTRIBUTION in the Vietnamese
OF POWER PLANTS Solar Market, GIZ
IN VIETNAM Energy Support
Programme
Source: FPTS Truong Sa
Spratly Islands
(Vietnam)
Truong Sa
Spratly Islands
(Vietnam)
+ Slope terrain: suitable for hydropower plant + Crisscross dissected topography of the Mekong
construction delta: inland waterway; bridges construction.
NATURAL RESOURCES POTENTIALITIES BRIDGES HELP MEKONG DELTA

- WIND POWER INTERCONNECTED AND REMOVE FERRYBOATS
Bridge My Thuan
HO CHI MINH CITY

LONG AN
DONG THAP
Bridge Cao Lanh
TIEN GIANG
AN GIANG Bridge Rach Mieu
Bridge Vam Cong Bridge
VINH LONG
BEN TRE Ham Luong
Bridge Can Tho
Bridge Co Chien
CAN THO
Hoang Sa
Paracel Islands KIEN GIANG
(Vietnam) TRA VINH
WIND POWER SOC TRANG

PLANNED
Bridge Dai Ngai
PROJECTS IN BAC LIÊU
VIETNAM
CA MAU
East sea
Source: Ministry
of Industry
Bridge Nam Can
and trade/GIZ
Energy support
programme
Truong Sa
Spratly Islands
(Vietnam)
Graphic: Tan Dat
As exhibited in the picture above, there exists a natural terrain of crisscross rivers in the Mekong delta,
which demands an equally intelligent interconnection of bridges to expedite transportation. This also
brings forth the potential for developing an inland-water way both domestically and to Cambodia.

b) Positioning of Vietnam’s economy: transition from factor-driven to efficiency driven economy
that calls for investment in infrastructure
VIETNAM’S STAGE OF ECONOMIC DEVELOPMENT AND THE NECESSITY OF INVESTMENT
Edition 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Edition 2012-13
Edition 2012-13 2013-14
2013-14 2014-15
2014-15 2015-16
2015-16 2016-17
2016-17 2017-18
2017-18
Rank 75/144
RankRank 75/144
75/144 70/148
70/148
70/148 68/144 56/140
68/144
68/144 56/14060
56/140 60/13860/138
/138 55/137 55/137
55/137
Factor Investment
Factor
Factor Innovation
Investment
Investment WealthWealth
Innovation
Innovation Wealth
driven driven
driven
driven driven
driven driven driven
drivendriven driven
driven
Score
Score
Score 4.14.14.1 4.2
4.2
4.2 4.24.2
4.2 4.3 4.3 4.3
4.3 4.3 4.3 4.4
4.4 4.4
1 stpillar:
1 st pillar:
1 st pillar:
Institutions
Institutions
1212thth pillar:
pillar: ndnd pillar:
Institutions 22 pillar:
th pillar:
12
Innovation
Innovation "" 2 nd pillar:
Infrastructure
Infrastructure
Stageofofdevelopment
Stage development Innovation " Infrastructure
age of development 1111thth pillar: 3rd pillar:
3rd
pillar: pillar:
Businesssophistication
Business sophistication Macroeconomic
Macroeconomic
Transitions
Transitions Transitions
Transitions th
11 pillar: 3rd pillar:
11 1-2 22 2-3 33 environment
environment
Transitions 1-2 Transitions 2-3

Business sophistication
th
Macroeconomic
1 2 3 44th pillar:
thth
1010 pillar:
pillar: pillar:
environment
!!
1-2Factor 2-3
Efficiency Innovation
Marketsize
Market size Healthand
Health
education
andprimary
primary
Factor Efficiency Innovation 10 th pillar:
education th
4 pillar:
driven driven driven !
driven driven driven Market 9thsize
th pillar:
9 pillar:
Health and primary
th pillar:
55th pillar:
ctor Efficiency Innovation Technologicalreadiness
Technological readiness Higher
education
Highereducation
education
andtraining
training
iven driven driven 9th pillar:
8th pillar:
and
5 th pillar:
8th pillar: thth
Technological readiness
Financialmarket
market development th 66 pillar:
pillar: Higher education
Financial development 7 th pillar:
7 pillar: Goodsmarket
marketefficiency
Goods efficiency
Labormarket
Labor market and training
efficiency
efficiency
8th pillar: th pillar:
6Pacific
Financial market development Vietnam
Vietnam EastAsia
7 thEast Asiaand
pillar: andPacific
Goods marketefficiency
Labor market
efficiency
Vietnam East Asia and Pacific
Source: World Economic Forum: 2017-2018 Edition
Based on the classification of the World Economic importance to the development of infrastructure,
Forum (WEF), the Vietnamese economy has especially economic infrastructure such as
positioned itself at the transitional stage from a seaports, roads, bridges, bridges, energy, hospitals,
factor-driven economy to an efficiency-driven schools, houses ... To meet development needs, in
economy. The “Global Competitiveness Report” the coming years the level of capital investment
of WEF states: “As economies move from low-to- in infrastructure requires an increase of 11-12% of
middle-income status, global competitiveness GDP. To ensure sufficient capital, the Government
becomes Investment-driven, as economic growth of Vietnam always encourages and facilitates the
is increasingly achieved by harnessing global mobilization of all sources of capital, including
technologies to local production”. foreign capital, to participate in infrastructural
development.
“As development proceeds, government
priorities need to focus increasingly on Infrastructural adequacy is the top concern of
improvements in physical infrastructure (ports, investors and businesses before making investment
telecommunications, roads) and regulatory decisions. A country with adequate communication
arrangements (customs, taxation, company law) systems, transport networks, energy, water
to allow the economy to integrate more fully with supply and drainage systems, and financial and
global markets”. (Source: Executive Summary: banking service facilities will further facilitate the
Competitiveness and Stages of Economic development of FDI projects. In addition, reducing
Development). the cost of transportation and information will
increase investment efficiency. Therefore, in
- Infrastructure sector, in fact, shows that order to promote FDI and economic growth,
any country with a synchronous and modern infrastructure development is a key task at present.
infrastructure system will promote economic
growth, productivity and efficiency of the
economy and contribute to solving bottomneck
problems. Therefore, Vietnam attaches great

y assumptions
VIETNAM 2015 2040 Av. Annual growth
TheKey assumptions
following graphs show the overall picture of Vietnam’s infrastructural landscape.
P (Billion $US) * 191 679 5.2%
2015 2040 Av. Annual growth
P per head GDPVIETNAM
($US) *
(Billion $US) *
2,048 191
6,179 679 4.5%
5.2%
Key assumptions
pulation (000s)
GDP per head ($US) * 93,448 2,048 109,9256,179 0.7%
4.5%
2015 2040 Av. Annual growth
ban population
GDP (% of
Population
(Billion total)
(000s)
$US) * ** 33.6%
191 93,448
679 49.3%
109,925
5.2% * 1.5%
20150.7%
prices and
GDP per head ($US) * 2,048 6,179 4.5% exchange rates
Urban(persons
pulation density populationper
(% of
kmtotal)
2) **
301 33.6% 355 49.3% 1.5%
0.7%
**
Av. Annual growth
Population (000s) 93,448 109,925 0.7%
Population density (persons per km ) 2 301 355 shows 0.7%
average
Urban population (% of total)
** 33.6% 49.3% 1.5% annual change
Population density (persons per km 2 ) 301 355 0.7%
in urban share of
population
RASTRUCTURE INVESTMENT NEED, 2016-2040

INFRASTRUCTURE
INFRASTRUCTURE QUALITY
INFRASTRUCTUREINVESTMENT
INVESTMENT NEED,
NEED, 2016-2040
2016-2040 INFRASTRUCTURE QUALITY
INFRASTRUCTURE INVESTMENT NEED, 2016-2040 1-7 (best)
1-7 (best)
1-7 (best)
1-7 (best)
ercent of GDP Percent of GDP
Percent of GDP
Overall Overall
Overall
Road Road
Road 5 5
5
4 4
RailRail
l Vietnam Electricity 4
Rail Airports
supply
3
Electricity Road
Electricity supply
2
3
Road
Airports l Asia 3 2 Road
supply
1
ports Ports l Low and lower 0 2 1

Ports
Telecoms middle income 1 0
Ports Telecoms
Electricity
Ports Railroad 0
Ports Railroad
coms Water
Electricity Air transport
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Ports Railroad
ricity Water
Air transport
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Water
Air transport
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Source: Oxford Economics & Global Competitiveness Index, l Vietnam l Asia
World Economic Forum
2nd pillar: Infrastructure 0-100 - 65.9 s 77 Singapore
Transport infrastructure 0-100 - 52.2 s 66 Singapore
2.01 Road connectivity 0-100 (best) 63.3 63.3 s 104 Multiple (3)
2.02 Road of road infrastructure 1-7 (best) 3.4 40.1 s 103 Singapore
2.03 Railroad density km/1.000km2 7.6 19.1 s 58 Multiple (24)
2.04 Efficiency of train services 1-7 (best) 3.6 43.3 s 54 Japan
2.05 Airport connectivity score 364,184.2 86.0 = 22 Multiple (8)
2.06 Efficiency of air transport services 1-7 (best) 4.0 49.7 s 103 Singapore
2.07 Liner shipping connectivity 0-100 (best) 68.8 68.8 s 19 Multiple (5)
2.08 Efficiency of seaport services 1-7 (best) 3.8 47.3 s 83 Singapore
Utility infrastructure 0-100 - 79.6 t 87 Iceland
2.09 Electricity access % of population 98.8 98.8 s 84 Multiple (67)
2.10 Electricity supply quality % of output 10.2 93.5 t 62 Multiple (10)
2.11 Exposure to unsafe drinking water % of population 34.3 67.0 t 95 Multiple (28)
2.12 Reliability of water supply 1-7 (best) 4.6 59.2 s 81 Iceland

c) Regional connectivity: ASEAN, China and the world
The arrows pointing toward Japan and India indicate the aim to strengthen connectivity not only
within ASEAN, but also with Japan, India and other countries outside the region.
ROAD NETWORK
QL1A
QL5B
- Part of Eastern Economic Corridor. Though it
runs the entire length of the country, only parts
around Hanoi and Ho Chi Minh City are used
heavily for trade.
- From Hanoi, the road leading to Lao Cai border is QL1A
an important entry point to China. QL9
Hoang Sa
Paracel Islands
(Vietnam)
QL9
- Part of East-West Economic Corridor. Used for

transport of Lao-Vietnam trade as well as Transit
goods from Thailand’s Mukdahan through Laos. QL19
Provides Laos and Thailand access to Danang Port.
Truong Sa
Spratly Islands
(Vietnam)
QL80 QL22, 51
- Part of Southern Coastal Economic Corridor that

QL80
runs from Bangkok through Cambodia’s biggest
deep sea ports and industrial zones: Sihanoukville
and Koh Kong.
Other Key Roads
QL19, 22, 51 QL5B
- Parts of the Southern Economic Corridor. - Major road linking Hanoi to Hai Phong, where Hai
- The southern arm serves as a key link between Phong port is one of Vietnam’s major ports which
Bangkok, Phnom Penh and Ho Chi Minh City. Traffic sees the highest cargo traffic. Hai Phong is also
congestion is often a problem, especially around Ho home to a number of industrial zones.
Chi Minh city. - The route is used extensively for Vietnam’s
- The other significant portion is from Ho Chi Minh international trade.
City to Vang Tao and Cai Mep port.
- QL19, the northern arm to Quy Nhon, is not often
used since the Quy Nhon is not currently a major
trade hub. Source: Kasikorn bank
Vietnam has actively participated in many bilateral recommends expanding the scope of the hardware
and multilateral cooperation frameworks including infrastructure program - connecting traffic in GMS
the Greater Mekong Sub region (GMS) cooperation including road and rail.
framework. This is a cooperation framework
sponsored by the Asian Development Bank (ADB) Within this cooperation, Vietnam, with the support
and has 6 participating countries including: of donors, including ADB and internal resources,
Vietnam, China, Laos, Cambodia, Thailand and has been completing a series of important external
Myanmar. Transport connectivity is a top priority corridors.
in the GMS Program. The next transport strategy

On the corridor connecting to China, Vietnam The second East-West Corridor running through
has fully utilized the Kunming - Lao Cai - Hanoi National highway 217 is being prepared for
- Hai Phong Expressway (from December 2015). assistance by ADB. In the coming time, on the
Before 2020, the Nanning - Lang Son - Hanoi - Hai basis of the East-West alignment being exploited
Phong expressway will be set into motion, and the connecting the Pacific and Indian Oceans, Vietnam
Hanoi - Hai Phong - Ha Long - Van Don - Mong and Laos have researched and proposed a corridor
Cai - Bang Tuong expressway will be the next route from Myanmar to Thailand to Laos (via Huu
to commence operation. To elaborate, the Hai Nghi Bridge No. 5 (between Laos and Thailand)
Phong - Ha Long segment will be completed in and follow the section of Po San - Thanh Thuy -
the second quarter of 2018 and the Ha Long - Van Vinh to Vung Ang port. This is a session in Hanoi
Don - Mong Cai segment is being invested by the - Vientiane highway is a strategic highway that the
Quang Ninh People’s Committee. Governments of Vietnam and Laos are determined
to build.
In respect to Laos, there is the Da Nang - Dong
Ha port route along National Highway 1– Lao Bao Lastly, Cambodia’s connecting southern corridor
according to National Highway NH9– QL9 of Laos and southern coastal corridor have been
- Thailand - Dawei port of Myanmar (the section supported by ADB. Additionally, Vietnam and
on Myanmar territory is under construction) has Cambodia had recently signed an agreement to
a length about 1,450 km. This important corridor promote investments for the construction of
shortens the distance transported by road from the Ho Chi Minh - Phnom Penh 180 km highway.
the Pacific to the Indian Ocean and vice versa, From Ho Chi Minh City, this corridor will allow
traveling only takes 3 days by road; meanwhile, connection to Cai Mep - Thi Vai port, and from
if the goods must go by sea through the Strait of Phnom Penh, it will allow connection to Thailand
Malaca they will have to travel 6,000 km for 10 and the southern corridor.
days.
d) The status of infrastructure development & supply-demand balance
d1. Energy sector

The present status and projected configuration of the Vietnamese energy industry can be
illustrated in the following graphs.
STATUS OF POWERSTATUS
DEVELOPMENT
OF POWER IN VIETNAM IN VIETNAM
DEVELOPMENT
In 2030 in 2030
Installed
INSTALLED capacityBY
CAPACITY by FUEL
fuel Projected power
PROJECTED POWER production by fuel
PRODUCTION BY FUEL
Nuclear Nuclear
power Import Hydrepower power Import Hydrepower
Small hydropower & pumped-storage Small hydropower & pumped-storage
+ Renewable energy
0.0% 2.4% hydropower + Renewable energy
0.0% 2.4% hydropower
9.9% 25.2% 6.5% 25.2%
Oil + Gas power Oil + Gas power
14.9% 16.6%
Coal power Coal power

42.7% 49.3%
Source: PDP VII Revised


STATUS OF POWER DEVELOPMENT IN VIETNAM
STATUS OF POWER DEVELOPMENT IN VIETNAM
In 2030 in 2030
Installed capacity by fuel

INSTALLED CAPACITY BY FUEL Projected power production by fuel
PROJECTED POWER PRODUCTION BY FUEL
Nuclear power 5.7% Nuclear power 5.7%

Small hydropower Impor 1.2% Small hydropower
+ Renewable energy + Renewable energy
Impor 1.2%
Coal power
10.7% 49.3% 10.7% Coal power 49.3%
Oil + Gas
power
Oil + Gas
power 16.8%
16.8%
Coal power 53.2% Coal power 53.2%


With an average growth rate of 8.6% per year according to the VII electricity plan (adjusted), the electricity
output needs to supplement an average of 26.5 billion kWh annually. According to calculations by the
Department of Electricity and Renewable Energy (Ministry of Industry and Trade), the output shortage
in 2021 estimates 6.6 billion kWh; in 2022 it will increase to about 11.8 billion kWh; and in 2023 it can
potentially reach 15 billion kWh (equivalent to 5% of demand).
Electricity market
Vietnam’s energy sector is dominated by big state-owned-enterprises (SOE).Therefore, it is mainly
controlled by the government through the Ministry of Industry and Trade. The integrated state-owned
utility Electricity of Viet Nam (EVN) dominates the Vietnamese generation market. Furthermore, it holds
a monopolistic responsibility for transmission, distribution and system operation. The remaining shares
of the generation capacities are held by other big SOEs (e.g. PetroVietnam (gas-fired power plants) or
Vinacomin (coal-fired power plants). Foreign investors often use a “Build-Own-Transfer” (BOT) model and
other domestic investors incline towards an independent power plant (IPP)-model. Nonetheless, generated
electricity from IPPs is sold to EVN under long- term contracts.
Vietnam plans to develop a competition based electricity market. A prime minister decision in 2013
underlined and confirmed the deregulation processes that started in 2005. The deregulation process
should proceed in three phases and will be completed in 2023:
ELECTRICITY MARKET
Competitive Electricity Wholesale Electricity Retail

Generation Market Market Market
(VCCIM)
2012 2015 2019 2021 2023
Pilot Full Pilot Full Pilot Pilot

Operation Operation Operation Operation Operation Operation
Source: EVN

In the revised National Development Plan VII (the revised PDP 7), which was approved by the Prime
Minister on March 182016, the average GDP growth rate is predicted to be at 7% during the period of 2016-
2030. In order to satisfy the domestic electricity demand, the revised PDP 7 sets a target for commercial
electricity to reach 235-245 billion kWh in 2020; 352-379 billion kWh in 2025; 506-559 billion kWh in 2030.
The targets for electricity production and import are 265-278 billion kWh in 2020; 400-431 billion kWh in
2025; and 572-632 billion kWh in 2030.
According to the revised PDP7, coal will be the most significant source of power for the period 2020-2030,
providing 42.7% of total generation in 2020; 49.3% in 2025 and 42.6% in 2030. The structure of power
source is illustrated in figure below.
1.4% 2.4% 1.5% 1.5%

1.2%
21.1% 16.9%
37.3% 30.1%
n Nuclear
15.6% 14.7%
n Import 14.9%
n Hydro 22.5%
n Gas
42.7% 49.3% 42.6%
n Coal 33.5%
n RE
5.4% 9.9% 12.5% 21%
2015 2020 2025 2030

Installed Capacity 39 GW 60 GW 96 GW 129.5 GW
+ Renewable energy
(Source: Data provided by the Institute of Energy)
In the revised PDP 7, renewable energy (wind energy, solar energy, and bioenergy) will be prioritized.
Renewables targets for 2020, 2025 and 2030 are set to have a share of electricity production equals 6.5%
in 2020; 6.9% in 2025 and 20.7% in 2030 (figure below).
RE*
2020 2025 2030
(% electricity
6.5% 6.9% 10.7%
production)
12,000 MW
6,000 MW
4,000 MW
Total installed 2,000 MW
capacity 800 MW
850 MW
% electricity 1% 0.8% 0.5% 1.2% 1% 1.6% 2.1% 2.1% 3.3%
production
n Biomass n Wind n Solar
Source: Revised National Power Development Plan VII

d2) Transport sector
According to the Minister of Transport of Vietnam, Nguyen Van The, when he delivered the speech at
the 6th GMS cooperation summit (2018), the transport- infrastructure system in Vietnam is still small in
scale, not synchronized and has not created a continuous connection; the ability to meet traffic demand
and traffic safety is limited. Compared to other advanced countries in the region, Vietnam’s transport
infrastructure system is relatively average. Currently, there are 765 km of built and operating high-speed
roads. The main railway system of 1m is very backward and has a very low transport market share (<2%).
For aviation, there are 21 airports operating nationwide, of which include 8 international airports. However,
most airports currently have limited passenger capacity, none of which meets regional focal standards so it
is the chance for foreign investors and contractors to participate in the future biddings
Minister Nguyen Van The states, the total demand for investment capital in order to develop Vietnam’s
transport infrastructure in the period of 2018-2023 is estimated at VND 1,015,000 billion, equivalent
to about USD 48 billion. To accomplish this goal, proposed solutions have been grouped improve the
efficiency of investment capital and promote the connection integrity of the transport infrastructure
system. Solutions include a focused and key investment, creating a significant change in the allocation
of investment capital among transport fields, focusing capital on constructive works, and creating
connections between modes of transport between works in the same system and in key economic regions
and international gateways.
Land routes development plan: the goal is to continue perfecting and constructing the highway system.
From now unto 2020, 654 km out of 1,300 km North - South Expressway will be completed in the form
of public - private partnership, in which the State contributes to 40% of the total investment. Other
objectives include studying the plan to build a new high-speed railway, doubling track gauge of 1435 mm
on the North-South axis, completing the system of roads and railways of Vietnam synchronously with
technical standards, establishing convenient connection with the ASEAN road system, the Greater Mekong
Subregion and the trans-Asia railway; seaport system to meet the needs of customs clearance for import
and export goods; researching and investing in construction of Long Thanh international airport with the
role and scale on par with major international airports in the region.
CAPITAL STRUCTURE 2017 - 2021
Total Investment $5.09 Billion
State Budget $2.36 Billion

($0.61 Billion for
Hoang Sa
Paracel Islands
(Vietnam)
site clearance and

resettlement)
BOT Investors $2.73 Billion
Total Distance 654 km

(km)
Truong Sa
Spratly Islands
(Vietnam)
Source: Resolution 52/2017/QH14 dated 22/11/2017;

PPP Department of MOT Vietnam Database

RAILWAY DEVELOPMENT PLAN
Based on Decision No.1468/QD-TTg by the

Prime Minister:
Until 2020
l Operate some urban railway lines in Hanoi
and Ho Chi Minh City.
l Complete national high-speed railway study.
Until 2030
l Basically complete urban railways in Hanoi
and HCMC.
l Basically complete high-speed railway in
Hanoi - Vinh and HCMC - Nha Trang.
Until 2050
Operate the Whole national high-speed
railway network.
AIRPORTS
The major airports allocation can be viewed in the
following picture:
Aviation infrastructure is an urgent problem

crucial to long-term growth. Many airports in
big cities have to operate beyond capacity, like
airports in Ho Chi Minh City at the rate 130% and
Nha Trang is 320%. Noi Bai International Airport
have also detected deterioration in some runways.
(Source: Hoang Linh, 2018)
Mr. Pham Nguyen Tung, Project Director of

Vietjet Air Joint Stock Company, said that Vietnam
currently has an average of only 1.9 aircraft/
million people, while Thailand has 4.7 aircraft/
million people and this figure in Malaysia is 9.5.
This proves that the market surplus remains very
large. Aside from potential, the competition of this
market is also considered extremely fierce.

Background information about the Long
Thanh International airport project
1. Scale, capacity: 100 million passengers/year, 5

million tons of cargo/year.
• Phase 1: Invest in 1 runway and 1 passenger

terminal with a capacity of 25 million passengers/
year and 1.2 million tons of cargo/year.
• Phase 2: Invest in an additional runway and

passenger terminal, increasing the capacity to 50
million passengers/year and 1.5 million tons of
cargo/year.
• Phase 3: Completion.
2. Total investment: US$5.4bn for Phase 1 with

funding from enterprises, state budget and ODA.
3. Implementation status: Finished the

Investment direction approved by the National Assembly
architecture, currently bidding for FS consultants. in Decree No. 94/2015/QH13 dated 25/6/2015
4. Expectation: In 2019-2020: bidding to selects

investors for PPP components and start the
technical design by state budget. In 2021: attract
investment.
WATER
Inland waterways
Vietnam has 41,000 km of inland waterways,
of which only 8,000 km are used commercially
despite huge potential for freight transport.
Despite limited investments, waterway transport
capacity and usage have recently increased for
high-weight, low-value goods (e.g. coal, rice, sand,
Hoang Sa
stone, gravel), and personal transport (World Bank,
2014).
Paracel Islands
(Vietnam)
Transport in the Mekong Delta benefits from

an extensive waterway network including rivers
and channels, many of which can cater to large
vessels. However investment in the development
of waterways accounts for only 1.7% of transport
infrastructure spending in the Mekong.
Truong Sa
Spratly Islands
VIETNAM PORT MAP

(Vietnam)
Source: Sea Rates 2017
l Sea Port
l Container terminal

Maritime
Vietnam’s 3,400 km long coastline hosts over 80 seaports alongone of the world’s busiest sea cargo lanes.
The larger ones have traditionally been developed by government, and handed over to the country’s state-
owned port and shipping company operator, Vinalines, for operation (World Bank, 2014).
Infrastructure is a big challenge for Vietnam, especially in relation to its ports. China places 6th overall of
the top 10 global ports by container traffic -- Shanghai at No. 1 - while Vietnam’s two biggest ports, Ho Chi
Minh Seaport and Cai Mep, rank No. 25 and No. 50 according to data compiled by Bloomberg Intelligence.
Congestion at the ports often mean rising inventory costs and less diverse production lines that are limited
to non-time-sensitive goods, according to the BI analysis. “President Donald Trump tweeting Vietnam as
a candidate for a manufacturing shift from China would require a long, drawn-out process. Vietnam lacks
maritime infrastructure, large container ports and a shipping network needed for rapid export-capacity
growth. It’s unlikely to match China’s deeply entrenched trade apparatus for several years.” (Lee Klaskow,
Bloomberg Intelligence Senior Industry Analyst & Chris Muckensturm, Bloomberg Intelligence Associate
Analyst). The government estimates it would cost about 80-100 trillion dong ($3.44-$4.31 billion) to develop
its ports. Big-figure deals -- around new ports or revamping of old ones -- have yet to come to fruition.
(Source: Vietnam Becomes a Victim of Its Own Success in Trade War by Michelle Jamrisko and Xuan Quynh
Nguyen).
Annual Container Throughput

(mn teus)
Singapore, 34 S. Korea, 26 Malaysia, 21
Netherlands Taiwan, Vietnam,

UAE, 18 14 14 14
Other, 71
Indonesia
Belgium 11 10
Japan, 16 Spain, 13
U.K., 9 Sri
Panama Lanka
8 7
U.S., 41 Germany, 15 India, 11 Thailand, 8 Australia, 6
Source: Bloomberg, Michelle Jamrisko and Xuan Quy Nguyen Source: Bloomberg, Michelle Jamriskoa and Xuan Quy Nguyen
d3) Construction sector

The construction sector frequently witnesses strong correlation with economic growth and is subject
to cyclical fluctuation. The following graph shows the trend of movement of Vietnam’s construction
industry over the years.
12% 10.82%
PROJECTION 10%
10.00%
8.70%
OF REAL GROWTH 6.93%
8.01%
RATE OF VIETNAM’S 8% 7.23%
CONSTRUCTION 6% 5.84%
INDUSTRY 3.66%
4%
2% -0.26%
0%
-2% 2011 2012 2013 2014 2015 2016 2017 2018f 2019f
Source: GSO, FPTS, BMI

Note: The real growth rate of Vietnam’s construction industry in 2018 stood at 9.2%.

In 2018, foreign direct investment (FDI) in Vietnam’s real estate industry reached 6.6 billion USD,
accounting for 18.6% of total FDI, ranking second to industry and manufacturing. FDI inflows into the real
estate industry increased sharply, stable construction material prices along with stable macroeconomic
background are considered favorable factors for the construction industry next year. These figures
demonstrate a positive trend of prospective opportunities in the construction industry.
PROPORTION OF FDI BY SECTORS IN 2018, VIETNAM
18%
6% l Manufacturing
47% l Real estate
10%
l Retail
19% l Technology
l Others
Source: General Statistics Office
In 2018, the output value of the entire construction industry reached a growth rate of 9.2%. Up until now,
the total number of urban centers nationwide is 828. The rate of urbanization achieved 38.4% (an increase
of 0.9% compared to 2017).
6,0%
Agra-Forestry & Fishery
s 2.39%
s 6.76%
51,8% 42,2%
GDP
Industry & Construction
Service
s 8.93%
s 2.39%
Information from the General Statistics Office on the socio-economic situation in the first 6 months
of 2019 showed that the agriculture, forestry and fisshery increased by 2.39%, contributing 6%
to the general growth; industry and construction sector increased by 8.93%, contributing 51.8%;
service sector increased by 6.69%, contributing 42.2%. In fact, our country’s socio-economic
situation in the first 6 months of 2019 occurred in the context of the world economic growth
tendency to slow down with increasing risks and challenges.
Coustruction industry in the first 6 months of 2019 maintained a good grwoth rate of 7.85%,
contributing 0.48 percentage points.
Looking ahead, the Fitch Group Company predicted that Vietnam’s construction and infrastructure
industry will experience an average growth rate of 7.2% per year in the period 2017-2026. This forecast
is based on potential population growth in big cities like Hanoi and Ho Chi Minh City, which will boost
demand for infrastructural development such as transportation, energy, utilities and civil constructions.
Meanwhile, the Government has directed to equitize a series of state-owned enterprises to supplement
capital towardsurgent infrastructure works.

e) Demand forecast & orientation of infrastructure development
n Status of present infrastructure spending
VIETNAM AMONG ASIA’S BIGGEST INFRASTRUCTURE SPENDERS

Spending as a percent of GDP
7%
0
China Vietnam India Indonesia Myanmar Singapore Philippines Malaysia Thailand
Source: Asian Development Bank

Data includes public and private sector investment
According to Bloomberg (2017), Vietnam has spent on average, 5.7% of GDP on infrastructure each year in
the past few years, establishing its status as the highest spender of this category in Southeast Asia, behind
China (6.8%). However, Vietnam still needs US $ 480 billion in order for infrastructure to meet development
needs. According to Bloomberg, if Vietnam wants to become the next Asian tiger, alongside low labor cost,
Vietnam needs to have satisfactory infrastructure to meet the conditions of foreign companies.
With the current annual spending of

5.7% of GDP on infrastructure, Vietnam’s BIGGEST INFRASTRUCTURE SPENDERS IN ASIA
Spending as a percentage of gross domestic product
infrastructure has achieved certain
achievements such as an extensive
%
transportation system comprising of
airports, highways and expressways built China
across the country. However, if Vietnam
wants to attract more FDI capital then it will Vietnam
need a total of USD 480 billion from now
to 2020 directed towards investment in India
infrastructure, including 11 power plants with
a total capacity of 13,200 MW and 1,380 km of
Indonesia
highways.
Myanmar
According to the Asian Development
Bank (ADB), Vietnam’s investment on
infrastructural development alone accounts Singapore
for 5.7% of national GDP and outperforms
the remaining countries in Southeast Asia. Philippines
Investments in Indonesia and the Philippines
account for less than 3% of GDP, and Malaysia
Malaysia and Thailand are below 2% of GDP.
Thailand
0 1 2 3 4 5 6 7
Note: Data includes public and private-sector investment

Source: Asian Development Bank, Bloomberg Straits times Graphics

+ Demand forecast
The Global Infrastructure Hub (GI Hub), which is under the management of the G20 Big Economies Group,
has just partnered with Oxford Economics, a leader in global forecasting and quantitative analysis to
implement and publish the Global Infrastructure Perspective report. According to this report, Vietnam’s
infrastructure investment demands US $ 605 billion between 2016 and 2040.
The biggest gap lies in the road sector with an increase in investment demand of up to 70% to meet the
anticipated needs.
FORECAST ON VIETNAM’S INFRASTRUCTURE INVESTMENT DEMAND
According to a report from the Global Infarastructure Outlook, Vietnam will meet 83 percent of its
infrastructure investment needs by 2040 if the current investment trend is maintained. Road sector
is said to face largest gap to fulfill targeted investment needs.
Billion USD % GDP

TOTAL Billion USD % GDP 256 2.64
ENERGY
INFRASTRUCTURE ENERGY 256 265 2.64 2.73
265 2.73
INVESTMENT TELECOMMUNICATIONS 99
99 1.02
99 1.02 1.02
FORECAST IN TELECOMMUNICATIONS 99 1.02
3.8 0.01
2016-2040 TRANSPORT:
TRANSPORT: AIR
3.8 AIR 5.2 0.01 0.06
5.2 0.06
0.414 0.01
TRANSPORT:0.414
TRANSPORT: SEA PORT
SEA PORT 8.5 0.01
0.1
8.5 0.1
15 15 0.15 0.15
TRANSPORT:TRANSPORT:
RAILWAY RAILWAY
21 21 0.22 0.22
79 79 0.81 0.81
TRANSPORT:TRANSPORT:
ROAD ROAD 134 134 1.38 1.38
50 50 0.52 0.52
CLEAN WATER
CLEAN WATER
72 72 0.75 0.75
0 0 0 0
32
32
29
29
26
INFRASTRUCTURE 25 24 25 26
INVESTMENT 22 24
21 22
19 19 21
FORECAST 17 19 19
15 16
THROUGH YEARS 15
17 16
– BILLION USD
10
2017 10 2020 2035 2030 2035 2040
2017 2020 2035 2030 2035 2040
Source: Globall infrastructure Hub
World Bank forecast: As Diop shared, large, quality investments in

According to Vice President of the World Bank infrastructure will play a key role in sustaining
(WB), Makhtar Diop, Vietnam’s rapid economic Vietnam’s economic growth in both medium and
growth rate demands more investment in long term. He appreciates Vietnam’s efforts in
infrastructure. planning and prioritizing the nation’s backbone
infrastructural projects, including highways,
According to WB estimation, Vietnam’s demand for railways and inland waterways.
sustainable infrastructure investment will reach 25
billion USD per year. At present, the state budget Vietnam’s forecast: According to the Ministry
accounts for about two-thirds of infrastructural of Finance’s Deputy Minister, Tran Xuan Ha, the
investment, but Mr. Diop emphasizes that such investment capital for Vietnam’s infrastructure
drastic financial needs cannot solely rely on the in the near future is substantial. According to a
public sector. Improving the efficiency of public report by the Ministry of Planning and Investment,
investments while implementing beneficial Vietnam’s infrastructural investment demand in
conditions to attract private investment in the period of 2017 - 2020 is approximately USD
infrastructure development are keys to address 195 billion. In particular, energy, roads, bridges,
infrastructure development challenges. aviation, clean water supply, waste treatment... are
important necessities

The forecast of Vietnam’s infrastructure investment demand in the future can be summarized as follows:
450
INFRASTRUCTURE INVESTMENT DEMAND 390

400
350
300 259
Unit: billion $
250
167 170
200
150
78
50
25 17.2 24.2
16.7
0
Annually average 2015 - 2025 2016 - 2030 2013 - 2020 2016 - 2020
amount
The World Bank ADB HSBC KPMG MPI
n Total investment demand n Investment demand annually
Source: The Ministry of Planning and Investment
f) Orientation of development:
Green, energy saving, inclusive, smart cities, sustainability, urbanization, worth-living cities
Building a quality, green, sustainable and intelligent infrastructure is one of the most important orders at
the 25th ASEAN Transport Ministers Meeting (ATM 25, taking place in two days 14th - 15th November 2019,
in Hanoi). Speaking at the conference, Vietnam’s Deputy Prime Minister, Trinh Dinh Dung, suggested
other Ministers to consider and discuss proposing new directions and mechanisms for cooperation in
the fields, that is: Further strengthening digital connectivity, data sharing in transport activities; make
use of scientific and technical achievements of the industrial revolution 4.0 to improve the efficiency of
transportation connection. At the same time, developing infrastructure, promoting regional connectivity,
ensuring smoothness in the ASEAN region and between ASEAN and the outside areas.
“In particular, building infrastructure” quality, green, sustainable and smart “- using advanced materials
and environmentally friendly technologies, attaching environmental factors, climate change into design
and construction; ensure financial sustainability, apply scientific advances in operation and management”,
Deputy Prime Minister, Trinh Dinh Dung, emphasized.
g) Market access
+ WTO & FTAs commitment & public procurement

As with all countries, Vietnam reserves its sovereign rights to restrict investment in sensitive fields by
setting conditions for conditional sectors that investment projects must satisfy for the purpose of national
defense and security, social order and safety. Foreign investors are also subject to conditions in relation to
foreign ownership limitation; forms of investment and requirements of Vietnamese partners; operational
contents and other conditions as stipulated in the international treaties to which Vietnam is a party. The
basic conditions are found in the Schedule of Specific Commitments in Services contained in Vietnam’s
World Trade Organization (WTO) accession package (The WTO Commitments). More favorable conditions

for Foreign Investments from ASEAN countries may be found within the ASEAN Economic Community
framework.
In term of public procurement, Vietnam remains an observer at WTO. Vietnam so far has signed only the
agreement on government procurement in the Comprehensive and Progressive Agreement for Trans-
Pacific Partnership (CPTPP), and the Vietnam-European Union (EU) FTA. Therefore, Vietnam only needs to
ensure competition in government procurement with businesses from the countries participating in the
two agreements.
+ Market access through the legal framework of Public-Private Partnership

Mobilizing private investment
In the context that the state budget can only meet about 50% of the total demand, diversify forms of
investment, encourage and create conditions for all economic sectors, including foreign investment, to
participate in development. Infrastructure is essential.
In a report by the Asian Development Bank (ADB), only 10% of Vietnam’s infrastructure is financed by the
private sector. “PPP-related government risk sharing is critical for Vietnam to attract private sector capital.
The PPP law should allow comprehensiveness (termination, foreign exchange, minimum revenue, and
others) and flexibility in risk-sharing to suit project, sector, and market situations,” said Sanjay Grover the
expert from Asian Development Bank.
Vietnam has so far attracted 336 PPP projects in transport, technical infrastructure, energy, water supply
and drainage, and environment, culture and sports, education and training, and other fields.
The Public-Private Partnership Investment Bill was submitted to the National Assembly for consideration
at the 8th Session 2019 expected to be approved at the first meeting of 2020 in May.
According to the Drafting Board of the PPP Bill, in Vietnam, the Public-Private Partnership (PPP)
investment model began to be implemented in 1997 when the Government issued Decree 77/ND-CP on
the investment regulation according to the BOT contract (build - operate - transfer) applies to domestic
investment.
The framework of PPP legal corridor can be summarized as follows:
Construction Investment Public Bidding Law on

LAW Law Law Investment Law Management and
Law use of public assets
Decree No. 63/2018/ND-CP dated Decree No. 30/2015/ND-CP

04/5/2018 on PPP Investment dated 17/3/2015 on guiding the
DECREE (replacing decree implementation of Investment Law on
No. 15/2015/ND-CP) selecting investors
Circular Circular No.75/2017/ Circular No.02/2016/ Circular No.86/2015/

No.55/2016/TT- TT-BTC on amending TT-BHKDT guiding on TT-BGTVT on
BTC on financial several articles of selecting projects, making, investment sectors and
CIRCULAR management of Circular No.55/2016/ appraising and approving contents of F/S report of
PPP projects TT-BTC project proposals and F/S PPP transport projects
in PPP model
Source: Ministry of Transport

The proposal is intended to allow PPP investment in the following areas: Road
infrastructure, railways, inland waterways, maritime, aviation, seaports; Power plants,
public lighting works; Infrastructure system: clean water supply; Drainage and waste
water treatment; waste treatment; Infrastructure of urban area; Park; Head offices of state
agencies; official residences; Medical infrastructure works; education, training, vocational
training; cultural; sport; travel; Telecommunication infrastructure works; information
technology applications; Infrastructure works in service of scientific and technological
development according to the provisions of law on science and technology; Commercial
infrastructure works; Infrastructure of economic zones and industrial parks; Agricultural and
rural infrastructure works; Other sectors involve private attraction to invest in infrastructure
and provide public services.
In addition, the Draft PPP Law excludes projects that can greatly affect the environment,
such as nuclear power plants and land use projects in national parks, protected areas, and
protective forests, watershed or likely to invade the sand or sea.
Under the draft, tourism; culture and sports; telecommunications infrastructure;

infrastructure for science and technology development; infrastructure at industrial parks,
economic zones, industrial clusters, and high-tech parks; and infrastructure for rural areas
and agriculture are the sectors where PPP development would not be available.

CHAPTER III
HO CHI
MINH CITY
- A LAND
WHERE
BIRDS
WILL COME
TO BUILD
THEIR NEST
Graphic designer: Nguyen Quang Tu

1. HO CHI MINH CITY STAYS TRUE TO ITSELF
Ho Chi Minh City is to Vietnam what New York is to HO CHI MINH CITY 2018 AT A GLANCE
American or Shanghai is to China: a global trading
city with an international outlock. It is a hub of AREA 2,095.5 km2
economic and cultural dynamism with an outward 24 districts
looking entrepreneurial population. Generations of
ousiders have come to trade and many settled down POPULATION 8.136 million
among the local people creating a cosmopolitan and
GRDP GROWTH RATE 7.5 million
broad minded mix.
GRDP VALUE ... 5 million
Ho Chi Minh City always stays true to itself. On his
visit to Vietnam, US president Obama did not only GRDP PER CAPITA 8.05%
make a stop at the capital but also chose to make
GRDP SHARE TO GDP 8.05%
a stop in Ho Chi Minh City for a dialogue with a
start-up entrepreneurs. Numerous multinational CPI US$5,428
corporations like Intel and Samsung have decided
to establish manufacturing bases here. In the FOREIGN TRADE Export: US$11,76 billion
past, Ho Chi Minh City leaders and natives were Import: US$12,48 billion
often promoted to important roles in the central FDI: US$7.07 billion
government. For instance, Mr. Vo Van Kiet was
LABOUR FORCE US$5,428
elected prime minister and Mr. Nguyen Minh Triet,
the President of State after their initial term in
the government. Currently, Ho Chi Minh City is a
centrally-run city along with the capital, Hanoi.
2. THE COSMOPOLITAN CITY
In 1698, Nguyen Huu Canh established the Gia of Korean expatriates in the District 7, Phu
Dinh government, marking the birth of a city. My Hung area has instituted a strong Korean
During French colonization, this city was named presence through the establishment of traditional
the Pearl of the Orient, possessing a legacy of restaurants, Taekwondo, and Korean church.
distinctively beautiful architectural buildings that Other notable mentions allude to the newly
still exists today. Ho Chi Minh City is a melting developed cosmopolitan area in District 2, Thao
pot, which embraces the diverse and distinct from Dien and the dispersion of Russian and Cambodian
all corners of the world. For instance, District 5 markets throughout the city.
is home to traditional Chinese groups who have
brought with them rare herbs and specialty cuisine To qualify as a cosmopolitan as well as
whereas the lively Western Quarter such as Bui metropolitan city in the 4.0 revolution, many
Vien or Pham Ngu Lao streets host a stream of developments still need to be made to provide
backpackers that continually offer a stimulating complete infrastructural modernity and
local and tourist dynamic. convenience. Ho Chi Minh City’s first two metro
lines are undergoing construction and Long Thanh
The diversity of people and cultures present International airport will commence construction
here can accommodate to all interests. For in the near future. Over the years, more
example, those in search of a clean and tranquil internationally accredited universities (Vietnam-
environment amid a bustling city can find their German University and RMIT) and hospitals
preferences satisfied by visiting little Japan located (Vietnam-France hospital) have also made
on Le Thanh Ton and Thai Van Lung streets. The establishments here. Essentially, these changes
settlement of the Japanese expatriate community mark Ho Chi Minh City’s evolution towards a
here has created an intimate atmosphere of small developed smart-city platform and improved
restaurants and spas helping to neutralize the quality of life.
feeling of a city chaos. Similarly, the concentration

3. SMART CITY DEVELOPMENT PLAN
In the short term, HCMC will focus on 5 main Flood resistant; Environment; Health, Community
components: Building a shared data warehouse health services, Food safety; Social security and
and developing an open data ecosystem; Building order; and Urban embellishment.
a forecast simulation center to support the city’s
socio-economic development strategy; Building The Thu Thiem Eco-Smart City project located
an operating center; Establishing Information in the historic Thu Thiem Ward is one of the
Security Safety Center; and Proposing an overview most important developments of the smart city
technology framework as a foundation for the drive. The private-public partnership, funded
implementation of smart urban construction. $1.9 billion USD by South Korea’s Lotte Group
, brings together smart planning and advanced
There are also 7 priority areas for development IT infrastructure to build a modern, high-tech
including: Administrative reforms associated with area with various convenient services in banking,
the construction of an e-government; Traffic; shopping, and entertainment.
4. HCMC INVESTMENT AUTONOMY
Since 1 January 2018, the local government in Ho The city can also use 100% of additional budget
Chi Minh City (HCMC) have been granted with revenues from policy adjustments and 50%of
the authority to decide on the majority of policies earnings from selling state property and land-
relating to investment, land management and attached assets to invest further in socio-
public spending without securing prior approval economic infrastructure.
from the country’s Prime Minister. This enhanced
autonomy furthers the city’s status as the Lastly, the city will enjoy revenues from privatizing
country’s economic powerhouse and it is set to be SOEs under its management and divestment of
in effect for a minimum period of five years. state capital from economic entities in which
the Municipal People’s Committee acts as
These changes will allow HCMC to retain a representative of the state owner.
greater proportion of local tax revenues, while
entitling the city authorities to impose additional The resolution came into effect on January 15, 2018
consumption taxes and environmental protection and will be effective for five years.
levies as they see fit. .
Ho Chi Minh City’s implementation of special

mechanisms and policies for development grants
greater autonomy to city authorities in land
management, investment, finance and state budget
management, as well as incomes of cadres and civil
servants under the city’s management.
For example, the Municipal People’s Council is

allowed to impose certain charges and fees not
present on the list regulated by the Government,
and certain raise charges and fees that have been
decided by competent authorities.
The council can ask the Government to submit to

the National Assembly Standing Committee for
approval to increase taxes or tax rates for some
products regulated by the Government.

5. THE DRIVING GROWTH FORCE & ECONOMIC HUB
OF THE COUNTRY
Share of Ho Chi Minh City in National GDP and

state budget contribution in 2018 as compared
with previous years
27.21
2018
23.97
27.8
2016
21.6
23.8
2006
18
1996 31.4
16.7
n Share in National GDP n State budget contribution
GRDP GROWTH RATE OF HO CHI MINH CITY

IN 2018 COMPARED TO PREVIOUS YEARS
10.2 9.6
8.05 8.25 8.3
Urban central core zone
Regional center
Satellite towns 2.7
Sub-centers
Urban centers outside HCMC
1976-1985 1986-2010 2011-2015 2016 2017 2018
Source: Department of Planning and Architecture of Ho Source: Fitch Solutions

Chi Minh City
Ho Chi Minh City contributes to one third of Situated in the center of South Vietnam – Ho Chi
industrial production value, one fifth of export Minh City is the “hinge” connecting the Southeast
turnover, and approximately 27.8% of total state and the Southwest. The city acts as the focal point
budget revenue in 2018. Ho Chi Minh City’s greater for road, waterway and air transports, connecting
area will develop in a concentrated multipolar the country’s two biggest economic areas (the
model with an integrated center is the old inner key industrial region - the Southeast and the
city area, the nucleus are a and city-level centers key agricultural region - the Southwest). Ho
in four development direction including Binh Chi Minh City’s prime location has underpinned
Duong northern dynamic urban area; Bien Hoa - the development of a modern and synchronous
Long Thanh - Nha Be Eastern dynamic urban area; infrastructure system, including transport
Cu Chi - Hau Nghia - Duc Hoa north-west urban systems, communication systems, domestic
area; Ben Luc - Can Giuoc - Hiep Phuoc South- banking system and modern international system…
west ecological urban area. etc. This international traffic hub, houses major
infrastructural accomplishments such as the
Gross Regional Domestic Product (GRDP) growth Xuyen A road, Tan Son Nhat International airport
rate of Ho Chi Minh City over the years. and Saigon, Soai Rap and Cat Lai seaports.

The central urban sub-region is divided into five parts, each its own function whereby Ho Chi Minh City is
at the heart or epicenter. Binh Duong is the city at the North of the region and a driving force. Bien Hoa-
Long Thanh-Nhon Trach is the urban area on the Eastern border. Cu Chi-Hau Nghia-Duc Hoa urban is the
urban area in the Northwest; and Ben Luc-Can Giuoc-Hiep Phuoc urban areas are ecological cities in the
Southwest.
6. KEY INFRASTRUCTURE
6.1. Seaports
Currently, Ho Chi Minh City has 41 operating cargo ports with a total length of 14,679m. By 2020, there will
be a projected 46 ports with a total length of 16,295m. Moreover, by 2030, there will be a projected 48 ports
with a total length of 18,330m. From1997-2017, there were more than 170,000 international import and
export ships docked in Ho Chi Minh City with more than 1.1 billion tons of goods. In 2017, Ho Chi Minh City
actively transported a total of over 82 million tons of imported and exported goods.
6.2. Airport
In 2017, Tan Son Nhat International Airport served 36 million passengers, exceeding the designed capacity
of 28 million passengers per year. Currently, the project is undergoing expansion to increase annual
capacity to 50 million passengers.
Tan Son Nhat International Airport
Long Thanh International Airport will be implemented in three phases and apportioning a total
investment of 16 billion USD accordingly.
The first phase has a capacity of 25 million passengers and 1.2 million tons of goods per year. It will
commence operations in 2025 and utilize 5.45 billion USD of the total budget. Phase 2 will increase
capacity to 50 million passengers and 1.5 million tons of goods per year, and phase 3 will increase capacity
to 100 million passengers and 5 million tons of goods per year.
6.3. Export processing zone & Industrial parks

At present, Ho Chi Minh City is home to 3 export- processing zones and 14 operating industrial parks in
operation with the total area of 2,509 hectare and tenant occupancy rate of 68.4% (last measured in 2018).
As of the end of 2017, there were 564 foreign investment projects operating domestically with the total
registered capital reaching 5.68 billion USD.

7. THE CITY OF PIONEERS
7.1. The first export-processing zone 7.3. Quang Trung Software Park
Tan Thuan Export Processing Zone extends over First of its kind, Quang Trung Software Park was
an area of 300 ha and is located in District 7, Ho the first software park to have been established in
Chi Minh City. Tan Thuan Export Processing Zone Vietnam. This software park is located in District
– the nation’s first export-processing zone (EPZ), 12, approximately 15 km (9 m) from downtown Ho
was established under Decision No. 394/CT of the Chi Minh City. It houses software enterprises, dot.
Chairman of the Council of Ministers on November com companies and a software training school.
25, 1991. This event triggered the first wave of Here, Dot.com investors are supplied with other
foreign investors, largely Taiwanese, coming to facilities and services such as residency, high-
invest in Vietnam, especially in Ho Chi Minh City speed access to the internet as well as favorable
and its surrounding areas. taxation. Together with the establishment of
the Hi-Tech Park in District 9 and the software
Enterprises operating in Tan Thuan Export ark inside Tan Thuan Export Processing Zone in
Processing Zone mainly produce to export. District 7, Ho Chi Minh City aims to become an
Goods and raw materials coming in and out of important hi-tech city in both the country and
this export-processing zone will be handled as South-East Asian region
exported and imported goods; thus, enjoying
.
preferential import and export tax rates. This was
also the first export-processing zone of Vietnam to
achieve International standards for it was ranked
as the Best Export Processing Zone in Asia -
Pacific region one year.
7.2. Ho Chi Minh City Stock Exchange (HOSE)

HOSE, otherwise known as Ho Chi Minh City Stock
Exchange, was established in 2001 as Vietnam’s
first stock exchange. Now there are 71 securities
corporations registered as members. In 2018, the
7.4. The Saigon Hi-Tech Park (SHTP) - Saigon
total value of listed securities approximated 33.8
Silicon City
billion USD.
The Saigon Hi-Tech Park is a park for high
technology enterprises located 15 km from
downtown Ho Chi Minh City. The park covers an
area of 326 ha (with 95% being utilized) and is
currently expanding to 913 ha. High-tech investors
are granted priority access to land leases and
taxation, as well as additional support for customs
services.
Several world leading high-tech companies have

chosen SHTP, notably:
l Japanese Nidec, (TSE:65940, NYSE:NJ, hard
disk drive motors) with multiple factories
under Nidec, Nidec Copal and Nidec Sankyo
flagships and a total investment of 500 million
USD for a workforce of 20,000 employees;
l US Intel (NASDAQ:INTC) with a 1 billion USD
registered investment to build the largest
chip assembly & test plant in the world;

l French Air Liquide (EPA: AI), world leader USD. Several major investors come from global
in gases for industry, health and the leading hi-tech firms like Intel, Sanofi, Samsung,
environment; Schneider, Datalogic and Jabil. So far, the park
has accumulated nearly 45 billion USD in high
l Danish Sonion, leader in miniature and
technology production value. This figure is
hearing components employing a workforce
expected to grow over 20 billion USD by 2020.
of more than 2,000 people;
l US Jabil (NYSE:JBL) a major electronic The SHTP has established 5 laboratories and
supplier; published more than 40 research articles on ISI
l Italian Datalogic (STAR: DAL.MI) global leader journals and domestic magazines. It has also had
in bar codes readers. 4 intellectual property products announced and 7
products commercialized. Its business incubator
has successfully supported 25 projects in product
commercialization.
Incentives and supports when investing in Saigon

High-tech Park
Investment projects in HCMC Hi-tech Park are

supported by high incentives under laws:
1. Enterprise income tax rate.
2. Import tax exemption and VAT on imported
goods for direct use in scientific research and
technological development.
This park was constructed to promote Ho
Chi Minh City and Vietnam as a hi-tech, 3. 0% export tax and VAT on high-tech products.
investor friendly destination. The new phase 4. Import tax exemption for imported goods to
of development is focusing on education, create fixed assets of the project.
biotechnology, start-up incubators, training
5. Soft incentives:
centers, software, R&D, and telecom. This park
is one of two hi-tech parks in Vietnam, the other - Prioritizing cooperation, ordering, using
being Hoa Lac Hi-tech Park situated in the machines and equipment and research human
western outskirts of Hanoi near the University of resources of the Research and Development
Sciences and Technologies of Hanoi. Center of the CNC Zone;
- Training courses on technical English, soft
The SHTP now owns technologies that can create skills, and technical skills at a preferential cost
major impact during Industry 4.0 such as 3D at the Training Center of the CNC Zone;
printers, biotechnology, new material technology,
and automation technology. - Supporting access to preferential loans for
science and technology development of Ho Chi
The SHTP has granted investment licenses to 148 Minh City;
projects, including 93 domestic projects worth 6 - Support for multiple entry visa for foreign
billion USD and 55 FDI projects worth 5.4 billion experts
8. BUSINESS INVESTMENT LANDSCAPE
8.1. Always highest on the list of FDI-attracting of 5.9 billion USD, accounting for 16.7% of the
localities nation’s total investment capital.
According to the Foreign Investment Agency
(Ministry of Planning and Investment), Ho 8.2. Granted with investment certificate
Chi Minh City have continually remained the In 2018, there were 1,029 newly granted FDI
leading locality in FDI attraction with 45 billion projects with a total investment of 784.81 million
USD (accounting for 13.2% of the nation’s total USD (up by 21.8% in new projects and 33% in
investment capital). In 2018 alone, Ho Chi Minh investment capital over the same period from the
City ranked second with a total registered capital previous year).

a. In terms of investment by countries and 8.3. Business opportunities
territories:
According Mr. Nguyen Thanh Phong, Chairman of
Korea has the largest share of investment capital
the Ho Chi Minh City People’s Committee; during
in Vietnam with 26.3%; followed by Singapore with
the 2016 - 2020 period, Ho Chi Minh City needs an
22.2%; then Japan with 12.5%; Norway with 9%;
investment capital of 78 billion USD, of which the
and Hong Kong (China) with 6%.
state budget can only satisfy 20% of the total.
SHARE OF MAJOR FDI INVESTORS BY COUNTRY Ho Chi Minh City is calling forth investors for
AND TERRITORIES IN HO CHI MINH CITY IN 2018 210 projects and a total investment capital of 1.18
quadrillion VND (51.5 billion USD) in the fields of
South Korea transportation, infrastructure, agriculture, trade
Others 26.30% and services, urban development, education,
24%
healthcare, sports, tourism, and entertainment
Korea (See appendix 8.5)
pore Hong Kong
6%
South Korea
Others
The transportation sector offers the most 26.30%
ay
24%
opportunities for investments (85South projects)
Koreawith a
Kong
Norway
s ■ South Korea total
Others investment capital of 923 26.30%
trillion VND (40.1
9%
24%
billion
Hong KongUSD), including 55
South Korea bridge and road linkage
■ Singapore
Singapore
Japan projects, 6%7 waterway
26.30%projects, 8 urban railway
12.50% ■ South KoreaOthers 22.20%
■ Japan
24% Hong Kong projects, and 15 inner city road projects. Pertaining
■ Singapore ■ Norway to infrastructural improvement, the city is offering
6%
■ South Korea ■ Japan ■ Hong Kong 36 projects
Norwaywith the total investment capital of 108
■ Singapore Hong Kong■ Others
Norway trillion VND
■
Others 9% (4.7 billion USD), including 4 car park
13.4% 6% projects, 28 on building technical infrastructure
Japan
■Construction ■ Hong Kong Real estate
5.2% 41.7% Norway Singapore
■ Norway ■ Others systems, and 4 flood Japan prevention projects.
9%
Manufacturing 12.50% 22.20%
Source:
■ Hong Report of the People Committee
Kong
of Ho Chi9.5%
Minh City in 2018 Norway The cityJapan
also offers 9 trade and services
Singapore projects,
■ Others 9%
2 agricultural 22.20%
12.50% projects, 29 urban development
Wholesale,
b. FDIretail
inflow in HCMC in 2018 by sector projects, 14 education projects, 6 healthcare
Singapore
10% Japan
South Korea
Others 26.30% 12.50% projects, 15 sports and cultural projects, and 14
22.20% Others
In terms of investment
24% by sector and industry, Real tourism and entertainment projects.
Estate accounted for the highest percentage with Construction 13.4% Real estate
■ South Korea
5.2% 41.7%
■ Singapore 41.7% Hong
in 2018;
Kong followed by Scientific,
Professional, professional, scientific According Others
to Tran Vinh Tuyen, Deputy Chairman
6%
■ Japan and technological activitiesactivites
Technological with 20.2%; Wholesale Construction 13.4% Real estate
20.2% of the Ho Chi
Manufacturing Minh City People’s Committee, the
■ Norway
& retail with 10%; Manufacturing with 9.5%; AndOthers 5.2% 9.5% 41.7%
■ Hong Kong city authorities are improving land clearance and
finally, Construction
Norway with 5.2% 13.4% handover procedures, Realhighlighting
estate to VIR the in-
■ Others 9% ConstructionManufacturing
5.2% 9.5% ¬principle commitment41.7% with the government to
Japan Singapore
SHARE OF FDI IN HO Manufacturing 22.20%
CHI MINH CITY IN 2018
12.50% shorten
Wholesale, the
retail ¬duration of these procedures from
BY SECTOR
9.5% 420 to 10%
around 100 days
Wholesale, retail
Others 10% Based on the general scheme of the HCMC
Construction 13.4% Real estate Institute of Economics, the municipal government
5.2% Wholesale, retail 41.7% Professional, Scientific,
10% has assigned leaders of departments and relevant
Manufacturing Technological
State agencies to prepare detailed activites
plans for
9.5% 20.2%
implementing programs
Professional, and projects proposed in
Scientific,
Technological activites
the scheme.
Wholesale, retail 20.2%
10% Professional, Scientific,
20.2%
Professional, Scientific,
20.2%
Source: Report of the People Committee

of Ho Chi Minh City in 2018

THE TRADE & INVESTMENT CAPITAL
01 OF VIETNAM TOP TEN REASONS
The largest contributor to state budget revenue,
export, FDI inflow, and GDP per capita. TO INVEST IN HCMC
HIGH CONCENTRATION OF
02
STRATEGIC LOCATION 07 SKILLED HUMAN RESOURCES
Within a 4 – 5-hour flight time to most Asian Ho Chi Minh City has the largest number
key markets. It is at the heart of the key of universities, colleges, vocational
Southern economic region and is the junction schools in Vietnam. There are over 60
point in the Southern Economic Corridor universities, nearly 50 colleges and 35
linking HCMC with Phnom Penh (Cambodia), vocational colleges and training schools
Bangkok (Thailand) and Dawei (Myanmar). located here. One of the principal
reasons for big corporations such as
Samsung or Intel to establish their base
in Ho Chi Minh City can be attributed to
a wide and skilled labor forces.
MODERN INFRASTRUCTURE
03 The nation’s largest international airport and
seaport are located here.
Export processing zones, industrial parks and ALWAYS TOPS THE LIST IN FDI
high-tech parks are constructed and provided
with high incentives for investors.
08 ATTRACTING LOCALITIES
According to the Foreign Investment
Agency (Ministry of Planning and
Investment), Ho Chi Minh City is the
leading locality in FDI attraction having
HIGH-STANDARD AMENITIES accumulated 45 billion USD (accounting
04 Good availabity of international universities,
for 13.2% of total investment capital of
the whole country). In 2018, Ho Chi Minh
hospital, schools, supermarkets, and office City ranked second with total registered
buildings. capital of 5.9 billion USD, accounting for
16.7% of total investment capital.
COSMOPOLITAN CITY
05 The English-language is prevalent and daily
09
HIGHEST PURCHASING POWER
OF THE COUNTRY
cultural presence from other countries (China,
Japan, Thailand, South Korea, and France) is Ho Chi Minh City ranks top in
strong (Number of tourism…). comparison other domestic areas in
terms of highest population income per
capita. The population in Ho Chi Minh
City as of January 2019 have reached 8.8
million and income per capita estimated
DYNAMIC ENTREPRENEURSHIP
06 HCMC has always been known as one of the
6.4 thousand USD.
most dynamic cities of Vietnam. It is where

the first stock exchange, the first software
park and the first business incubator of the ADVANTAGE OF THE HUB
country has been established. As an attractive
destination to establish business, in 2018,
10 In 2018, Ho Chi Minh City welcomed
there are approximately 372,000 domestic 7.5 million international and 29 million
enterprises operating in Ho Chi Minh City. By domestic incoming visitors.
2020, Ho Chi Minh City projects an increase to
500,000 operating enterprises.
APPENDIX
A. LIST OF KEY PROJECTS AND PROGRAMS IN HCM CITY
Service sphere Projects, programs Responsible

agencies
1. Finance l Setting up HCM City Financial Center Department of Finance

l Setting up HCM City Finance Investment
Corporation
2. Trade l Identifying key export products, developing Service of Trade

distribution, retail and e-commerce networks
l Forming the International Trade Center in Thu
Thiem Peninsula
l Building the Goods Transaction Center
3. Transport, l Hiep Phuoc Port New Town Department of

logistics and l Moving inner-city ports to outlying areas Communication and
forwarding Public Works, Hepza
4. Telecoms and l Completing Quang Trung Software City project Department of Post and
information l Encouraging development of new e-towns Telematics
technology l Developing e-transaction services
5. Real estate l Thu Thiem New Urban Town Department of

l Saigon South New Urban Town Natural Resources and
l Stepping up construction of residential areas Environment
l Housing program
6. Consulting, l IT business incubator Departments of

science-technology, l Upgrading HCM City Scientific and Technological Construction, Department
research and Information Center into a regional center of Science and Technology
application l Building key laboratories
l Setting up venture investment funds to
encourage application of technical studies
l Building Economic Information Center
7. Tourism l Promoting the city’s tourism in and out Vietnam Economic Institute,
l Linking with cities and provinces for tourism Department of Tourism
development
8. Healthcare l Building one hi-tech treatment area in downtown Department of Health

area and four at the city’s gateways
l Building a 100-ha, US$85-million medical training
center, hospital in Cu Chi District
l Setting up a pharmaceutical holding company
l Building a hi-tech diagnosis center in Saigon
South
l Building a traditional medicine center
9. Education l Zoning land for the International University The city’s Council of
and training l Training technical workers Universities

APPENDIX
B. TWENTY LARGE-SCALE PROJECTS CALLING FOR INVESTMENT IN HO CHI MINH CITY
No Name of project Sector Investment form Investment

Capital
1 Constructing elevated Road No.5 Transport BOT, BOT S4.439

combined with billion
BT (BOT priority)
2 Constructing the north-western radial road Transport BT (mainly S227 million

(from Long An dike to Vinh Loc Industrial exploiting land)
Zone)
3 Constructing Tam Tan road Transport ppp (BT contract) S278 mlllion
4 Constructing Metro Line No.2 (Ben Thanh- Transport ppp (BOT, BOT S833
Thu Thiem section and Tham Luong-Tay Ninh combined with million
Station-Tay Bac Cu Chi urban area section) BT)
5 Constructing Metro Line No.4 (Thanh Xuan- Transport ppp (BOT, BOT $3.532
Hiep Phuong urban area) combined with billion
BT)
6 Constructing Tram Line No.1 Transport n.a. $568

million
7 Constructing bus passenger terminal at Cho Intrastructure n.a. $50 million

Lon Bus station
8 South Saigon wastewater treatment plant Intrastructure n.a. $205

(Basin No.4) million
9 Dredging, improving the environment, building Intrastructure n.a. $232 million

intrastructure, and exploiting land along
Xuyen Tam canal
10 Water environment improvement project in Infrastructure ODA, ppp $855 million

the City, Phase 3
11 Investment in the city’s fisheries centre in Can Agriculture ppp $55 million
Gio district
12 The complex located at 621 Phan Van Chi, Trade-services Auction of land $745 million
Ward 7, District 6 use rights
13 Implementing gentrification, building high-rise Urban FDI and other $648

condominiums in the remaining area of Ward gentrification invest ment million
11, District 8 forms

14 Implementing gentrification, building Urban FDI and other $274 million
residential houses, high-rise condominiums in gentrification investment
the investment area near Y-shaped bridge of forms
Ward 8, District 8
15 Relocation of a school located in District Education FDI and other $137 mlllion
8 to create land for developing apartment investment
buildings. forms
16 Constructing hospitals in the medical cluster Healthcare ppp $428 million

of Tan Kien commune of Binh Chanh district
17 Constructing high-quality examination Healthcare ppp $50 million

and treatment area in Zone 2 of Nguyên Tri
Phuong hospital
18 Planning the construction of Rach Chiec Culture, sports FDI and other $922 million
National Sports Complex investment
forms
19 Constructing an amusement and public Tourism, BOT, BCC, and $17 million
Service area (Zone I - Cultural activities area of entertainment other investment
Historical Park - Ethnic Culture) forms
20 Constructing an adventure park and peace Tourism, BOT, BCC, and $20 million
square (Zone IV - Cul tural activities area of entertainment other investment
Historical Park - Ethnic Culture) forms

CHAPTER IV
BUSINESS
GUIDE
1. INTRODUCTION TO NEW INVESTMENT LAW AND
LAW ON ENTERPRISE 2014 (NEGATIVE LIST)
Vietnam’s regulatory framework is constantly revised to incorporate more favorable

regulations for businesses to invest and operate in Vietnam. The Law on Investment 2014
(LOI) and Law on Enterprises (LOE) 2014 governing investments and the establisment,
operation and dissolution of an enterprise, took effect from 1 July 2015. The laws
liberalise business and investment activities in Vietnam, especially inbound foreign
investment. Aside from certain economic sectors and industries (national defense, public
health, publishing, culture and exploitation of natural resources), foreign investors can
comfortably do business in Vietnam by setting up a company(ies) or acquiring existing
businesses.
The LOI and LOE clearly specify the economic sectors that are restricted or not open to
foreign investors.
Prohibited sectors 243 conditional sectors Equity restricted sectors

(specific investment under WTO commitment
certificate is required)
• Trade in narcotics • Including financial and • Advertising
• Trade in hazardous professional services, • Services incidental to
chemicals and minerals exploitation and agriculture, hunting and
• Trade in endangered flora trading for energy and forestry
and fauna minerals, certain types • Travel agencies and tour
• Prostitution of educations, ports operation
• Human trafficking, trade operation, railroads and • Film production,
in human tissue and body airports, construction, distribution and screening
parts medical services, trading • Services incidental to
• Human cloning and land surveying mining and manufacturing
• Trade in firecrackers services, real estate • Telecom services
service, and environmental • Entertainment services
services • Environmental services
• Electronic games
• Transport services

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2. INVESTMENT SCREENING AND LICENSING AUTHORITY
An investment project should be registered and/ • Legality of the project’s location (lease agreement)
or approved by the licensing authority before it can • Feasibility of the project
be granted an Investment Registration Certification
(IRC) and/or a Enterprise Registration Certificate Vietnam has a decentralized licensing authority
(ERC). at provincial and municipal people’s committees.
Certain projects with significant environmental
For non-conditional investment sectors, the issuance
For impacts and important national projects in certain
of IRC is a straight forward process with minimal designated sectors must first obtain approval from
review by investment authority in the province or the National Assembly or the Prime Minister of
city where the project is located. A foreign invested Vietnam.
project subject to conditions is required to go
through a screening process before being approved The LOI provides a list of approval authorities for
and issued with an IRC. Screening criteria may particular projects. For example, foreign invested
include the following: projects seeking to be located in special zones like
the Economics Zone, High Tech Zone, or Industrial
• Legal and capability status of investors, including Zone will be liable to the zone’s management board,
financial capability who holds full licensing authority to assess and upon
• Compliance to Vietnam’s Master Plan (WTO approval, issue the IRC.
commitments, International Treaties)
Type of projects Approval required

• Large environmental impact National Assembly
• Change purposes of land for rice cultivation of 500 hectares of larger; and
• Require the relocation of 20,000 or more people in remote areas such as
mountainous regions
• Require relocation of 10,000 people or more in remote areas such as Prime Minister
mountainous regions;
• Building airports, sea ports and golf courses; opening casinos; exploring,
producing and processing oil and gas, producing tobacco; developing
infrastructure of industrial parks, export-processing zones, and specialized
sectors in economic zone;
• Project having investment capital more than 5,000 billion VND (around 232
million USD);
• Projects invested by foreign investors in sea transportation,
telecommunication with network infrastructure, forest plantation,
publishing, press; and
• 100% foreign-owned scientific and technology companies or organisations.
• Other Provincial People’s
Committee / Zone’s
Management Board
Foreign investors can invest in Vietnam in the 2. Investment into existing legal entity
following legal forms: a. Purchasing of shares, capital
1. Investment with establishment of legal contribution, M&A;
entity b. Buy stock through exchange or
a. Limited liability company (LLC) intermediaries
b. Joint Stock Company (JSC)
c. Partnership Company (PC) 3. Investment without establishment of legal
entity
a. Through Public-Private partnership
Contract (PPC) – BOT, BTO, BT, BOO,
BLT, BLT; O&M
b. Through Business Cooperation Contract
(BCC)
3
3. COMPANY INCORPORATION PROCESS
To legally carry out business activities in Vietnam, foreign investors must register their
investment with the appropriate licensing authorities. Under the LOI and LOE, foreign
investors need to go through two steps:
i: Obtaining Investment Registration Certificate (IRC)
ii: Obtaining Enterprise Registration Certificate (ERC)
From a practical licensing perspective, foreign investors should consider the followings
before applying to the licensing authorities: (1) business activities, (2) proposed location,
capital and scales of operation, (3) governance structure.
PROCEDURES FOR NEW COMPANY SET-UP
Step 1 Step 2 Step 3
15 days 3 days 5-10 days
Location IRC ERC Post

selection Application Application licensing
(*) The timeline for setting-up projects prioritized by national or provincial Government shall be
shortened.
(**) Please note that IRC is required only for investments by foreign investors or deemed-to-be for-
eign investors (i.e. companies with more than 51% of charter capital held by foreign ownership).
The set-up procedures require various types of documents which will largely depend on
the type of company/business activities that is being set up. All legal documents issued by
oversea authorities must be translated into Vietnamese and validated by the Vietnamese
Embassy in the home country of the investor.
PAID UP CAPITAL / CHARTER CAPITAL

Generally, there is no minimum paid-up (charter) capital requirement. However,
licensing authorities may request that evidence of sufficient capital is provided to
regulate businesses.
The committed paid-up (charter) capital must be remitted into Vietnam within 90 days
from the issuance date of the ERC.
POST LICENSING PROCEDURES

After the issuance of IRC and ERC, there are certain statutory post-licensing
procedures to be completed before commencing operation (i.e. making and
notification of the company’s seal, labor and tax registration, opening a bank account).

4. INVESTMENT INCENTIVES
4. INVESTMENT INCENTIVES
In Vietnam, investment incentives are granted to projects invested in incentivized business

In Vietnam, investment incentives are granted to projects
In Vietnam, investment incentives are granted to invested
projectsininvested
incentivizedin business
incentivized business
sectors
sectors and/or in locations with social-economic difficulty. The investment projects with
and/or in locations with social-economic difficulty. The investment projects with
sectors
large and/or in locations with social-economic difficulty. The investment projects with
large investment
investment capital
capital or
or engaging
engaging inin the
the manufacture
manufacture of of support
support industry
industry product
product
large
would investment
would also
also be capital
be considered
considered to or engaging
to apply
apply investment
investmentin incentives.
the manufacture
incentives. The of support
The incentive
incentive can
can be inindustry
be in forms
forms product
would
of
of a also be tax
a preferential
preferential considered
tax rate,
rate, CIT to apply
CIT holiday
holiday andinvestment
and reduction, incentives.
reduction, import
import duty The incentive
duty exemption
exemption for goodscan be in forms
for goods
imported
of to create
a preferential
imported fixed
to create tax assets
fixedrate,
assets and
CIT exemption/reduction
andholiday and reduction,
exemption/reduction of land rental,
import
of land or
duty
rental, taxes on
on land
exemption
or taxes land for goods
use
use right
right for
for qualified
qualified investment
investment projects.
projects. The
The criteria
criteria for
for incentives
incentives are
are set
set out
out in
in the
the
imported to create fixed assets and exemption/reduction of land rental, or taxes on land
Investment
Investment Law,
Law, CIT
CIT law
law and
and Law
Law on
on Import
Import –– Export
Export Tax.
Tax.
use right for qualified investment projects. The criteria for incentives are set out in the
Investment
The Vietnam’sLaw,
The Vietnam’s CITCorporation
standard
standard law and Law
Corporation on Import
Income
Income Tax (CIT)– rate
Tax (CIT) Export
rate is
is 20%,Tax.
20%, qualified
qualified projects
projects can
can
expect
expect to
to receive
receive the
the following
following benefits:
benefits:
The Vietnam’s standard Corporation Income Tax (CIT) rate is 20%, qualified projects can
expect PREFERENTIAL
to receive theTAX
PREFERENTIAL TAX RATE
following
RATE benefits:
A
A preferential
preferential tax
tax rate
rate is
is applicable
applicable from
from the
the first
first revenue-generation
revenue-generation year
year (except
(except
high-tech
high-tech enterprises or projects). The preferential tax rate can range from 10%
enterprises or projects). The preferential tax rate can range from 10% to
to 15%;
15%;
PREFERENTIAL TAX RATE
A preferential
TAX
TAX HOLIDAY
HOLIDAY tax rate is applicable from the first revenue-generation year (except
Ahigh-tech
A tax holiday enterprises
tax holiday is
is available or projects).
available from
from the
the first The preferential
first profit-making
profit-making year ortax
year or therate
the canrevenue-
fourth
fourth range from 10% to 15%;
revenue-
generation year when applicable (except high-tech enterprises).
•• Reduced CIT
ReducedTAX rate
rate of
of 10%
CIT HOLIDAY 10% oror 15%
15%
•• Tax
Tax holidays
holidays (from
(from first
first profitable
profitable tax
tax year)
year) for
for certain
certain number
number of
of years
years followed
followed byby 50%
50%
A
reduction tax
for holiday
the is
remaining available from
incentivized
reduction for the remaining incentivized period
the
period first profit-making year or the fourth revenue-
•Detailed
Reduced
Detailed CIT for
criteria
criteria rate
for of 10%for
eligibility
eligibility ortax
for 15%
tax incentives
incentives and
and tax
tax incentive
incentive scheme
scheme are
are provided
provided in
in
the CIT regulations. A summary of criteria are as follows:
• Tax holidays (from first profitable tax year) for certain number of years followed by 50%
•• Investment
reduction sectors
Investment for thethat
sectors that are
are encouraged
encouraged
remaining by
by the
the Government
incentivized period of
Government of Vietnam
Vietnam
•• Investment
Investment projects
projects located
located in
in areas
areas with
with difficult
difficult social-economic
social-economic conditions,
conditions, or
or certain
certain
industrial
industrial zones,
zones, export
export processing
processing zones,
zones, and
and economic
economic oror high-tech
high-tech zones
zones
Detailed
•• Large criteria forprojects
Large manufacturing
manufacturing eligibility for tax incentives and tax incentive scheme are provided in
projects
• Investment sectors that are encouraged by the Government of Vietnam
• Investment projects located in areas with difficult social-economic conditions, or certain
industrial zones, export processing zones, and economic or high-tech zones
• Large manufacturing projects
5
5
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PM
5. TAXATION
TAXATION REGIME
REGIME
In addition
addition to
to the
the tax
tax incentives
incentivesfor
forpreferential
preferential TAX
TAXON
ONBUSINESS
BUSINESS
projects,
projects, Vietnam
Vietnam is is one
one of
ofthe
thecountries
countriesthat
thathas
has • •Standard
Standardcorporate
corporateincome
incometax
taxrate:
rate:20%
20%from
from2016
2016
lowest
lowest CIT
CIT rates
rates in
in ASEAN.
ASEAN. • •Value
ValueAdded
AddedTax
Tax(VAT):
(VAT):
VAT
VATisisimposed
imposedonongoods
goodsand
andservices
servicesused
usedfor
for
Vietnam
Vietnam is
is on
on its
its way
way to
to implement
implementananelectronic
electronictax
tax production, trading and consumption in Vietnam
production, trading and consumption in Vietnam
administration
administration across
across the
the country
countryto
tobecome
becomemore
more (including
(includingthose
thosepurchased
purchasedfrom
fromoverseas
overseas
business
business friendly.
friendly. organizations
organizationsandandindividuals).
individuals).
Below
Below are
are taxes
taxes applicable
applicableto
tobusinesses
businessesand
and There
Thereare
arethree
threetypes
typesofofVAT:
VAT:non-taxable
non-taxableitems,
items,
individuals:
individuals: items
items not required to declare VATand
not required to declare VAT andtaxable
taxable
•• Corporate
Corporate Income
Income Tax
Tax ••Capital
CapitalTransfer
TransferTaxes
Taxes items.
items.VAT
VATrates
ratesinclude
include0%,
0%,5%and
5%and10%.
10%.
•• Value Added Tax
Value Added Tax • Import tax
• Import tax
•• Withholding
Withholding Taxes
Taxes ••Personal
PersonalIncome
IncomeTax
Tax • •Foreign
ForeignContractor
ContractorWithholding
WithholdingTax Tax(FCWT):
(FCWT):FCWT FCWT
isisapplicable to foreign organizations/individuals
applicable to foreign organizations/individuals
The
The types
types of
of taxes
taxes mentioned
mentionedaboveaboveare
areimposed
imposed who
whoconduct
conductbusiness
businessororearn
earnincome
incomeininVietnam
Vietnam
at onon the basis of a contract/agreementwith
the basis of a contract/agreement with(i)(i)a a
at the national level. There are no provincialor
the national level. There are no provincial orcity
city
level Vietnamese
Vietnameseparty
party(as
(asa amain
mainforeign
foreigncontractor)
contractor)oror
level taxes. Vietnam applies a self-assessmenttax
taxes. Vietnam applies a self-assessment tax
system. (ii)
(ii) another foreign contractor to implementpart
another foreign contractor to implement partofof
system.
the contractual scope of works (as a foreign
the contractual scope of works (as a foreign sub- sub-
In line with Vietnamese government continuing contractor). FCWT is a tax collection mechanism
In line with Vietnamese government continuing contractor). FCWT is a tax collection mechanism
efforts in enhancing efficiency and transparency, that normally comprises of both CIT and VAT,
efforts in enhancing efficiency and transparency, that normally comprises of both CIT and VAT,
increasingly, most aspects of Vietnam tax but may also include PIT for payments to foreign
increasingly, most aspects of Vietnam tax but may also include PIT for payments to foreign
administration for corporate taxpayers are individuals.
administration for corporate taxpayers are individuals.
transacted online through the e-government system.
transacted online through the e-government system.
Activities VAT Rate CIT Rate

Activities VAT Rate CIT Rate
Supply of goods in Vietnam or associated with services Exempt 1%
Supply of goods in Vietnam or associated with services Exempt 1%
rendered in Vietnam (including in-country export-import,
rendered in Vietnam (including in-country export-import,
distribution of goods in Vietnam or delivery of goods where
distribution of goods in Vietnam or delivery of goods where
the seller bears risk relating to the goods in Vietnam)
the seller bears risk relating to the goods in Vietnam)
Services 5% 5%
Services 5% 5%
Supply of goods attached to services where the value is separated:
Supply of goods attached to services where the value is separated:
• Goods portion Exempt (for goods) 1% (for goods)
• Goods portion Exempt (for goods) 1% (for goods)
• Services portion 5% (for services) 5% for services)
• Services portion 5% (for services) 5% for services)
Supply of goods and some services where value is not 3% 2%
Supply of goods
separated (*) and some services where value is not 3% 2%
separated (*)
Construction 3% or 5% 2%
Construction 3% or 5% 2%
Loan interest Exempt 5%
Loan interest Exempt 5%
Income from royalties Risk of being taxed 10%
Income from royalties atRisk
5% of being taxed 10%
at 5%
Other cases where value is not Highest rate Highest rate
Other cases where value is not
separated Highest rate
applicable Highest rate
applicable
separated applicable applicable
6
6

Ho Chi Minh City6Branch
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TAXES ON INDIVIDUALS Tax residents are subject to Vietnam’s Personal
TAX RESIDENCY Income Tax (PIT) on their worldwide income
An individual is a tax resident if he/she meets one of regardless of where such income is paid, earned or
the following conditions: charged. Worldwide employment income is subject
• Residing in Vietnam for 183 days or more in 12 to tax at progressive tax rates ranging from 5 percent
consecutive months from the first arrival date or in to 35 percent depending on income level. Individuals
a calendar year
who do not satisfy any of the conditions above are
• Having a registered permanent residence in
Vietnam as recorded by a temporary/permanent classified as non-residents and are subject to tax only
residence card on Vietnam-sourced income. The rate applicable to
• Having rented a house in Vietnam with a term of tax non-residents’ Vietnam- sourced employment
183 days or more within a tax year income is fixed at 20 per cent. Both residents and
non-residents are also subject to PIT in Vietnam on
Note: An individual having registered address or incomes of non-employment nature, which are taxed
rented house over 183 days but residing less than 183 at different flat rates.
days in Vietnam may still be a tax resident if unable to
prove residency of another country.
1-5%
on revenue
*depending on
Monthly Business Income type of business
Assessable Income
(million VND)
Residents
Capital investment,
i.e. interest, dividents 5%
(except for bank
Up to interest)
5% 5 20%
on net gains for
tax resident; 0.1%
Over on sales proceeds
Capital transfer
10% 5 to 10
for non-resident
0.1%
Over Securities/JSC on sales
15% 10 to 18 share transfer proceeds
Non-
Over Employment
Employment
Income (Applicable
2%
20%
from sales
18 to 32 Income
TAX RATES
to both residents & Real estate transfer
non-residents)
proceeds
Over
25% 32 to 52 Income from winning 10%
prizes (in excess of
VND 10 million)
Over
30% 52 to 80
Income of copyright 5%
Over (in excess of VND 10 million)
35% 80
Income from royalty/ 5%
franchising (in excess of
Non-
20% residents
VND 10 million)
Income from gifts/

inheritances (in excess of 10%
VND 10 million)
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6. PROFIT REMITTANCE/REPATRIATION OF
CONTRIBUTED
CONTRIBUTED CAPITAL
CAPITAL AND LOANS
AND LOANS
CONTRIBUTED CAPITAL AND LOANS
After declaring, paying taxes, notifying the repatriation to the tax authority and having no
outstanding tax debt, dividend can be repatriated freely.
After declaring,
Investors
After declaring, paying
can repatriate
paying taxes,
their
taxes, notifying
contributed
notifying the(charter
thecapital repatriation
repatriation to capital) to the
only tax
upon
the tax authority authority
having noand having no
liquidation.
and
No remittance tax will be imposed on the repatriation of profit to corporate shareholders.
PIT of 5% can
Investors will repatriate
be imposed on income
their from capital
contributed investment when
(charter repatriating
capital) profits
only upon to
liquidation.
Investors can repatriate their contributed capital (charter capital) only upon liquidation.
individual shareholders except one member limited liability company owned by one
individual.
No remittance tax will be imposed on the repatriation of profit to corporate shareholders.
No
PIT remittance tax willon
of 5% will be imposed beincome
imposedfromon the repatriation
investment of profitprofits
when repatriating to corporate
to shareholders.
PIT
An of 5%shareholders
increase
individual will be imposed
and decrease of theon
except income
member from
contributed
one capitalinvestment
limited is subject
liability to when repatriating
additional
company owned by one profits to
registration
and approval
individual. from the licensing authority.
individual shareholders except one member limited liability company owned by one
individual.
Medium andand
An increase long-term
decreaseloans (more
of the than 12 months)
contributed are
capital is required
subject to be registered
to additional with
registration
the
and State Bankfrom
approval of Vietnam. Thoseauthority.
the licensing not registered with the State Bank of Vietnam cannot be
An increase and decrease of the contributed capital is subject to additional registration
repatriated.
and
Mediumapproval from the
and long-term licensing
loans authority.
(more than 12 months) are required to be registered with
the State Bank of Vietnam. Those not registered with the State Bank of Vietnam cannot be
repatriated.
Medium and long-term loans (more than 12 months) are required to be registered with
the State Bank of Vietnam. Those not registered with the State Bank of Vietnam cannot be
repatriated.

8
7. LABOR REGULATIONS
It is essential for investors doing businesses in Vietnam to comply with labor regulations.
The Labor Code of Vietnam governs labor contracts, minimum wage, working hours,
overtime, statutory insurance, labor disputes, and termination of labor contract. All labor-
related matters should be properly documented.
Employers with more than 10 employees are required to register internal labor rules with
Department of Labor. Employers are not allow to prevent union formation when requested
by at least five employees.
The Vietnamese compulsory Social Insurance, Health Insurance and Unemployment

Insurance (SIHIUI) scheme is applicable to Vietnamese national employees with a definite
term under a Vietnamese labor contract of 3 months or more.
Foreign employees, however, shall only be subject to the mandatory Vietnamese HI scheme
in the same manner as Vietnamese employees. Currently, the SIHIUI contributions rates
for eligible employees are as below:
Type of Insurance Employee Employer Total

Contribution Contribution
SI 8% 17.50% 25.50%
HI 1.50% 3% 4.50%
UI 1% 1% 2%
Total 10.50% 21.50% 32%
The trade union fee includes a 1% contribution from the employee and 2% contribution
from the employer. This is payable when the internal labor union is registered.
The base to calculate statutory insurance and union fees are subject to maximum caps,
which can be revised.
Foreigners must obtain a valid work permit from the local Labor Department before
working in Vietnam. Exception applied for those hold the positions of experts, managers,
chief executive officers or technicians for a period of under 30 days and an accumulated
working period of under 90 days per year. Normally the term of a work permit is 2 years.
Renewal of a work permit is required prior to its expiry if the foreign employee is still
under the assignment term.
In addition, a business visa is statutorily required prior to a foreigner’s entry into Vietnam.
Upon the expiry of the initial business visa (normally 3 months), applying for either a visa
extension or a Temporary Residency Card (TRC) is required. Since the duration for visa
extension is less than 12 months, the TRC with a current limited period of up to 3 years
should be considered in the case of long-term assignments.
9
8. MARKET ACCESS RESTRICTION RELATED TO WTO
COMMITMENT AND FREE TRADE AGREEMENT
To promote free trade flow, transparency and fair competition, Vietnam joined the WTO in
2005. Under the WTO commitment, Vietnam commits to (1) schedule tariff reduction for
goods and (2) open its markets for certain business sectors to foreign service providers.
Except certain restricted sectors mentioned in Section I that are subject to specific
conditions, in which foreign investors can only invest in Vietnam in the form of a joint-
venture with local investor, other committed business sectors can be invested in the form
of 100% foreign owned company. Business sectors that are not committed under WTO
commitments may not be allowed to invest in Vietnam.
In recent years, Vietnam has actively engaged in several Free Trade Agreements (FTA)
to help accelerate the country’s integration into the global economy. FTAs that Vietnam
have signed represent around 80% of global trading partners. These FTAs fundamentally
aim to obtain preferential treatment for goods and services and eliminate non-tariff
barriers encountered by the party country of the agreement. They also set up a clear and
transparent legal framework to govern trade and investment relations between agreement
parties. Essentially, FTAs allow products manufactured in Vietnam to comfortably access
party countries at preferential duty rates based on its origin and vice versa.
Bilateral agreements
• Vietnam - Chile
• Vietnam - South Korea
• Vietnam - Japan
• Vietnam - Israel (in negotiation)
• Vietnam - EU FTA (to be rectified in 2020)
• Vietnam - Eurasian Economic Union FTA
(concluded negotiation)
• Vietnam - European Free Trade
• Association
Comprehensive and
Progressive Agreement for Trans-
Pacific Partnership (CPTPP)
(signed on March 8th, 2018)
Regional Comprehensive
Economic Partnership (RCEP)
(on-going negotiation)
Free trade agreements signed as an

ASEAN member country
• ASEAN - Japan
• ASEAN - South Korea
• ASEAN - India
• ASEAN - China
• ASEAN - Hong Kong
• ASEAN - Australia - New Zealand
10

9.9.FOREIGN
FOREIGN INVESTMENT
INVESTMENT CAP OWNERSHIP
CAP OWNERSHIP
9. FOREIGN INVESTMENT CAP OWNERSHIP
Foreign investors have no capital contribution restriction except those restrictions under
WTO commitments as mentioned in Section I above and public companies.
Foreign investors have no capital contribution restriction except those restrictions under
For
WTO public
Foreign companies,
investors
commitments except
have
as nofor conditional
capital
mentioned Ibusiness
contribution
in Section sectors
above and publicwhere
restriction there is athose
except
companies. cap onrestrictions under
capital investment of foreign investors, foreign investors can own up to 100% of the
WTO commitments as mentioned in Section I above and public companies.
charter capital
For public if this had
companies, beenfor
except agreed in a shareholder
conditional meeting
business sectors and recorded
where there is aincap
theon
charter of the company.
capital investment of foreign investors, foreign investors can own up to 100% of the
For public companies, except for conditional business sectors where there is a cap on
charter capital if this had been agreed in a shareholder meeting and recorded in the
capital
For investment
banks,
charter foreign
of the
of foreign
investors
company.
investors,
can own up to 30%foreign investors
charter capital; andcan own
other up to 100% of the
conditional
sectors which
charter capitalthe if
regulations
this had does
beennot specifyinthe
agreed foreign ownership
a shareholder cap, the
meeting caprecorded
and is 49%. in the
charter
For banks,offoreign
the company.
investors can own up to 30% charter capital; and other conditional
sectors which the regulations does not specify the foreign ownership cap, the cap is 49%.
For banks, foreign investors can own up to 30% charter capital; and other conditional
sectors which the regulations does not specify the foreign ownership cap, the cap is 49%.
11
Deloitte-GUIDE TO INVESTMENT.indd 11 11 4:04:10 PM
12/30/2019
10. REFERENCE COST OF LIVING, UTILITIES CHARGES,
MINIMUM WAGE RATES
In Vietnam, including the 2 largest cities, Ho Chi Minh City and Hanoi City, the cost
of living is quite reasonable. Serviced apartments’ rental rates range from 500 USD to
1,500 USD per month, depending on their location, level of luxury and facilities. Serviced
apartments are often the best choice for expats looking for an accommodation in Vietnam.
Office rental for urban areas ranges from 15 USD to 65 USD per square meter per month,
depending on the location and level of luxury. In addition, a management service fee may
be charged at the rate of 3 USD to 8 USD per square meter per month.
For travel, taxi and Grab can easily be used in cities like Ho Chi Minh City, Da Nang and
Hanoi. The taxi fare is around 0.5 USD per kilometer.
The electricity price in Vietnam ranges from 0.07 USD to 0.13 USD per Kwh for individual/
household consumption and from 0.04 USD to 0.21 USD per Kwh for business purpose. The
mentioned fees do not include VAT.
(Source: www.evn.com.vn)
Non-domestic water price varies depending on the Company’s location and business line,
(VAT not included):
2020 2021 2022

For manufacturing 10,800 VND 11,400 VND 12,100 VND
(0.47 USD) (0.49 USD) (0.52 USD)
For service and 19,000 VND 20,100 VND 21,300 VND
trading (0.83 USD) (0.87 USD) (0.93 USD)
(Source: http://capnuoctrungan.vn)
From 1 January 2020, the compulsory minimum salary rates of workers will range from 3.07
million VND (around 134 USD) to 4.42 million VND (around 192 USD) per month, depending
on the area knowing that wages are higher in urban areas. Salary rates offered to office
workers, especially in big cities is quite higher than the required minimum salary rates,
taking into account personnel qualification and capability.
12

REFERENCE LITERATURE
(2019 - 2020 VERSION)
l Globalization & regionalization, strategies, l PISA Worldwide Ranking – average score of

policies and economic environments, Jean-Louis math, science and reading
Mucchielli, PhD, Peter J. Buckley, PhD, Victor V. Source: Organization for Economic Cooperation
Cordell, PhD editors and Development (OECD), 2015-2016
l The encyclopedia of the Vietnam war, a l Why is Vietnam able to beat OECD countries in
political, social and military history, second PISA scores despite being poor?
edition, Spencer C. Tucker editor Adam Jang-Jones, Updated Nov 14, 2018
l Transformation to an open market system, l Vietnam’s manufacturing miracle: Lessons for

William T. Alpert, editor developing countries
Publisher: Routledge; 1 edition (November 30, Sebastian Eckardt, Deepak Mishra, and Viet Tuan
2001) Dinh, April 17, 2018
l Vietnam a guide for business and investment. l Brief on foreign direct investment of the first
Foreign Investment Agency. MPI. January 2007 five months of 2019
Ministry of Planning and Investment
l Vietnam’s investment potential & Brief on foreign direct investment of 2018 (MPI)
opportunities. APEC Vietnam 2017. VCCI Brief on foreign direct investment of the first five
months of 2019 (MPI)
l FDI Opportunities in Vietnam in 2018
January 25, 2018. Posted by Vietnam Briefing. l Global Innovation Index 2018
Reading by: Dezan Shira & Associates. Editor: By WIPO, (World Intellectual Property
Koushan Das Organization); INSEAD, Cornell, SC Johnson
College of Business
l Five Charts Explain Vietnam’s Economic
Outlook; IMF COUNTRY FOCUS l 2016 Global Manufacturing Competitiveness
July 16, 2019 Index by Deloitte
l The World Bank in Vietnam l Nikkei Vietnam Manufacturing PMI,

Last Updated: Oct 18, 2019 May 2nd 2019 by HIS Markit
Vientam overview by World Bank
Last Updated: Apr 24, 2019 l TAKING STOCK An Update on Vietnam’s
Recent Economic Developments by Word Bank,
l Viet Nam Quarterly Macroeconomic Report December 2018
Quarter 1 – 2019. Konrad Adenauer Stiftung
l Ho Chi Minh City calls for investors in 210
l World Economic Forum Global Competitiveness projects, by Van Ngoc 15/05/2019 (Vietnam
Reports 2018 - 2019 Investment Review)
Source: www.weforum.org
Viet Nam Global Competitiveness Index 4.0 2018 l Saigon becomes a top expat destination,
edition By Nguyen Quy November 29, 2018
l Vietnam 2035, Toward Prosperity, Creativity, l Vietnam 19th best country in the world for
Equity, and Democracy expats: HSBC survey - By Dat Nguyen, November
The World Bank, Ministry of Planning and 8, 2018
Investment of Vietnam (MPI)
l How to invest in QTSC by Quang Trung
Software City

ABBREVIATIONS
VCCI Vietnam Chamber of Commerce and Industry
VCCI HCMC Vietnam Chamber of Commerce and Industry, Ho Chi Minh City Branch.
MPI Ministry of Planning and Investment
ASEAN Association of Southeast Asian Nations
FTA Free Trade Agreement
CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership
EVFTA European-Vietnam Free Trade Agreement
RCEP Regional Comprehensive Economic Partnership
EAEU FTA Eurasian Economic Union Free Trade Agreement
ATIGA ASEAN Trade in Goods Agreement
ACFTA ASEAN-China Free Trade Agreement
AKFTA ASEAN-Korea Free Trade Agreement
AJCEP ASEAN-Japan Comprehensive Economic Partnership
AANZ FTA ASEAN-Australia-NewZealand Free Trade Agreement
VCFTA Vietnam-Chile Free Trade Agreement
VKFTA Vietnam Korea Free Trade Agreement
GII Global Innovation Index
HCI Human Capital Index
OECD Organization for Economic Cooperation and Development
PISA Program for International Student Assessment
JETRO Japan Export Trade Research Organization
WEF World Economic Forum
EVN Vietnam Electricity

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VIETNAM CHAMBER OF COMMERCE AND INDUSTRY

HO CHI MINH CITY BRANCH

TAN THUAN COMPLEX AREA

THE FIRST AND MOST SUCCESSFUL IP & EPZ IN VIETNAM

CITY CENTER STRATEGIC LOCATION COMPLETED INFRASTRUCTURES ABUNDANT HUMAN RESOURCE

MAIN SECTORS WHERE WE PROVIDE EXPERTISE

BONFIGLIOLI VIETNAM LIMITED COMPANY

20. Looking back on the

Second Edition published in 2020 by:

Vietnam Chamber of Commerce and Industry, Responsible for Publication

Editor-in-chief: Mr. Nguyen Thanh Binh Editors

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This year’s publication is also notably different for it features

Like the first edition, this one will similarly provide an

These two editions will also display similarities in the aspect

6 Vietnam Chamber of Commerce and Industry

Lastly, I would like to express my appreciation for the

No matter how much effort is put forth, flaws are inevitable. To

Vietnam Chamber of Commerce and Industry

VIETNAM CHAMBER OF COMMERCE AND INDUSTRY

About us What we do - What we offer

Our services Achievements

© 2020 Deloitte Vietnam Company Limited

Reproduced from Sy Hoang’s lotus pattern

1 Geography, landscape and climate

larger than the US state of New Mexico. Tuyen

Vietnam borders China to the north, Laos

and Cambodia to the west, and the Pacific Son La

Ocean to the east. Running along the east of Ha Tay

Hoa Binh Hung Yen

the Indochina peninsula, the country boasts Ha Nam

3,260 kilometers of coastline, territorial, Thanh Hoa

and inland waters (vùng nội thủy và vùng

square kilometers economic zone located

not least, a 100,000 square kilometers area

islets, including Paracel (Hoang sa) islands

Thua Thien Hue

2. Climate Quang Nam

Laying within the tropical rain belt, Vietnam Quang Ngai

experiences high temperature and humidity Kon Tum

all year round. Binh Dinh

The weather in the Northern part of Vietnam

into four seasons (spring, summer, autumn

a tropical monsoon with two seasons - the

and the dry season from December to the Dong Long An

Ba Ria - Vung Tau

engendered by Vietnamese topographical Phu Quoc Kien Giang

features that support agricultural

diversification and enhances landscape

aesthetic. Con Dao

Figure 1: Map of the Socialist Republic of Vietnam

12 Vietnam Chamber of Commerce and Industry

Figure 2: Vietnam is known as the “balcony over the Pacific”

II. COUNTRY AND PEOPLE

Vietnam Chamber of Commerce and Industry

Vietnamese history is also closely associated with

14 Vietnam Chamber of Commerce and Industry

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