Viet Nam – Why now?

Commercial SectionEmbassy of Viet Nam in Italy

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Contents

• Overview of Viet Nam economy• Bilateral economic and trade links• Favourable environment for investors

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Overview of Viet Nam economy

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Geography- Centre of Southeast Asia

- Area: 331,698 sq. km- Coastline: 3,260 km

Society- Population: 85 mil.

- Labor force: 45 mil.- Unemployment rate: 2%

- Literacy rate: >90%

Viet Nam at a glance

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• Substantial progress was achieved from 1986

• GDP growth averaged 7-8% per year even against the background of global recession.• Particularly, the growth of 2007

was 8.4%

• Membership in ASEAN, ASEM, APEC

• Joined WTO since 2007

Viet Nam economy /i

“Every 10 years, Viet Nam has built another economy.”

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Viet Nam economy /ii

• Investment (gross fixed): 32.6 % of GDP (2006)

• Inflation rate (consumer prices): 7.5% (2006)

• GDP: $222 billion• GDP per capita: $1,000• GDP - composition by sector:

• agriculture: 19.4%• industry: 42.3%• services: 38.3%

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Infrastructure

• Highways: 86,327km• Railways: 3,219 km• International airports: 3 • International seaports: 11• 139 industrial zones with

area of 29,392 ha• 8 economic zones with

area of 323,940 ha• Electricity output: 53.8

billion kWh

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0

2000

4000

6000

8000

10000

12000

Investment inflows Disbursement

US$ mil.

10,200

4,100

FDI By Sector

3% 16%

31%5%7%

6%1%3%

6%

5%1%2%5% 7% 2%

Oil & gas Light industry

Heavy industry Food industry

Construction Agriculture, forestry

Aquaculture Transport, ICT

Hotel, tourism Banking, finance

Culture, health, education New urban area construction

Office, apartment construction IZs infra contruction

Other service

FDI flow in Viet Nam 1986-2006

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Trade

• Exports: $49 billion (2007)• Annual growth 20%• Main exports: crude oil, marine products,

rice, garments, footwears, furniture, coffee, rubber, tea, electronics …

• Trading partners: US, EU, Japan, China, Singapore, Korea, Chinese Taipei, ...

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• Imports: $62 billion (2007)• Main imports: machinery

and equipment, petroleum products, fertilizer, steel products, raw cotton, grain, vehicles…

Trade

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Bilateral economic links

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Trade with Italy

• Export from Vietnam to Italy• 695 million euro (13.8% growth)• Main export items: foot wears, marine

products, coffee bean, garments, furniture, electronics, natural rubber, tourist items, plastic items, cashew nuts…

• Import from Italy to Vietnam• 515 million euro (70.7% growth)• Mechanical and electrical machinery, vehicles,

leather…

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Investment from Italy to Viet Nam

• Top investors in Viet Nam• Chinese Taipei, Korea, Singapore, Japan, US

• Italy has 21 projects in effect, registered capital: US$55.7 million, in which:• Heavy industries: 17 projects, US$40 mil.• Services: 3 projects, US$2.2 mil.• Agriculture: 1 project, US$13.5 mil.

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Investment from Italy to Viet Nam

• Forms of investment:• 100% foreign-invested company: 13 projects• Joint venture: 7 projects• BCC: 1 project• Latest project: Piaggio

• Be present in 12 provinces (Binh Duong, Quang Nam, Ha Noi, Vinh Phuc, …)

• Seeking opportunities in energy, environment, infrastructure, metallurgy, telecoms, education, transportation, etc.

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Favourable environment for

investors

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Why to invest in Viet Nam?

• Socio-political stability• Continuous economic growth• Abundant human resources

• High level of literacy, IT-savvy• Labourious, hard-working• New generation of corporate

leaders

• Low cost of materials and inputs• Electricity, water, telecoms, air

freight

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Why to invest in Viet Nam?

• Trade regime becomes more open and transparent following WTO entrance

• Favorable FDI policies• Simplification of investment procedures• Compliance with international practices

• Convenient for outsource and processing industries• Located at the heart of Southeast Asia• Easily reachable by air, sea or land• Enjoy preferential tariffs by FTAs

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WTO concessions on goods

• Bound rates for 10,600 tariff lines reduced from 17.4% to 13.4% phased over 5-7 years since 2007.

• Largest reduction applied to garment & textile, aquatic products, wood & paper, manufacturing, electrical and electronic machinery & equipment.

• Join Free Agreements by sector for IT, garment & textile, medical equipment, airplane equipment, chemical, construction machine.

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WTO commitments on services

• Open in 11 out of 12 service sectors (or 110 out of 115 sub-sectors)• trade, post & telecommunications,

construction, health, distribution, education, insurance, tourism, environment, banking & finance, entertainment, transport etc.

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Effects of WTO on investment

• TRIMS: Investors shall NOT be forced to undertake any of the following requirements:• Localization• Export or import ratio• Giving preferences to purchase domestic goods and

services• Achieving a certain ratio in R&D• Selling goods and services at a certain location

• Duties reduction promotes trade in goods and services between Vietnam and regional countries

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Preferential sectors

• New material, high-tech products, bio-technology, information technology and mechanical manufacturing

• Agricultural, forestry and aquaculture• Labor intensive industries• Development of infrastructure facilities and

important industrial large-scale projects• Education, training, health, sports, culture• Development of traditional crafts and

industries

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• 139 IZs and EPZs and 8 Economic Zones• In 2006, 356 projects with registered

capital of US$4.4 billion• Favourable incentives• One-stop administrative procedures• Better infrastructure facilities• Custom services included

IZs, EPZs, EZs

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What can be done with us?

• Provide general and specific info about Viet Nam• Database of laws and regulations

• Assist in applying for RO, branch and investment licenses

• Advise on doing business in Viet Nam• Help in seeking an appropriate trading or

investment partner• Support dispute mediation• Facilitate visa processing

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“In the WTO, when people work hard, things happen - and Viet Nam is a good example of that.”

Pascal Lamy

Conclusion

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How to reach us?

• Commercial Office, Embassy of Viet Nam in ItalyAddress: Via Po 22, Roma 00198Tel: (+39) 06 841 3913Fax: (+39) 06 841 4072E-mail: it@moit.gov.vn or thuongvu@tin.it