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Viet Nam – Why now?

Viet Nam – Why now?. Commercial Section Embassy of Viet Nam in Italy. Contents. Overview of Viet Nam economy Bilateral economic and trade links Favourable environment for investors. Overview of Viet Nam economy. Viet Nam at a glance. Geography Centre of Southeast Asia

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Viet Nam – Why now?

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  1. Viet Nam – Why now? Commercial Section Embassy of Viet Nam in Italy

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

  3. Overview of Viet Nam economy

  4. Viet Nam at a glance 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%

  5. Viet Nam economy /i • 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 “Every 10 years, Viet Nam has built another economy.”

  6. 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%

  7. 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

  8. FDI flow in Viet Nam 1986-2006 US$ mil. 10,200 4,100

  9. 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, ...

  10. Trade • Imports: $62 billion (2007) • Main imports: machinery and equipment, petroleum products, fertilizer, steel products, raw cotton, grain, vehicles…

  11. Bilateral economic links

  12. 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…

  13. 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.

  14. 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.

  15. Favourable environment for investors

  16. 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

  17. 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

  18. 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.

  19. 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.

  20. 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

  21. 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

  22. IZs, EPZs, EZs • 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

  23. 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

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

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

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