TPP withdrawal of The US – Vietnam investment impacts

Improved Legal Environment Will Boost Vietnam Despite Possible Failure of TPP

After Donald Trump, the US president-elect issued a note of intent to withdraw from Trans-Pacific Partnership (TPP) trade deal, there is a question raised on the attraction of FDI into Vietnam: would foreign investors continue to flood to Vietnam to set-up company?

Vietnam as well as other countries has delayed TPP ratification awaiting for the approval of the US because it has been assured that TPP would be meaningful if only the US is a member and if TPP is ratified, Vietnam will attract large volumes of FDI capital.

Nevertheless, there are opinions that Vietnam will continue to grow and attract FDI remarkably regardless of TPP approval from the US.

Vietnam has recently signed a number of trade agreements with other nations and territories which could attract foreign investments into Vietnam in the coming years.  For the US, there is a potential that instead of TPP, the US would negotiate and conclude other bilateral trade agreements with Vietnam.

Vietnam might attract foreign investment capital through TPP and this statement could not be denied. Therefore, in the process of speedy preparation to welcome TPP, Vietnam has changed the legal policies and regulations to adapt to TPP Agreement.  A number of newly passed laws have been considered that improve the rights and benefits of private enterprises in Vietnam such as Civil Code, Law on Investment, Law on Public Investment, Law on Environmental Protection, Labour Code… The new legal framework will create more opportunities in the process of international economic integration for Vietnam, encouraging foreigners to invest and set-up business in Vietnam.

In conclusion, TPP, despite the potential for not being approved by the US would not significantly negatively impact Vietnam.  Besides the continuously improved legal environment, Vietnam still has its own value in competitive labour, growing number of mid income earners, and  stable government to attract investment.

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ANT Lawyers is Vietnam exclusive member of Prae Legal, an international law firm network, providing full ranges of legal services in Vietnam

For Vietnam legal matters or services, the clients could reach ANT Lawyers, the exclusive Vietnam law firm members via email at ant@antlawyers.vn or call the telephone at +848 35202779.

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Three Reasons Japan Invests in Vietnam

In accordance with the statistics from the Ministry of Planning and Investment (MPI), accumulating to the end of May 2014, Japan is still the leading investor into Vietnam, with more than USD 35,57 billion registered for investment. Following Japan are Korea and Singapore, with the respective gross figures of USD 31,01 billion and USD 30,33 billion.

The gross FDI capital invested into Vietnam from Japan is not significant larger than investment from Singapore and Korea .  However, taking into consideration of the economic potential of Japan and Japanese companies which are perceived much higher than Singapore and Korea’s counterparts, it appears that the FDI from Japan has a lot potential.

The MPI expects the FDI capital from Japan might increase strongly in the next period. A few investment sectors which Japanese business shall keep on focusing in the next period are the pharmaceutical and chemical industry, steel and metal production, machine in general and other electronic devices, devices of transportation sector, wholesale and retail.

The reasons for the above mentioned expectation are:

First, after many natural catastrophes such as earthquakes, tsunamis, Japanese businesses has acknowledged that focusing too much in one investment location might has its risks. Therefore, to diversify the investment is to divide the risks, too. Many Japanese companies have been identifying the new destinations for investment.

Second, China has always been one of the most FDI-attractive nations of Japan.  But the increasing cost for labour and in contrast the decrease in incentive from Chinese Government for foreign investors, along with many tensions between Japan and China regarding border and territorial issues have been cooling down the interest of Japan investors. Pursuant to the annual survey report of the Commercial Promotion Agency of Japan, for production companies of Japan currently operating in Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam and India, with the relocation of investment destination, amongst those above mentioned nations, Vietnam has been rated best by most Japanese companies, with the percentage of 20,5%, 2,8 times higher than the nation in the following spot which is Thailand.

Third and finally, the commitment on strategic partnership and the implementation of incentives attracting investment, such as the establishment and development of the Industrial Zone for business supporting industry in Ba Ria – Vung Tau and HaiPhong, shall come fruity in the near future.

ANT Consulting provides services that could help Japanese companies to enter Vietnam and make investment taking advantage of the growing potential of mid income consumers, low labour cost and the incentives from Vietnam government.  If you have any inquiries, we could be reached at office number +84 8 35202779 or email ant@antconsult.vn.

Let ANT Consulting helps your business in Vietnam.

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Assistance in setting-up business venture

To help Clients start business in Vietnam, ANT Consulting introduces the service to assist in setting up business venture in Vietnam.

Foreign investors could make direct investment in Vietnam through setting up one hundred per cent (100%) capital of foreign investors, or establishing joint venture between domestic and foreign investors, or  investing in the contractual forms of: BCC, BO, BTO, and BT

Setting up company in Vietnam

Setting up company in Vietnam

Types of enterprise for foreign investors to invest in Vietnam are as following:

a)     Limited Liability Company

A limited-liability company may not issue securities to mobilize capital.

b)     Joint Stock Company

The main difference between Joint Stock Company and Limited Liability Company is the Joint Stock Company can raise funds by offering shares or securities.  In addition, an enterprise tends to join the Stock exchanges or public company must be a Joint Stock Company.  Management system of Joint Stock Company is more complicated than Liability Company.

c)     Partnership

Unlimited liability partners must be individuals who shall be liable for the obligations of the company to the extent of all of their assets.  Limited liability partners shall only be liable for the debts of the company to the extent of the amount of capital they have contributed to the company.

d)     Representative Office of foreign Trader

Representative Office is not allowed to directly conduct profit making activities in Vietnam (i.e: the execution of contracts, direct payment or receipt of funds, sale or purchase of goods, or provision of services)

e)     Branch of foreign trader

The Branch is permitted to conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

f)      The investing measures by signing Contracts

If you are interested in investment in Vietnam and need help from professional business consultants, please send us email at ant@antconsult.vn.

Let us help your business in Vietnam.

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