Dr. Oliver Massmann, Duane Morris Vietnam LLC


According to the Ministry of Planning and Investment (MPI), in the first 5 months of 2019, foreign direct investment (FDI) projects were US $7.3 billion, up 7.8% as compared to the same period in 2018.  In addition, FDI contribution to the state budget rose from US $1.8 billion during 1994-2000 to US $14.2 billion during 2001-10, and to US $23.7 billion during 2011-15. In 2017 alone, FDI contributed US $8 billion to the state budget, accounting for 17% of the total state budget.[1]  Phan Huu Thang, Vice Chairman of Vietnam’s Association of Foreign-Invested Enterprises, told Vietnam Investment Review that hi-tech processing and manufacturing, smart agriculture, healthcare, education and training, and renewable energy will be the hottest sectors for FDI in the coming months and years.[2]  All these numbers and projections sound fantastic, but there are always impediments to a flourishing FDI program, as well as untapped (or under-utilized) opportunities.  More importantly, how can the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) and European Union—Vietnam Free Trade (EVFTA) agreements foster and support FDI?

Two important draft laws affecting FDI originally slated for passage in July 2019 have, unfortunately, been postponed for passage until May 2020 per Resolution 78 (78/2019/QH14) in the Vietnam National Assembly:  the Law on Investment in the Public Private Partnership Form [Law on PPP] and the Law Amending the Law on Investment and the Law on Enterprises.[3]  There will be more to come on the effect of those laws after passage.

Unintended Effects of CPTPP and EVFTA on FDI

In the first five months of 2019, Vietnam’s FDI attraction reached a total value of US $16.7 billion, up 69 percent over the same period last year.[4]  Currently, there are 131 countries and territories with valid investment projects in Vietnam, of which the Republic of Korea (RoK), Japan and Singapore claim the top three places (Japan and Singapore are CPTPP countries).[5]  Since the beginning of 2019, however, a new top contender is emerging—China.  In the past, China has been the seventh largest investor in Vietnam (with US $15 billion total); however, in the first half of 2019, their FDI alone was US $2 billion.[6]  This is not a great surprise as the US—China “trade war” continues, but it does highlight that China is intending to exploit Vietnam’s entrance into the CPTPP and EVFTA (Agreements that China does not currently benefit from).  This year, the Vietnamese government licensed the US $280 million ACTR tire-manufacturing project in the southern province of Tay Ninh, and a US $214.4 million project by the Advance Vietnam Tire Co., Ltd in the Mekong Delta province of Tien Giang.

ACTR manufactures steel-radial tires for trucks and busses, and is a joint venture between China’s  Sailun Vietnam Co., Ltd, (with 65% equity) and the US’s Cooper Tire and Rubber Co. (35% equity).  Because of the more stringent Certificate of Origin (COO) requirements under the CPTPP, China could no longer import tire components from CPTPP countries and process them domestically to obtain CPTPP member-country benefits (or vice versa—export components for assembly).  They would need to have a physical processing plant located in Vietnam to claim “Made in Vietnam” COO.  With that member-country COO, China now enjoys zero-tariffs on those products exported to member nations.  That is a significant counter to the US—China trade tariffs, and a direct result of CPTPP.  Advance Vietnam Tire Co. (owned by Guizhou Advance Type Investment co., Ltd, of China) is an almost identical example to ACTR; other than Advance is not a joint venture.  China could have invested in other CPTPP countries, but Vietnam is the most attractive and cost-effective venue for FDI compared to others.

The EVFTA contains similar provisions as the CPTPP regarding tariffs and duties.  With the EVFTA now in force, China has poised itself to take advantage of this new regulatory environment for the European markets.  Using the examples from above, China will now be able to compete (in effect with domestic-preference) directly with Europe’s largest physically domestic producer of tires, Michelin.

Before CPTPP, EVFTA, and the US—China trade tensions, Chinese investors were mainly small businesses with out-dated technology, but now many large corporations are funding large-scale projects.  Five of the seven biggest foreign-invested projects in the last five months came from Chinese backers, including not only the ones already discussed, but also a US $260 million electronic equipment and multimedia audio products manufacturing project invested by Hong Kong-based Goertek Co., Ltd.[7]  Chinese investors are also increasing merger and acquisition (M&A) activities.  Hong Kong topped foreign investors in Vietnam with the US $3.8 billion purchase of Vietnam Beverage Co. Ltd, in Saigon Beer-Alcohol-Beverage Corp (SABECO).

It appears clear from the investment activity in Vietnam since the onset of CPTPP that it has had a substantial positive impact on FDI.  With the advent of EVFTA coming in force (and providing similar—if not more—beneficial trade platforms), Vietnam will have a multitude of investors rushing to reap the benefits of those trade agreements.  For Vietnam be able to absorb this inevitable expansion of its FDI landscape the government needs to adapt holistically (and quickly) to the new global trade environment they have embarked on to realize its full potential.   

EVFTA and CPTPP Vocational Training Market Opportunity

As Phan Huu Thang mentioned, education and training and renewable energy will be some of the hottest sectors in the coming months and years for FDI.  An often-overlooked aspect of FDI is Vocational Training Schools.  Vocational training will be critical to the long-term success of Vietnam’s infrastructure platforms, especially when operating and maintaining an enhanced energy and power sector.  With highly advanced and technologically complex energy platforms (especially renewables) comes a requirement for competently trained personnel to sustain them.  Vietnam has a large workforce pool; however, technical training for these opportunities is currently limited.

The EVFTA and CPTPP both have provisions easing the access of engineering and technology support to assist in achieving the required knowledge and training skillsets.[8]  Vietnam recognized this also and updated their regulatory requirements regarding vocational schools through Decree 15 (15/2019/ND-CP), which specifies the order and procedures for opening foreign-invested vocational training schools.[9]   The FDI project would need to be in line with the national planning of vocational training in Vietnam, but the threshold capital requirements have been lowered to VND 5 billion (US $216,000) to open a vocational training centre, VND 50 billion (US $2.2 million) for a vocational secondary school, and VND 100 billion (US $4.4 million) for a vocational college.[10]  In addition, if a project is aligned with an industry of national priority or significance (enter renewable-energy), the Ministry of Labour will be the sole authority on issuing licenses[11]—a departure from the traditional methodology in an effort to streamline the process.  This is good news for many renewable energy projects.  Not only will a foreign business have more opportunities for development under CPTPP and EVFTA, but they can also add a minimal supplement to that investment and create the necessary workforce to support it.

An example from USA clearly demonstrates the opportunity in vocational training schools.  In 2011, Boeing, Inc. opened a final assembly facility for the 787 Dreamliner in Charleston, South Carolina.  Along with that came a demand for technically trained personnel to operate the complex facility and to have personnel trained in the intricate technology involved in assembling the aircrafts.  Boeing invested US $80 million to have an aeronautical vocational training facility built near Boeing’s assembly plant (completed June 2019).[12]  This is a win-win for Boeing.  They provided the initial funding to build the vocational facility; in return, they have professionally trained personnel, and the government takes over costs of maintaining the training facility.  Boeing also gets guarantees from the government to repay Boeing’s initial investment through tax incentives and bond issuance.  This is a textbook case of vocational FDI supplementing an already significant investment.

As many foreign investors establish their presence even more in Vietnam’s infrastructure landscape, this is another opportunity for FDI to affect Vietnam’s (and the investor’s) bottom-line.  The EVFTA and CPTPP are enablers as they both allow services to flow less restrictively between the parties.  Phan Huu Thang noted that for Vietnam to realize its fourth-industrial-revolution plan (4IR), local enterprises [must] be encouraged to cooperate with foreign-invested enterprises to learn experience, transfer technology, and receive support in training.[13]  Vocational training centers will help fill that need. 


Vietnam’s FDI has been steadily increasing for decades.  FDI has helped transform Vietnam from a poor nation to the verge of a massive middle-class population.  CPTPP and EVFTA are two vehicles that will propel Vietnam across that line and perhaps even further.  The tangible benefits of CPTPP are already proving themselves as evidenced by the hard-data collected.   The unintended effects on FDI from non-member countries, however, have a distinct possibility of compounding those benefits exponentially as others see the potential of CPTPP and EVFTA.  Traditionally under-utilized sectors for FDI in education and training are also poised to take advantage of these trade agreements.  While not the most high profile, E&T are necessary support vehicles to sustain the larger sectors.  Vietnam has been slow, thus far, in aggressively changing their regulatory environment to adapt; however, they need to act expeditiously to fully reform their regulatory environment in order to meet this inevitable influx of FDI.   


If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under or any other lawyers in our office listing. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!






Banks facilitate SMEs’ access to capital



Small and medium size enterprises (SMEs) desire to expand their business but do not have enough capital, while banks are still cautious to lend to this group. What do SMEs need to do?

According to the general Statistical Office, in the first six months of 2019, there were nearly 67,000 newly registered enterprises with a total registered capital of 860.2 trillion dong, an increase of 3.8 percent in the number of enterprises and an increase of 32.5 percent of the registered capital compared to the same period in 2018. However, the number of enterprises temporarily suspending business in the first half was 21,100, up 17.4 percent over the same period last year. The number of enterprises that stopped operating and waited for dissolution procedures was 21,800.

Economic experts analyse that SME existing for two years since their establishment will have further development opportunities, otherwise they will “die prematurely”, especially the start-up. Therefore, it is not too difficult to understand when most banks are reluctant to lend to this group of businesses.

A senior leader of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) said that in order to meet the increasing standards of governance in accordance with international practice, the bank set many requirements for borrowers, in which the standard ones are based on legal regulations and all businesses need to comply. With SMEs, when they first joined the business, the financial accounting system had not been updated regularly, the transparency of information was not high, making it difficult to meet these requirements.

In the same view, the representative of Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank) said that the financial reporting system of small businesses, especially microenterprises had not yet been adjusted, incomplete, or inaccurate, which made it difficult for banks to perform customer information appraisal.

Pham Duy Hieu, Acting general director of An Binh Commercial Joint Stock Bank (ABBank), said that SME customers accounted for a relatively low proportion in ABBank’s customer base, at about 19 percent.

However, SMEs account for the majority of businesses, playing an important role in the economy, so banks are proactively offering many solutions to help these businesses access capital.

Vietcombank’s representative said that one of the first conditions that the bank was particularly concerned when appraising the loan application was the transparency in its business operations. The enterprises with a well-managed business system would make it easier for the bank to make lending decisions. Therefore, SMEs need to apply internal management systems to meet the increasing requirements for loan conditions.

Quach Hung Hiep, deputy general director of Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) said: “Enterprises also need to actively improve operational capacity, executive management, finance, self-improvement of competitiveness to meet loan conditions from the bank”.

Talking to reporters of the Securities Investment Newspaper, Nguyen Lan Huong, deputy director of the personal banking sector, Tien Phong Commercial Joint Stock Bank (TPBank) commented, there were SMEs who prepared unqualified and unprofessional financial statements. Even, there were customers who made poor financial statements with fake data. This was one of the risks that banks often encountered.

There are many technology companies in the market that provide accounting services that allow them to connect with banks. SMEs should take advantage of these solutions, help improve financial efficiency, and create transparency and trust with banks.

At that time, with the criteria of customer assessment already filtered such as the health of the financial situation and the business in normal operation, banks can select the right customers as well as provide solutions to solve the difficulties of capital for SMEs.


G-bonds: longer term more expensive



Hanoi Stock Exchange (HNX) has just announced the government bond mobilisation through auctioning in June 2019.

Specifically, in June, HNX held 13 auctions, mobilising a total of 11.132 trillion dong bonds, down by 6.7 percent compared to May 2019.

It is known that all mobilised bonds were issued by the State Treasury. The winning rate compared to the ask volume in June 2019 was 87.3 percent. In particular, five-year and seven-year bonds recorded no winning transaction. However, the bid volume in the month was still 4.9 times larger than the ask volume.

The winning interest rates were ranging from 4.64 to 4.67 percent per annum for 10-year bonds, five to 5.03 percent per annum for 15-year bonds, 5.58 5.63 percent per annum for 20-year bonds, 5.78 to 5.85 percent per annum for 30-year bonds.

Compared to the previous month, the winning interest rate of the State Treasury fell across the terms by 0.04-0.1 percent per annum.

The above statistics show that despite the decline in interest rates, the government bonds are still attractive on terms of 10 years or more.

Meanwhile, on the secondary government bond market, the total outright trading of government bonds in June 2019 reached more than 630 million bonds, equivalent to a trading value of more than 69.2 trillion dong, down by 19.6 percent in value compared to May 2019.

The total repos trading of government bonds reached more than 969 million bonds, equivalent to a trading value of more than 97.3 trillion dong, up by eight percent in value compared to May 2019.

Notably, the outright buying value of foreign investors was more than 3.6 trillion dong, and their outright selling value was more than 743 billion dong. The repos selling value of foreign investors was more than 39 billion dong.



Economists: Vietnamese economy could grow by 6.86 pct in 2019




Economists have forecast that the Vietnamese economy could grow by 6.86 percent this year, higher than the 6.6 – 6.8 percent set by the National Assembly.

They made the prediction during a symposium held by theNational Centre for Socio-Economic Information and Forecast (NCIF) in Hanoi onJuly 11 discussing 2019 mid-term economic report. 

Speaking at the event, NCIF Director Tran Thi Hong Minh saidthe growth of agro-forestry-fishery sector could reach 3.02 percent,agriculture and construction 8.61 percent, and services 6.84 percent. Inflationwould be about 3.13 percent, well below the targeted 4 percent. 

The economy expanded by an estimated 6.76 percent in thefirst half, lower than the 7.08 percent growth recorded during the same periodlast year. 

NCIF Deputy Director Dang Duc Anh said while macro-economywas stable in the past six months, but various challenges arose during January– June, including unfavourable weather conditions, the African swine fever andslow disbursement of public investment capital. 

Export growth also slowed down due to adverse impacts of theworld economy. 

A bright point was the increasing inflow of investmentcapital from China which soared to over 2.2 billion USD while foreigninvestment via mergers and acquisitions nearly doubled year-on-year. 

In order to achieve economic growth target, Anh suggestedcontinuing to pursue a cautious monetary policy to keep foreign exchange rateand interest rates stable, gear credit towards manufacturing and trade whilestepping up the disbursement of foreign and private investment capital. 

He called on the government to intensify the fight against tradefrauds, improve workforce quality via connecting with firms to offer vocationaltraining, and promote start-ups.


Prompt action needed to take advantage of FTAs



Opportunities provided by free trade agreements (FTAs) will only exist on paper if local authorities and enterprises do not take prompt and concrete actions to take advantage, experts said at a meeting on Wednesday in Hanoi.

Vietnam has signed many trade deals with different countries and regions but both local authorities and businesses have been slow to prepare plans for these changes, said Ngo Chung Khanh, deputy director of the Ministry of Industry and Trade’s Multilateral Trade Policy Department.

Speaking at the seminar on business and investment opportunities arising from the EU-Vietnam Free Trade Agreement (EVFTA), Khanh said inertia is common among Vietnamese authorities and businesses. He expressed his fear that businesses are not doing enough to take advantage of the ongoing implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

As an example, Khanh cited the prime minister’s request for local authorities and ministries to build action plans to carry out CPTPP. To date, only a few have submitted their proposals.

“Up to now, we’ve yet to receive full action plans from ministries, sectors and localities,” he said. “Implementation is too slow and if we continue this stagnancy then all the presentations on opportunities will remain on paper and never become a reality.”

EVFTA and CPTPP are two new-generation FTAs with a broad scope and the highest level of commitments that Vietnam has ever signed. Under the two trade deals, some reference calculations estimate Vietnam’s gross domestic product (GDP) could increase by between 1.3 per cent and 1.6 per cent.

EVFTA has a very short schedule for tariff reduction with many Vietnamese products enjoying tariff-free exports to the EU. Vietnam’s competitors in the region such as China, Thailand and Malaysia have not signed an FTA with the EU, but that does not mean they never will. Khanh told businesses they must move quickly to take advantage of the FTA while Vietnam is in an advantageous position.

He pointed out the indifference of local businesses to the trade deal. Only two foreign direct investment enterprises have sent questions on issues of tax codes or rules or origin concerning EVFTA.

Vietnam and the EU signed EVFTA and the Europe-Vietnam Investment Protection Agreement (EVIPA) on June 30. Khanh said the two agreements would be submitted to the National Assembly for approval in October this year and the European Parliament would vote around the same time to hopefully have the deals take effect next year.

Vu Tien Loc, chair of the Vietnam Chamber of Commerce and Industry (VCCI), said Vietnam’s economic openness was second in Asean only to Singapore but its competitiveness and capacity for integration were still low.

Vietnam placed 77th out of 140 countries in the 2018 Global Competitiveness Report by the World Economic Forum. It placed 99th for institutional competitiveness and 101st in business competitiveness.

The EU is highly demanding market and has little direct competition with Vietnam so Vietnamese products have advantages, Loc said. To make the most of their strong position, Loc said local businesses must satisfy many requirements for origins, environmental standards, labour relations and sustainable development. This means they need to restructure their production processes and technologies.




Sumitomo invests in Vietnam port operator


Japan's Sumitomo has invested $37 million in a major port operator to take advantage of Vietnam’s growing logistics demand.

SSJ Consulting Vietnam Llc, a company in which Sumitomo Corp owns a 51 percent stake, has acquired a 10 percent stake in Gemadept Corp, according to the Ho Chi Minh Stock Exchange.

SSJ Consulting was established recently by Sumitomo and two other Japanese companies.

Sumitomo operates three industrial parks near Hanoi and owns a logistics company in the country, while Gemadept operates six ports and handles 1.7 million containers a year. 

Stock brokerage MBS said in a recent report that Vietnam would see more demand for logistics services since exports are set to grow by 10 percent a year for the next three to five years. 

Last year the country's ports handled 524.7 million tons of goods, up 19 percent from 2017, according to the Vietnam Maritime Administration.

Vietnam has 1,600 ships with a total capacity of 7.8 million tons, the fourth highest in Southeast Asia, the report added.

South Korea, China investors dominate bids for North-South Expressway


Two sections of the North-South Expressway in the central region have attracted bids from 11 investors, the majority from South Korea and China.

The Ministry of Transport said six investors have expressed interest in a section connecting the provinces of Thanh Hoa and Nghe An, four from South Korea and China. The other section, between Nghe An and Ha Tinh has 10 prospective investors, seven from the two countries.

The ministry will start evaluating the applicants within three months, and after that call for bids for the two sections. Both of the sections will be built in public-private partnership (PPP) mode.

The first section will run 50 kilometers from the coastal Nghi Son Commune in Thanh Hoa to Dien Chau District in Nghe An. Its construction cost is estimated at VND8.38 trillion ($360.47 million), with VND2.55 trillion ($109.69 million), or 30.4 percent, coming from the government and the rest from the investor.

The second section will run 49 kilometers, starting from where the first section ends and going up to the Bai Vot junction in Ha Tinh. It will cost VND13.3 trillion ($572.11 million), with the government investing over VND8 trillion ($344.13 million), or 60.1 percent.

The sections make up one of eight components of the North-South Expressway to be built under the PPP model. Three others will be completely funded by the government.

Together, the 11 components are expected to cost VND118 trillion ($5.06 billion), with VND55 trillion ($2.36 billion) coming from the government.

They will cover 654 kilometers of the 2,000-kilometer expressway from Nam Dinh Province near Hanoi to Vinh Long Province in the Mekong Delta.

Forty investors have expressed interest in the eight PPP components, according to the ministry.

The ministry will award contracts to investors based on three criteria: financial capability, which makes up 60 percent of the overall score, experience (30 percent) and methods (10 percent).

The deadline for obtaining bid documents is July 10, after which the ministry will start the bidding process, with construction possibly beginning next April.

The government will provide the lands required for building the highway, the ministry has said.




Foreign property investment heading ever upwards


The amount of FDI going to Vietnam’s property sector in the opening months of 2019 paints a bright picture for the real estate market this year. Foreign capital flows since the beginning of the year put real estate as the second-most attractive sector after manufacturing and processing. Vietnam clearly remains an appealing destination for international developers, given the country’s strong economic growth, rising foreign investment, and booming middle class leading to healthy demand in the market over recent years.

Healthy flow

In the first five months of 2019, foreign capital flows into the real estate sector stood at $1.37 billion, according to the Foreign Investment Agency (FIA). FDI in the sector accounted for 16.7 per cent of the total, behind manufacturing and processing.

The figure has already surpassed the result in 2018 and is the highest ever. Mr. Linson Lim, President of Keppel Land Vietnam, told VET that, over the past few years, the government has taken active steps to strengthen the country’s economy and support enterprise growth. “We believe that Vietnam’s property market continues to offer long-term growth potential and opportunities for foreign investors, underpinned by continued urbanization and rising income levels,” he said.

Singaporean property developer Keppel Land now has about 20 licensed projects in the country, with total registered investment capital of over $3 billion. It recorded net profit of around $682.4 million last year and sold 4,440 homes, of which 900 were in Vietnam. It completed the development of the Saigon Centre Phase 2 and opened Estella Place in vibrant District 2 in Ho Chi Minh City, comprising 3.7 ha of gross floor area on five stories, meeting demand for prime office and retail space in the southern hub.

Among other major foreign investors, BW Industrial has been able to secure a total of 230 ha of industrial park (IP) space, with nine projects in five key cities to satisfy the ever-increasing demand for modern logistics warehouses as well as build-to-suit and ready-built factories. It will expand by another 170 ha this year to meet rising interest from customers. “The trend towards shifting manufacturing from China to Vietnam is presenting many opportunities for industrial real estate developers like us,” Mr. Michael Chan, Head of Sales and Marketing at BW Industrial, told VET. “Our vision in 2020 is to become the number one for-rent industrial developer in Vietnam, with a strong and expanding presence nationwide.”

Another Singaporean investor, Mapletree, has been steadily expanding its portfolio of assets in Vietnam. It unveiled the design of the 27- storey V Plaza twin towers in March, construction of which will start in April next year, with the Grade A office development to have a net lettable area of about 6.6 ha when completed. Over in Ho Chi Minh City’s District 2, its high-end residential property One Verandah has been highly sought after by homebuyers and investors.

Mapletree now has 16 properties around the country, ranging from industrial, logistics, mixed-use developments, hotel, office, residential, and retail to serviced apartments, and more than $1 billion of assets under management. Ms. Wendy Koh, Regional CEO, Southeast Asia, said Vietnam remains an attractive destination for foreign investors.

Preferred destination

The country is now seen as a hot new market for luxury property thanks to the arrival of more foreign investors, the easing of restrictions on foreign property ownership, and the increasing number of Vietnamese high net worth individuals (HNWIs). Prices for luxury condominiums in Ho Chi Minh City rose 17 per cent in 2018 to an average of $5,518 per sq m, according to CBRE Vietnam. It forecast that this price will have climbed nearly 10 per cent by early 2020, to $6,000 per sq m, while more affordable offerings in the city only increased 1 per cent last year.

Keppel Land Vietnam presently focuses on offering high-quality upper-middle to high-end residential and integrated mixed-use developments in Ho Chi Minh City that feature innovative and sustainable lifestyle concepts. With rising affluence, homebuyers are becoming more discerning and are on the lookout for quality properties with strong value offerings in prime and upcoming locations belonging to reputable developers. “We believe that well-located properties with strong attributes, such as having a river frontage, a wide range of facilities and amenities, quality finishes, and a thoughtfully-designed and spacious layout, will continue to see good demand from homebuyers,” Mr. Lim said.

Mapletree will also continue to make yieldaccretive acquisitions and develop income-producing assets, through either transforming more precincts or developing flagship properties in Vietnam. “As a country with great potential in terms of investment and a booming economy, Vietnam has a lot to offer and we seek to scale greater heights in the long run,” Ms. Koh said.

Manufacturing and processing continues to be the sector attracting the major proportion of FDI into Vietnam, taking up over 40 per cent in 2018, while real estate is the second highest, with over 23 per cent, so foreign investors are likely to continue to target these sectors in the future, according to Mr. Giles Cooper from Duane Morris.

In fact, industrial real estate has gained new growth momentum given the increase in production shifting from China to alternative locations in Southeast Asia, including Vietnam, as well as the positive impacts of trade agreements, according to CBRE Vietnam. While this trend is not new to many, as the cost of production in China continues to rise and makes relocation seem like a financially-viable choice to many manufacturers, new research from Cushman & Wakefield (C&W) highlighted that Vietnam ranks third in cost attractiveness for global manufacturers in the region.

As a result, BW Industrial affirmed its targets of building state-of-the-art industrial and logistics real estate infrastructure that is best suited to the growing demand from multinationals, logistics providers, and e-commerce providers in Vietnam. “Several sites in major cities and provinces will see construction completed this year and we are receiving a very positive market response regarding leasing,” Mr. Chansaid. “We want to keep the momentum going and help manufacturers or logistics players settle down in our facilities, without any hassles.”

Smart home trend

Along with increasingly strong FDI inflows into Vietnam’s real estate market, the whirlwind of Industry 4.0 has been creeping into the property sector in recent years, especially high-end real estate. Ms. Tran Minh Ai, Director of Property Management at Savills Ho Chi Minh City, said that smart technology is an indispensable element of luxury five-star products in prime locations. For projects with a location disadvantage, meanwhile, technology enhances property value and increases product competitiveness against those in better locations. Technological application has become a new competitive edge for leading real estate developers, and as the concept of smart homes becomes more widespread, rising interest could encourage more mainstream developers to incorporate smart technology in their new projects.

Smart home technology in Vietnam is still in its infancy and only five projects launched have applied it in their apartments. Most were new developments or still under construction, with those conducting a soft launch including Alpha King Real Estate’s Alpha City and Centennial Ba Son and Dreamhouse’s D-Vela, High Intela, and West Intela. While there are only a very small number of smart apartments being built at present, it is a good way for smaller or newer developers to compete. They must adapt and catch up with new trends so as not to be left behind by other markets in the region.

In commenting on the prospects of smart home development in Vietnam, Ms. Lieu Nguyen, President’s Liaison to Vietnam for the National Association of Realtors, said development trends in real estate projects around the world in general and in Vietnam in particular will be largely driven by the application of smart technologies. The world will see the emergence of more and more smart cities; an indispensable element of which is smart homes.

Although the market has seen many positive developments, it is no simple matter to boost the smart home movement in Vietnam. Many smart home solutions have been applied in real estate projects in Vietnam, but this is only to “pave the way”. It is estimated that it might take about three to five years for the innovation to truly grow.


Central Group plans 20 new hotels as Vietnam tourism booms



Thailand’s Central Group plans to open at least 20 new hotels across Vietnam in the next five years.

The Centara Hotels & Resorts chain, part of Central Group, said that targeted destinations include key economic hubs like Ho Chi Minh City, Hanoi and Hai Phong, and other high-growth areas like Da Nang, Phu Quoc, Nha Trang, Cam Ranh and Hoi An.

The company also saw "strong potential" in the southern coastal areas of Vung Tau, Ho Tram and Mui Ne, due to new roads connecting the region with HCMC and the development of a major new airport in nearby Dong Nai province, Centara said.

"Vietnam’s tourism industry enjoyed a great year in 2018 and we expect this to continue for many years to come," said Thirayuth Chirathivat, CEO of Centara Hotels & Resorts.

International visitor arrivals to Vietnam reached a record total of 15.5 million in 2018, the majority of which came from Asia. The country welcomed 8.5 million foreign visitors in the first half of 2019, up 7.5 percent year-on-year, according to the Vietnam National Administration of Tourism. 

Positive tourism trends are driving demand for new hotels and resorts. Recent data from hotel industry analysts STR Global shows that over 23,000 new hotel rooms are currently being constructed in Vietnam.

Centara said focus on Vietnam will form an important part of its global growth strategy, which includes the overall goal of doubling its total hotel portfolio by 2022. At present, the company has 71 hotels and resorts either operating or in the pipeline worldwide, comprising over 13,000 rooms.



Major solar power plant becomes operational in An Giang



The first phase of a solar power plant that has the total capacity of 210 MWp was put into operation in the Mekong Delta province of An Giang on July 6.

The Sao Mai Solar PV1 plant, covering 275ha in An Hao commune of Tinh Bien district, is invested with nearly 6 trillion VND (257.5 million USD) by Sao Mai Group.

In the first phase, carried out in only four months, the factory has an area of 120ha and the capacity of 104 MWp. It will generate 250,000 MWh each year, equivalent to the electricity amount consumed by more than 50,000 households, according to the plant’s General Director Le Tuan Anh.

The second phase, which has the capacity of 106 MWp, is scheduled to be completed before December 31 this year.

[Growth demand fuels solar power boom in Vietnam]

At the inaugural ceremony, Chairman of the An Giang People’s Committee Nguyen Thanh Binh said this is the biggest solar power project and also the one built in the shortest period of time in the province, less than one year in total.

He added the project will make an important contribution to local socio-economic development and the ensuring of national energy security.

As of June 30, as many as 82 solar power plants with a combined capacity of 4,460MW had been connected to the national grid, according to the Vietnam Electricity (EVN) group.

This makes solar power currently account for 8.28 percent of Vietnam’s electricity capacity.


Solar Esco developing solar energy project at Tong Hong Vietnam

Shoe manufacturing plant to reduce CO2 emissions by using solar power system from Solar Esco.


A grid connection ceremony for a 460 kWp solar power system was held on July 3 at the Tong Hong Vietnam Tannery Co. in Tan Thanh district, southern Ba Ria Vung Tau province, which specializes in manufacturing sports shoes. The project was developed by the Solar Esco JSC, a member of SolarBK, and was installed on the Tong Hong plant’s roof with Solar Esco capital.

The project has a total installed capacity of 460 kWp, producing about 679,530 kWh of electricity each year for Tong Hong and helping it reduce CO2 emissions by about 578 tons a year.

Tong Hong will save at least 5 per cent on the cost per kWh and contribute to reducing greenhouse gas emissions in each product, which meets its own standards. After 15 years (the lifespan of the agreement), Solar Esco will hand over the solar power plant to Tong Hong, which will use it for next 10-15 years.

As part of the strategic supply chain of Puma, a large German multinational company specializing in manufacturing footwear and sports accessories, Tong Hong is required to conform with the environmental policy Puma applies to its suppliers. One of the requirements is limiting the reduction of greenhouse gas emissions in the production process, with installing a solar system being an effective and easy-to-measure solution.

Through the VIP program on Clean Energy and Energy Saving, which promotes sustainable production in the textile and apparel industry and is from the International Finance Corporation (IFC) in partnership with a number of global brands including Puma, Solar Esco was shortlisted for being a prestigious supplier working directly with Tong Hong.

In a short period of time, Tong Hong and Solar Esco officially signed an agreement and SolarBK implemented the solar power project for the Ba Ria Vung Tau plant. Solar Esco will directly participate in the development and the investment in the solar power system, using IREX solar panels and with construction following Tong Hong’s specific requirements.

With the ESCO (Energy Service Company) form of investment, Solar Esco will provide total solutions in consulting, designing, installing, operating, financing, and managing the facility and earn revenue based on the energy saving efficiency brought about by the system.

This could be a popular energy-saving cooperation and investment type in the world, in which the project developer and investor (Solar Esco), the beneficiary company (Tong Hong), and the community all benefit. Tong Hong does not outlay any initial investment, saving electricity costs and meeting the emission reduction standards set by Puma. Meanwhile, Solar Esco must always ensure stable operations to obtain electricity fees from Tong Hong, ensuring the project’s investment efficiency for the 15 years.

“We previously spent much time understanding solar and wind energy technology and perceived this as a good opportunity, with Puma helping us to install a solar energy system to reduce carbon emissions,” said Mr. Chen Chun Chi, Deputy General Director of Tong Hong Vietnam. “We will continue to expand this project to increase the renewable energy ratio and reduce carbon emissions.”





First-ever White Book on Vietnamese Businesses launched


The first edition of the White Book on Vietnamese Businesses was launched at a ceremony in Hanoi on July 10. 

The White Book, compiled by the General Statistics Office (GSO) under the Ministry of Planning and Investment, contains essential information assessing the development of enterprises across the country and in localities in the 2016-18 period , said GSO General Director Nguyen Bich Lam.

“The book also honors enterprises with outstanding contributions to economic development in the country and each locality,” Lam told Việt Nam News.

The publication, to be published on an annual basis, provides an overall picture of the development of domestic businesses arranged according to sectors, business types and localities, serving as reference for the Government, ministries, sectors and localities in designing strategies, plans and policies for sustainable and effective development of businesses on both national and local scales, Lam said.

Also included in the book are rankings of foreign direct investment (FDI) firms, State-owned enterprises and private businesses, which were based on different criteria such as growth rate, business efficiency, tax payment, contributions to the State budget, and workers’ incomes in respective locality, among others.

It is also expected to be a source of useful information for international organizations, countries and foreign enterprises in assessing and making decisions on investment and co-operation, Lam said.

Addressing the publication’s launch ceremony, Deputy Prime Minister Vuong Dinh Hue said that the White Book provides abundant and reliable information for the Government, ministries, sectors and localities as well as associations and investors. 

“The White Book on Vietnamese Businesses 2019 is an important and necessary publication to help the Government, ministries, sectors and localities as well as associations and investors obtain rich information with high reliability to accurately assess business developments across the country,” Hue said.

Hue also requested ministries, sectors and localities to use the book as a major source of information when building strategies, plans and policies, and at the same time, to properly evaluate the strengths and weaknesses of enterprises, thereby proposing effective and sustainable development strategies.

Localities with low rankings in business development, defined through the ranking of basic business development indicators in the White Book should seriously review to find out the causes, at the same time proposing solutions and plans to support enterprises in the area more effectively, Hue said.

“The Government and the Prime Minister would use the results in the book to evaluate the effectiveness in leadership and direction of local leaders,” Hue said.

He requested the Ministry of Planning and Investment to continue researching and working closely with ministries, agencies and localities to improve the book, making it more diversified, accurate and reliable in the years to come.

Minister of Planning and Investment Nguyen Chi Dung said the book also proposes measures and sets of norms to assess business development in the country.



Roadmap to realize 2030 sustainable development goals


The country will fundamentally eradicate hunger by 2020 and totally get rid of hunger by 2025. 

Such goals are provided in Prime Minister Decision 681/QD-TTg dated June 5, which sets a roadmap to achieve the country’s sustainable development goals through 2030 set forth in Decision 622/QD-TTg of 2017.

Under the Decision, the average income per capita of rural residents will reach VND 43 million by 2020 and VND 60 million by 2025. By 2030, it is targeted to reach VND 90 million, thereby fulfilling the goal of increasing the labor productivity in agricultural sector and farmers’ income by 1.5 times.

In the upcoming year, all teachers will meet the standards of training qualifications. Meanwhile, 80 percent of schools will be able to provide teaching programs on gender, prevention of violence and abuse, and provision of knowledge about HIV. There will be 90 percent and 100 percent of schools providing such programs by 2025 and 2030, respectively.

Regarding gender equality, it is targeted to create more opportunities for women and girls and considerably eliminate all forms of violence against them in public places  and private spaces.

Specifically, by 2020, 70 percent of cases involving violence against women will be promptly detected and stopped. The rate of detected cases will reach 80 percent and 90 percent by 2025 and 2030, respectively. Meanwhile, all acts of violence against girls will be promptly detected, informed and stopped by 2020.

In order to ensure sustained, inclusive and sustainable economic growth and full and productive employment and decent work for all people, the GDP growth rate will be maintained at 5-6 percent during 2020-30. Meanwhile, per-capita GDP will increase by 4-4.5 percent per year, and the labor productivity growth rate will be kept at 5 percent annually.

Under the Decision, ministries and agencies are responsible for working out specific plans and programs to fulfill the goals  not yet mentioned in the roadmap in accordance with the approved agenda program on sustainable development.

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