Invest in Real Estate of Vietnam in 2016?

Real Estate regulatory in Vietnam

The real estate market in 2016 will continue to recover. Vietnam real estate sector had signs of recovery in late of 2013 and lasted until 2015. Up to now, there were not any signs showed that development flow will be slowed in 2016.

In general, as recorded, real estate price is increasing and the actual increase amplitude ranging from 5 – 15%, certainly not with every market segment and every project. According to experts, the price increasing is also consistent with the rule that the market is starting to come up from the bottom but not yet peaked.

If we look at the profit of the real estate businesses in 2014, businesses that operated efficiently in 2014 have achieved profit in the range of 5 – 15%. In 2015, the number has increased to 15 – 20%. However, a common project construction time is about 3 – 4 years so the profit margin is not too high. Compared with the period of the real estate bubble, this is still sustainable growth rate.

Also in 2016, the property was evaluated as a safe investment channel and promising to create added value. If the national economy continues to grow, along with a series of extensive integration opportunities that we are, can hope 2016 will form the opportunity to create added value for real estate Vietnam.

The important thing is the final price when reaching home buyers is still in the acceptable range. According to the real estate consultants, if buyer has financial capability, they should buy or invest in real estate right now because the price in the next year is likely to rise.

In 2016, real estate is evaluated as a safe investment channel and promising to create value added. If the national economy continues to grow along with a series of extensive integration opportunities that Vietnam had, it is hoped that 2016 will form many opportunities to create value added for Vietnam real estate market.

When investing in real estate market at this time, investors can easier to buy at cheaper price and more options. Market supply is abundant only with the apartment segment with prices more than 20 million VND/m2, while the segment with prices below 20 million VND/m2, there are not enough houses to sell to buyers.

There are many projects that products are sold out within a month. Hence, small and medium class segments are having greater certainty and especially never being affected by the financial crisis. It also demonstrates two issues: consumer confidence has begun to return to Vietnam real estate market and real estate market of Vietnam always have really secure segment.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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Many Foreign Brands Are Coming to Vietnam

Vietnam company formation

Realizing that Vietnam is a promising market, foreign enterprises want to do business in Vietnam through the form of franchising. Recently, many consumer goods, fashion and cosmetics brands from Japan and Thailand are promoting the franchise with Vietnamese partners and enterprises.

In the framework of the program “Vietnam – Thailand Enterprises Interaction in The Field of Franchising” which was held in Ho Chi Minh City (HCMC) recently, there were 40 Thailand enterprises operating in the food, beverage, restaurant, supermarket, health care, cosmetic sectors joined to find partners in Vietnam.

According Mr Nupartpat Sutthitham, Director of the MP Mart convenience store chain (Thailand), currently in Thailand there are 3 MP Mart stores, in which the model is not the same as Family Mart or Circle K. While Family Mart sells mainly food (80%), MP Mart sells mainly fast moving consumer goods, which are produced in Thailand (70%).

According to representatives of MP Mart, the cost to open a store in Thailand with an average area of 150 m2 is approximately 50,000 USD. Realizing the Vietnam market has many opportunities, MP Mart wants to explore and this is the first time this brand comes to Vietnam. The criteria for selection of investors, partners of MP Mart are having financial resources to be able to scaling this model in large numbers in Vietnam.

Meanwhile, according to representatives of Kokekokko – a well-known chicken fast food brand in Thailand with 5 stores, using Japanese spices to marinate chicken. Representatives of this brand also did not hide their intention to find partners with business understanding and financial resources to open stores in Vietnam.

Also in late November of 2016, there were 9 Japan enterprises with 14 fashion brands came to Vietnam to find partners to open franchise stores or distribute products in the domestic market.

According to Mr Akira Kaise, representatives of I Am Company Limited, this fashion brand has been presented in many markets around the world such as Hong Kong, Shanghai, Korea, Taiwan, Spain, UK, Netherlands… and this is the first time he comes to Vietnam to study the market.

Representative of I Am Co., Ltd commented that young population, good economic development, increasing people’s incomes… are factors to make Vietnam becoming a potential market for fashion items. In addition to the market penetration, the Company is also interested in outsourcing or investing in Vietnam to take advantage of low labor costs and highly skilled labors.

At the Vietnam market, Japanese businesses are often mentioned in the culinary field, meanwhile, the fashion, cosmetics or beauty brands are not widely known by consumers. Thus, recently, many Japanese cosmetic brands have decided to enter the market of Vietnam and looking for official distributors.

In an activity operated by the Esuhai Company of Vietnam recently in HCMC, there were nearly 10 cosmetic brands of Japan participated. Among them, the brand Kose is well known by many consumers.

According to the representative of Kose, this enterprise has been established since 1946, global sales reached 2.1 billion USD a year and has been presented in 18 countries. However, so far, this brand does not have official distribution channel in Vietnam market. Therefore, along with the promotion of market presence and product introduction, on this occasion, Kose desires to find agents and official partner in Vietnam.

Meanwhile, according to representatives of Nippon Menard Cosmetic Company, owner of the brand Menard, the Company is fully confident to introduce their products to consumers in Vietnam and wanted to find good partners to be able to access to more consumers.

According to the representatives of the Japan External Trade Organization (JETRO) in HCMC, Vietnam currently has more than 93 million populations, of which half are women who want to become more beautiful as earnings are improving and willing to spend the budget for beauty and body care. Therefore, this is a favorable time and good opportunity for the Japanese cosmetics brand to penetrate the market of Vietnam.

However, there is the fact that the Japanese cosmetic and fashion products are priced relatively high compared to the average income of local consumers. In addition, the Japanese fashion is not common in Vietnam market. Therefore, this is seen as the first step for the fashion and cosmetic brands of Japan to explore the market and find partners.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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India Interested in Vietnam’s Power and Renewable Energy Projects

Energy market in Vietnam

On November 2nd 2016, the Deputy Prime Minister of Vietnam had a meeting with Indian Industry Federation, led by Mr. Naushad Forbes, President of the Federation and Chairman of Forbes Mashall Pvt Ltd, came to visit Vietnam.

According to Mr. Naushad Forbes, currently, Indian companies are investing and developing infrastructure and thermal power projects in Vietnam, such as Long Phu thermal power project and through the business forum of the two countries, the two sides are also interested in seeking opportunities to invest in Vietnam in the field of renewable energy, information technology, adaptation to climate change and many other areas.

Representatives of the enterprises under the Indian Industry Federation expressed their confidence in the political, economic and trade relationship of the two countries. They suggested that the two-way trade turnover currently stands at 5 billion USD are still low and not commensurate with the potential of the two countries. Furthermore, the Indian businesses also affirmed that they will do their best to promote investment cooperation, long-term trade between business communities of the two countries in the coming time.

Indian businesses desire the Government of Vietnam to support and remove difficulties for the joint project of the two countries in construction, transfer of technology in a number of hydropower plants, production and assembly car (a joint venture between Tata Group and TMT Group) and invest in pumping systems in urban to prevent flooding, pharmaceuticals, transport infrastructure…

According to Deputy Prime Minister of Vietnam, for many years, Vietnam is an investment destination of many large enterprises around the world. Despite the world economic recover slowly and uneven. Moreover, Vietnam economy has to face with difficulties coming from natural disasters and climate change, the economic growth in the first 9 months of 2016 rose by 6% and export still grew by 8%, while many economies’ export growth is low or negative.

In Vietnam, the Enterprise Law and the Investment Law (amended) are creating favorable business investment environment and the Government also has policy to develop 1 million businesses by 2020. In such conditions, the Vietnam Deputy Prime Minister affirmed that Vietnam will create favorable conditions for investors, both domestic and foreign so that Indian businesses will invest in Vietnam more, especially when Vietnam is a member of the 10 free trade agreements of the important areas in the world.

Deputy Prime Minister evaluated that the members of the Federation are strong India businesses, that are investing in the areas that Vietnam is prioritize the development such as energy, renewable energy, information technology… Deputy Prime Minister suggested that Indian businesses need to promote cooperation and investment in projects in the no. 7 electrical diagram of Vietnam, especially is to promote the Long Khanh Thermal Power Project. In addition, Indian companies can also participate in the value chains of Vietnam in the fields of textiles and footwear when the TPP agreement will take effect in the coming time.

Vietnam also encourage cooperation forms such as BOT, PPP and even franchised highway toll collection for foreign partners when meeting the necessary requirements; encouraging investment, transferring of technology, energy-saving machinery in automotive manufacturing, construction industry…

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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Cargill (USA) Will Build Factory in Bac Ninh

set-up company in Bac Ninh

Cargill Company (USA) is planning to build a factory specializing in producing livestock feed in Bac Ninh. It shows the attraction of Vietnam market, which makes foreign enterprises to come and invest in Vietnam.

On January 6th 2017, Chairman of Bac Ninh province had a meeting with Mr. Jorge – CEO of Cargill Vietnam came to survey and explore Bac Ninh province. Cargill is the US leading company in the fields of agriculture, food, industrial products and financial services. With more than 150,000 employees working in over 100 countries in the world, the revenues of the Company reached 150 billion USD a year.

In Vietnam, Cargill has 11 factories manufacturing and processing livestock feed in many localities across the country, such as Dong Nai, Hung Yen, Long An, Can Tho, Binh Dinh, Dong Thap and Nghe An…, creating jobs for thousands of workers.

Through surveys, Mr. Jorge impressed with the favorable investment environment, infrastructure, drastic and flexible management system of Bac Ninh province. Hence, the Company intends to build a factory manufacturing livestock feed in Que Vo 3 Industrial Zone in the first quarter of 2017.

It is expected that the Cargill factory has a total investment of 60 million USD, with the area of land to be used is 11 – 13 ha, capacity of 70,000 tons/month. This will be the largest factory of the Company in Vietnam, applying modern technology and equipment with a closed and environmental friendly deodorizing process.

The Chairman of Bac Ninh province welcomes Cargill Company has trusted and choose Bac Ninh as investment destination to invest in stable and long-term production. He also assigned the Management Board of Industrial Zones in coordination with the VID Group – the infrastructure investor of Que Vo 3 Industrial Park and other offices complete the legal procedures and creating all necessary conditions for the project of Cargill Company.

Bac Ninh is one of the leading provinces in attracting FDI, with nearly 1,000 projects with total registered capital of over 12.26 billion USD. In which there are many projects of large companies such as Microsoft, Samsung, Pepsico and Canon…

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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Benefits of Setting Up Company in Ho Chi Minh City

set-up company in Ho Chi Minh City

Ho Chi Minh City is considered as Vietnam’s economic hub. During the long history of foundation and development, the city’s economy is growing constantly and motivating the development of the country.

The city is therefore considered as a potential investment environment for domestic investors as well as foreign investors. The investment through establishing companies and conducting business activities in Ho Chi Minh city certainly promises to achieve multiple benefits. These benefits come from the following reasons.

First, Ho Chi Minh City has strategic location advantage in Vietnam. Southeast Asia Region, Ho Chi Minh City is 1,700 km south of Hanoi, 297 km east of Phnom Penh, Cambodia, 881 km east of Bangkok, Thailand.

Food, glass, textiles, paper products, plastics, chemicals, building materials and machinery are produced here. Ho Chi Minh City accounts for 20% of total gross domestic product (GDP), 30% of industrial production and 40% of export products of Vietnam. The city also accounts for 33% of the national budget and 60% of foreign investment flows into the region. In the past few years, the economy have been grown at a rate greater than 10% (6% to 8% nationally).

Second, Ho Chi Minh City is home of well – qualified, abundant and young human resources.

With a population of more than 8 million, accounting for more than 10% of the total Vietnamese population, Ho Chi Minh City itself has potential employment market to make any business investment. The work force in Ho Chi Minh City was estimated to reach 4.7 million people in 2012, making up more than 50% of the total population of the city. The percentage of trained labor increased from 40% in 2005 to 55% in 2010 and was forecast to reach 70% in 2015. The percentage of labor source holding postgraduate degree is also increasing year by year and most of them tend to stay in the city after holding degrees. Ho Chi Minh City is also home to more than 80 universities and colleges, vocational schools with over 400,000 students providing an abundant trained work force.

With the above – mentioned abundant labor force, any companies set up in Ho Chi Minh City can easily recruit suitable employees in a short time..

Third, the city has modern and high infrastructure system. Namely, when setting up company in Ho Chi Minh City, the owners will benefit from the modern and comprehensive infrastructure system.

Tan Son Nhat Airport is the largest airport in the country with the capacity to accommodate 20 million people a year. From Tan Son Nhat Airport, there are 50 routes to other countries all over the world such as China, Japan, Korea, Singapore, European countries, etc.

Saigon Port serves as a gateway to the Mekong River Delta, the South China Sea (83 km away from the sea) and the Asia continent. The port has a total area of 500,000 m2 with 5 terminals meeting the international standards, and it handles about 8.3 million tons of cargo annually. Throughout the history of foundation and development of Saigon, Saigon Port plays an important role in making Ho Chi Minh City a flourishing trading center. It accounts for a fifth of the nation’s Gross Domestic Product and almost a third of its industrial production.

Ho Chi Minh City is also home to industrial zones. According to the statistics of Cushman & Wakefield, the city has 18 industrial parks that are operating with a total area of 3635 ha. When investing in such industrial zones in Vietnam, enterprises can benefit from various incentive policies such as low rate tax or other incentive policies.

Telecommunication and information technology in the city is modern. The system of post and telecommunication in Ho Chi Minh meets international standard, providing fast, reliable and high quality services such as ADSL, rapid data transfer, wide broadband MAN. The Internet service in Ho Chi Minh city is also among the cheapest in the world.

Besides, the city is also considered the best working conditions. Enterprise will not be fear that it is not enough place for working. The city with the system of offices provide ideal working environment for all investors.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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Alibaba from China Acquires Lazada Vietnam

Buy a company in Vietnam

Recently, there is a trend that foreign company comes and buy company in Vietnam, in order to expand their business operation and also set foot in Vietnam market, where is emerging as a potential market of the area.

Alibaba Group – China’s giant technology corporation has spent 1 billion USD to acquire Lazada, thereby officially set foot in the online sales market of Vietnam.

On April 12th 2016, the China’s giant technology group named Alibaba Group announced that it has reached an agreement to acquire the control of e-commerce platform in Southeast Asia, which is Lazada with an amount of 1 billion USD , thereby officially set foot in Vietnam.

The transaction includes an investment of 500 million USD in Lazada’s newly issued equity and the repurchase of shares of some Lazada’s shareholders include Rocket Internet SE, Tesco Plc and Investment AB Kinnevik with a total investment value of Alibaba reach approximately 1 billion USD.

This acquisition is expected to help worldwide brands and distributors that are trading on the platform of Alibaba, as well as local vendors can reach the consumer market of Southeast Asia. In addition, Alibaba deal with a certain number of shareholders of Lazada, giving Alibaba the right to purchase and shareholders the right to sell its remaining shares in Lazada at the market prices in 12-18 months after the completion of the transaction.

Lazada is headquartered in Singapore, which was founded and operated by Rocket Internet SE from Germany. The company carries out e-commercial activities in Indonesia, Singapore, Malaysia, Philippines, Thailand and Vietnam.

According to Bloomberg, the deal came from the objectives set by the billionaire cum Alibaba’s chairman Jack Ma, targeting at least half of company revenue comes from markets outside of China.

Through the deal with Lazada, Alibaba generate more revenue from sale of clothing and electronics in 6 regional markets in Southeast Asia where Lazada if operating, including Vietnam.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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