FOREIGN DIRECT INVESTMENT IN VIETNAM

INVESTMENT CLIMATE FOR FOREIGN DIRECT INVESTMENT IN VIETNAM

Investment climate Vietnam is one of the leading investment destinations in Southeast Asia. With the advantages of geography, natural resources, and an affordable labour force, Vietnam attracts a large amount of capital each year. Vietnam has a number of unexplored sectors and a growing consumer market.

In 2007, Vietnam’s FDI increased to more than US$21 billion from US$12 billion in 2006. The country’s FDI hit a record high in 2008, trebling 2007’s figure, reaching almost US$72 billion in registered capital. Due to the global financial crisis, the FDI registered in the 2009 – 2012 period decreased, yet the disbursement - both in terms of value and percentage - improved compared to 2007, indicating the continued confidence of foreign investors in Vietnam. Vietnam experienced a decline in FDI in 2012.

Following the decline in 2012, FDI in Vietnam increased again from 2013 and reached US$22.8 billion in 2015. The FDI sector in 2015 contributed US$ 115.1 billion to Vietnam’s total export turnover of US$162.4 billion. While there was a FDI sector export surplus of US$17.1 billion, the domestic enterprises sector import also reached a surplus of US$20.3 billion. In 2015, FDI sector contributed 20% of GDP of Vietnam.

The Vietnamese Government has made considerable efforts to improve the business and investment climate in Vietnam, for example by issuing favourable laws and regulations. Combined with the accession to the WTO in January 2007 these efforts have significantly paved the way for FDI in the country.

Vietnam’s success in attracting FDI should be measured not only by the amount of registered capital or disbursements but also by the efforts to improve the investment climate. At the end of August 2013, the Prime Minister issued Resolution 103/ NQ-CP in order to realise the commitment to improve the investment climate and business community for investors. A revised Law on Corporate Income Tax has been included in the terms of the expansion project that are also investment incentives. Investment incentives on industrial parks have been restored. The adjusted tax rate of Corporate Income Tax has been reduced to 20%, effective 1st January 2016. 
If you want to see more about FDI opportunities in Vietnam, contact us: info@fdi-vietnam.com

                                                                             (Source: KPMG Publication - Investing in VN 2017)