Investment projects in Vietnam could be evaluated and approved for business setting-up at top level of the government, at ministerial levels or at the provincial levels.
The licensing authorities for business setting up in Vietnam has been divided to distribute workloads at different state agencies with aim to speed up the process and attract more quality investment projects in Vietnam.
In practice, the process for establishing companies or executing investment projects in Vietnam would take from one month for simple project, three to six month for areas categorized under conditional investment areas, requiring sub-licenses, or additional time for more complicated projects. At the provincial levels, there might be inconsistency between cities and provinces due to different interpretation of laws. For investment project with difficulty to manage, the provincial levels would need to consult with technical department of central government agencies, as such the time taken to process the investment certificate would be lengthen.
Understanding the mechanism and the work division of Vietnam authorities that evaluate and approve business licensing at different government agencies would help foreign investors to smoothen the process and improve their experience in Vietnam.
It is notable that, the government level will be focusing on significant projects, in special area at large investment capital with impact on social economic situations. Most of the investment licensing procedures will be carried out at the provincial levels where the investment projects exist.
The following will point out directions for foreigners to approach respective agencies based on the particular area of interests, scale, and nature of the investment. However, to avoid delay and increase effectiveness, it is advisable that the foreign clients would consult with Vietnam law firms to help advise and represent them in preparing and executing the investment in Vietnam.
I. Projects evaluated and granted investment licensing at government level
Depending on the business nature, industry sector, investment scale, and investment policy, the Vietnam Prime Minister, on behalf of the government will evaluate and approve investment licensing for setting up business.
1. The investment project in Vietnam the government will evaluate and approve regardless of funding, the scale of investment are in the following areas:
a) Development and commercialization of airports and air transport;
b) Development and commercialization of national port;
c) Exploration, mining and processing of oil and gas; exploration and exploitation of minerals;
d) Radio, television;
f) Production of cigarettes;
g) Establishment of university level educational institute;
h) Establishment of industrial zones, export processing zones, high-tech zones and economic zones.
2. Although investment projects which do not fall under the cases listed above, but the government of Vietnam also evaluates and approves investment project with investment capital of VND 1,500 billion (around USD 75 mil) upwards regardless of funding and in the following areas:
a) Sales of electricity, mineral processing, metallurgical;
b) Construction of railway infrastructure, roads, inland waterways;
c) Production, sales of wine and beer.
3. Further, the government of Vietnam also evaluates and approve investment projects with foreign investment in the following areas:
a) Maritime transport;
b) Establishment of networks and provision of postal services, courier, telecommunication and internet; network setup and signal transmission;
c) Printing and distribution of newspapers; publication;
d) Establishment of independent scientific research.
4. Where the investment projects specified in the above cases are in the plan which the Prime Minister has approved or authorized other agencies to approve, and that the investment projects meet the conditions prescribed by law and treaties to which Vietnam Nam is a member, the agency granted investment certificates perform the procedure for issuance of investment certificates is not required to submit to the Prime Minister to decide on the investment policy.
5. Where the investment projects specified in the above case is not in the plan which has been approved by the Vietnam Prime Minister or authorized other agency to approve, and that the projects do not meet the conditions for market access provisions in international treaties which Vietnam is a member, the agency granted investment certificates shall consult with other of relevant industries and submit to the Prime Minister for investment policy decision.
II. Projects evaluated and granted investment licensing at ministerial level
1. The Vietnam Ministry of Planning and Investment shall evaluate and approve licensing for investment projects in the form of BOT, BTO, BT.
2. Other ministries will be evaluating and granting license for investment in some sectors.
a.Vietnam Ministry of Commerce and Industry shall evaluate and approve licensing for investment project in oil and gas sector;
b. Vietnam State Bank shall grant licensing for financial institutions;
c. Vietnam Ministry of Finance shall be responsible for issuing license for investment project of insurance business.
III. Projects evaluated and granted investment licensing at provincial levels
1. Department of Planning and Investment shall be the single point of contact that receive the application and evaluate the investment plan of the foreign investors wishing to establish business in Vietnam for projects
a. Outside of Industrial Zone, Industrial Processing Zone;
b. Infrastructure development project for Industrial Zone, Industrial Processing Zone which management board of industrial zone and industrial processing zone are not yet established.
2. The management board of Industrial Zone, and Industrial Processing Zone:
a. For investment projects within the Industrial Zone, and Industrial Processing Zone which are not under the authority of the Prime Minister;
b. Infrastructure development project to for industrial zone and industrial processing zone.
18:30 assistant service in Vietnam, set up a company in Vietnam, Set up company, setting up business in Vietnam No comments
Foreigners are encouraged to make investment in Vietnam through direct investment by setting up company in Vietnam.1. Which business should I invest in Vietnam?
00:28 Invests in Vietnam, setting up business in Vietnam, Three Reasons Japan, Why Japan Will Increase, Why Japanese Investors Invest in Vietnam? No comments
Japanese investors have switched from setting up business in Vietnam in manufacturing into financial investment, retail.
- Why Japanese Investors Invest in Vietnam?
- Three Reasons Japan Invests in Vietnam
- Why Japan Will Increase Investment in Vietnam
Til end of Jan 2015, Japan is the second largest foreign investors in Vietnam in direct investment form with 2,494 projects, and total registered capital of nearly 36.9 billion USD however there have been changes in the structure of the investment capital in Vietnam. In particular, the manufacturing sector once accounted for the largest proportion of investment in Vietnam drops 30% from nearly $ 1.2 billion in 2013 to nearly 830 million 2014. In fact, the projects in the manufacturing sector often require huge capital during a long-term investment. In the context that Japan's economy faces difficulties as well as the global economy is not bright, the reduction of investment in the manufacturing sector is also understandable.
In indirect foreign investment in Vietnam, Japan ranks sixth in the list of countries conducting M&A in Vietnam with more focus on small or medium but long-term and potential large area. The field of production only accounts for 10% of the total value.
However, the recent survey has shown there is a new wave of Japanese investment in other sectors such as construction, real estate, transportation or financial investment. The report of The Japan External Trade Organization, or JETRO, a Japanese government-related organization that promotes trade and investment reflects the proportion of new investment projects in the construction, real estate increased from 3% in 2013 to 6% in 2014, while the capital had risen to 13%, compared with 2 % of a year ago.
In real estate sector, Tokyu Corporation has joined invested with Becamex IDC to develop Tokyu Binh Duong Garden City in an area of over 110 hectares with a total investment of about USD 1.2 billion. Daibiru Corporation also acquired the office building Corner Stone in Hanoi with value of the deal at USD 60.1 mil. These are example that Japanese investors recognizing the potential development of Vietnam’s changes in real estate market as the land ownership have been approved and effective from Jul 2015. As reported, M&A deals in real estate in 2014 accounted for 61% of M&A deals.
In financial investment, in 2014, Daiwa PI Partners and Vietnam Opportunity Fund of Vina Capital invested USD 45 million in the International Dairy Joint Stock Company, making foreign ownership increase to 70%.
In retail sector, Vietnam is also considered as an attractive market with growing mid-income consumer group. The largest retailer Aeon Japan after years of market research has poured more than USD 500 million for two commercial centers were opened in Ho Chi Minh City, Binh Duong and a new center in Long Bien (Hanoi). The group also plans to expand through acquiring shares of two local supermarket being Fivimart and Citimart.
It appears that Japan is holding strong among the leading investors in Vietnam, together with Korea and Singapore.
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