Billion USD Projects Are Coming to Vietnam

After setting a record of 14.59 billion USD in the first 4 months, foreign investment in Vietnam is forecasted to continue to accelerate in the coming time. Most likely, the first billion-dollar project will land in Vietnam this year.

Although mentioned a lot, but the 4.6 billion USD project of Exxon Mobil Corporation (USA) probably will not be the first billion-dollar project granted investment certificate in Vietnam this year. Instead, it will be the Weijia Textiles Vina Project of Wai Chi Kai investor (Hong Kong). Under the plan, Wai Chi Kai will invest 1 billion USD to build a factory specializing in the production of knitted collar products, wrist bands, ribbed fabric, textile fabrics, textile accessories, fashion accessories… The project was implemented in Dong An 2 Industrial Zone (Hoa Phu Ward, Thu Dau Mot City, Binh Duong Province).

Meanwhile, Bac Lieu Provincial People’s Committee is also urging the Ministry of Industry and Trade to speed up the appraisal process and supplement the project LNG Bac Lieu Gas Thermal Power Plant of investor Energy Capital (USA), investment capital 4.3 billion USD in Electricity Planning VII. Although the investment procedure for a power project is not simple, Bac Lieu hopes that the Project will soon be granted an investment certificate, with a scale of 3,200 MW. The reason is quite understandable, this project will add 3,000 billion VND/year to the local budget.

Besides the above billion USD projects, a series of other large-scale projects may soon be granted investment certificates this year. In which, there is a 500 million USD project of Hana Micron investor (Korea).

Information revealed that, in the middle of April 2019, Hana Micron has officially signed an investment cooperation agreement with Bac Giang Industrial Zone Management Board to implement a project specialized in manufacturing high-tech products and semiconductor equipment in this province.

Meanwhile, Apparel Far Eastern is looking to increase 610 million USD, while Meiko Electronics is about to increase an additional capital of 200 million USD in Vietnam. Once the procedure is completed, the list of large-scale FDI projects registered to invest in Vietnam this year will be extended.

The trend of shifting investment into Vietnam in anticipation of the opportunity by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as well as to avoid the effects of US – China trade tension, which is becoming clearer.

After Compal, LG Group recently announced that it will stop producing smartphones in Korea to move to Vietnam, in order to cut costs, improve investment and business efficiency. LG’s factory in Pyeongtaek, south of Seoul, will officially stop operating later this year, to switch production to LG’s factories in Hai Phong.

In addition to LG, CP Foods – belonging to Charoen Pokphand Foods, Thailand’s leading group of billionaire Dhanin Chearavanont, will invest more than 200 million USD to build a pork and poultry export center in Vietnam to take advantage of free trade agreements that Vietnam has signed.

CP has invested in Vietnam about 1 billion USD since 1993 and is constantly expanding investment and business to dominate market share. According to CEO of CP Vietnam, Vietnam has an advantage over Thailand in export and labor costs.

That is also the reason why more and more foreign investors shift investment plans to Vietnam. After the US – China trade tension escalated and after the CPTPP took effect, this trend became stronger.

Even, not only secondary investment projects, but according to a recent study published by CBRE, the trend of companies shifting production from China to Southeast Asia, including Vietnam, will also positively impact Vietnam’s industrial real estate sector.

According to CBRE, this trend has been going on since 2018 and will continue to increase until 2020. Thus, at least within the next 2 years, foreign investment in Vietnam will continue to accelerate.

It is important to continue to improve the investment and business environment, create favorable conditions for foreign investors to be able to welcome opportunities and speed up attracting foreign investment, especially in the areas of production of Chinese goods subject to US sanctions.

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Ha Nam: Granting Investment Registration Certificate to Capella Real Estate JSC and Tejin Group (Japan)

On May 15th 2019, Ha Nam Provincial People’s Committee held a ceremony to grant Investment Registration Certificate for the Project of construction investment and infrastructure business of Thanh Liem industrial zone, phase II for Capella Real Estate Joint Stock Company, which has a total investment of nearly 950 billion VND and Tejin Carbon Vietnam Factory Project for Teijin Group with a total investment of 12 million USD.

Over the past years, with the viewpoint of always trying to improve the investment environment, Ha Nam’s leaders always support and create the most favorable conditions for investors, focusing on strong resources to build infrastructure, especially transport infrastructure, industrial zones and clusters. Drastically direct the implementation of solutions to improve the business investment environment, administrative reform…

Up to now, Ha Nam province has 8 industrial parks approved by the Prime Minister, of which 7 industrial parks have been put into operation, 1 Thai Ha Industrial Zone has completed the documents and procedures. 887 projects have been attracted, including 260 FDI projects and 627 domestic projects with registered capital of nearly 3,000 million USD and nearly 110,000 billion VND. In the first 4 months of 2019, the province granted 40 investment projects, including 16 FDI projects and 24 domestic projects with total registered and adjusted investment capital of 200 million USD and nearly 3,500 billion VND.

In the ceremony, Ha Nam province granted the Investment Certificate to the investment project of construction and business of Thanh Liem Industrial Park Phase II invested by Capella Real Estate Joint Stock Company. With a scale of 143 ha and total investment of nearly 950 billion VND. This is one of the most capable, reputable and experienced investors, has been very successful in the field of infrastructure development and attracting investment in industrial parks and industrial clusters in some localities all over the country.

Also at the conference, leaders of Ha Nam province granted the Investment Registration Certificate of Tejin Carbon Vietnam Factory Project to Teijin Group (Japan). This is an enterprise with more than 100 years of experience in the field of materials, health care and information technology. One of the leading enterprises developing core technologies including polymer chemistry, nanotechnology, biotechnology and synthetic technology.

Teijin Group (Japan) built Tejin Carbon Vietnam Factory with a total investment of 12 million USD, on an area of 15,300 m2, producing carbon fiber products used for the aerospace industry, automotive industry, plastic engineering, health, sports… to meet the demand of domestic and foreign markets.

At the conference, Chairman of Ha Nam Provincial People’s Committee welcomed the leaders of Teijin Group and Capella Company to trust and choose Ha Nam as the project investment location. At the same time, he also believed in the construction process, production and business activities, businesses will achieve high revenue and efficiency.

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Vietnam Solar Power Industry

Many investors are interested in solar power in Ninh Thuan, Binh Thuan, Bac Lieu and the market is very dynamic. According to General Electric Plan VII, the total installed capacity of solar power of Vietnam by 2030 will achieve 12GWp, so there will be nearly 12 billion USD pouring into this sector.

The lack of electricity price policies for renewable energy and solar energy are the main causes for the attraction of investment in this sector becomes less interesting.

However, presently there are many investors interested in solar power projects in Vietnam. The solar power investment market is very exciting and a lot of investors are very willing to pour capital into the sector.

Many projects of current investors are not only located in Ninh Thuan and Binh Thuan – 2 provinces that are attracting the most solar power projects, but also extending to Quang Ngai, Thua Thien Hue, Ha Tinh, Hau Giang, Bac Lieu…

According to the Clean Energy Association of Vietnam, currently the country has about 30 investors at home and abroad that are setting up new solar power projects with capacity of 20 MW to over 300 MW in some localities. Notably there are many foreign investors coming from South Korea, France, India… have registered to invest in some central provinces.

Not only foreign investors, domestic investors are also starting to research and invest in clean energy market. For example, Central Power Corporation has a solar power plant with capacity of 150 MW in Khanh Hoa; Vietnam Electricity Corporation is planning to research two projects in Dong Nai and Binh Thuan, Ninh Thuan.

Vietnam is a country with the potential of solar energy. The average solar energy density is 4.3 kWh/m2 and the average number of sunny days is around 2,000 hours/year.

In particular, from Da Nang to the southern, the potential of solar energy is very good, the radiant energy density is in the range of 4.5 to 5 kWh/m2; the average number of sunny days is 2,200 – 2,500 hours/year. Therefore, the application of solar power in these areas will be highly effective.

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Set-up Limited Liability Company in Vietnam

Limited Liability Company is a form of enterprise which is established by contributing of members. A member shall be liable for the debts and other property obligations of the enterprise within the amount of capital that he/she has undertaken to contribute to the company.

Limited liability companies are regulated by two types:

One member Limited Liability Company is an enterprise owned by one organization or individual;

Limited Liability Company with two or more members is an enterprise owned by organizations or individuals, in which the number of members shall not less than two members and not exceed fifty.

Organizational and management structure of Limited Liability Company normally comprise of a Member’s Council, General Director or Director.

A limited-liability company established by foreign investors may take the form of either:

100% foreign-owned enterprise (where all members are foreign investors); or;

Foreign-invested joint-venture enterprise between foreign investors and at least one domestic investor.

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