Vietnam
Content
•Bangkok Bank in Vietnam
•Economy, Fundamental and factor of Vietnam Economy
•Investment Procedure & Geography
•Opportunities
We care for you wherever you are …
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Bangkok Bank (Vietnam)
•Before VN war, established 1961 to 1975: Saigon branch
•After VN war reopened since 1992 and we are the first foreign bank
in Vietnam
•Investment consultant: Assist more than 100 FDI plants to set up in
Vietnam
•Awarded Letter of Merit and flag of Merit by State Bank and Prime
Minister for Outstanding Performance for year 2008-2011,
consecutively
•
Hanoi Branch
–Unit 3, 3rd floor, International Centre
– 17 Ngo Quyen, Hoan Kiem District
– Hanoi, Vietnam
– Tel: (84-4)3 936 5903 – 8
•
Ho Chi Minh Branch
–G/F Harbour View Tower
– 35 Nguyen Hue Boulevard, District 1
– HO Chi Minh City, Vietnam
– Tel: (84-8)3 821 4396 - 8
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Vietnam Economic Indicator
2010
2011
2012
2013 (F)
2014 (F)
2015 (F)
GDP Growth (%)
6.78
5.89
5.03
5.2-5.5
6-7
6-7
Import growth (%)
20.1
24.7
7.1
14-16
12-15
12-15
Export Growth (%)
25.5
33.3
18.3
12-14
10-13
10-13
Balance of Trade (USD Billion)
-12.4
-9.5
0.3
-2  -4
-8  -10
-8  -10
4.3
3.6
3.25
4–5
4-5
4-5
Inflation Rate (%)
11.75
18.13
6.81
7-9
8-10
8-10
Average Lending Interest Rate (%)
12-15
17-19
12-15
9-12
10-13
10-13
Average Exchange Rate
(USD/VND)
19,500
21,036
20,850-20,950
21,000-22,000
21,500-22,500
22,500-23,500
Unemployment Rate (%)
Sources: Vietnam State Bank, Ministry of Industry and Trade, Ministry of Planning & Investment, General Statistics Office,
Reuters, World Bank, IMF, ADB
Vietnam Economic Indicator
2009
2010
2011
2012
Sep - 13
2013 (F)
GDP
5.32%
6.78%
5.89%
5.03%
5.14%
5.2-5.5%
CPI
6.52%
11.75%
18.13%
6.81%
6.3%
7-9%
VIETNAM CONSUMER PRICE INDEX
GDP GROWTH
21%
7.0%
18%
6.5%
15%
6.0%
12%
5.5%
9%
5.0%
6%
4.5%
3%
4.0%
0%
3.5%
Y-2009
Y-2009
Y-2010
Y-2011
Y-2012
Y-2010
Y-2011
Y-2012
Sep-13
Sep-13
Sources: GSO, Reuters, World Bank, IMF, ADB
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Vietnam Economic Indicator
2009
2010
2011
2012
Sep – 2013
2013 (F)
Export
US$56.6 bio
US$71.63 bio
US$96.3 bio
US$114.6 bio
US$96.5 bio
US$129-130bio
Import
US$68.8 bio
US$84.0 bio
US$105.8 bio
US$113.8 bio
US$96.6 bio
US$132-133 bio
FDI (registered capital)
US$21.5 bio
US$18.6 bio
US$14.7 bio
US$13 bio
US$15.0 bio
> US$15 bio
FDI (Disbursement)
US$10.0 bio
US$11 bio
US$11 bio
US$10.46 bio
US$8.6 bio
US$10-11 bio
VIETNAM TRADE BALANCE
120
100
80
60
40
20
0
-20
-40
FOREIGN DIRECT INVESTMENT
25
20
15
10
5
Y-2009
Y-2010
Y-2011
Y-2012
Sep 13
0
Y-2009
Export
Import
Trade Balance
Y-2010
Registration
Y-2011
Y-2012
Sep 13
Disbursement
Sources: GSO, MOIT, MPI, Reuters, World Bank, IMF, ADB
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6
Vietnam Economic Indicator
VND Depreciation
(year-on-year)
Year
Country’s Rating
Depre.
Level
2007
0.4%
2008
7.7%
2009
5.7%
2010
5.5%
2011
7.9%
2012
-1.86%
Jan-Sep, 2013
1.3%
Fitch (Jan 2013)
 B+
 B+
S&P (Jun 2013)
 BB- (FC)
 BB- (LC)
 B2 (FC and LC bonds)
 B1 (FC Country ceiling)
 Ba2 (LC Country Ceiling)
 B3 (FC Bank deposit ceiling)
 Ba2 (LC Bank deposit ceiling)
Moody’s (Sep 2012)
(FC)
(LC)
Status
Stable
Stable
Stable
- Notes: FC: foreign currency; LC: local currency
Notes:
- As of Aug 30, 2013, the USDVND official
rate was increased by 1% from 20,828 to
21,036. But in terms of the inter-bank market
level, VND has been depreciated against USD
by around 1.3% in Jan-Sep 2013 .
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- Sources: Reuters
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Strength and Weakness of Vietnam
•
Strength
-
•
High political stability
Plenty of young and low wage labors
Abundant natural resources
Overseas Vietnamese 4.5 million population (bringing more than USD9 billion inward
remittance to the country)
Weakness
-
Indistinct principle and regulation
Obsolete infrastructure
Fluctuation of Money Market and Exchange rate
Shortage of skilled workers in Production hub area
Lack of upstream industry
Electricity shortage in dry season
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Reasons of VND Devaluation
• Lack of confident of local people in VND (sentimental factor)
• Black market
• Gold
• Huge Trade Deficit (around USD11-12B/month)  Solved
Reasons of high inflation
• Pro-growth policy and inefficient investment (demand pull)
• Lack of supporting industry  rely on imported raw material(cost
push)
Things to watch
• Vulnerable Banking Industry: Restructuring of Banking industry and
gold market
• Return of inflation  Further devaluation
Exchange rate
Items
2009
2010
2011
2012
Sep - 2013
2013 (F)
USDVND official ceiling rates
18,479
19,500
21,036
21,036
21,246
21,400-21,600
USDVND Inter-bank market
level
18,600-18,700
20,750
21,250
20,820-20,860
21,090-21,140
21,000-22,000
USDVND Foreign Exchange Rate (2012-2013)
• Currency : Vietnam Dong (Oct 21, 2013)
- SBV Base Rate: VND21,036/USD
21,300
- Ceiling and Floor Rate: + or – 1% of official
Rate: VND21,246/USD and VND20,826/USD
21,220
21,140
21,060
- Inter-bank level: VND21,080-21,120/ USD
20,980
- Free Market Rate: VND21,130-21,180/ USD
20,900
• FX is controlled strictly by SBV
20,820
20,740
20,660
• Declaration required for funds brought in/out of
20,580
Vietnam in excess of US$ 5,000.- plus VND15 million
20,500
-Aug -Sep -O ct -Nov -Dec -Jan -Feb -Mar -Apr -May -Jun -Jul -Aug -Sep
12
12
12
12
12
13
13
13
13
13
13
13
13
13
SBV's official rate
Bank's rate
Ceiling rate
Interbank level
Floor rate
10
Interest rate
Items
VND interest rates (3mth)
2009
2010
2011
2012
Sep - 2013
2013 (F)
12.0%
12.0-14%
14.0-16.0%
7.0 – 11.0%
5.0-8.5%
6.0 – 9.0%
VNIBOR Fixing Rates (2012-2013)
Interest rate (I.e. 3 mth as of Oct 21, 2013)
VND INTEREST RATE 2012-2013
(% per annum)
12.0
10.5
USD
VND

Fixed deposit interest rate 0.25-1.25% 4.0-7.0%

Loan interest rate
9.0
7.5
6.0
2.5-5.0%
7.5-11.0%
Note: State Bank’s VND base rate = 9%
4.5
3.0
1.5
0.0
Se p- O ct- Nov- De c- Jan- Fe b- Mar- Apr- May- Jun- Jul- Aug- Se p12
12
12
12
13
13
13
13
13
13
13
13
13
O/N
1M
3M
6M
Source: Reuters
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Banking Services
•
Deposits (USD, VND)

•
Current, Savings, Fixed
Loans (USD, VND)


Revolving Short-term Loan
Long-term Loan

Trade Finance Facility: L/C, S/G, T/R, Packing Loan, etc.
•
Local and Foreign Fund Transfer (USD, VND, THB, EUR, etc.)
•
•
Foreign Exchange
International Trade


Inward/Outward Bills for Collection: D/P, D/A
Letter of Credit
Settlement system
•
•
•
Cash settlement
Bank Transfer
Cheque (not widely used because don’t have cheque clearing house)
Profit Repatriation
•
•
•
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Convenient and easy
Profit repatriation is permitted after settlement of Corporate Income
Tax and other obligations to the State, if any.
Profit repatriation can be done once a year
Procedure for investment in Vietnam
•
•
•
•
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Contact industrial park for the land, factory and apply for the investment
license (take around 1 month long)
After complete investment license, bring the license to security department
at police office to apply for the legal company stamp (take around 2-3
weeks)
After authorized the company stamp, open the capital account with the bank
for transfer the fund (allow to have only one account only).
Investor can start construction or operation after complete all the process
above.
3 Purposes of Investment in Vietnam
• Enjoy cheap labor and reduce production cost
• To capture 90M population market
• To find source of raw material
Key success factors in investment in Vietnam
•
•
•
•
Know well and respect local regulations
Manage well in human resource
Understand culture of Vietnamese consumer
Have “BBL” as your partner
Export - Import Markets & Products
Export Markets & Products
Sources: General Statistics Office
Import Markets & Products
Sources: General Statistics Office
Notes: * the value by August 2013
Major FDI in Vietnam
FDI in Vietnam
Sources: Ministry of Planning & Investment
20
FDI in Vietnam
Sources: Ministry of Planning & Investment
21
FDI in Vietnam
Sources: Ministry of Planning & Investment
22
FDI in Vietnam
Sources: Ministry of Planning & Investment
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FDI in Vietnam
Sources: Ministry of Planning & Investment
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FDI in Vietnam
Sources: Ministry of Planning & Investment
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Major area for investment
Successful Thai Investor in Vietnam
Matters should be aware of
investment in Vietnam
•
•
•
•
•
•
•
Should study principle and regulation completely
VND devaluation may effect performance of the company (should add some
margin to partially cover such risk)
Strict foreign exchange control and tight USD currency liquidity
Balance between USD and VND debt
Labor quality should be closely monitored and well trained.
Should study the market, demand structure and also consumer behavior for
effectively do marketing and sales.
Aware of pollution issue
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Fact of Investment in Vietnam
• Joint Venture with local has low successful rate  100% owned is
best
• First three years consecutive loss  Big profit after 3 years
• High risk always bring high return
• Boss must be at the ground
• Always relied on expat team
Opportunity
• Bubble burst  Asset price went down  M&A(within 6 mths- 1
year)
• Cheaper production cost with potential big market
• Low PE and low market cap./GDP with long term growth
Investment’s General Information
•
Salary
-
-
•
Overtime
-
•
Overtime maximum 4 hours per day and 200 hours per year.
150% normal 180% night time 200% weekly holiday and 300% public holiday or paid leave
Labor Welfare (apply for year 2012-2013)
-
-
•
Minimum salary stipulated by government for both local and FDI enterprises: VND1.65 - 2.35
million or equivalent around USD 79-113 depend on defined area (effective from 1 Jan
2013). Salary offer to employee must be at least 7% higher than minimum salary.
Salary for probationary employee is at least 70% of official salary
Maximum 8 hours/day or 48 hours per week
Company part: 17% for social insurance, 3% for health insurance, 1% for unemployment
insurance
Employee’s part: 7% for social insurance, 1.5% for health insurance, 1% for unemployment
insurance
Labor Union
-
If the company has more than 10 persons, require to has union but not compulsory
Contact Industrial Park
•
HCM:
1. Tan Tao IP.
- Contact person: Ms. Uyen, cell phone no.: 094 99 84 666
- up to 2050.
2. Hiep Phuoc IP.
- Contact person: Mr. Binh, cell phone no.: 0907 962 922
- up to 2048.
3. Tan Thuan EPZ: the rental land area was already full.
•
Binh Duong:
1. VSIP 2 (Vietnam Singapore Industrial Park 2)
- Phone No.: 0650 3861868
- Contact person: Mr. Toan, cell phone no.: 093 88 68 788
- up to 2058.
•
Ba Ria- Vung Tau
1. My Xuan A Industrial Zone: as informed by subject, at
the moment, the rental land area was already full
and they only provide the service of factory rental to
customer.
2. My Xuan A2 Industrial Zone:
- Phone No.: 064 3899164
3. My Xuan B1 Industrial Zone:
- Phone No.: 064 3838423
- Contact person: Ms. Trang, cell phone no.: 0945
209 714
- up to 2048.
4. Phu My 1: the rental land area was already full.
2. My Phuoc IP:
- Phone No.: 0650 3811777 (MKT Dept.)
- up to 2057.
5. Phu My 2: the rental land area was already full.
6. Phu My 3:
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Contact Industrial Park
•
Dong Nai:
1. Bien Hoa 1 & 2: the rental land area was already full.
2. Nhon Trach 1:
- Phone No.: 0612 215 360
- Contact person: Ms. Hoi, cell phone no.: 0984 098 066
- up to 2048.
3. Nhon Trach 2: the rental land area was already full
8. Ho Nai IP:
- Phone No.: 061.3982039 (we cannot reach subject since
no one picked up the phone).
- up to 2048 (reference price from website).
4. Long Thanh Industrial Zone:
- Phone No.: 061.3514494
- Contact person: Ms. Hoang, cell phone no.: 0983 325 520
- 45 years.
9. Xuan Loc IP:
- Phone No.: 0613 834 700
- Contact person: Ms. Nhu, cell phone no.: 0913 130 18
- up to 2056.
5. Amata IP:
- Phone No.: 061.3991007
- Contact person: Ms. Thao.
- up to 2044.
10. Ong Keo IP:
- Phone No.: 0612 215468
- Contact person: Ms. Trinh, cell phone no.: 0909 289
006
-up to 2058.
6. Bau Xeo IP:
- Phone No.: 061. 3924377 - 3924690
- Contact person: Ms. Nhu, cell phone no.: 0933 050 167
- 46 years.
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7. Giang Dien IP:
- Contact person: Mr. Minh, cell phone no.: 0903 037 589
- 45 years.
11. Song May IP: the rental land area was already full.
12. Thanh Phu IP: in construction.
Thank you and see you in Vietnam