DOING BUSINESS IN VIETNAM

TRAN TAN SY

Sales & Marketing Director

Sy.tt@longhau.com.vn

LONG HẬU INDUSRIAL PARK

2

CONTENT

• Vietnam overview• Vietnam investment environment• Why Vietnam?• Why Long Hau industrial Park?• Our Customers

3

Location

4

Vietnam at a glane

• Area: 332,000 km2• Coastal line: 3.440 km• Population: 88 million,

– 60% is under 35 years old • Capital: Hanoi 7 MM people• Commercial hub: Ho Chi Minh

City 10 MM• GDP 2011 : 1,100 USD• Official language : Vietnamese• Location: Southeast Asia ,

bordering China, Laos an Cambodia

5

REAL GDP GROWTH

 Real GDP growth 5 2010  2011 2012F 2013F 2014F  

   Developing countries 7.4 6.1 5.3 5.9 6.0 

      

East Asia and Pacific

9.7 8.3 7.6 8.1 7.9 

         China 10.4 9.2 8.2 8.6 8.4 

         Indonesia 6.2 6.5 6.0 6.5 6.3 

         Thailand 7.8 0.1 4.3 5.2 5.6 

         Vietnam* 6.8 5.9 5.6 6.3 7.0 

Source: WB The global outlook in summary, 2010-2014 * IMF World Economic Outlook April 2012

6

Top 10 Urban Average Real GDP Growth in 2008 – 2025

7

Vietnam FDI inflowTop 10 FDI by country ( Update Nov. 2012)

No Country No. f

Projects

Registered Capital ( BN

USD) %

1 Japan 1800 29.00 14%2 Taiwan 2266 26.39 12%3 Korea 3159 24.65 12%

4 Singapore 1091 24.64 12%

5 BritishVirginIslands 519 15.97 8%

6 Hongkong 693 11.96 6%

7 Malaysia 432 11.34 5%

8 USD 634 10.45 5%

9 Cayman Islands 53 7.50 4%

10 Thailand 297 5.99 3%

Source: Vietnam GSO

- Japan rose no. 1 from no. 3 in 2009

8

FDI’s Japan into VN from 1993 - 2012

Capital Project

Unit: Million dollar. Source : Jetro.

9

Japanese FDI into Thailand, Indonesia,

Vietnam

Source : Jetro

BN USDNo. of projects

10

HCMC and 3 around provinces Dong Nai, Long An , Binh Duong attract 45 % of FDI’s JAPAN .

HCMCNo. of project: 495

Proportion: 28%

LONG ANNo. of project: 53

Proportion: 3 %

BINH DUONGNo. of project: 179

Proportion: 10 %

DONG NAINo. of project: 124

Proportion: 7 %

NEW DEEP PORTS SYSTEM

11

INVESTORS

2012 : 574.8 MM USD 4 factories, 400 MM USD

2012 : 441 MM USD

2012: 1.2 Billion USD 2012 : 6.7 Billion USD

2010 : 1 Billion USD

12

Why Vietnam?

- Triple Religion- Good

relationship

Attractive policy

( detail below)

Government StabilityCo Communist State Member of WTO Trade Agreement w with 70 countries : U US, EU, Japan…

• 60% under 35 years old

• 94 % literacy • Unskilled labor:120

USD/ month

Competitive Labor Cost

Stable Political

Social & Culture

Tax Incentive

13

Stable Political

14

VN – JP Cultural Similarities

• Triple Religion: The earliest established religions in Vietnam are Mahayana Buddhism, Confucianism and Taoism.

Tea, coffee are favorite drinkings in Vietnam

Japan, Vietnam are 2 of 4 countries in the world to use chopsticks as part of their traditional eating utensils for thousands of years.

15

VN – JP Relationship

Chùa Cầu, a Japanese-built in Hội An in the 16th century,

- Sep. 1973: Establish diplomatic relations- 1986 – VN – JP Trade Agreement- Dec. 2008 – VN-JP Economic Partnership

Agreement- The ODA pledged for 2012 by Japan reached 1.9

billion USD & committed 2.6 BL USD for 2013 - From 1993 to now, JPese Prime Mister visit

Vietnam 7 times and VNese Primse Ministers visit Japan 9 times

Vietnamese are friendly and like Japanese

16

Labor Force• Young and Diligent Workforce

– 60% under 35 years old

• High Literacy Rate: 94 %• Competitive Labor Cost

– Unskilled worker’s monthly wage: 120 USD

17

VN - JP Aging Population

VIETNAM

VIETNAM HAS A GOLDEN POPULATION STRUCTRUE

27.9% under 14

14.3% under 14

Sources: VN GSO ; www.nationmaster.com ; www.pdsblogs.org

18

Tax Incentive

• Zero Tax on:– Raw Material / Components For Export– Dividends Remitted– Capital Equipment

• Attractive Policy:– Incentive tax for High-Tech; scientific research; infrastructure

developer; software; healthcare…

Corporate income tax 10%. Incentive: 0% for first 4 years; 50% discount for the next 9 years

http://ebookbrowse.com/vietnam-law-guide-pdf-d78887314 Download Vietnam Law Guide by Jetro 2010

19

Potential Market• 13th Most Populous Country

– 88 million people

• GDP 2012 1,100 USD/ cap• Average GDP last 10 year: 7.1%• Growing Middle Class

March 2012, in Tan Phu District, HCMC

20

National

Wages (US$/month) Land price/Office rents (US$)Workers(general workers)

Engineers(mid-level engineers)

Legal minimum wage

Industrial Estate(land) purchase rate

Industrial Estate rent ( RBF)(monthly, per sq.m)

Viet Nam (HCM) 114 265 79.49  100 4 - 6

Thailan (Bangkok) 263 588 183.3 92 6.89

Indonesia (Batam) 240 406 130 78 3.10 – 4.65

Philippin (Manila) 236 388 185.9 48 - 52 1.7

China (Shenzhen) 235 530 167 28 - 109 4.55

Comparative Survey of Investment-Related Costs – Jetro August 2011

Vietnam has competitive wages, only 40% of Thailan, Indonesia, Philippine, China

21

Comparative Survey of Investment-Related Costs – Jetro August 2011

National

Public Utility rate TaxElectricity rate for

business use(per kWh)

Water rate forbusiness use(per cu.m)

Gas rate forbusiness use(per cu.m)

Corporate incometax rate

Personal incometax rate

(highest rate, %)

Valued-added tax

(VAT)(standard, %)

Tax on dividendsremitted to

Japan(highest rate, %)

Viet Nam (HCM)

(1) 0.028(2) 0.051(3) 0.099

0.69 1.1 - 1.2/kg 25%35% 0% . 5%.

10%0%

Thailan (Bangkok) 0.12 0.31-0.52

Rate per cu.m: 4.53

30% 37% 7% 10%

Indonesia (Batam) 0.12

1.16 Rate per 1mmBtu: 6.4

25%30% 10% (1) 10%

(2) 15%

Philippin (Manila) 0.13 1.39-1.68 1.41/kg 30%

32%12%

15%

China (Shenzhen)

0.03-0.160.47-1.44

Rate per cu.m: 2.37

25%45%

17%10%

- Vietnam has lowest electricity fee. Especially, It’s free for dividends remitted

22

WHY LHC?

LHC

Saving Time

Saving Cost

Sustainable Development

23

Overview Long Hau Industrial Park

12 km

Location:- 12 km from Phú Mỹ Hưng- 19 km from Sài Gòn- 30 km from Tân Sơn Nhất Airport- 3 km to deep ports: SPCT, Sài gòn,

Establish : 5/ 2006

Owner: ( the developer of Tân Thuận EPZ, Phú Mỹ Hưng city…)

Scale:- Long Hậu IP: 248 ha, occupancy

rate: 70%- Long Hậu 3 (developing) 869 ha, 3.5

km from Long Hậu

24

Saving Time• Near to HCMC• Infrastructure ready to build • Ready built factory available• 15 days for Business Certificate.

25

Saving Cost• Free:

– Legal support for start up business– Construction Project management

• Low cost:– Logistic : Near to port ( only 3 km)– Virtual office: Shared office Outsourcing

service : Accountant, HR service , Reception

– Labor minimum salary in Long Hau IP is lower than HCMC, Dong Nai, Binh Duong, Baria Vungtau

26LONG HẬU IP LONG HẬU –

HOÀ BÌNH IP

Amata IP VSIP

TÂN TẠO IP

TÂN THUẬN

SÀI GỎN PREMIER

CONTAINER PORT

27

Saving time & Cost

KCN To Phú Mỹ Hưng (km-miniute)

Cát Lái PortKm - minute

SPCT Port

Tân Sơn Nhất Airport

Land Price

RBF USD Month/ 1 m2

Tân Thuận 7 km - 15’ 11 – 20’ 20 – 35’ 20 – 45’ 250 / 30 years

6

VSIP I 42 km - 90’ 30 – 60’ 42 – 90’ 42 – 100’ 90 / 35 years

4.5

AMATA 40 km – 80’ 35 – 70’ 52 – 90’ 52 – 100’ 85 / 37 years

4.5

Long Hậu 12 km - 25’ 25 – 35’ 3 – 10’ 26 – 55’ 105/ 47 years

4 – 5

Long Hau – Hoà Bình

35 Km – 35’ 45 – 60’ 45 – 60’ 39 – 60’ 55 / 47 Years

3.5 - 4

28

Sustainable Development

• Save the environment : ISO 14001 : 2004• Customer Service ( Japanese, English, Chines, Korean) : ISO 9001:

2008 • Stable living environment for worker and expert:

– Dormitory– Convenience Store– Kindergarten– Leisure Service – Japanese Language Center

29

Structure of Tenants

6658%

3632%

54%

44%

33% VN

Japan

Korea

Eu & Us

Asean

There are 36 Japanese tenants, proportion of JP companies in LHIP is 32% and almost of them are invest in precision mechanical, machinery and labor – intensive industry (garment industry)

1747%

925%

411%

617%

Precision Mechamical

Garment, Leather, package, lable

Machinery

Others

Japanese tenants by industry

30

Our Customers

31

Thank You

• Contact information:

- JAPANESE / ENGLISH

MR. HIẾU – Foreign Accounts Manager

Tel: +84-963 021 768 Email : hieu.bla@longhau.com.vn

MR. LÀNH – Sales Manager

Tel: +84-914 191 616 Email : lanh.pv@longhau.com.vn

- CHINESE

MS. NGUYỆT – Sales Manager

Tel: +84-902 893 337 Email : nguyet.ntt@longhau.com.vn