Investment in Vietnam Essay Example

publishing the Guidebook.

Dr. Do Hoa Binh, the Ambassador of S.R. Viet Nam to Germany, is associated with the W TO Association of Southeast Asian Nations. He is involved in business co-operation contracts and serves on the Board of Management of IZs, EPZs, HTZs, and EZs. He has knowledge about Build-operate-transfer contracts (including its derivative forms BTO and BT), as well as Build-transfer and Build-transfer-operate agreements. He is familiar with the Common Effective Preferential Tariff Scheme and corporate income tax regulations. Moreover, he has expertise in various subjects such as Civil Proceedings Code, Provincial Department of Labour, War Invalids and Social Affairs, Provincial Department of Planning and Investment, environmental impact assessment reports , Enterprise Law ,and environment protection commitments.He has expertise in various areas such as export processing zones, the European Union, economic zones, foreign-invested companies, Free on Board terms, Gross Domestic Product calculations, high-tech zones, Investment Law, industrial zones, joint venture companies, Law on Technology Transfer, land use rights and Certificates of land use rights. He is also experienced in matters related to Most Favoured Nation status and has knowledge about the Ministries of Industry and Trade, Labour War Invalids and Social Affairs Ministry of Natural Resources and Environment Ministry of Science and Technology Ministry of Planning and Investment National Office of Intellectual Property Official Development Assistance Patent Cooperation Treaty Personal income tax regulations.

In addition to this expertise he possesses knowledge in Public-Private Partnerships and Representative Offices. He is well-acquainted with the operations of the State Bank of Vietnam as well as technology transfer contracts. Furthermore, he is knowledgeable about US dollar imports specifically relating to Machinery.

The text also provides a list of imported goods

including equipment, petroleum products pharmaceuticals fertilizer steel products metal textile garment shoe inputs vehicles. It mentions major import markets for these goods which include China Japan South Korea Taiwan Singapore Thailand USA Malaysia India Germany.

Lastly it states that the current Constitution was established in 1992 followed by a revision in 2001.

The State is established and operated by the people, who exercise their power through elected representatives in the National Assembly and People's Councils. These representatives embody the will and aspirations of the people. The Constitution ensures that all citizens, regardless of gender, have equal rights in politics, economy, culture, society, and family matters. It also safeguards freedom of belief and religion, granting individuals the freedom to choose and practice any religion they wish. Additionally, citizens have the right to freely travel within Vietnam as well as internationally under laws established. The National Assembly acts as the ultimate representative body of the people, wielding supreme authority in Vietnam.

The government of the Socialist Republic of Vietnam is responsible for governing constitutional and legislative rights, making decisions on fundamental domestic and foreign policies, socioeconomic tasks, and national defense and security issues. It also exercises supreme supervision over all activities of the State. The President, elected by the National Assembly from among its deputies, represents Vietnam in both domestic and foreign affairs. The President serves the same term as the Chairman of the National Assembly.

In terms of executive power, the Government oversees state affairs in politics, economics, culture, society, national defense and security, and foreign relations. Its term aligns with that of the National Assembly.

The government of the Socialist Republic of Vietnam is led by the Prime Minister and

includes Deputy Prime Ministers, Ministers, and other government officials. The judicial system in Vietnam is overseen by the Supreme People's Court, which manages local People's Courts, Military Tribunals, Special Tribunals, and other tribunals as decided by the National Assembly. The enforcement of laws is under the authority of the Supreme People's Procuracy, which has prosecutorial power and ensures consistent and thorough implementation of legal measures.

Since the mid-1980s, Vietnam has undergone rapid economic transformations through the implementation of Doi moi (reforms). Consequently, the country has achieved significant milestones as it shifts from a centrally-planned system to a socialist-oriented market economy. Currently, Vietnam is determined to become an industrialized nation by 2020. Overall, the adoption of Doi moi in 1986 has led to remarkable achievements for Vietnam, including an impressive average annual GDP growth rate of 7.3 percent over the past decade - outranked only by China within the region.

After facing a setback during the 2008-09 economic crisis, Vietnam's economy quickly rebounded and achieved a GDP growth rate of 6.78 percent in 2010. According to the Asian Development Bank (ADB), the Vietnamese economy is expected to maintain its growth, with projected increases of 6.1 and 6 percent.

Vietnam's GDP per capita was 1,204 USD in 2010, classifying it as a lower middle income country. However, the country has experienced a successful transition from a centrally-planned economy with bureaucracy and subsidies to a socialist-oriented market economy. This shift has led to significant dynamism and rapid growth in entrepreneurship. Additionally, Vietnam's economy has become closely connected to global and regional economies, leading to higher levels of trade and foreign investment. Consequently, the economy is evolving into a multi-sector model driven

by market mechanisms.

The Enterprise Law of 2000 has greatly benefited the private sector by allowing individuals to engage in business activities within the boundaries of the law and removing bureaucratic obstacles that previously hindered enterprises. In addition, effective restructuring policies through equitization have been implemented by the government to increase the efficiency of state-owned enterprises.

Vietnam's economic structure has undergone significant changes as its GDP continues to expand. From 1990 to 2010, the agriculture sector's share decreased from 38.7 percent to 20 percent, while the industry and construction sectors' share increased from 22 percent.

The employment rate in the agriculture sector declined from 7% in 1990 to 41.1% in 2010, while the service sector remained stable at around 38.6% during this period.

A crucial part of Vietnam's socio-economic sphere is agriculture, which accounts for around 57% of total employment and plays a significant role in foreign trade. Vietnam is well-known for its agricultural exports, such as rice, coffee, cashew nuts, and aqua-products. The industrial sector is also rapidly expanding with an annual average growth rate of 10-15% in gross output. Alongside state-owned enterprises, foreign-invested and private companies are becoming increasingly important in industrial development and exports. Likewise, the services sector is showing steady growth at an average rate of 7-8%.

In 2010, value-added in the service sector increased by 7.52%. The trade, finance, and hotels and restaurant sub-sectors experienced significant growth due to strong consumer spending and tourism. Both industry and services sectors are expanding, indicating market-oriented reforms, reduced competition barriers, private sector growth, and improved physical infrastructure. The diverse range of industrial production and services provides a solid basis for continuous output and employment expansion.

Vietnam has made significant

progress in integrating its economy regionally and internationally. It has signed several agreements, such as an economic and trade cooperation agreement with the EU in 1995, joining ASEAN in the same year, adhering to CEPT/AFTA in 1996, and becoming an APEC member in 1998. In 2000, Vietnam entered into the Bilateral Trade Agreement (BTA) with the United States, resulting in a notable increase in trade between the two countries. On January 11, 2007, Vietnam officially joined the World Trade Organization (WTO) as its 150th member.

As a WTO member, Vietnam is committed to expanding market access for exports from other WTO members and improving transparency in regulatory trade practices. Furthermore, Vietnam strives to create equal opportunities for both domestic and foreign businesses by implementing commitments related to tariffs, quotas, agricultural subsidies limits for goods; access for foreign service providers and related conditions for services; intellectual property rights (TRIPS); investment measures (TRIMS); customs valuation; technical barriers to trade; sanitary and phytosanitary measures; import licensing provisions; anti-dumping and countervailing measures; as well as rules of origin.

Vietnam has diplomatic relations with 172 countries and has signed bilateral investment agreements with 55 countries. It also has double taxation agreements with 58 countries and territories, including Germany. Additionally, Vietnam has economic and trading relations with approximately 165 countries and territories. Moreover, Vietnam is a member of 63 international organizations and over 650 non-governmental organizations. By pursuing a policy of "multi-lateralization and diversification" in international relations, Vietnam successfully integrated into the global and regional economies, expanding its trade and investment connections worldwide. Furthermore, Vietnam's efforts to improve its business-friendly environment have been recognized by the World Bank, ranking it as one of

the top 10 most-improved economies for ease of doing business in 2010.

Vietnam is currently ranked 78, surpassing other Asian countries such as Indonesia, the Philippines, China, and India. The rankings for different indices are:

2011-2010 rank

78

2010-2009 rank

Not specified

Vietnam has experienced significant foreign direct investment since implementing the Law on Foreign Investment in 1987. By the end of 2010, a total of $193.4 billion registered capital and over $61 billion disbursed capital were invested through licensing of 12,236 foreign investment projects. Investments have been made by individuals and entities from 92 countries and territories in Vietnam.

Investments in Vietnam primarily originate from Asian, European, and American countries and territories. The leading contributors consist of Taiwan, Republic of Korea, Singapore, Japan, and Malaysia. Furthermore, British Virgin Islands, America, Hongkong, Cayman Islands, and Thailand also hold significant roles. These top ten entities represent over 75% of the total licensed projects and foreign registered capital invested in Vietnam. Since 1996, there has been a growing inclination towards investment in exports, infrastructure development, import substitution industries, and labor-intensive sectors. At present, the manufacturing and processing industry together with real estate and construction industries have more than 8,327 projects with a combined capital of around US$153.5 billion. This accounts for approximately 80% of the registered capital.

Over 230 German companies, including Siemens, Deutsche Bank, Mercedes, Metro, and Bosch, have invested in Vietnam. These investments amount to USD 825 million across 163 projects as of April 2011. The key areas of focus for these investments are manufacturing, processing, technical services, information and communication technology (ICT), banking, and finance services.

These German investment projects can be found in various

locations throughout Vietnam (26 in total), with a particular concentration in Ho Chi Minh City, Hanoi, Binh Duong, and Dong Nai. Furthermore,
German Official Development Assistance (ODA) will partially contribute to infrastructure development and energy projects such as metro line No.

2 Ben Thanh - An Suong in Ho Chi Minh City, which has a length of 11 km and a total investment capital of USD 1.25 billion, will have positive impacts on promoting German investment flow into Vietnam. Additionally, the O Mon IV thermo power, Phu Lac wind power, and Vietnamese Green Line projects will also contribute to this. German foreign trade and investment promotion is well-positioned in Vietnam with the support and advice available from AHK Vietnam, the German Business Association (GBA), and Germany Trade and Invest (GTAI) in Vietnam. Furthermore, Vietnam is an important partner of Germany in development cooperation with 21 development cooperation projects.

Germany has been one of the largest donors among the EU members, giving Vietnam over EUR 1 billion in ODA since 1990. From 2011 to 2012, Germany pledged nearly EUR 300 million to Vietnam, showcasing their strong support for Vietnam's development. The German-Vietnamese development cooperation emphasizes three main areas: Sustainable economic development and vocational training; Environmental policy, conservation, and sustainable use of natural resources; Health.

German development cooperation has been effectively utilized and has made positive contributions to Vietnam's socio-economic development. This is particularly evident in areas such as vocational training, human resource development, infrastructure, and clean energy sources. To highlight the importance of this cooperation, a visit by German Chancellor Dr. Angela Merkel to Vietnam in October 2011 resulted in the signing of the Hanoi Declaration by Prime Minister Nguyen

Tan Dung and Chancellor Dr.