Ppp Water Supply Project in Hanoi

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Ppp Water Supply Project in Hanoi KOREA INVESTMENT IN VIETNAM & FDI POLICIES Seoul – 31st March 2014 PRESENTER: NGUYEN THI MINH HIEN- DEPUTY DIRECTOR FOREIGN INVESTMENT AGENCY- MINISTRY OF PLANNING AND INVESTMENT 1 I. VIETNAM IN PROFILE II. FDI IN VIETNAM AND KOREA FDI IN VIETNAM III. INVESTMENT POLICIES IN VIETNAM 2 I. VIETNAM IN PROFILE 3 COUNTRY & PEOPLE Area : 331,689 sq. km. Coastline : 3,260 km. Major cities : Hanoi Capital, Danang, Hochiminh city. Population : 88.5 mil – ranking: 13th in the world Natural resources: oil & gas, minerals, sea and tropical forestry. 4 4 INFRASTRUCTURE ROAD NETWORK Road network: • Road system 251,786 km country-wide • North-South pivot: The 1A National Highway: 2,260km through 31 cities/provinces The Ho Chi Minh Highway: 3,167km 5 5 INFRASTRUCTURE (cont.) RAILWAY NETWORK •Total length of 2,632 km of rail network • 278 stations country-wide • Hanoi – Ho Chi Minh City line: 1,726 km; 29.5 – 40 hours; Targeting to reduce to 10 hours with new high-speed connection. • Linked to China railways in two directions, one from Lao Cai province to Yunnan province and one from Lang Son province to Kwangsi province of China. • Construction of the railway lines connecting with Laos and Cambodia has been included in the Government’s development strategy for the Railway industry of Vietnam. 6 INFRASTRUCTURE (cont.) SEAPORTS and AIRPORTS Seaports: - 3,260km coastline, a strategic position close to international shipping routes and favored conditions of shpping with china, ASEAN and world wide. - Major Ports : 119 seaports in which Cai Lan (50,000DWT); Hai Phong (40,000DWT); Da Nang (45,000DWT); Quy Nhon (50,000DWT); Sai Gon (50,000DWT); Thi Vai (60,000DWT) Airports: - 10 international airports (Noi Bai – 4 million passengers; Tan Son Nhat – 8 million passengers; Da Nang; Cam Ranh – Khanh Hoa; Cat Bi – Hai Phong; Chu Lai – Quang Nam; Cam Ranh – Nha Trang; Phu Bai – Hue; Can Tho; Phu Quoc; Long Thanh – Dong Nai. - 14 domestic airports 7 Special zones 255 IZs/EPZs and 11 EZ Over 20 IZs/EPZs are developed by Joint Ventures (government & foreign investors) e.g. TLIP (Japan), Tanthuan EPZ (Taiwan), Amata (Thailand) Korea invest in IZs/EPZs mostly: s.g. Yen Phong-Bac Ninh (Samsung mobile);Dung Quat-Quang Ngai (Doosan); VSIP – Advantages: Binh Duong; Nghison - Thanhhoa - Higher quality infrastructure (electricity, transport, telecommunication) and available public system - Availability of land and most of IZ/EPZ in the convenient location - Simple administration procedure, expedited licensing process and convenient service for investors as mechanism “one stop” in IZ Management Board. - Fiscal incentives to infrastructure developers and projects inside economic zones 8 Human Resourses Strengths Weaknesses . Labor cost is still competitive in Asia • Shortage of qualified technical workers due to (Can operate over 300 days/year training not tied to requirements occupations, (48h/week) ) skill levels, and production technology required .Technical workforce, particularly workers with higher qualifications, have leading officials of almost all areas . Abundant labor force Opportunities Threats . Construction of high-quality training - The labor cost has been increasing in recent center and high-quality multidisciplinary years. universities located in Hung Yen. - The quality of work force is slowly improved . Building a specialized health center for therefore the company need to re- train the the region is expected in Ha Tay and Hai workers Duong (plays a crucial role in the training and health care for both regional and national) .. Research of building high-level training center for the region located in Vinh Phuc Vietnam’s labor cost is still competitive in Asia Electricity Strengths Ready and it will be connected to the fence of the border of each land lot. Power is supplied sufficiently and stably Two Sub-stations of 110/22kV – 40 MVA. High-voltage: 22KV (+) Nomal hours : From Monday to Saturday (From 04h00– 9h30) (11h30’ – 17h00) (20h00 – 22h00’); On Sunday (From 04h00’ – 22h00) (+) Off- peak hours (From 22h– 04h) in all day (+) Peak hours (From 9h30–11h30’)(17h30’ – 20h00’) Electricity Cost For industrial manufacture:(Unit: VND/Kwh) For business and services: (Unit: VND/Kwh) Weaknesses and Opportunities - Power outages often happen in the IZ due to overload. However, EVN will prioritize for power production in the IZ. - Son La hydroelectric projects (Southeast Asia's largest) with a total capacity of 12.8 billion kwh, has been completed and others being implemented: + Trung Son hydroelectric, + Ban Chat hydroelectric, + Duyen Hai 3 thermoelectric… + Mong Duong power plant; + Ninh Bình power plant; Those electricity plants will contribute to stability and adequate supply of electricity for production In conclusion: In 2014, there will be 14 new electricity plants to operate with the capacity is 4,031 MW, to increase the total capacity to 33,017 MW. This guarantee for the supply of electricity for the production. Why Vietnam?Political & Social Human Global Security Resource Integration Natural Resources Legal Why Vietnam? Environment Geographic Economic Growth Location & Competitive Market Potential Business Costs II. FDI IN VIETNAM AND KOREA FDI IN VIETNAM 15 II. FDI IN VIETNAM Up to February 2014 there are 16.053 FDI projects, with total registered capital of nearly 235 billion USD In recent years implementation capital in 10,5-11,0 billion USD 2012 Source: Ministry of Planning and Investment 16 10 BIGEST INVESTORS IN VIETNAM Unit: billion USD Source: Ministry of Planning & Investment 17 FDI IN VIETNAM BY SECTOR 18 Source: Ministry of Planning and Investment VIETNAM-KOREA RELATIONSHIP To February 2014 Korea is the 3rd largest investors in Vietnam with total registered capital of more than 30 billion USD and in the first rank amount of projects with 3,647 (Vietnam is the 3rd largest oversea investment location of Korea after America and China). − The biggest Korean companies in the FORTUNE 500 list investing in Vietnam are Samsung, LG, GS, Posco, Hyundai, SK ... − Investment of Korean companies has been focused in manufacturing, processing, infrastructure, construction, service ... − Signed Agreement on Investment Promotion and Protection (1993), Agreement on Double Taxation Avoidance (1994). − Korea-Vietnam trade reaches 27.3 billion USD in 2013, (in 2012 its is 21 billion USD), FTA between two countries is in progress (In 2020 the bilateral trade will be 70 billion USD). − Korea is the 2nd largest bilateral donor for Vietnam with around 1,2 billion USD commitment soft loan (EDCF) in 2012 ~ 2015. 19 KOREA INVESTMENT IN VIETNAM 6 Korea investment tendacy to Vietnam (1988 ~ 2012) (Unit:billion USD) 5 3 2 1 0 KOREA INVESTMENT IN VIETNAM Korea investment tendency to Vietnam (2008 – 2013) (Unit: billion USD) 2008 2009 2010 2011 2012 8/2013 Registered 5,276 1,895 2,545 1,467 1,285 0,99 capital New capital 4,278 1,623 2,089 0,873 0,777 0,68 Increased 0,998 0,275 0,456 0,591 0,508 0,31 capital −The new registered capital is increasing trend. −Investment capital in processing, manufacturing has been increasing. 21 KOREA FDI IN VIETNAM ( BY SECTORS ) Dvụ lưu trú và ăn uống Bán buôn,bán lẻ;sửa 2% chữa 1,4% Vận tải kho bãi 3,7% CN chế biến,chế tạo Nghệ thuật và giải trí 50% 3,7% Xây dựng 8,5% KD bat động sản 27,3% 22 Source: Ministry of Planning and Investment KOREA FDI IN VIETNAM ( by localities) Investment capital ( Localities No. projects billion USD) 1 Hanoi 690 4,778 2 Ho Chí Minh city 893 3,742 3 Ba Ria – Vung Tau 55 3,573 4 Đong Nai 273 3,489 5 Binh Duong 488 1,566 6 Hai Phong 47 1,130 7 Bac Ninh 165 0,724 8 Đa Nang 30 0,695 9 Quang Ngai 7 0,681 10 Long An 79 0,556 49 other provinces 656 3,928 Total 3.292 25,731 23 III. INVESTMENT POLICIES IN VIETNAM 24 III. INVESTMENT POLICY IN VIETNAM 1. Investment Guarantees 2. Incentive Investment Sectors and Regions 3. Investment Incentives 4. Government Supports to Investment 5. Investment procedures 25 Investment Guarantees No nationalization or confiscation of investors’ assets Protection of intellectual property rights Remittance of capital and assets abroad Application of uniform prices, fees and charges Investment guarantees in the event of changes in law or policies 26 Incentive Investment Sectors and Regions Incentive investment sectors Geographical areas of investment incentives • Manufacture of new material, new • Areas with difficult socio-economic energy, high-tech products, bio- conditions; areas with specially technology, information technology difficult socio economic conditions. • Agricultural, forestry and • Industrial zones, export processing aquaculture zones, high-tech zones and economic • Labor intensive industries; zones. • Infrastructure development • Education, training, health, sports • Development of traditional crafts and industries 27 CIT INVESTMENT INCENTIVES . Some special incentives: 10%: • 15 years (special difficult localities, high-tech parks) • 15 - 30 years (special investment attraction sectors) • For all life of projects (education, Health care, culture, sport, environment) 20%: From 01/01/2016 will be 17% • 10 years (difficult localities) • For all life of projects (Agricultural cooperation, people credit Fund) General Rate(CIT) : From 01/01/2014 CIT 22% and from 01/01/2016 will be 20% CIT exemption and reduction: apply for investment incentive sectors and investment incentive localities maximum tax holidays in first 4 years and reduction of 50% CIT in 9 following years. 28 CIT RATES Educatio n, Agricultur Techn High-tech, vocation al Special ology, infrastruct
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