Investment in Vietnam Remains Steady Despite Lagging Economy

February 21, 2013 Posted by Vietnam Briefing Reading Time: 2 minutes

Feb. 21 – Vietnam’s current economic worries are expected to continue in 2013, yet many businesses still maintain confidence and optimism in expanding their investments.

In the fourth quarter of 2012, 37% of Vietnamese citizens believed that the employment outlook was either good or very good. 40% of citizens responded in the same vein during the third quarter of 2012. Despite declining figures, 44% of Vietnamese consumers believed that their personal finances would be in a good or very good shape this year.

Caution remains, however. Inflation rates in Vietnam have now risen to become the highest in Southeast Asia. Inflation accelerated to 7.07 percent in January, with Vietnam’s 2013 inflation rate now expected to climb to somewhere between 8 and 10 percent (2 percent higher than the target set by the Vietnamese government).

Meanwhile, economic and corporate restructuring has been carried out slowly and inefficiently. Technical innovation in industrial production has been lackluster, resulting in stagnant growth, and a reliance on processing and outsourcing.

In spite of this, the southern coastal province of Ba Ria-Vung Tau held an ‘Investment Day’ this week. The event, which had a total attendance of over 200 local and foreign investors, went well as the local government presented investment certificates to five projects worth over US$28 million. The five projects pledged a total capital of more than US$139 million, predominately in the fields of industry, real estate and services. In addition to foreign direct investment (FDI), the local government also boosted Ba Ria-Vung Tau’s appeal to domestic investors in the tourism and renewable energy sectors.

Last year, the province of Ba Ria-Vung Tau attracted nearly US$500 million in new investment pledges. As of the end of 2012, there has been a total of 300 FDI projects capitalized at over US$27.5 billion, with 410 locally invested projects worth nearly US$11 billion. In addition, the number of enterprises in the province had been steadily rising, with nearly 9,000 enterprises now registered in the region.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email vietnam@dezshira.com, visit www.dezshira.com, or download the company brochure.

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