DANANG INVESTMENT PROMOTION AGENCY 05-2017

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INVESTMENT NEWSLETTER 03DA NANG RANKED 3RD IN PAPI 2016

DA NANG TOPS PAR INDEX RANKING FOR 5TH CONSECUTIVE YEAR

CITY LEADERS ATTEND WORLD CITIES SUMMIT MAYORS FORUM

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ダナン市投資ニュースレター ダナン市投資ニュースレター

FDI INTO VIETNAM

FDI OVERVIEW

According to the Foreign Investment Agency (under the Ministry of Planning and Investment), Vietnam attracted more than US$12 billion in both new and additional foreign direct investment (FDI) pledges in the first five months of 2017, up 10.4% compared to the same period of 2016, So far this year, the country has licensed 939 new investment projects with a total registered capital of US$5.59 billion, equivalent to 73.9% of the 2016 figure. Another 437 projects have registered to increase capital by US$4.74 billion, up 83% from last year. As of May 20, FDI disbursement had reached US$6.15 billion, up 6% over the same period of 2016.

The manufacturing industry remained the largest FDI attraction in five months with an investment of US$8.09 billion, claiming 66.7% of the total figure for the period. The mining sector came second with US$1.28 billion (10.5% of the total), followed by the retail and wholesale industry with US$798 million (6.5% of the total).The Republic of Korea was the largest foreign investor in Vietnam in the first five months of 2017 with a US$4.41 billion (36.4% of the total) investment, followed by Japan with US$1.94 billion (16%) and Singapore with US$1.23 billion (10.21%).

FDI INTO VIETNAM IN THE FIRST 5 MONTHS 2016

Indicator Unit First 5 month in 2016

First 5 month in 2017 Growth(%)

Realized capital Mil. USD 5,800 6,150 106

Registered capital Mil. USD 10,987.99 12,130.29 110.4

Newly-licensed capital Mil. USD 7,566.9 5,595.33 73.9

Increased capital Mil. USD 2,592.1 4,742.93 183.0

Newly-licensed projects Projects 907 939 103.5

Capital- increased projects Projects 425 437 102.8

Export (Including crude oil) Mil. USD 48,121 57,244 119.0

Export (Excluding crude oil) Mil. USD 47,203 56,155 119.0

Import Mil. USD 38,908 49,591 127.5

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Processing and Manufacturing

Other

Source:Foreign Investment Agency (FIA) Vietnam’s Ministry of Planning and Investment

Mining

Wholesale, retail and maintenance

Real Estate

FDI INTO VIETNAM BY SECTOR

TOP 5 FDI INVESTORS IN VIETNAM

CountryNewly issued

projects

Newly-registered

capital (US$ million)

Increased- capital

projects

Additional registered

capital (US$ million)

Newly-registered and additional

capital (US$ million)

South Korea 309 1,258.97 153 2,826.35 4,085.32

Japan 137 1,538.59 75 257.44 1,796.03

Singapore 67 597.77 29 473.19 1,070.96

China 90 756.58 21 98.79 855.37

Taiwan 34 82.28 36 563.81 646.09

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FDI INTO DANANG

According to the statistics of Da Nang Department of Planning and Investment, from January 1st to June 1st, 2017, 33 FDI projects were granted the Investment Certificates with a total newly-registered capital of USD 30 million, and 04 FDI projects increased their registered capital with a total capital of 2,190 million USD.

As of June 1st, 2017, there were 502 FDI projects in force with total registered investment of US$3,252 mil. Most of the projects are processing-manufacturing, consultancy-management, information technology & communication and import & export rights…

67%

10%

6%

5%12%

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NEWS - EVENTS

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Investment agreements worth US$22 billion were signed between Japanese and Vietnamese firms at the Conference on Investment Promotion organized on June 5th in Tokyo, Japan.Japanese PM Shinzo Abe assured that he and his Vietnamese counterpart will continue their strong support for Japanese firms’ investment activities in Vietnam through high-quality infrastructure projects, investment improvement and personnel training.Vietnamese Prime Minister Phuc hoped that there would be a new wave of investment from Japan to Viet Nam.

STRENGTHENING VIETNAM AND JAPAN’S RELATIONSHIP

The capital flow from the US is expected to open up a new chapter in investment cooperation with Vietnam.At recent workshops on Vietnam-US prospects in 2017 and the following years in Hanoi and Ho Chi Minh City, a large number of US companies affirmed to increase investment in Vietnam.

US INVESTMENT FLOW INTO VIETNAM OPENS UP NEW OPPORTUNITIES

With the economy growing around 6-7% in the past few years and the population approaching the 100 million mark, Korean businesses acknowledge Vietnam as an attractive investment destination. Mr. Park Chul Ho, General Director of KOTRA said that many production plants have been moved from regional countries in to Vietnam.After the Vietnam-Korea Free Trade Agreement (VKFTA) came into effect in 2016, the import-export turnover of the two countries has increased. Korea is still the leading country in terms of total investment capital and number of investment projects in Vietnam in the first three months of 2017, with $ 3.74 billion (approximately 49% of total investment).

KOREAN BUSINESSES EYE ON VIET NAM

According to Cushman & Wakefield, the Asia-Pacific region’s (including India) real estate sector is expected to garner investments worth USD 611 billion of the total 1,394.3 billion in the current year. Along with Japan, Singapore and Korea, Hong Kong is the biggest investor in the field of real estate in Viet Nam. The Chairman of Hong Kong Trade Development Council (HKTDC) said that Hong Kong is ready to support and facilitate planned infrastructure projects such as rail and road networks, sea and river ports in Vietnam.Hong Kong investors mainly interested in the form of 100% foreign-invested projects. In 2014, Hong Kong investors had 45 real estate projects in Vietnam with registered capital of approximately $ 2.5 billion.

HONG KONG BUSINESSES KEEN ON VIETNAM INFRASTRUCTURE PROJECTS

The International Monetary Fund (IMF) has projected Vietnam’s economic growth in 2017 at 6.5%, the highest among all Asian nations, and 6.3% for next year. According to IMF report, GDP growth of the ASEAN 5 (including Indonesia, the Philippines, Thailand, Malaysia, and Vietnam) will exceed 5% per year from now until 2022.

VIETNAM IS AMONG THE FASTEST GROWING ECONOMY IN ASIA

According to HSBC’s report, stable macroeconomy creates a favorable environment for enterprises to operate and develop, so FDI inflows continue to grow in Vietnam.

VIET NAM’S STABLE INVESTMENT ENVIRONMENT LURES FDI TO THE COUNTRY

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Vietnamese Prime Minister Nguyen Xuan Phuc said he is confident economic growth this year will meet a government goal of 6.7 percent without adding to inflation, despite weak expansion last quarter.Inflation eased to a nine-month low of 3.19 percent in May, the statistics office reported. Exports rose 17.4 percent in the first five months from a year earlier while pledged foreign direct investment increased 10.4 percent.

VIETNAM'S PRIME MINISTER STRONGLY BELIEVED OF 6.7% GROWTH GOAL

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Hosting the conference, Vietnam is looking at a rare opportunity to push FDI from APEC members to grow even faster. In 2006, when Vietnam also hosted the APEC, dozens of agreements and contracts were signed with other member states, valued at billions of dollars. A good example would be the 10 cooperation agreements with China, valued over $3 billion. “APEC 2017 is a golden opportunity for Vietnamese companies to connect more with APEC partners,” said Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry.

On May 17, Prime Minister Nguyen Xuan Phuc signed Directive 20 adjusting inspection and examination practices and requesting government agencies to tackle the issue. Specifically, an enterprise will be inspected for no more than one time per year. In case inspection plans coincide with state audit plans, inspectorates must work with the State Audit Office and the Government Inspectorate to avoid repeatitive inspection.

With growing innovation in the sector, experts and investors note that wind power projects in Vietnam will be feasible with an 8-9 US cent per kWh feed-in-tariff. The Vietnamese government has approved several programmes to encourage the development of renewable energy in the country, including the Renewable Energy Development Strategy to 2030, with a vision to 2050.

HOSTING OF APEC 2017: VIETNAM EXPECTS TO ATTRACT MORE FDI INVESTMENT

DIRECTIVE ORDERS FOR FEWER INSPECTIONS

WIND PROJECTS OFFER PROMISING FUTURE

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Da Nang has topped the 63 cities and provinces nationwide in the Provincial Public Administration Reform Index (PAR INDEX) 2016 for the 5th consecutive year. Da Nang gained 90.32 out of 100 points. Following closely behind were Hai Phong City with 87.24 points and Ha Noi with 85.23. Da Nang Vice Chairman Minh proudly said that city’s remarkable achievements in administrative reform over recent years have been mainly attributed to the great care and timely guidance from the local leaders, and the exemplary actions of local relevant agencies.

DA NANG TOPS PAR INDEX RANKING FOR 5TH CONSECUTIVE YEAR

With regard to the Lien Chieu Port, the 1st stage of the project will be started soon, using the public-private partnership (PPP) format. In particular, funds from the national budget will be spent on building a breakwater, the dredging of the port’s entrance channel, and other necessary technical facilities. Meanwhile, the cost of installing the infrastructure and other equipment will come from private sector investment.

Within the framework of the visit to Japan of Da Nang city delegation led by Mr. Ho Ky Minh, Vice Chairman of the Da Nang People’s Committee from May 22nd to May 25th, the city organized many tourism – investment promotion activities in Saitama and Sapporo, aiming at approaching investors in these localities.

Da Nang has been ranked 3rd in the Viet Nam Provincial Governance and Public Administration Performance Index (PAPI) 2016, the 6th consecutive year that the city has been in the top 5.In detail, Da Nang scored 38.58 points, after Can Tho City with 39.57 and Ha Tinh Province 39.32. Da Nang achieved high scores in the rankings of transparency, vertical accountability, public administrative procedures, and public service delivery.

LIEN CHIEU PORT PROJECT TO START SOON

DA NANG ENHANCES INVESTMENT – TOURISM PROMOTION ACTIVITIES IN JAPAN

DA NANG RANKED 3RD IN PAPI 2016

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On May 20th, Deputy Director of Da Nang Investment Promotion Agency Mr. Le Minh Tuong had a meeting with Niigata Youth Association delegation led by Mr. Hiroto Ebe, Chairman of the Association in the framework of their visit to Da Nang city.At the meeting, the delegation was briefed about the current affairs, developing orientation, investment potentials and opportunities in Da Nang; exchanging information on the development of such sectors as investment in tourism, seaport, hi-tech park…

YOUTH ASSOCIATION FROM NIIGATA, JAPAN EXPLORE DA NANG INVESTMENT ENVIRONMENT

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On May 12th, a total of over 400 representatives from businesses operating in Da Nang and local business associations attended the 2017 Business Dialogue at the city’s Administrative Centre. The event focused on some major issues, including analysing the city’s Provincial Competitiveness Index in 2016, answering questions raised by local business people and collecting their constructive opinions about furthering the city’s progress.

The People’s Committee has issued Decision No. 2406/QD-UBND dated 03/5/2017 on Regulation on coordination in investment promotion and support for foreign direct investment projects implemented outside Industrial Parks, and Hi-tech Park.This Regulation stipulates the methods, contents and responsibilities of coordination between the Da Nang Investment Promotion Agency and other related departments in settling some administrative procedures for investors from the investment preparation stage until completion.

2017 BUSINESS DIALOGUE:GOOD CHANCE FOR CONCERNS RAISED BY BUSINESSES TO BE HANDLED

REGULATION ON COORDINATION IN INVESTMENT PROMOTION AND SUPPORT FOR FOREIGN DIRECT INVESTMENT PROJECTS IMPLEMENTED OUTSIDE INDUSTRIAL PARKS AND HI-TECH PARKS IN DA NANG

According to a spokesperson for the Da Nang Tourism Department, the city is likely to have welcomed 612,922 visitors by the end of May, which will be an increase of 46.8% compared with the same period last year. Thanks to this, the local tourism sector is predicted to have earned over 1,800 billion VND in revenue, a rise of 48.8% compared with the previous year.

TOURIST ARRIVALS LIKELY TO BE UP 46.8% IN MAY

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The central city of Da Nang expects to attract at least 10 investment projects into its hi-tech park by 2020, including at least one major project of a multinational hi-tech company.The target is set in Da Nang’s plan on industrial development until 2020. Under this plan, the city also wants to become an investment destination of two or three leading IT firms of the world. The city welcomes projects which save natural resources and fuel, use clean technologies, and create consumer-safe and eco-friendly products.

DA NANG EXPECTS TO LURE AT LEAST 10 HI-TECH PROJECTS BY 2020

Danang Power Company successfully completed and put into operation the 110kV Hoa Xuan substation - the key project serving the APEC 2017 event which will take place in Da Nang city in November 2017.

According to the Da Nang Department of Industry and Trade, the city’s Industrial Production Index over the first 4 months of this year rose by 12.4% against the same period last year, 2.5 times more than the national average, ranking 3rd nationally.Over the 4-month period, mining sector jumped by 29.5%, the processing industry increased by 11.8%, electricity production and distribution climbed by around 14%, and water supply and garbage treatment went up by around 8%.

On 9 May, the Da Nang International Terminal Investment and Operation Joint-Stock Company (AHT) held a ceremony to officially open the new international terminal at the Da Nang Airport.The new - terminal, which covers an area of 21,000m2, involved a total investment of approximately USD 156 million. The project is comprised of four main items: the international passenger terminal, an overpass in front of the terminal, a technical building, and a new parking area. It will accommodate 6 million passengers per year, and serve 1,600 passengers in total at peak hours.

COMPLETED 110KV HOA XUAN SUBSTATION CONSTRUCTION SERVING APEC 2017

INDUSTRIAL PRODUCTION INDEX UP BY 12.4% IN FIRST 4 MONTHS

NEW TERMINAL AT DA NANG INTERNATIONAL AIRPORT OPENS

With just six months to go to the APEC Economic Leaders’ Week 2017 (AELW) in Da Nang, the city authorities have been making every effort to accelerate the construction of local key projects.

CONSTRUCTION PROJECTS FOR APEC 2017 PROGRESSING WELL

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ダナン市投資ニュースレター ダナン市投資ニュースレター

NEW LEGAL REGULATIONS

Circular No. 02/2017/TT-BKHDT dated April 18th, 2017 of the Ministry of Planning and Investment on guiding the mechanism for cooperation in processing of applications for investment registration and enterprise registration submitted by foreign investors

Decree 53/2017 / ND-CP: Legal documentation on land for construction license

Accordingly, the foreign investor (“Investor”) has the right to choose the investment registration and enterprise registration under the coordination mechanism as provided in Circular 02 or to carry out each procedure pursuant to the normal regulations for the cases.For the One-Stop Mechanism, the Investor needs to submit only one copy of the following documents if there are duplicates in the two registration dossiers: (i) Passport or personal identification paper if the Investor is an individual; (ii) Establishment Decision or Enterprise Registration Certificate if the Investors are the organizations; and (iii) Power of attorney by the Investors.The Circular comes into effect from 15/06/2017.

Accordingly, papers falling into one of the following categories will be considered as legal papers on land for construction permits: The land use right certificate; Certificates of land use rights, ownership of dwelling houses and other assets attached to land; Certificates of ownership of dwelling houses and the right to use residential land; Certificate of ownership of housing; Certificate of construction work ownership; Papers on land for cases where the land is allocated or leased by the State or changed land use purpose; Report on the review and declaration of land use status; Documents on the ranking of historical-cultural relics and scenic places, etc. This Decree takes effect from June 25th, 2017.

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Da Nang will revoke stagnant coastal projects if developers fail to resume construction as committed. Secretary of the municipal Party Committee Nguyen Xuan Anh said the project would be revoked if the developer failed to implement or resume construction after 24 months from the date the developers signed the commitment.

Budget carrier VietJetAir plans to launch a new route from Da Nang to Japan’s Osaka later this year. It will become the second budget airline to offer the new air route. The new route will help attract more Japanese tourists and investors to Da Nang, and elsewhere in the central region.

A group of Da Nang’s leaders, led by municipal Peoples’ Committee Vice Chairman Ho Ky Minh, attended the 2017 World Cities Summit (WCS) Mayors Forum in Suzhou City, Jiangsu Province, China between 17 and 19 May. The annual Forum took the theme ‘Livable and Sustainable Cities: Embracing the Future through Innovation and Collaboration’, and was a flagship event of the WCS.

Approval has been given by the Da Nang People’s Committee to build a 20ha logistics centre in Hoa Vang District. The soon-to-be-built centre borders Nam Hai Van Bypass to the northeast, the Hoang Van Thai extended road leading to the Ba Na Hills Resort to the southwest, the Minh Dai company to the northwest, and an area which has been earmarked for the Da Nang Logistics Centre Expansion project to the southeast.

THE CITY DETERMINED TO REVOKE STAGNANT COASTAL PROJECTS

VIETJETAIR TO LAUNCH DA NANG-OSAKA ROUTE

CITY LEADERS ATTEND WORLD CITIES SUMMIT MAYORS FORUM

20HA LOGISTICS CENTRE TO BE BUILT IN HOA VANG DISTRICT SOON

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Decree No. 43/2017/ND-CP dated April 14, on goods labeling

Under Government Decree No. 43/2017/ND-CP dated April 14, on goods labeling, a label’s compulsory information includes name of the goods, name and address of the organization or individual responsible for goods, origin of goods and other information depending on characteristics of the goods. The Decree also requires goods imported into Vietnam of which original labels are incompliant with this Decree or lack some prescribed compulsory information to have additional labels in Vietnamese to be enclosed with the original ones.This Decree will take effect on June 1st, 2017.

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UPCOMING EVENT

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Circular No. 37/2017/TT-BTC on amendment to the Circular No. 39/2014/TT-BTC and the Circular No. 26/2015/TT-BTC on providing instructions regarding sales invoices

Decision No. 13/2017/QD-TTg on amendments and supplements to the List of high technologies prioritized for development investment and the List of hi-tech products eligible for development promotion

Certain noticeable contents are included in this Circular as follows:- Notice of sales invoice issuance and sample sales invoices must be submitted to a tax authority within the maximum duration of 02 days before commencement of use of these sales invoices; - Unless otherwise informed in writing by the tax authority after 2 business days of receipt of the written request for use of internally- or externally-printed sales invoices, the requesting enterprise may use these sales invoices. In such case, the head of the tax authority will be responsible for failure to send his/her written response to the requesting enterprise.The Circular No. 37/2017/TT-BTC is going to enter into force from June 12th, 2017.

Accordingly, Decision No. 13/2017/QD-TTg changed names of some technologies on the List of high technologies given priority including Internet of Things; Virtual Reality; Augmented Reality; Smart television; 3D printing.The Decision added to the List of recommended hi-tech products the following products: Embedded IoT solutions, modules, equipment, software; Virtualization and cloud computing software, equipment, solutions and services; Software, equipment, solutions, services for e - government, e - enterprises, e - commerce, e - training, e - advertising; Virtual reality and augmented reality software, equipment, solutions and services; Smart television software, equipment, solutions and services; Auto - software testing software, equipment, solutions and services, etc.This Decision takes effect from 15/06/2017.

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DANANG INVESMENT PROMOTION AGENCY18th Floor, Danang Administrative Center, 24 Tran Phu St.

Danang CityTel: +84 236 3 886 243 | Fax: +84 236 3 810 056

Email: ipa@danang.gov.vn

EVENT TIME PLACE

Economic - Investment

Vietnam Business Forum 16/6/2017 Sheraton Hotel, Ha Noi

International Exhibition on Digital Agriculture and Organic Products (D-AGROTECH 2017)

14-16/7/2017 Phu Tho Indoor Sports Stadium, Ho Chi Minh City

Da Nang Start-up Wave 2017 (SURF 2017) 21-22/7/2017 Grand Tourane Da Nang Hotel

(252 Vo Nguyen Giap)

Build Eco Expo Asia (BEXASIA2017) 12-14/ 9/ 2017 Marina Bay Sands, Singapore

Conference on investment attraction into hi-tech applied agriculture TBD Da Nang Administration Center

Culture – Society

Da Nang Summer Destination 17/06 – 26/06/2017

Pham Van Dong beach, Vo Nguyen Giap Street, Da Nang

City

Da Nang International Fireworks Festival Closing Ceremony & Final Round

24/6/2017 Han River, Da Nang

Da Nang Street CarnivalFriday nights and Saturday

nightsVarious streets

Da Nang Street Music

The second and fourth Saturday nights of

each month

Bach Dang Street, Da Nang

Manulife Da Nang International Marathon 6/8/2017 Various streets