Business Environment in Vietnam

In 1995 Vietnam became member of the Association of South-East-Asian Nations (ASEAN), in 1996 participated in the ASEAN Free Trade Area (AFTA) and joined the Asia Pacific Economic Forum (APEC) in 1998. The membership in the World Trade Organization (WTO) is expected to happen in 2006.

Vietnam promulgated an entirely new Law on Enterprises in 2000, which forms the legal framework for establishing and operating private businesses.

The Bilateral Trade Agreement between Vietnam and the USA was signed in 2001 and took effect in 2002.

GDP grew by 6.7% in 2002, one of the highest rates in the region and worldwide. For 2003 a GDP growth of more than 7% is expected.

Compared with 2001, in 2002 exports increased by 10% to USD 16.5 billion, imports increased by 19.3% to USD 19.3 billion. The trade deficit amounted USD 2.8 billion.

At the beginning of 2003, a total number of 3,702 foreign invested projects had been licensed with total registered capital of USD 38.3 billion. The capitalization rate is about 57% in average. Singapore is the largest investor with USD 7.36 billion and 254 projects, followed by Taiwan, Japan, South Korea and Hong Kong.

To initiate your business activities in Vietnam, there are three major possibilities:

• A representative office
• A branch office
• An investment license for projects and investment activities under the Law of Foreign Investment in Vietnam