How Vietnam Real Estate Sector Performed in 2015?

Invest in real estate in Vietnam

The the real estate industry in 2015 have beee influenced by foreign investors and easier access to credit source.

With the credit easing policies, foreigners are allowed to buy houses in Vietnam and the infrastructure development has been the driving force for the recovery of the real estate market in 2015. The real estate industry outlook in 2015 will come from foreign investors and the easier access to credit source. Then, the B and C class apartment segment with prices ranging from 50,000 USD/apartments with full infrastructure, near the metro will attract attention in 2015.

Credit easing policy and interest rates on deposits and loans are at their lowest in 3 years; therefore, this is a good time to invest. Moreover, changes in Circular 36 will help reducing the risk factors for real estate loans, thereby creating more room for credit loan and lending rates are at their lowest in 3 years will encourage real estate businesses continue to develop projects to serve the increasing demand. It is expected that low interest rates will make the cash flow moving into other investment channels such as real estate.

Foreigners now can own houses are also the catalyst for the real estate market in 2015. Currently with nearly 80,000 foreigners are working in Vietnam, the home owning is expected to be a catalyst for the real estate market to become more active in 2015.

In addition, the lending conditions for the 30,000 billion VND lending package will be simplified, thereby helping to speed up the disbursement of this package in 2015.

The year 2015 witnesses the return of speculators, private investors in the real estate market. Mainly the apartments in segment A and B are their targets when the price of those segment decreased by 20 -25% compared with the peak of the market.

Besides, the development of infrastructure is also the motivation for the growth of the real estate market. With the expectation that in 2015 the Government will maintain the spending of over 3 billion USD for infrastructure, construction and expansion of roads, railways, power grids…, that will actively support the development of real estate market. The most obvious evidence is the construction of Metro no.1 in 2014 has attracted more real estate projects on the path of the Metro line.

Some notably infrastructure projects in 2015:

+ Complete Nhat Tan Bridge: The Ring Road 2 connect with the Nhat Tan Bridge will help reducing the travel time around Hanoi as well as connecting to Noi Bai International Airport. This will be a positive landmark for real estate projects in the northwest corridor of the capital.

+ Complete the Hanoi – Hai Phong highway: The 106 km long highway linking Hanoi and Hai Phong – the largest port city in Northern of Vietnam will help real estate projects in Long Bien and Gia Lam becomes more vibrant.

+ Complete the Ho Chi Minh City (HCMC) – Dau Giay highway and continue building the Ring Road 2 in HCMC will help the real estate projects in the Eastern of the city (District 2, 9, Thu Duc) becomes more attractive.

+ Construction of Ben Luc – Long Thanh highway: This is a part of Ring Road 3 that will connect Long An to Long Thanh International Airport in the future without having to go through the central districts of HCMC. The project is expected to help improving the real estate market in the Southern of HCMC.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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Good Risk Management for Enterprise – The Key to Success

Risk Prevention in Vietnam

Risk is an inevitable factor in business operation activities, higher return is always accompanied by higher risks. Coping and managing risk is an integral part of any business if you want to make profit and create value to shareholders. However, in fact, there are a lot of businesses does not manage risk effectively and furthermore not fully understand about the risks that they are facing.

Risk can be defined broadly as any factors or events could drive business and production activities of the enterprise below forecasted. Specifically, the measures that are commonly used as capital risk, profit risk or cash flow risk, depending on the emphasis that are accounting balance sheet and statement of cash flows.

According to the Vietnam Ministry of Industry and Trade, in recent times, there are many corporate scams between Vietnam and foreign enterprises. In particular, the main behaviors are foreign companies purchase/sell goods or provide services for partners in Vietnam and the Vietnam partner fail to make payment.

Typically, a director has scammed 3 billion VND of foreign companies and he was arrested. Although his company does not have pepper but he still receives nearly 350,000 USD of the Egyptian company, then appropriated half. According to the investigation, a few years ago, Vinamex Co., Ltd signed contract with a Libya company in Egypt to sell 4 black pepper containers with price of 669,600 USD even though the Vinamex Company do not have condition to implement the contract and also do not have goods.

To obtain the money of partners, the Director of Vinamex forging multinational bills of lading, certificate of plant quarantine and then send to Lybia Company. The Lybia Company then transfer to Vinamex a deposit amount of 348,300 USD. After that, Vinamex’s director withdraws all money to pay for his company’s debt.

After months have been urging, the Vinamex Company buy a container of black pepper worth 174,150 USD and then send to Lybia Company. The remaining amount equivalent to 3 billion VND was appropriated by the Vinamex’s director. The Lybia Company has adopted Vietnam embassy in Egypt to submit the denunciation.

In fact, many business leaders often put heavy emphasis on the business activity, profit, and revenues instead of concentrating more on risk management. Improving risk management process will create a tight and effective control of the Board of Directors, on the other hand will help integrate the risk management process into every daily decision-making process.

Businesses do not improve the risk management process will be faced with a lot of different types of risks: financial losses serious, adverse effects on cash flows and the value of shares, as declining prestige with customers, employees and investors.

Businesses that do not improve the risk management process will have to face with a lot of different types of risks: serious financial losses, adversely affecting cash flows and the value of shares, decreasing prestige with customers, employees and investors.

In the period of global crisis had been predicted that almost bottomed out and started to show signs of recovery, although the recovery process can occur with different speed and characteristics depending on sector and location of the business, the fully preparation of business in all aspects including process and risk management strategy could helps business not falling into the passive and also have more possibilities to take advantage of growth opportunities after the recession.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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Vietnam: The World Largest Smart Phone Manufacturer Headquarter

set-up business in Vietnam

Samsung has become the largest investor in Vietnam by setting up factory to produce electronics products in Vietnam and then export to more than 50 countries in the world.

According to Mr Hyun Woo Bang – Deputy General Director of Samsung Vietnam, the cheap and abundant labor source is not the main reason leading to the decision to expand Samsung’s investment in Vietnam.

In a recent meeting with the Ministry of Information and Communications, a leader of Samsung has revealed that each 100 employees in the mobile segment of Samsung, there are 80 Vietnamese. Currently, the corporation is employing around 130,000 employees in Vietnam.

In 1995, Samsung started to invest in Vietnam, so far has been 21 years. Since 2008, Samsung has formally invested in mobile phone manufacturing factory. Currently, Samsung has about 130,000 Vietnamese workers. There were so many people questioning if Samsung invested in Vietnam because of cheap labor. However, labor is not the most important factor. In terms of labor resources, Vietnam is not the richest country in comparison with India. Regarding labor costs, there are many other countries in the region also having cheaper labor costs than Vietnam. The quality of Vietnam’s labor is also not the best in comparison with surrounding countries.

Samsung invests in Vietnam is a strategic decision of the corporation based on the economic developments, tax policy, stable political factor, labor sources, the ability to import raw materials…

So far Samsung has invested nearly 15 billion USD in Vietnam. The two largest projects of Samsung in Vietnam are Samsung Electronics Vietnam (SEV) with an area of 110 ha in Yen Phong, Bac Ninh and Samsung Electronics Vietnam Thai Nguyen (SEVT) on an area of 170 ha in Pho Yen, Thai Nguyen. These two factories are producing and assembling mobile phone, tablet and phone components. Products from these factories will be exported to more than 50 countries and territories worldwide.

In addition, Samsung has recently invested more than 3 billion USD in Samsung Display (Bac Ninh); 300 million USD in R&D center specialized in researching and innovating new products.

In 2015, Samsung exported about 32.5 billion USD and two factories in Bac Ninh has provided 200 million mobile phones globally. In 2016, the factory in Ho Chi Minh City and Samsung Display will continue to go in operation with great outputs providing to the global market.

Vietnam has become the largest smart phone manufacturing headquarter in the world. Samsung has 9 factories and investing in many countries, but their investment in Vietnam is the largest.

In many countries around the world, the business environment of Vietnam is very stable. Perhaps because of large investments, Samsung always get the support from the Government and local authorities. Currently, there is a shift of capital flows of multinational corporations from one country to another. Therefore, Vietnam should base on the new context to offer attractive strategy accordingly.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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Game on Mobile Phone Industry in Vietnam

Industrial regulatory in Vietnam

About 3-4 years ago, the world’s game industry is undergoing a very big transformation, witnessing the rise of mobile gaming which outperformed the traditional platforms such as PC or console. In Vietnam, the gaming industry also falls in line with the world trend, many new companies or even large organization had developed mobile game.

In 2015, internet users in Vietnam reached 45 million, accounting for 48.4% of the total population of 93 million. The smartphone users reached 24 million, accounting for 25.8% of the total population, of which 9.3 million of mobile gamers and players loaded fee rate was 45%, reaching ARPPU index (average revenue average per player) is $ 27.71 (619.000 VND).

Until the end of 2015, the number of smartphone devices in Vietnam has reached $37 million, accounting for 52% the total number of mobile devices in the country. It can be seen from the General Statistic Office that from 2012 to 2015, 10 million devices have entered Vietnam’s market each year. Besides, Vietnam’s market has not come to saturation, so the potential growth for mobile gaming devices will continue to stay strong for at least 5-10 more years.

In terms of proportion of smartphone users based on age, the largest groups is from the age of 16-34 years old which accounted for 80% in 2015. In this group, the users from 16 – 24 years old take up to 45%. Besides, it can be noticed a remarkable rise of user groups of the age of 16-24 since this percentage rose from 20% in 2013 to 45% in 2015, indicating a huge change of demand of smartphone and purchasing power of smartphone.

If classifying users according to operating system, Android is still the most popular operating system in Vietnam in 2015 which accounted for 60% of users, followed by the 25% of iOS and Windows phone has the smallest market share of 15%. However, Windows phone showed significant change in 2015 when compared to 2014 (4%). It indicates the development of a new market alongside iOS and Android. This is a unique point in the Vietnam mobile gaming market compared to other countries.

In terms classification depending on by device users and gender, smartphone devices still dominated completely with 90.3%, while tablet only accounted for 9.7%. In terms of gender, the rate does not differ hugely with 58% male and 42% female.

Smartphone game market value in Vietnam in 2015 reach $ 116 million (2,592 billion VND), the growth rate was 39.75% compared with 83 million dollars (1,854 billion VND) in 2014.

In terms of marketing channel for mobile gamers, social network such as Facebook channel remains an ideal place to promote game which accounted for 45%, followed by the local ad network (Admicro, Nova Ads …) accounting 30%, while Google and PR normally accounts for respectively 15% and 10%. Thus, both domestic companies that wish to penetrate the market will be highly recommended to use the ad unit local to achieve optimum efficiency.

In a paid form of payment, Vietnamese users can mainly use the phone (85%) to pay for the mobile gaming, followed by domestic bank card (10%) and Visa / MasterCard (5%). Thus, the mobile game usually have good links with the network provider of mobile phones in Vietnam. It is due to the fact that the users have not had the habit of using cards.

ANT Consulting assists clients with Market Entry, Legal Advice, Tax Advice and Outsourcing Services in Vietnam.

We are located in Hanoi, Da Nang and Ho Chi Minh City.

Talk to our consultants at +84 28 3520 2779 or email us ant@antconsult.vn

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