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Legal reform key amid trade conflicts

Published

2 months ago

March 13, 2025

Stronger legal commitments from the Vietnamese government are expected to increase investors’ confidence and maintain the country’s attractiveness and competitiveness.

Some producers are seeking policy clarity when it comes to VAT refunds and customs issues, photo Le Toan

At a dialogue between Prime Minister Pham Minh Chinh and the EU business community on March 3, Deputy Minister of Finance Nguyen Thi Bich Ngoc said the ministry was working with local authorities to expedite investment certification issuance and adjust tax policies to better align with the needs of businesses.

Ngoc made the statement in response to customs and tax policy proposals raised by investors, including Hung Yen Textile & Dyeing Co., Ltd. and HEINEKEN Vietnam.

The latter called for regulations to support wastewater reuse and circularity, including enabling cans to be recycled for the same application.

As Vietnam continues to assert its position as a global investment hub, enhancing trade facilitation has become critical. Claudia Anselmi, CEO of Hung Yen Textile & Dyeing, emphasised the need to clarify policies to support on-the-spot import-export. She also pointed out the issues in the current VAT refund system, which increases costs and impacts business competitiveness.

“Addressing these issues will help ensure that Vietnam remains an attractive destination for high-value manufacturing investments,” she said.

Review and reform

Together with tax policy, energy, healthcare and technology were among the big issues which foreign-invested enterprises (FIEs) are looking for further advancements.

Deputy Minister of Science and Technology Bui Hoang Phuong said, “Vietnam will prioritise development of AI, semiconductor tech, and cloud computing. The government will offer personal income tax exemptions and a five-year visa extension to engage high-tech professionals.”

He elaborated that the development direction for the aforementioned priority areas is stipulated in the draft Digital Technology Industry Law and the Science and Technology and Innovation Law, which are expected to be presented by the Ministry of Science and Technology to the National Assembly in May this year.

The draft Science and Technology and Innovation Law is scheduled for review and feedback at a National Assembly session in mid-2025, and is expected to be passed at the next session at the year’s end. The Digital Technology Industry Law is expected to be passed in May.

In the healthcare sector, Minister of Health Dao Hong Lan confirmed that the new Pharma Law, effective from July 1, will shorten the drug and vaccine approval process from five years to just eight months.

“The government is also actively working on drafting relevant decrees and circulars, and the minister encourages businesses to actively collaborate closely with the Ministry of Health,” she said, emphasising the need to harmonise standards with European regulations to accelerate the approval process for medical products.

Deputy Minister of Industry and Trade Nguyen Hoang Long responded positively to the business recommendations regarding stable access to green power.

“The government plans to issue new decrees aimed at developing between 80,000 and 100,000MW of renewable energy, while also promoting the self-produced, self-consumed electricity model to optimise clean energy capacity,” he said.

These commitments are expected to be driving forces for the EU business community and FIEs amid new challenges that are going to come from US trade tariffs. This has raised fresh concerns about a global trade war, which could increase difficulties for struggling economies.

As shown in a survey conducted in February by the American Chamber of Commerce (AmCham) in Vietnam, close to four-fifths of US companies operating in Vietnam are concerned about the possibility of the US imposing tariffs on imports from the Southeast Asian nation.

And more than 85 per cent fear the proposed US tariffs will reduce trade volume, disrupt business relationships and affect the Vietnamese economy.

“If the US imposes tariffs on products originating from Vietnam, the consequences will not only be limited to domestic enterprises but will also have strong impacts on FIEs. For example, a multinational corporation may have a component manufacturing factory in Vietnam, assemble it in Europe or Japan, and then export it to the US. When the US adjusts tariffs on a link in this chain, businesses will have to re-evaluate their production strategies, posing a problem for Vietnam in retaining investment,” said Le Net, lawyer at LNT & Partners.

Pham Minh Chinh, Prime Minister

Vietnam is committed to creating a transparent, stable, and favourable investment environment for foreign businesses. We appreciate the contributions of the European business community and will continue to listen, improve, and innovate for the sustainable development and mutual benefits of both sides

The government is committed to boldly addressing bottlenecks in administrative procedures, customs, and compliance costs. All difficulties will be resolved according to a specific roadmap: ministries will address issues in March, the government by April, and the National Assembly in May if necessary.

The rapidly changing global context requires both Vietnam and the EU to take a flexible and proactive approach. We might live 100 years, but we need a vision that spans 1,000 years, not only in investment but also in long-term cooperation, with individuals and businesses at the centre. Let us set a goal to increase economic growth from the European business community and from Vietnam, each by at least 8 per cent this year, aiming for double digits in the future.

Legal refinements

Some experts said that facing external tariff pressure, legal reform will continue to be an important tool for a country to retain its attractiveness and competitiveness. The Vietnamese government has made significant strides in improving the business climate. However, further refinements are being sought to create a more favourable business climate for the business community.

The Vietnam Chamber of Commerce and Industry vice president Nguyen Quang Vinh told VIR, “Policy stability is key, as large investors need a low-risk and predictable business environment. Countries in the region such as Indonesia, Malaysia, and the Philippines are actively improving the investment environment to engage foreign investment inflows. With increasingly fierce competition from these countries, Vietnam faces the risk of foreign investment capital shifting if it does not have appropriate policies.”

Vinh suggested that enhancing the legal environment was required, via ensuring consistency and transparency in policy issuance and implementation, and creating trust for businesses to make long-term investment. “Vietnam needs to continuously improve its investment environment and have a flexible foreign investment attraction strategy to maintain its position in the region,” Vinh further addded.

European Union Ambassador to Vietnam Julien Guerrier highlighted the need for clear and predictable regulations, uniform application of the law across all levels of administration and provinces and alignment with international standards. This will help Vietnam to unlock the full potential of EU-Vietnam trade and investment cooperation.

He reaffirmed Europe’s readiness to bring more investment, tech, and opportunities to Vietnam. EU-Vietnam trade has already reached €68 billion in 2024, with the EU-Vietnam Free Trade Agreement. Further progress means securing an inviting environment for investors in Vietnam with clear and predictable rules, consistent application including across provinces, and faster decision-making,” Guerrier said.

According to the Foreign Investment Agency under the Ministry of Finance, Vietnam enjoys big growth in foreign direct investment in the first two months of this year. Specifically, 516 new investment projects were registered, totaling more than $2.19 billion. This represented a 10 per cent increase in the number of projects, but a 48.4 per cent decrease in registered capital.

On the other hand, 256 ongoing projects received additional investment capital of $4.18 billion, marking a 42.2 per cent rise in project numbers and nearly a 7.4-fold increase in capital.

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Vietnam’s Exclusive Economic Zone boasts over 1,000 GW of wind power potential: report

Published

2 days ago

April 27, 2025

Industrialzone.net

Vietnam’s Exclusive Economic Zone (EEZ) has a wind power potential of 1,068 GW, nearly 470 GW more than previously estimated, according to a report released Friday by the National Center for Hydro-Meteorological Forecasting (NCHMF).

An offshore wind power project in Vietnam. Photo courtesy of VnEconomy.

The report, titled “Detailed Assessment of Wind Resource Potential in Coastal (up to 6 Nautical Miles) and Offshore Areas in Vietnam,” was conducted by the NCHMF with support from the United Nations Development Program (UNDP) and the Norwegian Embassy.

This wind potential was measured at a height of 100 meters above sea level, said Mai Van Khiem, director of the NCHMF. He noted that from November to February each year, wind capacity accounts for half of the annual total – peaking in December and gradually decreasing, with the lowest levels recorded in May.

The southern offshore areas account for 894 GW of this potential, while the northern areas contribute 174 GW.

In nearshore zones (up to 6 nautical miles), the total technical wind power potential is 57.8 GW. The Bac Lieu-Ca Mau region alone contributes nearly 30% of this, while the Ninh Thuan-Binh Thuan area accounts for 24 GW. Although the Quang Tri-Hue region has lower potential, it offers stable wind speeds during the winter months. The Red River Delta has a modest potential of 0.17 GW.

Compared to previous assessments, such as the World Bank’s 2021 study and data from the Global Wind Atlas (GWA), this report provides more detailed and higher-resolution information, both spatially and temporally.

“Notably, the EEZ potential outlined in this report exceeds the World Bank’s estimate by 469 GW, primarily due to the broader scope of the survey and more refined climate modeling using domestic observational data,” the research team explained.

They also emphasized the use of the Weather Research and Forecasting (WRF) model customized specifically for Vietnam, which enhanced the accuracy of the results.

The findings are based on wind data collected from 26 coastal and island meteorological stations, satellite sources from CCMP, ASCAT, and SCATSAT-1 (covering 30 years of ocean surface wind data), as well as buoy data from Nghe An province and seabed depth measurements.

A key innovation in this report is the integration of potential impacts from extreme weather events. Typhoons and tropical depressions occurring between August and October pose structural and safety risks to wind turbines. Meanwhile, strong winds and high waves during the northeast monsoon season can hinder access to and maintenance of offshore wind systems.

To support model calibration and long-term observation, the research team recommends increased investment in offshore wind monitoring stations at heights exceeding 100 meters. They also suggest incorporating these findings into offshore wind development strategies and national marine spatial planning.

Additionally, the team advocates for expanding research into other forms of marine renewable energy, such as wave, tidal, and ocean thermal energy.

“Vietnam has some of the most promising offshore wind resources in the region, creating a strong foundation for the development of a large-scale offshore wind industry. This will contribute to energy security, green economic growth, and the achievement of net zero commitments,” they said.

The study provides a vital scientific basis for policy planning, identifying priority development zones, attracting investment, building infrastructure, and training the future offshore wind workforce, the team added.

Hoang Duc Cuong, deputy director of the Department of Meteorology and Hydrology, emphasized that Vietnam lies within a strong and stable Asian monsoon belt, giving it abundant wind energy potential. He noted that this renewable source will play a key role in meeting the country’s climate change goals and advancing a low-carbon economy.

However, he also warned that marine-based natural disasters are highly complex and could significantly impact the stability of offshore wind operations and energy generation.

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Uncertainty weighing on real estate

Published

2 days ago

April 26, 2025

Industrialzone.net

The ever-changing status of the global economy following last week’s tariff shocks continue to loom large among investors in Vietnam’s real estate market.

All real estate segments are at risk of losing appeal if high global tariffs are eventually put in place, photo Le Toan

Pham Lam, vice chairman of the Vietnam Real Estate Association, said that while it is premature to determine the full impact of new US import tariffs on Vietnam’s property market, early signs point to shaken investor sentiment and potential disruptions to foreign investment.

“If multinational corporations scale back or delay their factory expansion plans, the demand for land and factory leasing could decline, which may place downward pressure on industrial rents, lead to increased vacancy, and postpone new industrial zone developments,” he said. “This would affect key industrial property markets such as Bac Ninh, Bac Giang, Haiphong, Long An, and Binh Duong.”

Meanwhile, real estate expert Nguyen Hoang said that the United States remains one of the most critical export destinations for Vietnam’s foreign-invested enterprises.

“Any change in tariffs will significantly influence capital flows, investor confidence, and manufacturing strategies of companies operating in Vietnam. If a high tariff is fully implemented in 90 days, it could seriously diminish Vietnam’s investment appeal – affecting all real estate segments as a result,” Hoang said.

Vietnam’s property market has only recently emerged from a prolonged two-year downturn.

“It remains highly sensitive to economic and policy shocks. Investors have remained cautious, and any further external pressure could threaten to break the fragile liquidity recovery, potentially sending the market back into a period of short-term stagnation,” Hoang added.

Alex Crane, managing director of Knight Frank Vietnam, said that the recent tariff twists by the US casts a shadow of uncertainty, with potential implications for various segments of the market.

While manufacturing has shown resilience, it is still on the path to full recovery from the pandemic, particularly in labour-intensive sectors like garments and furniture. Tariffs imposed now would not have as severe an impact as they might have during Vietnam’s 2019 peak, but consequences are still expected, Crane said.

“I may expect that major transactions, especially those involving large capital outlays, are being paused or undergoing extended due diligence as investors and developers reassess assumptions and underwriting models and commercial occupiers are expected to defer large capital expenditures in the short term,” Crane said.

In addition, the response from the State Bank of Vietnam, particularly regarding monetary policy, will be crucial. While a rate cut may not effectively stimulate residential demand (as demonstrated in 2024), targeted lending for key industries and easing of loan-to-value ratios or debt-to-income limits for developers could provide relief.

“At present, most segments of the real estate market are in a holding pattern, awaiting clarity from the evolving negotiations between the Vietnamese and US governments. While uncertainty is unsettling, Vietnam’s underlying fundamentals remain sound, and the market’s long-term outlook is still viewed positively,” he added.

Nguyen Dung Minh, deputy CEO of MIK Group, has warned that under the new US tariff regime, many investors will be forced to reassess their strategies, likely leading to a decline in the demand for industrial land.

“Investors will need time to re-evaluate their actual demand and incoming orders and make necessary adjustments before they can fully gauge the extent of the impact,” Minh said.

He added that the implications go beyond just industrial land. “The new US tariffs are also expected to disrupt supply chains and negatively affect supporting sectors such as logistics, warehousing, and raw materials manufacturing. As production slows, so too will the demand for land associated with these services,” Minh said.

Trang Bui, country head Cushman & Wakefield Vietnam While the effects of tariffs are typically delayed, most economists warn that they may eventually fuel inflation and dampen economic growth. Many manufacturing firms could opt to postpone their expansion plans in the short term if export duties become too burdensome. There is also a possibility that some companies may look to diversify their supply chains towards a Vietnam+1 model, shifting parts of their operations to neighbouring countries. This could lead to a decline in demand for factories and warehouse leasing, two key drivers of the industrial real estate segment. However, it is important to recognise that industrial real estate is fundamentally a long-term investment. Vietnam has long positioned itself as the manufacturing hub of Southeast Asia, thanks to its strategic location and the “bamboo diplomacy” approach, which has enabled the country to swiftly join trade negotiations and sign multiple free trade agreements. Moreover, many manufacturers in Vietnam have already established tightly integrated supply chains. As such, their investment plans tend to operate on a much longer time horizon than the near-term effects of tariff policy. Relocating supply chains typically requires at least 3–5 years, making short-term shifts less likely. Overall, Vietnam’s industrial real estate sector has proven resilient under various political and economic conditions. Investors would do well to focus on long-term trends and structural advantages. Manufacturers, in particular, may take this opportunity to secure high-quality industrial assets, invest in automation, and pull in skilled labour, while continuing to monitor developments in upcoming trade negotiations with caution. Nguyen Thi Bich Ngoc, CEO, Sen Vang Group When it comes to the reciprocal tariff policy announced by the US, the greater danger currently lies not in the tariff itself, but in the heightened sense of uncertainty it has triggered across the Vietnamese market, a sentiment clearly reflected in recent VN-Index fluctuations. In the short term, the policy will weigh heavily on Vietnam’s industrial real estate sector. However, in the long run, this challenge could serve as a catalyst for stronger growth. It presents an opportunity for the government and industrial zone developers to rethink their strategies, offering more competitive, attractive solutions to both foreign and domestic investors. Rather than relying solely on external trends like the China+1 shift, Vietnam should leverage its inherent competitive advantages, including a strategic geographic location, a skilled and cost-effective labour force, and political stability, to pull in long-term investment. These are undeniable strengths that set Vietnam apart. Moreover, this is also an opportune moment for Vietnam to re-evaluate and restructure its key sectors, prioritising strategic industries with high growth potential. Continued engagement in bilateral and multilateral trade agreements will open up new opportunities and elevate Vietnam’s position both regionally and globally. Ultimately, we must seize this challenge as a turning point, transforming pressure into momentum for sustainable development. Vo Hong Thang, Investment director DKRA Group The industrial infrastructure, commercial, and residential real estate segments are all likely to face increasing headwinds if a huge tariff increase is eventually implemented. In recent years, a number of developers have made significant investments in industrial zones, betting on a continued influx of foreign direct investment. However, the new tariff policy raises the possibility of such flows being diverted to other countries. Vietnam now faces the risk of having built the nest, but being unable to attract the eagle. In addition, liquidity in both residential and commercial real estate, including retail, office, and hospitality, is likely to weaken in the short term due to more cautious investor sentiment, defensive capital flows, and reduced purchasing power from end-users. Niche investment segments such as serviced apartments, tourism-related accommodations, and foreign buyer housing could also see demand drop, particularly as the foreign expert and executive workforce, typically a key demand driver, scales back plans to live and work in Vietnam.

Trang Bui, country head Cushman & Wakefield Vietnam

While the effects of tariffs are typically delayed, most economists warn that they may eventually fuel inflation and dampen economic growth. Many manufacturing firms could opt to postpone their expansion plans in the short term if export duties become too burdensome. There is also a possibility that some companies may look to diversify their supply chains towards a Vietnam+1 model, shifting parts of their operations to neighbouring countries.

This could lead to a decline in demand for factories and warehouse leasing, two key drivers of the industrial real estate segment. However, it is important to recognise that industrial real estate is fundamentally a long-term investment. Vietnam has long positioned itself as the manufacturing hub of Southeast Asia, thanks to its strategic location and the “bamboo diplomacy” approach, which has enabled the country to swiftly join trade negotiations and sign multiple free trade agreements.

Moreover, many manufacturers in Vietnam have already established tightly integrated supply chains. As such, their investment plans tend to operate on a much longer time horizon than the near-term effects of tariff policy. Relocating supply chains typically requires at least 3–5 years, making short-term shifts less likely.

Overall, Vietnam’s industrial real estate sector has proven resilient under various political and economic conditions. Investors would do well to focus on long-term trends and structural advantages. Manufacturers, in particular, may take this opportunity to secure high-quality industrial assets, invest in automation, and pull in skilled labour, while continuing to monitor developments in upcoming trade negotiations with caution.

Nguyen Thi Bich Ngoc, CEO, Sen Vang Group

When it comes to the reciprocal tariff policy announced by the US, the greater danger currently lies not in the tariff itself, but in the heightened sense of uncertainty it has triggered across the Vietnamese market, a sentiment clearly reflected in recent VN-Index fluctuations.

In the short term, the policy will weigh heavily on Vietnam’s industrial real estate sector. However, in the long run, this challenge could serve as a catalyst for stronger growth. It presents an opportunity for the government and industrial zone developers to rethink their strategies, offering more competitive, attractive solutions to both foreign and domestic investors.

Rather than relying solely on external trends like the China+1 shift, Vietnam should leverage its inherent competitive advantages, including a strategic geographic location, a skilled and cost-effective labour force, and political stability, to pull in long-term investment. These are undeniable strengths that set Vietnam apart.

Moreover, this is also an opportune moment for Vietnam to re-evaluate and restructure its key sectors, prioritising strategic industries with high growth potential. Continued engagement in bilateral and multilateral trade agreements will open up new opportunities and elevate Vietnam’s position both regionally and globally.

Ultimately, we must seize this challenge as a turning point, transforming pressure into momentum for sustainable development.

Vo Hong Thang, Investment director DKRA Group

The industrial infrastructure, commercial, and residential real estate segments are all likely to face increasing headwinds if a huge tariff increase is eventually implemented.

In recent years, a number of developers have made significant investments in industrial zones, betting on a continued influx of foreign direct investment. However, the new tariff policy raises the possibility of such flows being diverted to other countries. Vietnam now faces the risk of having built the nest, but being unable to attract the eagle.

In addition, liquidity in both residential and commercial real estate, including retail, office, and hospitality, is likely to weaken in the short term due to more cautious investor sentiment, defensive capital flows, and reduced purchasing power from end-users.

Niche investment segments such as serviced apartments, tourism-related accommodations, and foreign buyer housing could also see demand drop, particularly as the foreign expert and executive workforce, typically a key demand driver, scales back plans to live and work in Vietnam.

Project

Central Vietnam city seeks $1.84 bln for 15 projects in economic zone

Published

2 days ago

April 26, 2025

Industrialzone.net

Authorities of Hue city in central Vietnam have released a list of 15 projects in Chan May-Lang Co Economic Zone which will need VND47.5 trillion ($1.84 billion) in investment capital between 2025 and 2026.

Chan May-Lang Co Economic Zone in Hue city, central Vietnam. Photo by The Investor/Dinh Duy.

Notable projects include the Chan May non-tariff zones No. 1 and 2 infrastructure development project, with a total area of over 503 hectares and combined investment capital of VND2.8 trillion ($108.23 million).

Another is the VND20 trillion ($773 million) Chan May Urban Area project (locations 1 and 2), which will cover 225 hectares and be implemented over five years.

The LNG terminal project at Chan May Port, 27 hectares with an investment of VND8.6 trillion ($332.43 million), is set for five-year implementation.

The 120-hectare Bai Ca eco-tourism project in Lang Co township will have investment capital of VND2.5 trillion.

The Lang Co beach resort, with an area of 45 hectares and total investment of VND4 trillion ($154.62 million), will be carried out over five years; while the 75-hectare Lap An lagoon tourism, urban development and resort complex in Lang Co township will cost VND6 trillion.

According to the management board of Hue Economic and Industrial Zones, since its establishment, Chan May-Lang Co Economic Zone has attracted 55 investment projects which remain valid, with total registered capital of VND97.32 trillion ($3.76 billion).

Among these, 15 are foreign-invested projects with combined capital of VND56.02 trillion ($2.17 billion), accounting for 57.56% of the total.

Several prominent foreign investors have established a presence in the zone, such as Banyan Tree Group (Singapore) with the Laguna Lang Co Resort and Winson Group (Taiwan) with the Billion Max Vietnam Export Processing Factory.

Chan May-Lang Co has become a destination for investments in sectors like tourism and resort development; seaport infrastructure; logistics; clean industry; and high-tech, environmentally friendly industries, with annual revenue reaching nearly VND4 trillion ($154.62 million) and tax contributions of around VND300 billion.

The management board said Hue city has proposed the Ministry of Construction review the adjustment of the EZ master plan through 2045, for submission to the Prime Minister.

The strategic goal is to develop Chan May-Lang Co into a key economic zone of central Vietnam – a coastal gateway offering logistics services for the central region and the East-West Economic Corridor, as well as a hub for high-end tourism services.

To attract investors, the local government will offer a range of incentives such as a 10% corporate income tax rate for 15 years from the first year the project generates revenue; import tax exemption for goods to create fixed assets for investment projects, and land and water surface rental exemptions, the board said.