More Cooperation Opportunities Introduced at the Orientation on Investment Climate of ASEAN

Written by Gan Quan / Translated by Hu Yi

More Cooperation Opportunities Introduced at the Orientation on Investment Climate of ASEAN

Written by Gan Quan / Translated by Hu Yi

Remarks by Pham Thanh Binh, Consul-General of the Consulate-General of Vietnam in Nanning

In March 2016, “Orientation on Investment Climate of ASEAN” was initially proposed at the 13th ASEAN-China Senior Officials’Meeting, with the aim of enriching the existing forms of cooperation between ASEAN and China, satisfying Chinese enterprises’ urgent demands for investment opportunities of ASEAN as well as assisting Chinese enterprises in investing in ASEAN; soon after the Orientation on Investment Climate of Vietnam & Thailand, hosted by the Consulate-General of Vietnam in Nanning, Vietnam Trade Office in China, the Consulate-General of Thailand in Nanning, and China-ASEAN Expo Secretariat, were held in Nanning, the provincial capital of Guangxi Zhuang Autonomous Region of China on May 25, 2016, during which enterprises from ASEAN and China were active participants, thus creating a new platform for Chinese enterprises’understanding of ASEAN’s preferential policies for foreign investment.

Ms. Huang Yuan, Deputy Secretary-General of China-ASEAN Expo Secretariat, stressed that Vietnam and Thailand are major countries that attract the investment attention of Chinese enterprises; meanwhile, enormous business opportunities have been created through the steady and progressive cooperation in terms of manufacturing, connectivity, infrastructure, tourism, fi nance, energy, etc.

Vietnam’s steadfast support to investment attraction

Vietnam has been a hot-spot area for international direct investment over the years, with a comparatively secure investment climate, favorable natural conditions, and low prices of labor forces, as well as the government’s support, making it an ideal investment place for more and more multinationals. As of May 20, 2016, the number of newly-approved foreign investment projects reached 907, a year-onyear increase of 53.2 percent, with the registered capital of US$ 7.56 billion, rising by 156 percent. In addition, the projects with capital increase amountedto 425, with the sum of US$ 2.59 billion. It is estimated that the available funds of foreign projects have totalled nearly US$ 5.8 billion, a year-on-year increase of 17.2 percent.

The capital market of Vietnam, as indicated by the commercial counsellor of the Economic and Commercial Counsellor’s Office of Vietnam’s Embassy in China, would be further expanded; meanwhile, foreign investors would be entitled to occupy 100 percent of Vietnamese enterprises’ share. Furthermore, a series of treasures aimed at attracting more foreign investments have been figured out, including simplifying the investment procedure, increasing transparency, reducing the cost spending of foreign investors and so on.

Over the years, robust growth has been seen in the bilateral economic and trade cooperation between Vietnam and China. “There is a huge potential for the economic and trade cooperation between the two sides. Besides, China has been the largest trading partner of Vietnam for the 12th consecutive year. More and more Chinese enterprises have made their investments in Vietnam, the investment field of which includes transportation, electricity, manufacturing, real estate, and so forth,” said Pham Thanh Binh, Consul-General of the Consulate-General of Vietnam in Nanning. In November 2015, the MOU on the promotion of industrial capacity cooperation was signed by Vietnam’s Ministry of Industry and Trade and China’s National Development and Reform Commission, thereby injecting vitality into the bilateral industrial capacity cooperation and broadening the investment range of Chinese enterprises in Vietnam.

Thailand’s preferential policies for foreign investment

Lin Songbao, Director of the Offi ce of the Board of Investment of Thailand in Guangzhou, China, said, “When investing in Thailand, there is no limitation to the location of raw materials, the export of products, as well as foreign exchanges. As for the investment projects with capital allowances which are gained with the help of the Board of Investment of Thailand, foreign investors are accessible to 100 percent of share, land usage right, and work visas for foreign experts and relevant professionals. It is worth noting that the application procedure of work visa can be completed at the one-stop service center; if permitted, the applicants will receive their work visas within 3 hours.”

In the face of increasingly fi erce competitions from Thailand’s neighboring countries in terms of the prices of labor forces, the Thai government has made strategic adjustments to boost its economic development. Besides an extremely higher degree of freedom for investment, foreign investors are also encouraged to invest in knowledge-oriented industries instead of labor intensive industries, S & T industries with innovation and high value added, and thus to pursue sustainable development of Thailand’s economy.

The industries enjoying new preferential investment polices are divided into Class A and Class B according to their types and significance. Class A industry includes high-tech industries centered on S & T and R & D while Class B industry is aimed at general industries. In fact, the reduction and exemption of taxes is seen as the largest tangible benefi t to foreign enterprises. The Thai government is steadfastly committed to giving priority to the development of Class A industry; therefore, foreign enterprises accessible to this range will be granted maximized preferential policies in terms of taxes. Specifically, Class A industry can enjoy the exemption of 3-8 years of corporate income taxes; at the same time, the tax for importing machine and raw or essential materials used for the products to be exported can be exempted and so on, based on which industries oriented at knowledge and high technologies can even enjoy the 5-year exemption of 50 percent of corporate income taxes. In addition, foreign-funded industries oriented toward S & T and innovation can be exempted from the corporate income taxes accounting for 200 percent of their total investment volumes at most, while others granted preferential policies can enjoy the maximized exemption of 100 percent of their total investment volumes.

Additionally, Thailand is seeking for an economic development model characterized by advanced technologies and low pollution, with a focus on bringing long-term mutual benefits to both foreign investors and Thailand.