PRESS RELEASES

30 Jul

10 Reasons why Vietnam and Deutsches Haus Ho Chi Minh City is the place to be - for doing business with ASEAN

Thursday, 30 July, 2015

DHTerrace.jpg

Vietnam emerges as ASEAN’s new tiger, while Deutsches Haus in Ho Chi Minh City becomes the lighthouse for Central European and German business and institutions in Vietnam for the ASEAN region in 2017.

Macroeconomic conditions in Vietnam set for stable growth:

Vietnam’s GDP growth is set to reach at least 6.1% this year and 6.2% in 2016 and it may become the second fastest growing economy in the Asia region after India, says the Asian Development Bank’s report “Asian Development Outlook 2015”. According to PricewaterhouseCoopers “The World in 2050 report”, the country has the potential to become one of the world’s fastest-growing economies over the period to 2050, featuring Vietnam as “the world’s factory”.  Vietnam’s annual real gross domestic product growth could average 5.3% in the 2014-50 period, a pace only bettered by Nigeria, according to PwC’s “The World in 2050” report. Growth in China may fall below 4%.  Not only is Vietnam gaining ground as a cheaper and more efficient manufacturing alternative to neighboring China and other ASEAN countries, Vietnam is also politically stable.

 

Labor cost development favors Vietnam:

The average monthly wage in Vietnam was $197 in 2013 compared with $391 for Thailand and $613 for China, according to International Labor Organization calculations. That disparity is widening. The Economist Intelligence Unit predicts that in 2019, manufacturing labor costs per hour in China will be 177% of those in Vietnam, up from 147% in 2012.

A recent survey of Standard Chartered Bank in China showed that 11 % of manufacturer plan to shift production-capacities from China to ASEAN or overseas, with Vietnam and Cambodia top of the list.

A young, education-driven population:

Demographics are a big help. Some 13% of China’s population in 2012 was already 60 or older, compared with 9% in Vietnam, according to the UN. More than 40% of Vietnam’s population of about 90 million in 2013 was in the labor force aged 15 to 49, government data show.

The results from the Program for international Student Assessment (PISA) 2012 show that Vietnam’s general education system is more successful than the one in many wealthier countries in providing students with strong basic cognitive skills such as reading literacy and numeracy. Participating for the first time in PISA, Vietnam’s 15 year old perform on par with their peers in Germany and Austria and better than those in two thirds of participating countries. This stunning performance is consistent with the results from a recent survey of adult literacy which found Vietnamese adults to be strong readers. Indeed, widespread literacy among the workforce has been a major driver of Vietnam’s development success over the last two decades by helping Vietnamese workers move from low productivity agriculture into higher productivity non-farming jobs.

Almost 21% of all government expenditure in 2010 was devoted to education - a larger proportion than seen in any OECD country. Expect Vietnam to perform even better in PISA 2015.

Another remarkable fact, documenting how much the value of driving education is fundamentally embedded in the society of the Vietnamese culture, shows that more than 50 % of the children of the approx. 120,000 Vietnamese living in Germany (the largest and best integrated population of Asian origin in Germany) achieve the highest level of secondary education: “the Abitur” followed by a higher tertiary academic education at German universities.

 

The fastest growing middle class in South East Asia:

Vietnam has the fastest growing middle class in Southeast Asia. In 2012, the middle class population was 12 million and is projected to increase to 33 million by 2020. In a population forecast to reach 97 million by 2020, approximately one-third of Vietnam’s citizens will be defined as “middle class.” It is forecast that the middle class will drive more than 50 percent of the country’s total consumption. Considering the prevailing tendency of rural-urban migration, the growth of this middle class is likely to exceed such estimates.

 

Vietnam is in the pole position in the ASEAN Region with the most Free Trade Agreements amongst all the other larger geographic countries with a high population density:

Vietnam is making rapid progress in concluding free trade agreements with other countries and regions in order to boost trade and investment and create business opportunities. On May 29th, 2015, Vietnam signed a Free Trade Agreement with the Eurasia Economic Union (EEU), whose members include Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.

Earlier, Vietnam also signed a Free Trade Agreement with South Korea, and is in ongoing discussions with the U.S. about joining the Trans Pacific Partnership Free Trade Agreement.

The Trans-Pacific Partnership (TPP) is a proposed free trade agreement (FTA) between the United States, Japan, and ten other countries along the Pacific Rim, including Vietnam and would form the largest trade-pact in the world, representing 40 % of all global trade.

TPP membership of Vietnam is intended to boost exports, including those to the United States, Vietnam’s largest export destination. Trade between the two nations was US$ 36.3 billion in 2014.

The FTA discussions with the EU are also progressing well. The EU and Vietnam concluded a 13th round of negotiations on a Free Trade Agreement between the EU and Vietnam, in which issues related to trade in goods, rules of origin, intellectual property rights and sustainable development were addressed. The negotiations with Vietnam and the EU have been ongoing since May 2012 and are expected to be finalized for ratification in 2015.

The FTA between Viet Nam and the EU, once signed, could help expand Viet Nam's GDP to 7-8 % by 2025. Viet Nam's exports to the EU are likely to increase by 10 per cent. In 2014, EU-Vietnam trade in goods was worth over € 28.3 Billion, with € 22.1 Billion in imports from Vietnam into the EU, € 6.2 Billion in exports from the EU to Vietnam.

It is highly likely that these Free Trade Agreements will strengthen Vietnam’s competitive advantage as a manufacturing and trade hub in the region, especially due to the fact that no other ASEAN nation other than Singapore will have in the near future a Free Trade Agreement with the EU.

 

Formation of the Asia Economic Community from 2016 onwards:

At the end of 2015, the ten countries that make up the Association of Southeast Asian Nations (ASEAN) will form the ASEAN Economic Community (AEC). ASEAN covers 4.4 Million square kilometer and has a population of 617 million growing at 1.3% per year. This means in terms of population that the AEC is bigger than the EU and Russia combined. Currently, ASEAN is the 7th largest global economic community with a GDP amounting 2.4 Trillion USD. Growth is expected at 5 % once formally established at 01st of January 2016 and expected to strike 4 Billion USD in GDP by 2020.

So far, one initiative that is pretty far advanced in the AEC is the liberalized intra-region trade in goods. The community's six leading participants Brunei, Philippines, Indonesia, Malaysia, Thailand and Singapore had practically abolished tariffs by 2010 on all items.

This upcoming January 2016, the four latecomers took substantial steps in the same direction. Cambodia eliminated tariffs on some 3,000 items. Laos did so on around 1,000 goods. Myanmar got rid of duties on 1,200 items. And Vietnam freed about 1,700 goods from tariffs. Now 96% of all items traded among the 10 ASEAN countries come and go with no tariffs following them around. This makes ASEAN one of the world's freest trade blocs.

Myanmar, Vietnam and the Philippines will likely become major sources of growth within ASEAN before too long, thanks largely to the growing number of labor-intensive businesses setting up shop within their borders. Collectively, the ASEAN Free Trade Area (AFTA) countries are already Vietnam's third largest market for exports.  Vietnam's exports to ASEAN exceeded 18 Billion USD in 2014.

Vietnam is expected to meet most of its tariff reductions at the end of this year, when it is due to be in ASEAN Economic Community compliance. It may not meet all its obligations, but tariffs will probably be amongst the initial trench of reforms it will enact, resulting in Vietnam being in complete free trade synchronization with ASEAN in addition to its own Free Trade Agreement with China. That means zero tariffs on Vietnamese exports to China.

In addition to this, it should be noted that while Vietnam is part of the potential TPP agreement with the United States, and has, via its membership of ASEAN, a free trade agreement with China, it is currently also the only country within all of these agreements to possess a free trade agreement with the Eurasian Economic Union (EEU).

 

Latest economic reforms will boost investment and trade 

Vietnam is betting on the most significant ease of doing business regulation in 25 years and an accelerated sale of state-owned firms' shares.

The government of Vietnam on July 1, 2015 launched its new Investment and Enterprise Law and will reduce to six from 51. The number of areas in which firms is prohibited from operating, allowing fireworks manufacture and genetically modified products, among others. It will also loosen regulations in more than 100 other areas in what will be the biggest overhaul of business rules in the economy since private firms were allowed in Vietnam in 1990.

The new Law on Real Estate Business and Law on Residential Housing which came also into effect on July 1, 2015 have made it easier for foreigners to invest in the Vietnamese real estate market. Foreign invested enterprises (FIEs) may now lease houses and other buildings for the purpose of sub-letting. FIE’s are also permitted to purchase completed buildings for use as a head office or place of business and may receive an assignment of all or part of a real estate project.

Foreign organizations operating or with an investment project in Vietnam, and individuals permitted to enter Vietnam, may now purchase and own houses (including condominiums/apartments, villas and townhouses) in residential development projects for a term of up to 50 years (extendable in certain circumstances), subject to overall caps on foreign ownership at the building or ward level.

And the most significant change and economic game-changer is expected for September 1st, 2016 when the Vietnamese government lifts the 49 percent cap on foreign ownership at certain listed companies. This entails that from September 2015 onwards, foreign investors can hold 100 percent of company shares in select industries, compared to the previous 49 percent. Exceptions apply however- holdings in sectors governed by separate ownership regulations such as banks and those pertaining to national security will remain with their existing limits.

 

Germany: Vietnam’s most important trade partner in the European Union

Germany is in the last 5 consecutive years Vietnam’s most important European Union trade partner by trade value, making up 28 percent of the trade between Vietnam and the EU. In the past year, bilateral trade reached USD 7.8 billion: German imports from Vietnam increased by 5.3 per cent, to USD 5.18 billion, and German exports to Vietnam grew by 6.5 per cent, to USD 2.62 billion. Bilateral trade reached $1.28 Billion in the first two months of 2015, up 15.9 percent from the same period in 2014.

While Germany is the biggest trade partner of Vietnam in the EU for many years, Germany is 22nd out of 101 countries and regions investing in Vietnam with 232 effective projects and the total registered capital of US$ 1.25 billion. About 250 German enterprises, such as Siemens, Euro Auto BMW, Schaeffler, Deutsche Bank Adidas, PUMA, BOSCH, B.Braun, Bayer, Mercedes-Benz, BASF, Fresenius just to name a few,  are operating successfully and effectively in Vietnam.

It is expected that significantly more German companies will establish themselves the coming years in Vietnam to benefit from the stable and growing macroeconomic market environment and conditions Vietnam has to offer as ideal gateway for German companies for the ASEAN region.  

 

Vietnam is a strategic partner for Germany in the Asia Pacific Region

Germany has been one of the most important partners of Vietnam in Europe for years. The trust and mutual understanding between the two countries have been strengthened through regular exchanges of high-level delegations.

The bilateral relationship between Vietnam and Germany has a special quality. More than 125,000 Vietnamese or German citizens of Vietnamese origin live in Germany. In Vietnam more than 100,000 people speak the German language.

In 2011, Chancellor Angela Merkel and Prime Minister Nguyen Tan Dung signed the “Declaration of Hanoi” on the establishment of a strategic partnership, aiming to strengthening cooperation in priority areas. In 2015, the two countries celebrate the 40th anniversary of the establishment of diplomatic relations.

The two countries' cooperation in fields of investment, commerce &trade, culture, education and training, tourism and science and technology is very active.

Germany is one of the most significant and regular ODA donors to Vietnam with over US$1.5 Billion provided for ODA projects since 1990. The German Government pledged an ODA of nearly US$100 million for Vietnam in the 2014-2015 period with the concentration on three priority areas of energy, environment and vocational training.

German firms are also involved in extending the urban mass transit system network in Ho Chi Minh City. This project receives financial support from the Asian Development Bank (ADB), the German Development Bank (KfW) and the European Investment Bank (EIB) with a total capital of 1.3 Billion USD, including 340 million USD from Germany. The project’s purpose is to create a safe and convenient transport system for passengers as well as enhance economic growth of the city. 

Another significant key project of Germany in Vietnam is the Vietnamese-German University (VGU), a Vietnamese state university, which was founded and opened in Ho Chi Minh City in September 2008, and is based on a close cooperation between the Socialist Republic of Vietnam and the German State of Hesse. Currently the university has already more than 1000 students enrolled in its state-of-the-art study-programs. The objective is to build a research-oriented university of world standard. VGU´s strategy is to import excellent German study programs, taken from the strongest engineering areas of Germany and customize them to the needs of Vietnamese higher education.

Plans and designs get finalized these days for construction in 2016 of a New Model University Project to develop a new campus for the Vietnamese-German University (VGU) near Ho Chi Minh City in the Binh Duong Province. With an approximate capital of 180.4 Million USD funded by the World Bank, it will not just create a new science and technology university that will produce highly qualified graduates needed in the labor market, it also explicitly test the reforms currently taking place in higher education and demonstrate lessons and provide guidance to other universities as they develop more autonomy in areas of governance, finance, and quality.

Given the mission by the Vietnamese government, VGU aims to become the leading research university in Vietnam in the region. Focusing on High-Tech Engineering and Sustainable Development

Another milestone of the strategic partnership between Vietnam and Germany is the collaboration in the field of advanced vocational training. The German model, linking universities, colleges and vocational training institutions and enterprises remains popular and successful in Vietnam and around the world. In Germany students study in school and at the same time they are trained and can get a graduate and diploma by the Chamber of Industry and Commerce in Germany (IHK) in a business for more than 350 recognized professions

In January 2013, BOSCH Vietnam and the Lilama 2 Technical and Technological College concluded a first cooperation agreement for mechatronic engineers on advanced vocational training, followed by a Strategic Memorandum of Understanding on vocational training between the two governments. This MoU aims to improve the skills of the Vietnamese labor force in the context of international integration in advanced vocational training.

Nowadays many German and Vietnamese corporations can partner for the “world-class advanced vocational training program” with the Delegate of German Industry and Commerce in Vietnam (AHK) and GIZ in Vietnam to establish an advanced, tailored vocational training with their company offering certified vocational training graduation in compliance with German and Vietnamese standards. 

The most important project however of the “Declaration of Hanoi” signed by German Chancellor Dr. Angela Merkel and the Vietnamese Prime Minister Nguyen Tan Dung in September 2011 has been however the development of Deutsches Haus Ho Chi Minh City. Deutsches Haus Ho Chi Minh City symbolizes not only the strategic partnership and friendship between the Socialist Republic of Vietnam and the Federal Republic of Germany, but demonstrates the commitment of the Federal Republic of Germany, that Vietnam has become for Germany one of the most important countries and partners today and more so in the future within the ASEAN-Region

 

Deutsches Haus Ho Chi Minh City - Gateway and prime destination for German and Central European companies and institutions for Vietnam and ASEAN 

Since November 2014 the construction of the Deutsches Haus Ho Chi Minh City is underway. Currently a 4-level basement is under construction till December 2015, offering 13764 sqm GFA for parking. Completion of construction and development of the building will be the 3d Quarter of 2017.

Deutsches Haus Ho Chi Minh City is a pioneering premium grade office tower strategically located on the corner of Le Duan Street and Le Van Huu Street in the heart of Ho Chi Minh City. The 25-storey building consists of approximately 40,000 square meters GFA of prime office real estate including retail areas (Level 1), a multifunctional exhibition, event and conference area (Level2), the Consulate General of the Federal Republic of Germany in Ho Chi Minh City (Level 6), restaurant-areas with outdoor terrace (Level 19 an 20) and apartments and penthouses (Level 24 and 25).

Deutsches Haus Ho Chi Minh City in the heart of Ho Chi Minh City will therefore be the ultimate place to be, for doing business with ASEAN and Vietnam for German and Central European headquartered companies and institutions. At the same time Deutsches Haus Ho Chi Minh City will be the ideal trading platform for Vietnamese companies doing business with Germany and the European Union. 

Deutsches Haus Ho Chi Minh City has all modern state-of-the-art facilities and services one would expect from a centrally located premium grade office building. The building will be home to the Consulate General of the Federal Republic of Germany, making it the destination for German and Central European companies, promoting German and Vietnamese relations.

Deutsches Haus Ho Chi Minh City presents itself to the city as a transparent and inviting building with a cost-effective design, low energy consumption, the use of ecological building materials, combined with the latest German technologies, and coupled with a high degree of sustainability, including the installation of photovoltaic equipment and panels to generate renewable energy. 

One of the key features is the double façade which reflects the latest of German technology. It is a first in Vietnam and South East Asia and serves to emphasize the energy-saving structure under the climatic conditions of Vietnam.

Consequently, Deutsches Haus Ho Chi Minh City aims to be the premier green office building in Ho Chi Minh City, aiming for the LEED Gold certification (Leadership in Energy and Environmental Design) and DGNB Bronze certification, the German equivalent.

Already today, the Federal Ministry of Economic Affairs and Energy in Germany has awarded Deutsches Haus in Ho Chi Minh City as the only building worldwide, the distinction “Energy Efficiency - Made in Germany".

In addition Deutsches Haus in Ho Chi Minh City will set a new benchmark and standard in Vietnam in terms of “Wellness” for tenants and their employees, creating value for different workspaces.  

“In the future, performance will be measured in terms of collaboration, innovation and presence, enabled by technology. Employees will then see the built environment as an extension of their home and social lives, allowing them to work any place, anytime and anywhere. Their wellbeing will be front and center for both employers and employees, driving growth and loyalty respectively.” Elmar Dutt, Senior Director of Marketing & Communication stated.

The features in premium services Deutsches Haus Ho Chi Minh City will offer to tenants and their employees are for example: Free high-speed Wi-Fi & power connectivity in common areas, common area seating and public workspaces, fitness centre with activity pool, lounges & coffee shop, bicycle racks for staff/tenants, Dry cleaning pick up & delivery, concierge services, valet parking, dedicated car-driver lounge, mobile washing station for vehicles, tenant engagement programs, click and collect facility for mail and packages, raised floors for all rental areas and many more.

 

About Deutsches Haus Ho Chi Minh City:

Deutsches Haus Ho Chi Minh City is a pioneering premium grade office tower strategically located on the corner of Le Duan Street and Le Van Huu Street in the heart of Ho Chi Minh City.

The 25-storey building consists of approximately 40,000 square meters GFA of prime office real estate and is expected to be completed in the 3rd Quarter of 2017.

Deutsches Haus Ho Chi Minh City has all modern state-of-the-art facilities and services one would expect from a centrally located premium grade office building.

The building will be home to the Consulate General of the Federal Republic of Germany, making it the destination for German companies and promoting German and Vietnamese relations.

Modern German technology coupled with a high degree of sustainability will provide innovative commercial office space of exceptional quality.

 

For questions and further information please contact:

Ms. Nguyen Anh Que Chi
Executive Assistant Manager Marketing & Communications
Deutsches Haus Ho Chi Minh Stadt Ltd.
120 Pasteur Street, Ben Nghe Ward, District 1, Ho Chi Minh City
Phone: +84 28 3821 9309
Fax: +84 28 3821 9312
E-Mail: chi.nguyen@deutscheshausvietnam.com
Website: www.deutscheshausvietnam.com

Source: Deutsches Haus Ho Chi Minh City

READ MORE

CONTACT US

Tel: +84 (0) 28 3821 9309

Fax: +84 (0) 28 3821 9312

contact@deutscheshausvietnam.com

www.deutscheshausvietnam.com

LOCATION

33 Le Duan Boulevard

Ben Nghe Ward, District 1

Ho Chi Minh City

Vietnam

NEWSLETTER SIGN UP

If you want to receive our email newsletter, please sign up below.