25 Aug

Encouraging German investment in Vietnam

Monday, 25 August, 2014

According to the 2014 Vietnamese business environment survey in German businesses announced by the Association of German Chambers of Commerce and Industry in Southeast Asia, most of surveyed German companies said they felt optimistic about economic development in Vietnam. This encouraged more German investors to come to Vietnam.

German Chancellor Angela Merkel and Vietnamese Prime Minister Nguyen Tan Dung 

Effective, comprehensive cooperation

Vietnam and Germany will celebrate the 40th anniversary of their diplomatic relations in 2015. Germany is the largest EU trade partner of Vietnam, accounting for 20 percent of Vietnam’s export value to the EU. Germany is an important gateway through which Vietnamese goods can reach other markets. Bilateral trade increased more than 7.5-fold between 2000 and 2013 to reach nearly US$8 billion. According to the General Department of Vietnam Customs’ statistics, Vietnamese businesses exported goods worth US$2.41 billion to Germany in the first six months of 2014, up 2.6 percent compared to the same period last year.

According to the Foreign Investment Agency (FIA), as of June 2014, Germany had 227 investment projects with a total registered capital of more than US$1.246 billion in Vietnam, ranking 22nd among the 101 countries and territories investing in Vietnam. German investment is found in 26 provinces of Vietnam, with the vast majority of the investment found in Ho Chi Minh City, Hanoi and Binh Duong and Dong Nai provinces. Leading German corporations including Bosch, Siemens, Deutsche Bank, Bayer and Stock have invested in Vietnam.

In late June 2014, the Ho Chi Minh City People's Committee granted an investment certificate to the German House Co., Ltd, Ho Chi Minh City to build and operate a German House project in Ho Chi Minh City with an investment capital of US$38.9 million. German House is a project licensed in accordance with an agreement signed by Vietnamese and German governments. The project will be the office of the German Consulate General and also a place through which German businesses, German economic associations and German cultural scientific organizations increase investment activities and promote cultural exchanges in Vietnam and Southeast Asia.

Germany is a large official development assistance (ODA) provider for Vietnam, especially in the field of education and training. The Vietnam-Germany University is a notable project funded by German ODA. During his visit to Vietnam and at a meeting with the Vietnamese Ministry of Science and Technology in July 2014, Georg Schutte, State Secretary at the Federal Ministry of Education and Research of Germany stressed that the two countries will focus on cooperation related to urbanization, biotechnology, electronics technology and automation and material technology that are strengths of Germany.

Promoting German investment

The success of German investors in Vietnam is encouraging more German firms to look for investment opportunities in Vietnam. Germany has become the second-largest European investor in Vietnam. However, inadequate infrastructure and skilled workforce and the macroeconomic situation in Vietnam that haven’t improved significantly are the concern of many German businesses, Terraverde Director, Vietnamese German Vu Minh Anh said.

The 2014 Vietnamese business environment survey in German businesses shows that German businesses have high expectations for growth in production, trade and demands for manpower and reinvestment in production in Vietnam in 2015. Of all surveyed German businesses, about 50 percent achieved more successes than the previous year and expected positive business development in the coming year, more than 56 percent believed in their positive development in the next 12 months, and 60 percent had plans to increase staffing in 2015 and maintain a relatively high level of reinvestment in reproduction.

Feeling optimistic about the Vietnamese business environment, the German government has many incentives to encourage German businesses to invest in Vietnam. The ongoing DeveloPPP program of the Federal German Ministry for Economic Cooperation and Development (BMZ) will give priority to encouraging German businesses to invest in vocational training, energy and waste water in Vietnam, with financial support for each of related project being up to EUR200,000./.

German Chambers of Industry and Commerce in Vietnam (AHK Vietnam) announced that the Asia-Pacific Conference of German Business will be held in November 2014 in Ho Chi Minh City with the participation of 750-800 management board chairmen from leading German industrial corporations. This will be a good opportunity for businesses from the two countries to find cooperation opportunities.







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