ALL FORMS OF INVESTMENT IN VIETNAMESE INDUSTRIAL PARK - FOREIGN INVESTORS NEED TO KNOW
Ngày:27/07/2020 05:18:29 CH
Vietnam has succeeded in controlling the Covid-19 epidemic, creating a huge advantage that contributes to building and strengthening the confidence of foreign investors. Firstly, in the eyes of investors, it is safe to see that not only Vietnamese people but also foreigners can receive the best medical treatment possible.
Secondly, investors also see golden opportunities in Vietnam thanks to the continuous economic development in recent years, namely the rapid and strong growth of the economy. They also see the determination and rightness of the Government in the prevention of epidemics and the restart of the post-epidemic economy.
Third, Investors also noted that Vietnam has a consistent policy in dealing with foreign capital flows, always considering foreign investment as an important component of the economy for development. All are contributing to create golden opportunities for Vietnam in the context of broken global supply chains and foreign investment flows.
Fourth, the trade agreements that Vietnam has signed and has been providing certain advantages for Vietnam.
It can be said that Vietnam is gradually showing its position as an attractive business environment and has strong growth potential. That has attracted a lot of attention from foreign investors, but many investors, when carrying out investment activities, were still confused, not knowing where to start. The following article of IIP VIETNAM will provide investors with information about the forms of investment ownership in industrial parks in Vietnam, helping investors to take the first step when investing, namely Choose the appropriate investment form.
1. Direct investment in industrial parks
This is the most popular form of industrial park investment in Vietnam today. Most domestic investors are investing in this direction. For this type of investment, investors need to understand Vietnamese Laws as well as specific administrative procedures from time to time to complete project documents and investment policies. , conducting compensation, site clearance, construction and business operation of the project.
Foreign investors who want to invest in this direction should choose a reputable industrial real estate investment promotion unit like IIP VIETNAM to:
• Legal support for all issues related to Industrial Real Estate.
• Providing basic and periodic market and business information.
• Provide industry / local reports and in-depth research as required.
• Advice on investment environment, policies to attract investment.
• Identify, select and recommend suitable investment opportunities.
• Learn, evaluate, determine the ability to meet investment needs.
• Search, select and recommend investment locations.
• Land survey.
• Support in negotiating and signing related agreements and contracts.
• Consulting on making and applying for investment project.
• Consulting and applying for, adjusting investment certificates.
• Consulting and applying for, changing, extending licenses for representative offices and branches of foreign businesses in Vietnam.
• Consulting and implementing the establishment, change and dissolution of foreign-invested companies.
• Regular legal advice.
• Other consulting activities related to foreign investment activities.
• Designing, consulting construction drawings.
• Constructing and handing over the factory and infrastructure of the Industrial Park to the Investor.
2. Auction to select industrial park investor
This form applies to industrial parks which have been planned, site clearance or projects revoked by the State to conduct auctions for various reasons such as delayed project schedule, change the purpose of the project into Industrial Park ...). For this auction, land rental is paid in one lump sum for the entire 50 years of the project.
In Vietnam, this form is not really popular among investors, only a number of industrial parks across the country have successfully implemented this form.
3. Form of investment in industrial parks under public-private partnership (PPP) contracts
PPP contract is an investment contract in the form of public-private partnership, which is an investment made on the basis of a project contract between a competent state agency and the investor, project enterprise for construction. construction, renovation, operation, business, management of infrastructure works, provision of public services. The most common ones are the Construction - Transfer Contract or the payment plan component of the PPP contract which is the right to trade, exploit the works and services of the Industrial Park.
Construction - Transfer contract is a contract signed between a competent state agency and an investor, project enterprise (if any) to build infrastructure works; After the project is completed, the investor shall transfer the project to a competent state agency and be paid with the right to trade and exploit the industrial park's works and services.
Component of payment plan in PPP Contract. In the payment plan for PPP contracts, there are many forms of payment including payment by the right to trade, exploit the works and services of the Industrial Park in the Build - Transfer Contract.
In this case, after being assigned to be the investor of the industrial park project, the investor completes the project file, compensates, site clearance, construction and business operation of the project. .
For this form, land rent is usually determined once for the entire 50 years of the project. In Vietnam, this form is not really popular among investors, only a number of industrial parks across the country have successfully implemented this form.
4. Mergers and acquisitions (M&A) Industrial parks:
This is a fairly common form for foreign investors to enter Vietnam. However, M&A is a complex activity and involves many fields from corporate governance, finance to legal ... so the success of M&A deals is always a difficult problem and creates challenges. There is great awareness for foreign investors as well as domestic investors.
Therefore, foreign investors need to look to reputable units in the field of industrial real estate promotion such as IIP VIETNAM to:
Signing a service contract on brokerage and promotion in searching industrial parks and industrial clusters seeking M&A activities. Some contents that IIP VIETNAM will provide for foreign investors to explore include:
- Locations and areas of industrial parks and industrial clusters wishing to purchase, sell or transfer?
- What is the area, right to use, and lease term of industrial zones?
- What is the current status of infrastructure, physical facilities of industrial zones, industrial clusters?
- Fields of investment attraction, investment incentives in industrial parks and industrial clusters
"Evaluation report" on the Seller of the Industrial Park, including:
- Financial due diligence report ("Financial Due Diligence"): This report focuses on the entire core of a business such as invoices, documents, bookkeeping, accounting, loans from organizations and individuals, checking the depreciation of assets and the ability to recover debts, financial statements in the latest 1 year, certified by auditing organizations.
- Legal evaluation report ("Legal Due Diligence"): This report focuses on the legal status of the Company such as disputes, complaints against any individual or organization? personnel, labor, project files, ...
Negotiate and sign M&A. In order to provide a reasonable price with the value of the Industrial Park, there is a need for professional valuation, in this step, IIP VIETNAM will advise and provide to both parties foreign investors and owners. Industrial park professional valuation service. Ensuring the accurate valuation of the value of the Industrial Park brings a harmonious benefit between the two sides. After confirming the rights and accepting the sale, transfer. The two sides will carry out the signing of the contract and to ensure the legality, IIP VIETNAM will provide legal advice and professional contract drafting services for both parties to choose or as agreed by both parties.
Above are the 4 basic forms when investing in Vietnam Industrial Park. Hopefully with this article, IIP VIETNAM can help foreign investors to quickly select the appropriate investment form.
Any need to cooperate and promote industrial real estate investment, please contact Hotline: 1900888858 or Email: firstname.lastname@example.org.