China Outbound: Vietnam’s FDI Outlook for 2016 and Human Resource Market in ASEAN

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Our Latest Round-Up of Business News Affecting China-Based Businesses Investing in Asia

In this edition of China Outbound, we start with an overview of the FDI trends and opportunities in Vietnam and India, particularly the lucrative foreign investment opportunities in India’s Smart Cities. From there, we move to an in-depth analysis of the updated Double Taxation Agreement (DTA) between Thailand and Singapore, which will minimize investors exposure to taxation in multiple jurisdictions. Lastly, we explore the human resource and social security market in ASEAN nations, featuring several pieces on the minimum wage levels in ASEAN and Vietnam’s social insurance scheme.

Vietnam’s FDI Outlook for 2016: Trends and Opportunities

Initial figures from January’s FDI data show strong year on year growth over 2015. Newly registered projects reached a high of 127, up 186 percent from a year prior. Total FDI from this period was also up over 100 percent – exceeding 1.3 billion dollars. The substantial changes over 2015 help to highlight the increased importance of Vietnam as a destination for foreign capital and underscore the utility of these figures as a means to evaluate the communist nations changing reception as an investment destination by potential investors.

Foreign Investment Opportunities in India’s Smart Cities

India’s urban population is projected to increase from 370 million in 2015 to 590 million in 2030, an unprecedented expansion that will change the economic, social, and political landscape of India.  The urbanization of India brings with it a host of environmental and humanitarian issues, from pollution to lack of civic amenities like drinking water, sewage, and electricity.  However, urbanization may also mean big opportunity for business.  Prime Minister Narendra Modi is betting on such opportunities with his Smart Cities initiative.

In Depth: The Singapore-That DTA

Singapore, long known for its exemplary investment climate and lucrative trading arrangements, continues to improve upon its competitiveness with the implementation of an updated Double Taxation Agreement (DTA) with Thailand. Minimizing investors exposure to taxation in multiple jurisdictions, this DTA, along with Singapore’s many others,  is a critical components in attracting foreign investment and maximizing profitability for those incorporated within the city’s limits.

Minimum Wages in ASEAN – All You Need to Know in 2016

It is important to evaluate current minimum wages across ASEAN every couple of years, as they often fluctuate heavily and impact productivity, profits and ultimately investor decisions. With recent shifts towards a “China Plus” strategy within APAC at large, examining minimum wages across ASEAN is an increasingly useful strategy. Although wages alone will not determine the utility of given markets, minimum wage trends provide valuable insight on whether a country is likely to be a sourcing, production, or sales market for a given product.

Updates to Vietnam’s Social Insurance Scheme

With social insurance related debts reaching a high of US$ 414 million in 2015, Vietnamese Authorities have initiated reforms intent on bringing outstanding obligations under 223 million by the end of the year. Rather than solely cutting social insurance programs, however, the increasing burdens of social insurance are in some instances being shifted to the private sector. While the resulting costs are unlikely to have a significant impact on competitiveness, visa-vi regional competitors, current and prospective investors should be cognizant of updates from a budgeting and compliance standpoint.


About
Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email china@dezshira.com or visit www.dezshira.com.

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