Vietnam's food trade industry is one of the most dynamic sectors in the country. Fueled by an expanding middle class, rising disposable incomes, and shifting consumer preferences, the increasing demand for high-quality food products is undeniable. From bustling markets in Ho Chi Minh City to modern supermarkets in other major cities, the opportunity for both […]
Vietnam's food trade industry is one of the most dynamic sectors in the country. Fueled by an expanding middle class, rising disposable incomes, and shifting consumer preferences, the increasing demand for high-quality food products is undeniable. From bustling markets in Ho Chi Minh City to modern supermarkets in other major cities, the opportunity for both […]
Ever wondered how to tap into Vietnam’s tech scene to grow your business? As the world changes, global leaders are looking beyond traditional outsourcing destinations. Vietnam has rapidly become not just a cost-effective option but a strategic partner for innovation and growth. For over a decade I’ve guided companies through the investment landscapes of ASEAN and I’ve seen Vietnam’s tech sector become a global powerhouse.
For CTOs, founders and managers under pressure to deliver cutting edge technology without breaking the bank, understanding this market is a game changer. This isn’t just about hiring developers; it’s about building a resilient, strategic extension of your team. Choosing the right software development outsourcing partner is key, expertise, reliability and alignment with your project’s needs can make all the difference.
Key Takeaways
Vietnam is a strategic outsourcing destination valued for its large talent pool and competitive costs, not just a low cost alternative.
Choosing the right partner means looking beyond price and evaluating technical expertise, operational maturity and security compliance (like ISO 27001).
There are different types of vendors, from MVP shops for startups to enterprise grade integrators for large corporations; your choice must align with your project’s scale and goals.
Ensure your SOW clearly breaks out VAT (10%), PPh 10% on non‑resident technical service fees (if applicable), and any reimbursable expenses (travel, software licenses). This prevents unexpected cost bumps when you’re invoiced.
Understanding different engagement models, dedicated teams, staff augmentation and fixed price arrangements, is crucial. These engagement models offer flexibility, transparency and tailored solutions to fit your project’s unique needs.
A successful outsourcing relationship is a long term strategic partnership that requires careful vetting and can be structured for growth, from simple team extension to a full fledged local entity.
Seamless communication between clients and Vietnamese development teams is key to project success, ensuring efficient collaboration and minimizing misunderstandings.
Vietnam’s Rise as a Global Software Outsourcing Hub
Why Vietnam is no longer a “cheap” option—it’s a strategic one
For years the conversation around outsourcing was about one thing: cost. Today the smartest companies are looking for value, stability and talent, and that’s where Vietnam shines. The country has developed a thriving ecosystem of highly skilled, ambitious tech professionals.
Vietnam’s rapid technological advancements and strong government support have further cemented its reputation as a leading software outsourcing destination. This isn’t a cottage industry; according to VietnamPlus in a 2024 report, IT outsourcing is a booming sector that has generated hundreds of millions of dollars in revenue. This financial success is built on quality and that’s why Vietnam is a strategic choice for long term growth.
Target audience: CTOs, founders and teams under pressure to scale affordably
Whether you’re a startup founder needing to build an MVP yesterday, a CTO at a mid-sized company looking to expand your development capacity or a project manager at a large enterprise tasked with modernizing legacy systems, the challenge is the same: how to scale? Outsourcing to Vietnam is the answer, offering a combination of cost efficiency and technical expertise that’s hard to beat. Vietnamese software outsourcing companies have a proven track record of delivering projects for global clients and international clients across various industries.
Viettonkin’s ASEAN positioning across tech, legal and operational advisory
My work at Viettonkin goes beyond simple matchmaking. We operate at the intersection of technology, law and business strategy. We don’t just help you find a vendor; we help you build a sustainable operational footprint. As a trusted outsourcing service provider and service provider, Viettonkin supports clients throughout their outsourcing journey in Vietnam. From structuring your service agreements to protect your intellectual property to advising on long term strategies like setting up a local entity, we provide the 360 degree insight needed to succeed in the ASEAN market.
Vietnam vs Other Outsourcing Markets—Where It Wins
Statistics on the Growth of IT Outsourcing
The global software development outsourcing industry has grown exponentially over the past decade and Vietnam has solidified its position as a major player in this market. Recent industry reports project the global IT outsourcing market will reach $397.6 billion by 2025, with a CAGR of 7.7%. Vietnam’s own IT outsourcing sector has mirrored this growth, with software development exports reaching $3.5 billion in 2020. This growth is driven by a combination of highly skilled talent, competitive labor costs and a business friendly environment that encourages innovation and efficiency.
As a leading software development company in Vietnam, Orient Software has been part of this transformation. By delivering high quality software development outsourcing services to clients worldwide, Orient Software demonstrates the strengths that have put the Vietnamese outsourcing industry on the global map.
Companies looking for a reliable development company in Vietnam benefit not only from cost savings but also access to a deep pool of technical expertise and a culture of continuous improvement. The result is a thriving ecosystem where both startups and established enterprises can leverage world class outsourcing services to accelerate their digital transformation and achieve sustainable growth.
Onshore, Nearshore and Offshore Outsourcing—What’s Right for You?
When considering software development outsourcing, it’s essential to understand the differences between onshore, nearshore and offshore models. Onshore outsourcing means working with a software development company within your own country, offering the benefits of shared language, culture and time zone. Nearshore outsourcing means working with a provider in a neighboring or nearby country, which can offer similar benefits with added cost savings. Offshore outsourcing, such as working with an outsourcing company in Vietnam, typically offers the most cost advantages, thanks to lower labor costs and access to a large talent pool.
Each has its own strengths. Onshore outsourcing is ideal for projects that require close collaboration and minimal communication barriers. Nearshore outsourcing strikes a balance between proximity and affordability, suitable for companies that value cultural alignment and overlapping work hours.
Offshore outsourcing, especially with a reputable software development outsourcing company like Orient Software, is perfect for organizations that want maximum value and scalability. With experience across all three models, Orient Software can help you assess your priorities. Whether it’s cost, communication or technical expertise, and guide you to the outsourcing strategy that best fits your business goals.
Cost comparison with India, Eastern Europe, LATAM
Let’s get to the numbers. While Eastern Europe and Latin America have become more expensive, Vietnam is still very competitive. For a more detailed view, the 2024 “IT Salary & Recruitment Market” report from ITviec shows that even senior developer salaries in Vietnam offer significant savings compared to Western markets, without the communication friction or time-zone challenges of some other regions. This cost-efficiency means you can get more done, whether that’s building more features or accelerating your time to market.
Vietnam’s cost-efficiency also means you can get efficient solutions that maximize value and minimize waste in software development projects.
STEM talent and developer pool scale
Vietnam’s advantage is its people. The country has a young, tech-savvy population and a strong government focus on STEM education, producing a large talent pool of over 400,000 IT engineers. This isn’t just about quantity; the quality is high, with developers skilled in latest technologies. Vietnamese developers have extensive knowledge, strong technical skills and proficiency in multiple programming languages, making them highly sought after for complex software projects.
English fluency and cultural alignment for Western teams
One of the historical barriers in outsourcing was communication. In Vietnam, that barrier is rapidly disappearing. The younger generation of tech professionals has high level of English proficiency and the business culture is increasingly aligned with Western practices. This means smoother collaboration, clearer requirements and better outcomes for your projects.
Many Vietnamese software outsourcing companies have also adopted Western business practices, making them better equipped to work with international clients.
Types of Software Outsourcing Companies in Vietnam
Product-focused vs service-driven vendors
It’s essential to understand the different types of partners you’ll encounter. Some companies are product-focused, meaning they may offer solutions built on their own platforms. Others are purely service-driven, offering custom development tailored to your exact needs. These vendors specialize in delivering customized solutions that address specific business requirements. The right choice depends on whether you need a ready-made solution or a completely unique build.
MVP shops vs enterprise-grade system integrators
You’ll also find a spectrum from small, agile “MVP shops” to large, enterprise-grade system integrators.
MVP Shops: Perfect for startups and new projects. They specialize in speed and iteration, helping you get a Minimum Viable Product to market quickly.
Enterprise-Grade Integrators: These companies are built for scale. They have deep experience with complex systems, robust security protocols and project management discipline required by large corporations. They often provide dedicated development teams to handle large scale projects and deliver enterprise software development solutions.
Choosing the right type of partner from the start is key. A startup that partners with a slow-moving enterprise vendor will be frustrated, while a large corporation that hires a small MVP shop will face risks in security and scalability.
How to Evaluate a Software Outsourcing Partner in Vietnam
Look beyond the marketing brochures. The real proof is in their technical depth. When evaluating potential partners, it’s essential to assess their software engineering capabilities and extensive expertise in relevant technologies and domains. Ask for detailed case studies relevant to your industry. Ask about their experience with your specific tech stack. If you’re in a regulated field like fintech or healthcare, ask about their domain-specific knowledge.
Operational maturity: project managers, onboarding, time zone management
A great development team is only as good as the processes that support it. How do they manage projects? Do they have skilled, English-speaking project managers? What’s their onboarding process like? How do they ensure smooth collaboration across time zones? A mature partner will have clear, confident answers to these questions.
Mature outsourcing partners may also provide managed services to ensure ongoing support and optimization of your technology systems.
Security & compliance: IP, NDAs, ISO 27001, GDPR
For me, this is non-negotiable. Your intellectual property is your most valuable asset. A trustworthy partner must have ironclad security practices. This includes:
IP Protection: Per Civil Code 2015 Arts 715–726 and Law 52/2017 on Technology Transfer, your outsourcing contract must include an explicit IP assignment clause—beyond an NDA—detailing that all source code, designs and related rights transfer to you upon acceptance and payment.
Data Security: Certifications like ISO 27001 are a strong indicator of a commitment to security.
Privacy Compliance: Beyond ISO 27001, under Cybersecurity Law 2018 and Decree 13/2023, any vendor processing Vietnamese personal data must localize data or secure approval, implement mandated technical measures, and report breaches within 72 hrs. If handling EU data, ensure GDPR‑compliant transfers (SCCs or BCRs).
Quality Assurance: Comprehensive quality assurance processes are essential to ensure the reliability and security of your software solutions.
Pricing Models and Hidden Costs to Watch For
Hourly, fixed price, dedicated team—what each model means
You’ll typically encounter three pricing models:
Hourly (Time & Materials): You pay for the hours worked. This offers flexibility but can be unpredictable in cost.
Fixed Price: You agree on a set price for a specific scope of work. This provides cost certainty but can be rigid if requirements change.
Dedicated Team: You hire a full-time team that works exclusively on your project.
This is the best model for long-term projects, as it fosters deep integration and knowledge retention. Many companies choose to establish offshore development centers in Vietnam to access dedicated teams and optimize project outcomes.
Typical price ranges in 2025 for mid-senior developers
While rates vary, you can expect significant value. Data from Arc.dev, updated for 2024, shows that software engineer salaries in Vietnam are highly competitive, allowing outsourcing firms to offer rates that are often a fraction of what you’d pay for equivalent talent in the U.S. or Europe. This translates directly into a longer runway for startups and a higher ROI for established companies.
Outsourcing software development to Vietnam means you get competitive rates without compromising on quality.
Hidden costs to watch for
What most vendor price lists won’t show you are the additional costs mandated by Vietnamese labor law. Under Labor Code 2019 Articles 101–104 and Decree 58/2020, you will incur employer contributions of 8% Social Insurance + 1.5% Health Insurance + 1% Unemployment Insurance on top of gross salaries. In addition, "13th-month" bonuses are customary (per MoLISA Circular 13/2020), so it is crucial to confirm with your service provider if this is included in their pricing. A transparent partner will be upfront about these costs, while an opaque one might surprise you later.
Most in-demand outsourced services in 2025
Web & mobile app development
This is the bread and butter of outsourcing, and Vietnamese firms excel at building high-quality, user-friendly applications for both iOS and Android. They also have strong expertise in web application development, mobile application development, and web development for clients worldwide.
AI/ML development and data engineering
Vietnam is moving up the value chain, and its top firms are rising to the challenge. In fact, Vietnam News recently highlighted the “Top 10 Outstanding Digital Technology Enterprises in 2024,” recognizing companies for their achievements in advanced fields like AI and big data. This proves the country’s growing capacity for complex, innovative work.
Vietnamese firms are getting recognized for their expertise in machine learning and natural language processing, delivering advanced AI solutions for various industries.
Cloud-native systems and DevOps
Modern businesses run on the cloud. Vietnamese developers have deep expertise in cloud computing and can deliver scalable, reliable cloud-based solutions for digital transformation. They are skilled in AWS, Azure, Google Cloud Platform and have DevOps expertise to build, deploy and manage scalable, resilient systems.
Custom ERP and enterprise application modernization
Many large companies are stuck with outdated legacy systems. Vietnamese partners are increasingly being trusted to handle complex projects modernizing these core applications, integrating with new technologies and unlocking new efficiencies. Vietnamese partners are recognized for delivering high quality software solutions that drive business transformation.
Red Flags When Outsourcing to Vietnam, And How to Avoid Them
Lowball pricing = quality risks
If the price seems too good to be true, it probably is. Extremely low rates are often a sign of inexperienced developers, poor management or high turnover environment. You want value, not the lowest price.
Overpromising without infrastructure
Be wary of a small firm that can do everything. A capable partner will be honest about their strengths and weaknesses. Ask for proof of their infrastructure, team size and past projects at the scale you require.
Communication breakdowns and how to vet for clarity
Vet communication skills from your very first interaction. Is their team responsive? Are their answers clear and direct? A partner who communicates poorly during the sales process will be a nightmare to work with once the project starts.
Case Scenario: Startup vs Enterprise. How Their Needs Differ
Retained Clients and Success Stories
At Orient Software, long-term partnerships are at the core of our approach to software development outsourcing. We have successfully delivered custom software development, mobile app development and a wide range of outsourcing services to clients across various industries including finance, healthcare and e-commerce. Our commitment to innovative solutions, technical expertise and quality software outsourcing services has enabled us to build long-term relationships with clients who trust us to drive their digital transformation.
One example is our work with a leading financial services provider. We developed a mobile app that allowed their customers to manage accounts seamlessly on the go, resulting in over 100,000 downloads within the first month of launch. In another project, we partnered with a healthcare company to build a web application that streamlined patient management, delivering significant cost savings and improved patient care. These success stories demonstrate Orient Software’s ability to deliver software outsourcing services tailored to each client’s specific needs, with measurable business impact and long-term satisfaction.
Startup: fast iterations, flexibility, MVP-centric partner
A startup’s priority is speed. It needs a flexible partner who understands the iterative nature of building a new product. The ideal vendor is an agile MVP shop that can deliver a functional product quickly and adapt as the vision evolves.
Enterprise: governance, SLAs, data protection
An enterprise has different needs. Its priorities are security, stability and seamless integration. It requires a partner with strong governance, strict Service Level Agreements (SLAs) and demonstrable experience with enterprise-grade data protection.
How Viettonkin Supports Sustainable Outsourcing Growth
Additional Tips for Clients
If you’re considering software development outsourcing to a company in Vietnam, a few best practices can help you have a smooth and successful experience. Start by thoroughly researching potential partners, look for a software development outsourcing company with a proven track record, relevant industry experience and a reputation for delivering high quality results. Clear and consistent communication is key: establish well-defined goals, timelines and feedback channels from the beginning to keep your project on track.
Be open to new ideas and flexible in your approach, as the best solutions often emerge through collaboration and adaptation. By choosing a reliable partner like Orient Software, you get not only technical expertise but also a commitment to transparency and continuous improvement. With the right outsourcing company in Vietnam by your side, you can navigate the complexities of software development outsourcing with confidence and achieve your business goals efficiently and innovatively.
More than a vendor. we structure entry, tax, compliance and growth
This is where Viettonkin provides unique value. We are not just a vendor directory. We are strategic advisors. For some clients, a simple service contract is enough. For others with a long-term vision, we help structure more complex arrangements, from setting up a local entity to optimizing their tax and compliance framework for sustainable growth in Vietnam.
Example: Building a digital team for a Fortune 500 brand
For a Fortune 500 retail client, we went beyond finding developers. We helped them structure a Build-Operate-Transfer (BOT) agreement. We set up the initial team, established the operational processes and managed it for two years before transferring it to them as a fully functional, captive R&D center. That’s a risk-free strategy for growth.
Cross-border IP, entity setup and tech talent advisory
Our services are designed to support your journey from initial outsourcing to full-fledged market presence. We offer expert advice on cross-border IP protection, legal entity setup and ongoing tech talent advisory to ensure your venture is successful for years to come.
Conclusion: Outsourcing Is a Growth Lever—Choose Wisely
Recap: vendor fit > cheapest option
Outsourcing to Vietnam is one of the most powerful growth levers available to your business today. But success depends on choosing the right partner. The best decision is rarely based on price alone. It’s based on fit—technical fit, cultural fit and strategic fit.
The most powerful attack by Hamas in decades against Israel recently has partially revealed the strength of this force as the conflict escalates in the Middle East “hot spot”
Attack by Hamas against Israsel. Source: Internet
On October 7th, Hamas forces carried out the largest attack on Israel in recent years. Thousands of rockets from Hamas were launched from the Gaza Strip, while mobile attack groups conducted a ground breakthrough to enter the area controlled by Israel.
These events demonstrate that Hamas possesses a relatively significant military potential and can exert pressure on the Israel Defense Forces. This is noteworthy when the military wing of Hamas is built under severely restricted conditions and is frequently under threat.
Organizational structure of Hamas
Members of the Izz ad-Din al-Qassam Brigades, a military wing of Hamas, in 2017 (Photo: AFP).
The Hamas movement (“Harakat al-Muqawama al-Islamiya” – “Islamic Resistance Movement”) was founded in late 1987. Hamas declares that the organization's goal is to destroy Israel and establish an Arab state throughout the entire territory of the former Palestinian mandate. Unlike other Palestinian organizations and movements, Hamas pursues a hardline stance in both political and military struggles.
Initially, Hamas did not clearly divided into military, political and ideological wings. A prominent military wing of Hamas only emerged in the early 1990s. This force is referred to as the Izz ad-Din al-Qassam Brigades. Since then, this brigade has carried out numerous attacks targeting Israel.
In the context of economic blockade by Israel, the people in the Palestinian territories and various Palestinian organizations have to rely on support and supplies from external sources.
Some countries have provided not only humanitarian aid but also weapons and ammunition to the Hamas movement and the Izz al-Din al-Qassam Brigades. Some aid is sent in the form of finished products, while others are transported in individual components. Furthermore, channels have been established to transport raw materials and supplies for the domestic production activities of the Palestinian people.
Despite all limitations and difficulties, the military wing of Hamas continues to maintain a relatively large number of units and is also striving to improve domestic equipment. Recent events have demonstrated that Hamas has accumulated significant military potential and has executed strong strikes against Israel. At the same time, these battles have inflicted serious damage to the reputation of the Israeli military and intelligence agencies.
Combat units of Hamas
For various reasons, the military wing of Hamas has, until now, remained secretive and has not disclosed much information about its forces. However, some data has leaked beyond the control of Hamas and Palestine. Additionally, foreign intelligence agencies also provide information about the Izz ad-Din al-Qassam Brigades.
According to the statistics from the Military Balance, Hamas' combat brigades consist of approximately 15,000-20,000 individuals. Other studies estimate this figure to be around 30,000-40,000 people.
In addition to regular forces, the Izz ad-Din al-Qassam Brigades also have reserve forces, numbering in the tens of thousands. Moreover, recruiting new members into the forces is often not very challenging.
Foreign intelligence indicates that the organizational structure of the Izz ad-Din al-Qassam Brigades does not exceed the level of companies and battalions. In total, they have 27-30 battalions and around 100 companies. There is also information suggesting that they have specialized support units in terms of technology, logistics, and more.
Until recently, leaked sources have revealed that Hamas combat brigades primarily consist of ground forces and have limited capabilities.
However, recent events indicate that Hamas has established and deployed units within other forces, such as airborne assault units or marines forces. Palestine has never had an official air force, but now, some operations are being carried out using unmanned aerial vehicles (UAVs).
Military capabilities of Hamas
The launch pad of the Mutabar-1 air defense system (Photo: Hamas/Topwar).
According to Topwar, despite the addition of some units, the majority of Hamas's combat forces are infantry. This force is equipped with various types of small arms, with the most common being Soviet-era weapon systems, but also includes other weaponry. Handheld anti-tank weapons are also widely used by Hamas forces and are considered as a versatile weapon.
Hamas also employs a number of anti-tank missile systems. These are primarily products from Iran or items from other countries that have somehow been brought into Palestine. Additionally, military air defense systems are also deployed, based on affordable MANPADS (Man-Portable Air-Defense Systems), primarily of Soviet origin.
The Mutabar-1 systems with unguided anti-aircraft missiles have been utilized by Hamas.
Due to Israeli obstructions and a lack of resources and combat capabilities, the Izz ad-Din al-Qassam Brigades do not have armored vehicles. The armored vehicles captured by Hamas forces are often destroyed on the spot or displayed for the Palestinian people to boost morale.
Due to the lack of armored personnel carriers and infantry fighting vehicles, the transportation of troops and fire support for infantry is carried out using commercial vehicles. At local workshops, mounted machine gun vehicles have been assembled. Various types of weapons can also be used on the same vehicle. Motorcycles are employed as light transport vehicles.
The engineering units of the brigade have employed both cars and motorcycles for their advances. They traversed barriers in the Israel-Gaza border region, utilizing available equipment to accomplish their missions without undergoing any specific training.
In recent attacks, Hamas forces have employed an entirely new vehicle to enhance mobility.
Hamas fighters have approached some of Israel's targets using paragliders. Single and two-seater commercial airplanes have also been utilized. These vehicles are used to penetrate Israel's air defenses. Motorboats are also employed as landing craft.
Social media videos show that Hamas fighters have employed motorized paragliders to effectively infiltrate areas under Israeli control.
The radar reflectance cross-section of motorized paragliders is very small, and their slow speed and low altitude make them difficult to detect by radar. Israel typically uses infrared systems to detect and alert low-altitude targets, but this time, the motorized paragliders of Hamas fighters successfully infiltrated, largely due to Israel's agile combat readiness.
For reconnaissance and aerial attack operations, the military wing of Hamas has employed small drones. These UAVs are sourced from the commercial market or assembled from readily available components.
The video capturing Hamas UAV dropping ammunition on an Israeli tank and a border post has been widely circulated. In both cases, Hamas UAVs approached the targets unhindered, carried out the attack, and then left.
Hamas forces are reported to also use suicide UAVs in their attacks. Drones with warheads are believed to be manufactured with the support of foreign entities.
According to Defense Blog, members of Hamas have drawn lessons from the Russia-Ukraine conflict and are using UAVs to target Israel's main battle tanks, including the Merkava, one of the best-protected main battle tanks in the world.
In addition to attacking Israel's tanks, small-sized UAVs are also used to target Israeli soldiers. Social media videos show small UAVs hovering above Israeli soldiers and dropping grenades on them, but Israel has very little reaction.
The primary offensive weapon of the Izz al-Din al-Qassam Brigades, which has caused significant damage to Israel over the years, is rocket artillery. Hamas employs various types of unguided rockets. Underground workshops of Hamas have produced several such rockets with different calibers and characteristics.
The quantity and quality of self-produced rockets have gradually improved over time. Additionally, rocket launchers have also been developed. These launchers were utilized in a recent Hamas attack.
How does Hamas build its forces?
A Palestinian man hanging down a tunnel on the Gaza-Egypt border, southern Gaza Strip (Photo: AFP).
Last weekend, Hamas launched an attack from the Gaza Strip, a coastal land strip spanning 360km2, bordered by Israel on two sides and Egypt on one side. This is an economically underdeveloped area with a dense population and limited resources.
Gaza has been virtually cut off from the rest of the world for nearly 17 years, with Hamas in control, leading to Israel and Egypt imposing a strict blockade on this territory. Israel also enforces an air and sea blockade and conducts surveillance operations in Gaza.
This raises the question: How does Hamas accumulate such a vast weapon, enabling the group to carry out coordinated attacks on Israel that have resulted in over 1,200 casualties and thousands more injured, all while continuing rocket launches?
According to CNN, experts have identified several factors supporting Hamas in the process of building its forces.
The role of Iran?
Hamas obtains weapons through local trade or production and receives some military support from Iran, according to a report by the U.S. Central Intelligence Agency (CIA).
Although the Israeli and U.S. governments have not directly identified any role of Iran in Hamas's recent attacks last weekend, experts believe that Iran has long been a primary military supporter of Hamas, smuggling weapons into the region through secret border-crossing tunnels or boats evading the blockade in the Mediterranean.
“Hamas's tunnel infrastructure remains extensive, while the infrastructure of Israel and Egypt often experiences degradation”, according to Bilal Saab, a senior fellow and director of the Defense and Security Program at the Middle East Institute (MEI) in Washington.
“Hamas has received weapons from Iran smuggled into the Gaza Strip through tunnels. These weapons often include long-range systems”, stated Daniel Byman, an expert at the Cross-Border Threats Project at the Center for Strategic and International Studies (CSIS).
“Iran also transports advanced ballistic missiles to Hamas by sea, along with components for manufacturing in Gaza”, said Charles Lister, a researcher at MEI.
Furthermore, analysts believe that Iran could also be an adviser to Hamas.
“Iran also helps Hamas domestically produce weapons, allowing Hamas to create its own armory” noted expert Byman.
A senior official of Hamas in Lebanon provided detailed information about Hamas' weapons production activities in an interview with RTArabic, a Arabic news channel of Russian Today, on October 8th.
“We have local factories that produce everything, including missiles with ranges of 250km, 160km, 80km, and 10km. We have factories producing artillery and mortar shells. We have factories producing Kalashnikovs (assault rifles) and ammunition for these types of guns. We are producing ammunition with the permission of the Russians. We are building facilities in Gaza”, stated Ali Baraka, a Hamas official.
Iran has denied any involvement in Hamas's recent attacks on Israel. The spokesperson for the Iranian mission at the United Nations stated that Iran supports the actions of Hamas but does not direct them.
Weapon enhancements
Rocket launched from Gaza into Israel (Photo: Reuters).
For larger equipment, MEI expert Lister noted that Iran's Islamic Revolutionary Guard Corps (IRGC), a wing of the Iranian military directly responsible to the country's supreme leadership, has been training weapons for Hamas engineers for nearly two decades.
“For years, access to more advanced systems has provided Hamas engineers with the necessary knowledge to significantly enhance domestic production capabilities”, revealed expert Lister.
Additionally, according to Mr. Lister, Iran continually updates training programs for Hamas weapon manufacturers.
“Hamas rocket and missile engineers are part of Iran's regional network, so regular training and exchanges in Iran are part of Iran's efforts to professionalize their forces across the region” , said expert Lister.
However, Hamas also seeks ways to supplement the material source for the types of improvised weapons.
Gaza lacks heavy industry to support the production of weapons like other places around the world. According to the CIA report, the main industries in Gaza are textiles, food processing, and furniture.
However, one of the main export items in Gaza is scrap metal, a type of iron that can provide raw materials for manufacturing weapons right within the tunnel network beneath this area. In many cases, this metal is found in intense conflicts in Gaza, according to expert Ahmed Fouad Alkhatib.
“When the infrastructure in Gaza is destroyed in Israeli airstrikes, what remains, including metal sheets and pipes, steel rods, and electrical wires, is taken to the weapon production workshops of Hamas, where they are fashioned into rocket casings or other explosive devices”, said expert Alkhatib.
Additionally, according to Mr. Alkhatib, the recycling of unexploded Israeli ordnance for use as explosive material and other components has also contributed to Hamas' weapons stockpile
“The activities of the Israel Defense Forces have indirectly provided Hamas with materials that are closely monitored or completely banned in Gaza”, added expert Alkhatib.
In the recent attacks over the weekend, Hamas' primary weapons were still rockets, but they were no longer simple projectiles, which were previously called "flying pipes". At least, they were equipped with multiple launchers similar to standard systems.
In the latest video released by Hamas, a large number of light-class rocket launch systems appeared. Although they may not visually compare to the rocket launchers used in the Russia-Ukraine conflict, this time, their reliability and stability far surpass what simple rockets could achieve in the past.
Additionally, there have been advancements in other types of weaponry. For instance, Hamas employs an upgraded RPG-7 anti-tank rocket launcher to target Israeli tanks with dual-explosive warheads, offering more effective countermeasures against reactive armor. Its armor-penetrating depth also ensures the capability to penetrate through multiple layers, especially on the sides and rear of the vehicle.
Supported by enhanced weaponry and more refined tactical training, the armed forces of Hamas have achieved surprising results in the initial stages of the conflict.
The modern Merkava tanks of Israel were destroyed by Hamas (Photo: AP).
Of course, all of the above doesn't happen overnight.
According to Aaron Pilkington, a U.S. Air Force analyst specializing in Middle Eastern affairs and a doctoral candidate at the University of Denver, to fire thousands of rockets in a short period, as seen in the weekend raid, Hamas undoubtedly built up its own weapons stockpile. This includes both imported and domestically produced weapons over an extended period.
Baraka, a Hamas official in Lebanon, acknowledged that this group of fighters took two years to prepare for the attack on Israel last weekend.
“Hamas allies have supported us with weapons and finances. First and foremost, Iran has provided us with both financial support and weapons”, revealed Mr. Baraka.
Analysts also acknowledge that the scale and scope of Hamas attacks on Israel have caught the intelligence agencies of Israel and other countries off guard.
“Firing a series of rockets is not overly complex. But what's surprising is how they can build stockpiles, move, deploy, and launch thousands of rockets while evading the intelligence of Israel, Egypt, and Saudi Arabia. It's hard to comprehend how Palestinian fighters could accomplish this without guidance”, said expert Pilkington
Source: Topwar, CNN, BI, Defense Blog
In the third quarter of 2023, Vietnam'ssocio-economic situation is undergoing a phase of noteworthy transformation, driven by critical factors such as GDP, CPI, and the dynamic state of the labour market. This period is marked by a robust GDP growth rate, signifying the nation's resilience and potential in the global economy. As the country navigates the intricacies of economic development, it faces multifaceted challenges and opportunities in areas like education, healthcare, and infrastructure. This article aims to dissect the current socio-economic situation, highlighting the significance of these key indicators while delving into the nuanced interplay of forces that define Vietnam's evolving landscape.
Economic Performance Indicators
GDP Growth and Key Sector Contributions
In the third quarter of 2023, Vietnam's socio-economic landscape underwent a series of notable shifts. The nation's GDP growth rate held steady, registering an estimated 5.33% year-on-year expansion, reaffirming its economic vigor.
Over the initial nine months of the year, key sectors played distinctive roles in shaping Vietnam's economic performance. The agro-forestry-fishery sector reported a 3.43% increase, demonstrating its ongoing importance in supporting the nation's sustainable growth. The industrial and construction sector contributed significantly with an expansion of 2.41%, reflecting its resilience and potential.
Perhaps most notably, the service sector, encompassing diverse domains like finance, healthcare, and education, posted an impressive 6.32% growth. As reported by the General Statistics Office (GSO), this sector played a pivotal role, contributing 68.57% to the overall economic expansion. This growth underscores the adaptability and innovation characterizing the Vietnamese services industry.
The agro-forestry-fishery sector reported a 3.43% increase, demonstrating its ongoing importance in supporting the nation's sustainable growth. Source: VNA
Inflation Concerns and Economic Realities
However, amidst these achievements, inflation rates remained a concern, as they can affect consumer purchasing power and overall market stability. According to GSO data, in September, the CPI increased by 1.08% compared to the previous month, rising 3.12% since December 2022, and 3.66% compared to the same period last year. The average CPI recorded during the third quarter of the year grew by 2.89% in comparison to the third quarter of 2022.
Consumer Price Index in Vietnam. Source: tradingeconomics
While the economic picture demonstrates progress, the report by the GSO portrays an environment that remains challenging, with Vietnam striving to meet its ambitious economic growth targets set by the National Assembly. The GDP growth in the first nine months of 2023 reached a modest 4.24%, falling short of the targeted 6%-6.5% growth for the entire year. This shortfall reflects both external challenges, as the global economy faces a downturn, and internal economic difficulties, including high inflation, stringent financial and monetary conditions, and fluctuations in financial and real estate markets. These circumstances collectively weigh on investors' confidence.
Expectations at the end of the second quarter had suggested that Vietnam needed to achieve a growth rate of 8-9% in the last two quarters to attain its annual growth target. However, the data from the third quarter paints a more challenging reality, necessitating a substantial push for double-digit growth in the final quarter. These economic dynamics emphasize the importance of proactive economic policies, adaptability, and resilience as Vietnam navigates the complexities of its socio-economic landscape.
Growth in Vietnam's Labor Force
Expanding Labor Force
According to the report by GSO, in the third quarter of 2023, Vietnam's labor force, comprising individuals aged 15 and older, witnessed growth, reaching an estimated 52.4 million people. This reflects an increase of 92.6 thousand individuals compared to the previous quarter and a notable rise of 546 thousand individuals over the same period last year. Among these, employed workers numbered approximately 51.3 million, demonstrating an increase of 87.4 thousand people compared to the previous quarter and a substantial expansion of 523.6 thousand workers over the same period in the previous year.
Stable Unemployment and Underemployment Rates
The unemployment rate among the working-age population remained relatively stable at 2.3% during the third quarter of 2023, showing no significant change when compared to the previous quarter but marking a slight increase of 0.02 percentage points from the same period last year. Similarly, the underemployment rate among working-age individuals stood at 2.06%, maintaining consistency with the previous quarter but indicating a noteworthy rise of 0.14 percentage points compared to the same period in the previous year.
Positive Income Trends
As per the GSO report, a significant gauge of socio-economic well-being, the average income of workers during the third quarter of 2023 was estimated at 7.1 million VND per month. This represents a promising increase of 146 thousand VND when compared to the second quarter of 2023, signifying a positive trend in income growth. Furthermore, when contrasted with the same period in the previous year, the average worker's income demonstrated substantial growth, surging by 359 thousand VND. These developments underscore the progress in income stability and economic well-being among the labor force in Vietnam during the third quarter of 2023.
Vietnam's labor force witnessed growth, reaching an estimated 52.4 million people. Source: VOV
Challenges and Opportunities in Vietnam's Economic Development
Meeting Growth Targets Amid Complex Landscape
The pursuit of achieving Vietnam's growth target of 6-6.5 percent for the year remains a formidable challenge, requiring a concerted effort to overcome. Recent adjustments to growth projections by the Ministry of Planning and Investment reflect the complex landscape facing the country. In the most optimistic scenario, a 6 percent economic growth for the entire year necessitates a remarkable 10.6 percent increase in the fourth quarter. The second scenario envisions a 5.5 percent economic growth in 2023, requiring an 8.8 percent increase in the fourth quarter. The least favorable scenario involves a 5 percent growth, demanding a 7 percent surge in the fourth quarter. These scenarios underscore the need for substantial economic rejuvenation in the remaining months of the year.
Hurdles in Economic Restructuring
The economic restructuring program, integral to sustainable growth and development, encounters its own share of hurdles. Out of the 30 targets set by the National Assembly's Resolution 31/2021/QH15, only 10 are expected to be attainable. Thirteen of these goals, especially those related to productivity enhancement, pose significant challenges. Overcoming these obstacles hinges on several critical factors. Effective coordination of monetary policy and fiscal easing are vital, as is the need for ongoing reform to reduce transaction costs for businesses and restore market confidence.
A Multi-Faceted Approach for Economic Reinforcement
To bolster economic growth, a multi-faceted approach is required, beginning with the anticipation of more favorable external factors. Implementing support policies, including demand stimulation, market diversification, public investment promotion, and the utilization of Free Trade Agreements (FTAs), remains crucial. Additionally, sustained business support measures, such as debt relief, reduced market interest rates, and preferential credit packages, along with fiscal policies involving tax and fee reductions, are necessary to reinforce the business environment. This dynamic approach is indispensable for steering Vietnam's economy towards achieving its ambitious growth targets in the face of persistent challenges.
In summary, the socio-economic situation in Vietnam for the Q3 of 2023 is marked by notable indicators. While GDP growth has been recorded at a robust 5.33%, it is imperative to recognize that inflation, reflected in the CPI, increased by 1.08% in September. The economic landscape features a 3.43% expansion in the agro-forestry-fishery sector and a 2.41% growth in the industrial and construction sector, while the service sector significantly contributed with a 6.32% uptick. The labor force also exhibited positive trends, with more employed workers, but the country still faces an unemployment rate of 2.3%. As we look ahead, these insights underscore the significance of continuous analysis and strategic planning. For comprehensive perspectives and guidance in navigating Vietnam's dynamic socio-economic environment, turn to Viettonkin - your partner for success.
Viettonkin Consulting has helped its clients register their businesses in the Philippines for years. Our offerings consist of i) services for company formation in the Philippines; ii) registration for a government license; iii) establishing corporate bank accounts at local or foreign banks; iv) hiring new personnel; v) work permit, visa and immigration related services and vi) provision of office lease and/or office supplies and equipment.
Philippines business structure overview
The Philippines has the fifth-largest GDP in ASEAN. For clients seeking to expand their market reach throughout the country and the larger ASEAN area, incorporation of a Philippines firm is advised;
For foreign investors looking to start a business in the Philippines, a joint-stock corporation is a popular choice. A foreign firm no longer needs to appoint a board of directors as of 2019;
Since 2019, a Philippines One Person Corporation (OPC) with just one shareholder—who may be a foreigner—can be registered;
There are further business entities in the Philippines;
Although it can go up to US$2.5 million for some industries and activities, the minimum paid-up capital for a foreign business in the Philippines is $200,000. Therefore, opening a corporate bank account in the Philippines is required before registering a company.
Since English is the official business language in the Philippines, finding English-speaking employees is simple. The Philippines has one of the lowest average salaries in ASEAN at $3,294 USD. Our company can help our clients find local employees in the Philippines.
Benefits of Philippines company registration
Without entering the nation, foreigners can register a company in the Philippines;
The Philippines is a prospective frontier market for international business people due to:
In 2022, the Philippines' economy is anticipated to develop at the quickest rate in South East Asia. For business owners establishing Philippine enterprises, this will translate into a variety of prospective investment options.
With several rating upgrades since 2015, rating agencies like Moody's Investor Service, Fitch, and Standard & Poors currently consider the Philippines favorably for investment;
The Philippines has a thriving startup culture that is backed by laws like the Innovative Startup Act and the Philippines Innovation Act, both of which were signed into law in 2019;
For business people looking to invest in the Philippines, the Philippine Economic Zone Authority (PEZA) provides a variety of online services.
The Philippines is a fantastic location to establish an export-focused service business because
Infrastructure, utilities, and office space are inexpensive. Additionally, the average incomes in the Philippines are among the lowest in all of ASEAN. Filipinos with English proficiency can generally be hired by foreign companies for less than $5,000 annually;
Due to the vibrant expat population, high quality of life rankings, and lack of significant recruitment barriers, a local company can attract foreign talent;
The Philippine government provides tax breaks and additional assistance for foreign investment projects, such as i) breaks for corporate taxes and ii) customs taxes on imported machinery and raw materials, which have been decreased or waived. Projects that qualify include i) centers for medical travel; ii) projects in hospitality for the elderly tourism sector and iii) IT companies;
The information and communications technology (ICT) service industry in the Philippines is developing quickly. In addition to serving as a desirable base for the IT and Global In-House Center (GIC) services sectors, the nation is a recognized global Business Process Outsourcing (BPO) powerhouse. The following should be noted:
With a large pool of tertiary graduates, particularly in fields like finance, accounting, and business IT, the Philippines is ranked ninth internationally as a BPO destination;
Numerous call centers and BPO firms are housed in the Philippines Cyber Services Corridor (PCC), which is supported by a high-bandwidth fiber backbone and digital network.
A number of market access benefits are available when registering a business in the Philippines because the country is a signatory to the ASEAN Trade in Goods Agreement (ATIGA). These consist of:
Closer linkages in the economy between the Philippines and other ASEAN nations to allow for economies of scale for Philippine businesses;
A bigger market that Filipino businesses can tap into;
Lowering some tariffs and trade restrictions.
It is simple to register a company in the Philippines because
A single shareholder and director, who may be a foreign national residing outside the Philippines, may register a corporation in the Philippines;
Because registration processes are digitized, the majority of applications for company registration in the Philippines are processed in about three weeks. Regrettably, tax registration, which might take up to six weeks, is not yet subject to this.
Problems with Philippine company registration
Unless the company hires more than 50 employees, in which case the paid-up capital minimum is US$100,000, a foreign-invested company in the Philippines must have US$200,000 in paid-up capital. However, sectors that are restricted from receiving foreign investment include i) retail; ii) agriculture, and iii) advertising requires up to US$2.5 million in paid-up capital;
A limited liability firm is not permitted by Philippine law. If they want to open a business in the Philippines, foreigners must: i) register a branch in the Philippines, which gives the foreign company unlimited liability for activities there; ii) Philippine One Person Corporation or Joint Stock Corporation;
A limited liability firm is not permitted by Philippine law. If they want to open a business in the Philippines, foreigners must: i) register a branch in the Philippines, which gives the foreign company unlimited liability for activities there; ii) a One Person Corporation in the Philippines or iii) a corporation with joint-stock;
Our clients must open a temporary bank account before a joint-stock company may be registered. For the purpose of opening an account, some local banks demand that a foreign bank signatory get a visa and present the Alien Certificate of Incorporation;
Philippine company formation takes time as licenses must be approved by numerous government agencies as well as the municipality where the business will be located;
There is a lot of restrictions
The Philippines publishes a list of industries that demand 100% Filipino ownership;
Property registration is costly and takes longer than a month to complete.
The Philippines does poorly in terms of investor protection and the ease of acquiring financing;
The Philippines is only listed by the World Bank as one of the top 95 countries in the world to launch a business because of the aforementioned reasons.
Additionally difficult reasons to conduct business in the Philippines are:
The per capita income in the Philippines is just over US$3,000 per year. 25% of people are considered to be below the poverty level;
Infrastructure for inter-island travel must be updated to support domestic commerce and the movement of people and goods;
Mindanao's southernmost island is still susceptible to political violence and terrorism.
The appointment of a resident treasurer is necessary for Philippine business registration. In addition to reviewing and ensuring the accuracy of the Philippines firm's financial statements, the treasurer's duties are similar to those of a company secretary. Our clients will receive resident treasurer services from Viettonkin Consulting.
All local businesses in the Philippines are required to submit numerous accounting and tax-related returns, including:
Within 60 days of the conclusion of each quarter, the quarterly provisional corporate income tax return (1702Q);
20 days after the end of each month, a monthly VAT return (2550M) is required;
25 days after the end of each quarter, a quarterly VAT return (2250Q) is due;
10 days after the end of each month, withholding tax returns (1601C and 0619E) are due.
Within 30 days at the end of each quarter, you must submit the quarterly enhanced withholding tax return (1601EQ).
The preparation and submission of these returns will be finished by Viettonkin Consulting PLC. To discover our price for these services, visit this page.
A single shareholder and director are permitted for a Philippine corporation, but this individual must be an individual. There must b e a minimum of two shareholders for entities with corporate shareholder(s).
Best applications for a firm based in the Philippines
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Prosperous, democratic, and strategically located off the Chinese coast, Taiwan has long been an important ally of the United States under the One China policy. However, in the context of the intense rivalry between the U.S. and China, along with several controversial claims U.S. President Joe Biden has recently made about protecting Taiwan in the case of an unprecedented attack by China, concerns start to emerge about whether the U.S. has changed its approach towards Taiwan. So what is the whole picture of the U.S.-Taiwan geopolitical relations?
Historical background of U.S.-Taiwan relations
The relationship between the U.S. and Taiwan has a turbulent and complicated history. The U.S. had long backed and recognized the Republic of China (i.e. Taiwan) but it ended at the end of 1978 when the U.S. moved to acknowledge the People’s Republic of China (i.e. China) due to the changing geopolitics of the Cold War. Since then, the U.S. has claimed that Taiwan is a part of China and the People’s Republic of China is the only legitimate government of China but has resolutely refused to acknowledge Chinese sovereignty over Taiwan. Thus, today, the U.S. continues to have formal relations with China and unofficial ones with Taiwan under the One China policy.
In particular, the U.S. passed the Taiwan Relations Act (TRA) in 1979 to safeguard its substantial security and commercial interest in Taiwan. Through the American Institute in Taiwan (AIT), the TRA also authorized the maintenance of ties between Americans and Taiwanese in terms of business, culture, and other areas.
The growing geopolitical importance of Taiwan to the U.S.
Taiwan is of great strategic importance to both the U.S. and China due to its geopolitical location. The island of Taiwan is located about 180 kilometers off the southeast coast of mainland China across the Taiwan Strait, with a total area of around 35,000 square kilometers. Undeniably, the island is an important link in the “first island chain”, which includes such pro-American countries as Japan, South Korea, and the Philippines. These islands and peninsulas together form a vital stronghold, helping the U.S. contain China’s influence and safeguard trade routes.
The island of Taiwan is perhaps the most important link in the “first island chain” due to its location central to Japan, with South Korea in the northeast and the Philippines in the southeast. It is also located the closest to China of all four islands and peninsulas mentioned. Goods and the navy that need to travel from South Korea or Japan to the south or vice versa will have to pass through the area of influence of Taiwan. In addition, Taiwan and the Philippines block access to the sea of important southern areas of China such as Guangzhou, Fujian, and Hong Kong.
According to Bloomberg, the Taiwan Strait is the arterial route for cargo ships from China, Japan, and South Korea to the west, carrying goods from Asian factories to Europe and America. Any action affecting this transport route will further disrupt the global supply chain, which has already been fragile because of the Covid-19 pandemic and the Ukraine conflict. China, as the world’s largest exporter, would be hit hard by any military action taking place along this crucial shipping route. During the past 7 months of 2022, approximately 48% of the total 5,400 container ships passed through the Taiwan Strait, bringing clothes, home appliances, mobile phones, and semiconductors from China and Taiwan to all five continents.
U.S. General Douglas MacArthur, who played a crucial role in the Pacific during World War II, highly appreciated the island in many battle strategies used by the U.S. to contain China during the Cold War. Specifically, he once referred to the island as the most powerful weapon of the U.S. Navy - an aircraft carrier. Today, with China’s growing military power and influence, the island of Taiwan does not hold much deterrent power but rather has a defensive meaning, preventing Beijing from projecting its influence out to the world.
Taiwan deserves the title of “an unsinkable aircraft carrier” not just because of its location but also its topography. The island is surrounded by water on all four sides and thus any attack on Taiwan will have to be by air or by sea.
Furthermore, the U.S. government aims to keep its credibility in East Asia by honoring its long-standing commitment to the Taiwanese people. Through its military presence and alliances, the U.S. intends to continue to be the primary guarantor of East Asian security and the balance of power. If the U.S. just left Taiwan for China, its position in Asia would be significantly undermined and China would be able to drive the U.S. out of the region.
Another factor that makes Taiwan important to the U.S. lies in its economic success. Trade ties between the two are substantial. According to the U.S. Congressional Research Service, Taiwan is the eighth-largest trading partner of the U.S., with total goods trade estimated at $114.1 billion in 2021. Taiwan has also risen to the top of the world rankings for computer and telecommunication component technology, playing a crucial role in the growth of this vital sector.
With the Taiwan Semiconductor Manufacturing Company (TSMC) supplying half of the world's yearly supply of chips, semiconductor chips have grown in importance as a diplomatic asset for Taiwan in recent years. Nearly all key U.S. technology companies now have a presence in Taiwan. The U.S. acquires its most cutting-edge chips for military hardware that cannot be produced domestically from TSMC. Taiwan is also the second-largest market for U.S. semiconductor equipment. The island has proven even more vital to the U.S. as the U.S.-China technological war becomes more intense. With the support of the Biden administration, TSMC bought a site in Arizona in 2021 to construct a chip factory there, which is expected to be completed by 2024.
Notable fields of cooperation in U.S.-Taiwan geopolitical relations
Trade and investment
The economy of Taiwan is well developed with an estimate of about $786 billion in goods and services in 2021. Commercial, financial, and trade ties between the U.S. and Taiwan are robust and ever-growing. The American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO) have hosted the Economic Prosperity Partnership Dialogue between the U.S. and Taiwan since 2020 in an effort to strengthen their economic and commercial ties in areas such as supply chain security and resilience, investment screening, health, science and technology, and the digital economy. To provide a forum to create business initiatives and find potential measures to reinforce vital supply chains, the U.S. Department of Commerce introduced the Technology, Trade, and Investment Collaboration framework with Taiwan in 2021.
The U.S. is Taiwan’s second-largest trading partner, while Taiwan’s trade with the U.S. ranks eighth overall. The U.S. exports of goods and services to Taiwan fueled an estimate of 188,000 American jobs in 2019.
In 2020, total investments made by Taiwanese companies in the U.S. were close to $137 billion. Manufacturing, wholesale trade, and depository institutions make up the majority of Taiwan's direct investment in the U.S.. These investments directly create an estimate of 21,000 jobs in the U.S. and $1.5 billion in U.S. exports.
Science and technology
Taiwan and the United States collaborate in fundamental and cutting-edge research in a variety of fields, including physics, atmospheric science, meteorology, nuclear energy, environmental conservation, space science, bio-medical and life sciences, etc. As of December 2021, the two signed over 270 bilateral collaborative agreements in an attempt to advance research and technology.
Military
Under the Trump administration, the U.S. strengthened its relations with Taiwan over China’s rising military concerns, particularly by selling more than $18 billion worth of weaponry to the Taiwanese military, which is the highest sum ever seen in any U.S. presidency.
The Biden administration has adopted a similar strategy, maintaining arms sales and endorsing the Trump administration’s decision to facilitate more informal meetings between the U.S. and Taiwanese officials. Additionally, the U.S. engages Taiwan in military training and dialogues, frequently deploys ships across the Taiwan Strait to show its military presence in the region, and has encouraged Taiwan to raise its defense budget.
A promising picture of economic cooperation between U.S.-Vietnam and Taiwan-Vietnam
Taiwan-Vietnam economic cooperation opportunities
Taiwan has long been among Vietnam’s major economic partners. It ranked fourth among investing nations in 2021 with 2,845 projects totaling more than $35.3 billion in registered cumulative capital. With roughly $25.3 billion in two-way trade, Taiwan emerged as Vietnam’s fifth-largest trading partner, with $20.7 billion in exports to Vietnam and $4.5 billion in imports from Vietnam. Notably, Taiwan was the fourth-largest market for tourism in 2021 and was the top importer of Vietnamese labor, with over 205,000 Vietnamese workers there.
Taiwan’s new government of Tsai Ing-wen has unveiled its New Southward policy to promote trade and investment ties with ASEAN nations. Vietnam is potentially regarded as a key economic partner of Taiwan in its new strategy due to Vietnam’s implementation of the economic liberalization policy and efforts to lift trade barriers through free trade agreements (FTAs, TPP, RECP, etc.). More Taiwanese businesses have recently invested in Vietnam, and multinational corporations have also moved production plants there, expanding Vietnam's potential for economic cooperation and elevating its status in the global supply chain.
U.S.-Vietnam economic cooperation opportunities
Ever since diplomatic relations between the U.S. and Vietnam were normalized, the trade between the two countries has significantly increased. Noticeably, according to the General Department of Customs, bilateral trade between Vietnam and the U.S. reached a record-high $111.56 billion in 2021, an increase of about $21 billion from the year before. This figure makes the U.S. Vietnam’s second-largest trading partner now.
Vietnam has also benefited in various ways from the U.S.-China trade war. Vietnamese exporters have noticed a rise in demand for their goods, particularly clothing and textiles. For U.S. investors taking advantage of the China plus one strategy, which entails moving or expanding operations to other countries to enhance market access, Vietnam has emerged as a viable alternative to China.
Major U.S. companies have already moved production lines to Vietnam, including Apple, Intel, Qualcomm, Universal Alloy Corporation (UAC), Nike, and KeyTronicEMS. U.S.-based Universal Alloy Corporation (UAC) has invested $170 million in the Da Nang Hi-Tech Park to produce electronics for Boeing and Airbus aircraft. Another U.S. investor, Vector Fabrication Inc., has also invested $59 million in Vietnam at the Da Nang Hi-Tech Park.
For foreign investors, Vietnam offers a number of advantages over other Asian countries, including a fairly efficient and stable governmental structure, regulatory and cultural familiarity for businesses accustomed to operating in China, highly competitive labor costs, and close proximity to existing Asian supply chains. Although the Covid-19 pandemic and U.S.-China trade war have generated great opportunities to entice manufacturing companies to migrate, Vietnam’s greatest challenge now is how to manage its expansion sustainably.
Conclusion
While Taiwan’s public and political parties are inclined to retain the status quo and the Biden administration is expected to continue pursuing its one-China policy, China’s more assertive measures towards Taiwan suggest that further crises in the Taiwan Straits are still likely to occur. However, the geopolitical ties between the U.S. and Taiwan have been greatly strengthened over time, particularly in the economy. Therefore, there are ample prospects for U.S. and Taiwanese investors to establish lucrative businesses in politically stable nations like Vietnam.
In the journey to seek new business opportunities in Vietnam, please let Viettonkin be your right-hand man. Let’s contact Viettonkin now!
“Real estate and retail are two important fields for people, but no business has a comprehensive solution to this problem,” said Mr. Dinh Viet Hung, Chief Information Officer (CIO) of One Mount, explaining why this corporation decided to research and provide solutions for two essential areas of the majority of Vietnamese people. This is also a way for One Mount to realize its goal of serving 75% of Vietnamese households by 2025, with OneHousing to solve the story of the real estate market and VinShop in the retail sector.
Mr. Dinh Viet Hung, Chief Information Officer (CIO) of One Mount.
Bringing 1.4 million "rice-powered" groceries into the digital era
70% of retail goods are still supplied by small businesses, and serve 75% of the needs of the Vietnamese people - according to Nielsen. In fact, these small businesses still trade and use pen and paper to record their activities in the traditional way and are still outside the 4.0 trend. Therefore, according to Mr. Dinh Viet Hung, in order to create a "revolution" to change the retail sector, it is necessary to target nearly 2 million small traders at 1.4 million grocery stores and 9,000 traditional markets, helping them transform by technology but still maintaining the traditional retail model that has become a community culture in Vietnam.
And VinShop has helped bringing 100,000 groceries in 22 provinces and cities "to the technology world" to solve the biggest problem of small traders, which is the source of goods.Through the VinShop application, grocery owners can actively buy up to 4,000 items every time, every where. The fact that VinShop cuts unnecessary intermediaries also helps save operating costs of the whole retail chain by 10-15%, bringing value to participants including manufacturers, distributors, grocers and end customers.
Before One Mount's technology is used, grocery store owners often had a notebook to record the types of items they sold. However, each of these items they buy from a few different suppliers and the prices of these items are also constantly changing, they have to update regularly and do not know all the items that are on promotion to actively buy goods. Technology has helped them solve those problems. Grocery owners only need to go to the VinShop application to have a list of suppliers immediately, choose the source of goods quickly with just one touch instead of searching for each supplier of goods. VinShop also takes advantage of data, suggesting which items are selling well for dealer owners to get goods immediately with transparent and competitive prices.
In addition, VinShop has launched the feature of identifying the store shelves of dealers by, in addition to information from the store, getting data from many different sources. Through the camera, it will be possible to analyze which products are selling well without needing a record notebook.
Grocery owners only need to go to the VinShop application to have a list of suppliers immediately, choose the source of goods quickly with just one touch. Technology may change the way millions of grocery stores operate. However, according to Mr. Dinh Viet Hung, digital transformation for these dealers is not easy because most owners are elderly, so it is difficult to adapt to the application of technology. So One Mount will come to find out what the dealers sell, what problems they face, and then guide them to use the platform.
“When developing the VinShop platform, we had to figure out how to make it easy for dealers to use, with just one touch, they could contact the suppliers. One Mount will have to do for them to see the value of technology application, reduce costs and be effective” said Mr. Hung.
Digital transformation for real estate market transparency
In addition to the VinShop platform in the retail sector, One Mount offers the OneHousing platform to relieve the "pains" of real estate buyers and sellers. Featured by a housing valuation tool, it helps buyers or sellers only take 1 touch to know the exact price of the property at that time. This makes buying and selling transactions quick, easy and transparent.
Sharing about this solution, Mr. Nigel Butler, One Mount's Director of Data Analytics, said that OneHousing collects information from many different sources such as real estate sales transactions, bank valuations, etc. that only technology can do. Then comes the validation stage to filter out information noise and cross-check between sources and apply AI (artificial intelligence) applications to come up with a pricing model. OneHousing not only determines the price of real estate, but also identifies market trends such as how many bedrooms are needed, which type of bedrooms are needed, how high-rise and low-rise building tend to be.
“Buyers often spend a lot of time researching property prices and trends, but now we've solved that problem for them. We use data and AI to analyze data to give advice to homebuyers what to do if they buy houses to invest, what to do if they buy houses to live in,” said Mr. Nigel Butler.
Sharing more about this platform, Mr. Dinh Viet Hung said that after OneHousing analyzes and offers real estate prices, banks may use it as a basis for offering loans very quickly because it does not take time for valuation like now. Even banks can lend customers to buy real estate online and shorten the approval time.
Moreover, this valuation uses AI for analysis, so it will help banks to prevent collusion between credit officers and borrowers to inflate asset values as used to happen. Currently, Techcombank has used OneHousing as a basis for valuation for customers to buy real estate.
“OneHousing does not charge users to encourage buyers and sellers to use technology applications that promote transparency of the real estate market. If more and more users come up, the OneHousing system will evaluate more accurately. Banks may approve loans instantly on this system,” said Mr. Hung.
Banks may use valuation tools as a basis for valuation for real estate borrowers.
Housing valuation tool is just one of three technology tools from OneHousing alongside market analysis and loan approval tools. This trio of breakthrough tools in the real estate industry will empower users to proactively check house values, use price advice sheets for home loan applications at banks, understand project information as well as the area of interest. Time, effort, money and procedures in real estate transactions will be shortened and maximized savings for all participants. Further, technology will promote the real estate market in Vietnam to develop healthier, more sustainable and more vibrant.
The Department of E-Commerce and Digital Economy (Ministry of Industry and Trade) has just introduced the Statistical yearbook of 2022 Vietnamese e-commerce.
2022 Vietnamese retail e-commerce market revenue is about USD 16.4 billion, higher than 3 times of 2017 shown in the Statistical yearbook of the General Statistics Office.
It is estimated that about 60 million online shopping consumers, up more than 5 million consumers compared to the last year and as twice as 2017.
E-commerce revenue will account for about 7.2-7.8% of the total retail sales of consumer goods and services nationwide; 75% of people use the internet, of which, 74.8% of users are online shopping members.
69% of clothes, shoes and cosmetics are the group of goods mostly preferred to be bought through e-commerce, shown the Statistical yearbook.
10-20 products/services shopped online by a person a year is VND about 2-5 million on average shown the report.
INVESTMENT CAPITAL FOR HCMC - MOC BAI EXPRESSWAY IS INCREASED OVER VND 800 BILLION
The pre-feasibility study report, for the construction investment project of Ho Chi Minh City - Moc Bai expressway, which has just been submitted by the People's Committee of Ho Chi Minh City to the Ministry of Planning and Investment for appraisal shows that the total investment capital of this expressway is more than VND 16,700 billion, increased by more than VND 800 billion compared to the 2021 expected total project investment of VND 15,900 billion.
VND 16,700 investment capital is financed from VND 9,296 billion (accounting for 56%) of the Investor, VND 7,433 billion (accounting for 74 %) from the payback of 18 years and 1 month, the budget fund of Ho Chi Minh City and Tay Ninh for site clearance compensation and resettlement assistance.
This expressway is 50 km long. The expressway section crossing Ho Chi Minh City is 23.7 km long, there are 8 lanes for the section crossing Ho Chi Minh City and 6 lanes for the section crossing Tay Ninh, the speed of 120 km/h.
QUANG BINH PROVINCE FINANCES VND 21.5 BILLION TO SUPPORT THE BOAT OWNERS FISHING IN THE SEA
The People's Committee of Quang Binh province has issued a decision on deducting more than VND 21.5 billion from the central fund to support the boat owners fishing in the remote waters.
The People’s Committee of Quang Binh province uses the state treasuries to finance such places as: Dong Hoi city with more than VND1 billion; Quang Trach district with more than VND 1.5 billion; Bo Trach district with nearly VND 3.4 billion, Ba Don town with more than VND 5.5 billion to support them buying hull insurance, crew accident insurance, fuel costs for the fishing boat owners’ trips.
50% OF CHARGES FOR TRANSPORTATION IS PROPOSED TO BE REDUCED.
The Ministry of Finance has just completed a draft circular stipulating the collection rate of certain fees and charges in the field of transportation.
Accordingly, the new rate is expected to be 80% of the current one on the tonnage of ships and boats for domestic maritime activities; Maritime security fees for domestic maritime activities; Fees for entry and exit from seaports for domestic maritime activities etc.
For the fees for entry into and exit from the inland ports and wharves; Waterway reporting fees, the new rate proposed by the Ministry of Finance is 50% of the current rate.
This reduction is expected to apply from the time the Circular issued to December 31, 2022.
VIETNAMESE AIRLINES OPERATE 208,242 FLIGHTS FOR 8 MONTHS
Vietnamese airlines have operated a total of 208,242 flights for the last 8 months, increased by 103% according to the latest report of the Civil Aviation Administration of Vietnam (directly controlled by the Ministry of Transport).
All airlines have gained the very good growth rates. The growth rate of the most airlines is up more than 100% over the same period last year.
The percentage of on-time performance flights (OTP) of the whole market in the past 8 months has decreased by 7.5 percentage points, down to 86.9%. For each airline, no airline gains an increased OTP rate. This means that the airlines have delayed their flights more than the same period last year.
This rate is sharply down on Vietnam Airlines - the airline gains 84% of OTP flights, down nearly 11% compared to the same period. Bamboo Airways gains more than 95% of OTP flights - 1.7 percentage points down. Both Pacific Airlines and Vietravel Airlines gain 93% of OTP flights. VASCO gains 90%. Vietjet gains 84.8% of OTP flights.
For the past 8 months, the fight cancellation rate of the whole market is decreased by 1.5 percentage points. Total cancellation rate for the whole market is 896 fights. VASCO is the airline with 60 cancelled fights, accounting for 1.1% of the operation. Weather is the main reason for cancellation.
PROPOSED CAR LICENSE PLATE AUCTION PILOT | STARTING RATE OF VND 40 MILLION FOR ZONE 1
The Government has just submitted a proposal to the National Assembly Standing Committee for reviewing and supplementing the draft Resolution of the National Assembly on piloting for auctioned license plate option grant into the making program of the 2022 law and ordinance.
Accordingly, the Government proposes to stipulate the starting rate of each number plate put up for auction, to determine the general calculation formula, to apply it uniformly and transparently in all auction cases, the starting rate is the lowest one, in line with the reality.
Specifically, the starting rate for Zone 1 (including Hanoi city and Ho Chi Minh city) is VND 40 million, zone 2 (including the other localities) is VND 20 million.
HO CHI MINH CITY PAYS HIGH WAGES TO ATTRACT 8 AGRICULTURAL EXPERTS
The People's Committee of Ho Chi Minh City has just issued a decision to attract Ho Chi Minh city’s experts and scientists for the period of 2022 - phase 2.
Accordingly, Ho Chi Minh City attracts 8 experts for 5 positions of the Management Board of HCMC Hi-Tech Agricultural Park, including: 2 experts with doctorate degrees or higher majoring in the selection, breeding and production of aquatic breeds, aquatic pathology; 2 experts with doctorate or higher degrees majoring in plant breeding and selection, 2 experts with doctorate degrees or higher majoring in consulting and orienting on technology for production of microbial products applied in agriculture; 1 expert with doctoral degrees or higher majoring in technology-oriented consulting in the field of processing, preservation and post-harvest; 1 expert with doctoral degrees or higher majoring in training, consulting, researching, and producing biological diagnostic kits.
The successful candidates will be provided with an initial support of VND 100 million; The BASE salary multiplied by the multiplier of the senior specialist payroll. For professors and associate professors, the coefficient is 9.6, the coefficient is 8.8 for the other cases etc.
THAILAND IS EXPECTED TO EXPORT 7.5 MILLION TONS OF RICE FOR THIS YEAR
Thailand has exported 4.09 million tons of rice, up 54% compared to the same period last year in the period from January 1 to July 2022, said Thai Government spokesman Rachada Dhnadirek.
Thai rice production in the 2022-2023 season may be 26.92 million tons, up 2.09% compared to the previous season, forecast Thailand's Ministry of Commerce.
Thailand is expected to export 7.5 million tons of rice this year, up from the previous target of 7 million tons thanks to increased rice production as well as the weakening of the domestic currency in the unstable global food security.
Currently, Thailand is the third highest rice exporter in the world after India and Vietnam.
The government has planned several strategies for each critical economic zone to strengthen each community and make the area a catalyst for national prosperity.
New Proposal for Dividing Socio-economic Regions
Currently, Vietnam has six socio-economic regions, including the Northern Midlands and Mountains (14 provinces), the Red River Delta (11 provinces and cities), the North Central region, the Central Coast (14 areas and cities), the Central Highlands (5 provinces), the Southeast region (6 provinces and cities) and the Mekong Delta (13 provinces and cities).
Implementing the Law on Planning, the Ministry of Planning and Investment (MPI) has researched, developed a set of criteria, and proposed zoning plans for 2021-2030. The Ministry of Planning and Investment has submitted to the Government two zoning plans as follows:
Option 01: Divided into 07 regions
According to this plan, 02 regions will be remained (Red River Delta and Mekong River Delta).
Separating the current Northern Midlands and Mountains into the Northeast and Northwest regions.
Separating the current North Central and Central Coast regions into North Central and South Central regions (Thua Thien - Hue province included in the South Central region).
Adjusting 01 province (Binh Thuan) to the Southeast region and merging 04 Central Highlands provinces (Kon Tum, Gia Lai, Dak Lak, Dak Nong) into the South Central region.
The new Southeast region was formed on the basis of the current Southeast region and added two more provinces (Lam Dong and Binh Thuan).
Option 02: Divided into 06 regions
This option proposes the formation of 06 new regions, in which the Northern Midlands and Mountains, the Red River Delta and the Mekong River Delta remain intact.
Re-forming the three regions of the North Central, South Central and Southeast regions as in Option 01 above.
Option 03: Divided into 08 regions
This plan separates the whole country into 8 regions, of which 04 regions ramain unchanged: the Red River Delta, the Central Highlands, the Southeast and the Mekong River Delta.
The Northern Midlands and Mountains are divided into two regions: Northeast and Northwest (as Option 1).
The North Central Coast and the Central Coast are divided into two regions: the North Central Coast (from Thanh Hoa to Thua Thien - Hue) and the South Central Coast (from Da Nang to Binh Thuan).
Option 04: Maintain the current 06 socio-economic regions.
Option 05: Divided into 07 regions
This plan proposes to keep 05 (five) regions: the Red River Delta, the Northern Midlands and Mountains, the Central Highlands, the Southeast and the Mekong River Delta.
North Central and South Central regions will be formed by dividing the Central Coast and North Central regions.
Option 06: Divided into 07 regions, including the New Capital region
According to this option, 03 (three) regions remain unchanged: the Central Highlands, the Southeast and the Mekong River Delta; while separating the North Central and Central Coast regions into the North Central and South Central regions.
Bring 04 (four) provinces (Bac Giang, Phu Tho, Thai Nguyen and Hoa Binh), which belong to the Northern Midlands and Mountains, into the Red River Delta, to form the Capital region (or the expanded Red River Delta).
The Northern Midlands and Mountains with the remaining provinces will be renamed the Northern Mountain region.
The Ministry of Planning and Investment proposes to choose Option 06 as the zoning plan for the 2021-2030 period due to the following advantages:
Ensure high inheritance.
Less disturbance to the area.
Expanding the new development space for the Red River Delta region, forming the new Hanoi Capital region.
Create conditions for some provinces formerly in the Northern Midlands and Mountains region to have more development conditions.
Regional connectivity is enhanced.
This Option also overcomes the limitation that the North Central Coast and Central Coast have too long distances. With Option 6, the advantages of regions will be promoted, creating conditions for rapid and sustainable development of the regions and the whole country.
New Obstacles in Current Context
However, the current division of six economic zones is no longer suitable for the country's actual situation and development goals, especially in the context of increasingly convenient traffic connections, digitization, and new technology applications.
"Regions and provinces are essential and urgent," said Mr. Le Hoang Chau, Chairman of the HoREA. "Economic zoning is scientific, reasonable, and meets people's aspirations to promote socio-economic development and serve as a basis for planning the national urban network." The economic zoning is scientific, reasonable, meeting people's aspirations to promote socio-economic development and serve as a basis for planning the national urban area," said Mr. Le Hoang Chau, HoREA Chairman.
Therefore, HoREA sent a proposal to the Central Economic Commission, proposing economic zoning. Accordingly, HoREA said that it has researched and highly appreciated the suggestion of economic zoning plans of the Ministry of Planning and Investment and asked for comments on the division of 7 economic zones as follows:
The northern mountainous region has ten provinces (Ha Giang, Cao Bang, Bac Kan, Tuyen Quang, Lang Son, Lao Cai, Yen Bai, Dien Bien, Lai Chau, and Son La).
The Hanoi region (Northern Delta and Midlands) has 15 provinces/cities (including Hanoi, Hai Phong, Hai Duong, Hung Yen, Hoa Binh, Phu Tho, Thai Nguyen, Bac Giang, Vinh Phuc, and Bac Ninh). , Thai Binh, Nam Dinh, Ha Nam, Ninh Binh, Quang Ninh).
The North Central region has six provinces (including Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, and Thua Thien - Hue).
The South Central region has seven provinces/cities (including Da Nang, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, and Ninh Thuan).
The Central Highlands region has five provinces (including Kon Tum, Gia Lai, Dak Lak, Dak Nong, and Lam Dong).
The Ho Chi Minh City region (Southeast region) has nine provinces/cities (including Ho Chi Minh City, Binh Phuoc, Tay Ninh, Binh Duong, Dong Nai, Ba Ria - Vung Tau, Binh Thuan, Long An, Tien Giang.
The Mekong Delta has 11 provinces/cities (including Can Tho, Ben Tre, Tra Vinh, Vinh Long, An Giang, Dong Thap, Kien Giang, Hau Giang, Soc Trang, Bac Lieu, and Ca Mau).
Conclusion
Each city and province in the region has different strengths and factors to be considered. Therefore, investors must build a foundational understanding to utilize the utmost local strengths.
If you are looking to invest in Vietnam's key socio-economic regions, contact Viettonkin for the most up-to-date and reliable information. Viettonkin and our team of specialists have over 12 years of expertise in the sectors of investment and business consulting. Contact us now.
Stemming from the orientation of building an ecosystem of green and environmentally friendly products, Son Ha Group has cooperated with Bosch to launch EVGO electric motorbike – Aiming to become one of the three largest electric motorbike developers in Vietnam.
Vietnam is a market with nearly 50 million motorbike users, but still mainly traditional fuel-powered vehicles. However, given the recent fluctuating gasoline prices, the switch to electric motorbikes is gradually becoming a popular trend. Not only has many economic benefits, but this is also an environmental choice for a green future.
Along with that, the Prime Minister's Decision No. 876 on the Action Program to convert greenenergy, and reduce carbon and methane emissions in the transportation sector has opened up great opportunities for the development of electric vehicles in Vietnam. Accordingly, it is expected that by 2050, 100% of road motor vehicles will convert to the use of electricity and green energy sources.
Catching the trend, in 2020, Son Ha Group cooperated with Bosch (Germany) - a leading corporation in the world in providing technology solutions and equipment used for electric vehicles - to launch the EVGO electric motorcycle brand. This is also the next leading product of Son Ha's green ecosystem.
EVGO electric motorbike is a cooperation product of Son Ha Group and Bosch
Not the earliest participant entering the electric motorcycle market, Son Ha has affirmed its prestige and position in the market with a methodical and serious investment to meet the increasing tastes of customers. Son Ha has invested in building a factory to manufacture and assemble electric motorcycles in Bac Ninh with a capacity of phase 1 from 20,000 to 30,000 units per year.
Son Ha electric motorcycle factory in Bac Ninh
At the end of 2020, in the context of the Covid epidemic had much difficulty, Son Ha Group proved its production capacity by launching two new electric motorcycle models for students, EVGO C and EVGO. D. With stylish, modern designs and powerful, super durable Bosch engines, these two models quickly dominated the market in the mid-range price segment. In early 2021, Son Ha continued to research, develop and launch several new electric motorcycle models with outstanding improvements in form and quality. Dubbed the "mini Vespa", EVGO A beat other models on the market, bringing in "tremendous" revenue for Son Ha's electric vehicle production segment.
Not ending at the mid-range segment, Son Ha also offers customers two high-end models, Ecooter ET1 and EH1. With powerful engines and top-notch performance, this is the optimal choice for customers who love to explore and experience.
A highlight of Son Ha electric motorbikes is that it integrates many modern technology features such as anti-theft sensors, moving warning and remote locking, and convenient USB charging ports,...
In the upcoming time, Son Ha Group will continue to diversify its product portfolio with models in the popular segment. The system of showrooms, authorized agents, and distributors will also be expanded across the country to best serve the needs of customers.
The Civil Aviation Authority of Vietnam has sent an official dispatch to Pacific Airlines advising and requesting a report on meeting the conditions for an air transport business license before August 10. The reason is that this company had negative capital and couldn’t maintain the minimum capital under Decree 89.
However, in the audited Financial Statements of Pacific Airlines in 2020 and 2021, the airline's equity was negative 2,275 billion and negative 4,583 billion VND, respectively. Thus, for 2 consecutive years, Pacific Airlines did not meet the capital requirements. If the minimum capital is not maintained for 3 consecutive years, the air transport business license will be canceled.
The Civil Aviation Administration of Vietnam required Pacific Airlines to provide information on ensuring security and safety by regulations of aviation authorities; a dealing plan paying debts for partners (ACV, VATM...), and the business restructuring plan.
Pacific Airlines established in 1991, is the first state-owned low-cost airline in Vietnam. Currently, this airline is a subsidiary of Vietnam Airlines when the national airline owns 98% of the shares in Pacific Airlines.
In the past decade, Pacific Airlines only reported a profit in 4 years, including 2014 - 2015 and 2018 - 2019, the highest profit was just over 100 billion VND.
After reporting a record loss in 2016, Pacific Airlines' business results from nearly 5,000 billion VND in revenue increased to nearly 6,900 billion VND in 2017 and peaked in the 2018 - 2019 period with a scale of 8,000 - 9,000 billion VND per year.
However, the Covid-19 pandemic blew away all of the airline's achievements. Pacific Airlines has continued to record losses. From more than 8,400 billion VND in 2019, the revenue has plummeted to 2,600 billion VND - the highest loss since its establishment. However, by 2021, Pacific Airlines recorded a loss of more than 2,300 billion VND.
Discussing the situation of this low-cost airline, Mr. Le Hong Ha, General Director of Vietnam Airlines said: there is an item to restructure Pacific Airlines in the plan of Vietnam Airlines and they still have been looking for shareholders capable of both finance and operation to go with Vietnam Airlines in creating more resources for Pacific Airlines. Concurrently, he also emphasized: "Vietnam Airlines needs Pacific Airlines to exploit customers who want to take cheap flights." Vietnam Airlines has received positive information from 3 investors interested in Pacific Airlines. Currently, Vietnam Airlines is conducting negotiations to reconstruct Pacific Airlines.
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Entering Vietnam's Banking Market: Get Your Essential 2025 eBook
Vietnam's dynamic banking sector is a top destination for foreign investment. To succeed, you need a deep understanding of the local landscape, from new regulations to market entry models.
Our eBook, "ESTABLISHING FOREIGN BANK PRESENCE IN VIETNAM" gives you the crucial insights you need, including:
2024–2025 Sector Overview: Key economic and banking industry analysis.
Step-by-Step Entry Guidance: A deep dive into all primary market entry modes.
The Latest Legal Updates: Critical regulatory changes taking effect in 2025.
Smart Investment Strategies: Insights on M&A, strategic equity, and Fintech.
Download now for the expert knowledge to invest with confidence.
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