Vietnam - Main Investment Opportunity
Oil and Gas
Amendments to the Oil Law in May 2000 offer further financial incentives to foreign investors. Investors will be allowed to earmark up to 70 percent of the output value to recover their investment capital, compared to the 30-35 percent range previously applied.
Moreover, foreign investors can open bank accounts and raise funds abroad to finance their oil and gas projects in Vietnam.
Under the previous law, an across-the-board 50 percent corporate income tax applied to oil projects. Deep-sea oil exploration projects now enjoy a 32 percent tax.
Article 3 of the law defines encouraged oil and gas projects as those carrying out oil and gas operations in deep water areas, offshore waters, and areas that have especially difficult geographic and geologic conditions according to the block list decided by the Prime Minister.
The MPI issued a life insurance license to a joint venture between Taiwan's Chinfon Global Corporation and Canada's Manulife Financial, allowing the joint venture to be the first foreign company to sell life insurance in Vietnam.
A license was also issued by MPI to Allianz-AGF, thereby creating the first 100 percent foreign-owned non-life insurance operation in Vietnam. The newly formed company is only authorized, however, to sell insurance to non-Vietnamese clients.
In January 1998 the government issued the Decree on the Encouragement of Foreign Investment. Numerous business operations were listed, including the following:
• Technology for preserving food; post-harvest technology, and related bio-technology and biological measures in agriculture, fisheries, and forestry
• Production of materials for safe insecticides
• Manufacturing of equipment, spare parts, and agricultural machinery
• Raising international standard livestock
• Production of petrochemicals
• Production of steel, alloy, non-ferrous metals, and sponge iron
• Manufacturing of machine tools for metal machining
• Manufacturing of spare parts for vehicles and motorbikes
• Ship building and production of equipment and spare parts
• Precision mechanical equipment
• Manufacturing of wastewater treatment equipment
• Production of cement and other building materials
• Production of high quality packaging for export
• Production of chemicals and dyes