China Outbound: New Investment Trends in Asia, Moving Your Business from China to Vietnam

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

In this edition of China Outbound, we highlight Vietnam’s increasing attractiveness as an alternative to China, not only as a major manufacturing  destination in Asia, but also a lucrative market for selling high-end products. We start with an overview of China’s GDP growth, FDI trends, as well as the country’s disappearing tax incentives, which have inevitably increased the costs for doing business in China. From here, we move into practical business intelligence, with guides for setting up a representative office in Vietnam. Lastly, we provide a comparison of Visa requirements for foreign employees in China, Vietnam and India.

China to Roll Back Local Tax Incentives for Foreign Investors

The Chinese government requires all the local governments to roll back their regional tax incentives (including subsidies and discounted land and utility fees) for foreign companies. China is now facing a slowdown in tax revenues and massive local debt, along with a slower economic growth.

What the China GDP Figure Isn’t Telling You

China’s economic growth slowed to 7.4 percent last year, causing the country to miss its full-year economic target for the first time since 1998. However, China also became the world’s top destination for foreign direct investment (FDI) in 2014, surpassing the United States.

Vietnam Increasingly Attractive to U.S. Investors

With more than US$11 billion, the United States has become the seventh largest investor into Vietnam. Despite a contentious history with the U.S., the Vietnamese are now among the most pro-American people in Southeast Asia. This has led to calls for building an even stronger relationship with the United States. 

Appetite for Luxury in Vietnam: A Lucrative Market for High-End Products

A survey conducted by Nielsen concluded that Vietnam ranks third in the world in terms of fondness for branded goods, only surpassed by China and India. Moreover, 56 percent of the participants responded that they are willing to pay more for designer products than for less known brands despite same functionality.

Setting up a Representative Office in Vietnam

The representative office (RO) is an effective tool for foreign traders to monitor Vietnamese market trends and engage in cooperation with local companies. An RO is not subject to Vietnamese corporate income tax (CIT). However, it still has to pay value-added tax (VAT) when consuming goods or services from other Vietnamese enterprises, and is responsible for declaring its employees’ personal income tax (PIT).

The Cost of Business in the Philippines Compared With China

The Philippines is another of the ASEAN Tigers, with a population of about 100 million and GDP of US$ 300 billion is has been performing well over the past few years. With English spoken across the lower and middle classes of the Philippines, especially in the larger cities and tourist spots, the country has found itself attracting a great deal of business process outsourcing on a global scale.

City Spotlight: Investing in Jakarta

Located on the northwest coast of Java, Jakarta is the capital of Indonesia and the largest city in the country. Strategically located in the archipelago, Jakarta serves as the gateway to the rest of the country. The cities top industrial sectors include automotive, electronics, mechanical engineering, chemicals and bio-medical sciences manufacturing.


About Us

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

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