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Vietnam, many opportunities and some risks for companies
June 12, 2019
Abstract : The recent visit of Italian Prime Minister Giuseppe Conte in Vietnam celebrated the 46th anniversary of bilateral relations, emphasizing the great opportunities for Italian companies that this country can offer.
MILAN, Jun 11 (Class Editori) -- The recent visit of Italian Prime Minister Giuseppe Conte in Vietnam celebrated the 46th anniversary of bilateral relations, emphasizing the great opportunities for Italian companies that this country can offer.
Hsbc knows Vietnam very well because it was the first international bank, back in 1870, to have a presence in the country and since then it has been helping companies of all nationalities to do business there. For this reason, also in light of the current state of relations between Italy, Europe and Vietnam, and of the growth rate reaching 7% a year, it is clear that the country offers opportunities more than ever.
According to Ice, the total value of Italian exports attained 1.3 billion euros, therefore making Vietnam the eighth target market for Italian goods in South East Asia. This significant figure is estimated by Sace to grow further over the next three years, when total exports would reach a value of 1.8 billion euros.
The driving force of these exchanges are some industries of emblematic Made in Italy sectors, such as food, textile and mechanical engineering, leather processing, footwear and food processing, but also packaging and plastic industry, which alone is worth about a third of exports.
Vietnam is also a country from which Italy imports. Last year, the value of imports was equal to over 2.5 billion euros, mainly in technological products such as smartphones and TV, about 4% more than in 2017.
To increase the attractiveness of the country as a counterpart for the internationalization of Italian companies, the Europe-Vietnam Free Trade Agreement with the European Union could contribute. The closing is expected to be materialized in the short time, which would eliminate 99% of the reciprocal duties.
Vietnam has an entrepreneurial structure similar to the Italy, with 96% of small and medium-sized local businesses, mainly active in technology and mechanics. Hundreds of Italian companies have developed commercial relations with Vietnam in recent years and today more than 50 of these have consolidated a stable presence in the country.
Among the first Italian multinationals present there are sector leaders, including Perfetti, Segafredo Zanetti, Mapei, Ghella, Menarini, Medlac, Leonardo, Bonfiglioli and Piaggio. The signing of the treaty would lead to an acceleration of relations between the two countries in crucial areas for the development and modernization of Vietnam such as infrastructure, which represents a major priority for the Government, renewable energies, whose demand will quadruple in the next ten years, and the furniture sector, already grown three times as much in the last three years, and in which Italy holds an absolute leadership position.
However, the opportunities they put on display in Hanoi are not completely risk-free. According to the World Bank, Vietnam is in 104th place (out of 190) for the easiness of starting a business, at 133rd for the solution of insolvencies, with a banking system and very complex customs duties for trade. These are areas of risk that is necessary to know well when deciding on the appropriate countermeasures to be taken, before starting a business in this country.
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