Opportunities For Russian Businesses As Vietnam Bilateral Trade Continues To Rise
Since Vietnam signed off a Free Trade Agreement with the Eurasian Economic Union in October 2016, trade between EAEU members and Vietnam has risen from close to zero to about US$10 billion. Of the EAEU nations trade with Vietnam, Russia accounts for about 90%. That has also been growing, with Ta Hoang Linh, a Director of the Vietnam Ministry of Trade saying that in 2018, the Russian-Vietnam trade value reached US$4.57 billion, a year-on-year jump of 28.63 percent.
That trend is continuing according to Linh, who also commented that in the first four months of 2019, Russian-Vietnamese trade revenues reached US$1.52 billion, rising 5.92 percent compared to the same period last year.
Russia ranks 24th among 129 countries and territories investing in Vietnam, and has 123 projects with total registered capital of over US$932 million in situ in the country, mainly focusing on oil and gas, and energy industries. However there are opportunities for Vietnamese goods being sold to Russia as well. Vietnam has 20 projects in Russia with a total capital of just under US$3 billion, most notably with the Vietnamese TH Group’s dairy farms investment. Smaller traded, yet still growing Vietnamese exports to Russia include electronic products, garment-textiles, footwear, aquatic products and coffee.
Vietnam was the first country to sign an FTA with the Eurasian Economic Union, although others, including India, Mongolia, Singapore, South Korea and Thailand are all at later stages of trade negotiations. Chris Devonshire-Ellis of Dezan Shira & Associates comments “With sanctions pricing Russian businesses out of Western markets, new opportunities are opening up in Asia. Vietnam’s signing of the Free Trade Agreement with the Eurasian Economic Union has shown what can be achieved and what is possible. It is a good opportunity for Russian entrepreneurs to take a look at Vietnam and the import-export potential between the two countries.”
Russia Briefing is produced by Dezan Shira & Associates. The practice assists Russian businesses invest into the Asian markets and has offices in Hanoi and Ho Chi Minh City as well as offices throughout ASEAN, China and India. Please contact our Russia desk at Maria.Kotova@dezshira.com or visit us at www.dezshira.com
How to Set Up in Vietnam
Vietnam’s economy continues to perform well, sustained by ongoing domestic reforms, a stable government, and the diversification of foreign direct investment in the country. With such growth, it makes sense that new market entrants see Vietnam as a good opportunity to establish in Asia or diversify their regional presence. In this issue of Vietnam Briefing magazine, we detail company structures in Vietnam and outline the most efficient structure for foreign businesses that seek to take advantage of the country’s investment climate.