ASEAN Briefing, Dec. 23, 2020
Mergers and Acquisitions (M&As) in Vietnam are popular routes for foreign investors to enter the Vietnamese market. This trend continues in Vietnam and while global M&A activity has declined recently, M&A activity continues to be vibrant. While business activity and trade have slowed in 2020 due to the pandemic, we expect M&A activity to further pick up in 2021.
Challenges in manufacturing M&A
Having said this, recently foreign investors have faced some difficulties to get M&A approval from the relevant authorities in the manufacturing industry. Local authorities are scrutinizing documents and investors have been asked for explanations on several parameters ranging from technology, machinery, labor use, source of input materials, product markets, and environmental protection.
These recent developments come as Vietnam becomes more selective in attracting FDI.
The restrictions seem to stem from Resolution No 50/NQ-TW (Resolution 50) on foreign investment policy towards 2030. As per Resolution 50, the provincial Ministry of Planning and Investment is responsible for scrutinizing such investments and has been told to hold approvals on expanding or renewing manufacturing projects that use old, obsolete technology that may cause damage to the environment. Resolution 50 is also stated in the new Law on Investment where investors can typically request an extension of an investment project except for those that use old, obsolete technology.
In full:https://www.aseanbriefing.com/news/challenges-in-vietnams-manufacturing-ma/
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