VIPC Brochure: Vietnam Investment Opportunities

VIPC Viet Investment Power

TABLE OF CONTENTS

PART 1:VIETNAM – EMERGING FOR OPPORTUNITIES ...................................................... 6

I. Vietnam – Land for Opportunities............................................................................................... 7

1. Vietnam at a glance ................................................................................................................. 7

1.1 Geography ......................................................................................................................... 7

1.2 Society............................................................................................................................... 7

1.3 Infrastructure ..................................................................................................................... 7

1.4 Economy ........................................................................................................................... 7

2. Why do invest in Vietnam ...................................................................................................... 8

II. Foreign Direct Investment in Vietnam ....................................................................................... 9

1. FDI inflows to Vietnam (1988- May 2010) ............................................................................ 9

2. FDI distribution by sector (1988-2007) ................................................................................ 10

3. Top ten countries investing to Vietnam ................................................................................ 11

III. Post – WTO Investment climate & Legal framework ............................................................ 12

1. Vietnam’s commitments to WTO ......................................................................................... 12

1.1 Schedule of concessions & commitments on goods: ...................................................... 12

1.2 Schedule of specific commitments on trade in services ................................................. 12

2. Investment-related obligations .............................................................................................. 12

3. Investment Opportunities entitled to Incentives ................................................................... 13

3.1 Preferential sectors: ....................................................................................................... 13

3.2 Regions entitled to Incentives: ........................................................................................ 13

2


4. Incentives on Corporate Income Tax .................................................................................... 13

5. Import Duty Exemption & Reduction................................................................................... 14

6. Forms of Investment ............................................................................................................. 14

7. Licensing & Registration Procedure ..................................................................................... 15

8. Investment Licensing Bodies ................................................................................................ 15

IV. Investment- related cost .......................................................................................................... 16

1. Monthly-wage (Source: JETRO survey, May 2009) ............................................................ 16

2. Land price, office rent (Source: JETRO survey, May 2009) ................................................ 16

3. Public Utility & Transportation expenses ............................................................................. 17

(Source: JETRO survey, May 2009) ......................................................................................... 17

4. Taxation (Source: JETRO survey, May 2009) ..................................................................... 18

PART 2: FOREIGN INVESTMENT IN VIETNAM ................................................................... 19

(Indirect investment in stock market) ........................................................................................... 19

Foreign investment in Vietnam's securities market ...................................................................... 19

I.Foreign investment in Vietnam's securities market .................................................................... 20

1. WHO are foreign investors? ................................................................................................. 20

2. What must a foreign investor do? ......................................................................................... 20

3. What must a foreign investor not do? ................................................................................... 21

4. Making the investment ......................................................................................................... 21

5. Appointment of a transaction representative ........................................................................ 22

6. Engaging a local fund manager............................................................................................. 22

3


7. Reporting............................................................................................................................... 22

8. What's missing? .................................................................................................................... 22

8.1 Personal income tax ( for individual).............................................................................. 22

8.2 Enterprise income tax (FOR institute) ............................................................................ 23

8.3 Capital investment tax (FOR investor) ........................................................................... 23

II.Investment entrustment process ................................................................................................ 23

III. Fee ........................................................................................................................................... 24

1. Fee for investment portfolio (VIPC): ................................................................................. 24

2. Broker fee (Securities company): ...................................................................................... 24

3. Custodian fee and asset keeping (custodian bank): ........................................................... 24

IV. Tax (MENTION above) ......................................................................................................... 25

1. Individuals (one of the following case) ............................................................................. 25

2. Enterprise income tax (Mention above) ............................................................................. 25

2.1 Institutes .......................................................................................................................... 25

2.2 Capital investment tax..................................................................................................... 25

PART 3:VIPC CAPITAL MANAGEMENT CORPORATION .................................................. 26

I. Our Firm .................................................................................................................................... 27

II.VIPC Products & Services ........................................................................................................ 29

1. VIPC Product family............................................................................................................. 29

2. Real Estate Fund (REF) ........................................................................................................ 29

2.1 Investment Objective ...................................................................................................... 29

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2.2 Investment Strategy ........................................................................................................ 30

2.3 Investment process .......................................................................................................... 30

2.4 Why Vietnam? ................................................................................................................ 31

2.5 Key Facts ........................................................................................................................ 32

2.6 VIPC Real estate Fund structure ..................................................................................... 34

2.7 What are the benefits VIPC’s REF bring to investors? .................................................. 35

3. Portfolio management services ............................................................................................. 36

3.1 VIPC Portfolio Management Service (PMS) OFFERS: ................................................. 36

3.2 Investment methodology:................................................................................................ 36

3.3 PMS Term ....................................................................................................................... 37

3.4 VIPC 6 PMS Models ...................................................................................................... 38

3.5 Portfolio asset allocation and performance in 2009 ........................................................ 41

4. Advisory services .................................................................................................................. 47

4.1 About Our Team: ............................................................................................................ 47

4.2 Advantages to deal with us ............................................................................................. 47

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PART 1:

VIETNAM – EMERGING FOR
OPPORTUNITIES

6


I. VIETNAM – LAND FOR OPPORTUNITIES

1. VIETNAM AT A GLANCE

1.1 GEOGRAPHY

 Population (2009): 85.79 millions
 Centre of Southeast Asia
 Area: 331,698 sq. km
 Coastline: 3,260 km

1.2 SOCIETY

 Growth rate (2007): 1.2%
 Under 30 yrs old: >60%
 Literacy rate: >90%

1.3 INFRASTRUCTURE

 National highways: 86,327 km
 Railways: 3,219 km
 International Airports: Hanoi, Da Nang & Ho
Chi Minh City
 International Seaports: 11 (Cai Lan, Da Nang, Van Phong, etc.)
 150 IPs with area of 31,436 ha
 8 EZs with area of 323,940 ha

1.4 ECONOMY

 Real GDP: 94.68 billion US$
 Real GDP growth rate (2009): 5.2%, year 2010e: 8.5%
 Real GDP per capita (2009): US$ 1052,year 2010e: 1200 US$
 Export Turnover (May 2010): US$ 6.1 billion

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2. WHY DO INVEST IN VIETNAM

 Political and socio-economic stability
 Brisk and steady economic growth
 Transportation hub of Southeast Asia
 Abundant young labor force at low price
 Member of WTO, APEC, ASEAN, ASEM
 Favorable FDI promotion policies
 Rapidly improving infrastructure

Source: FIA , GoldmanSachs
Vietnam GDP Growth rate (%) forecast

10 9.54 9.34
8.83
9 8.7 8.48
8.4 8.2 8.28
8.08 8.15
8 7.7
7.1
6.75 6.84 7.01
7 6.32
5.81
5.76
6
5.2
4.77
5

4

3

2

1

0

8


II. FOREIGN DIRECT INVESTMENT IN VIETNAM

1. FDI INFLOWS TO VIETNAM (1988- MAY 2010)

US$ mil.
70000
64,000

60000

50000

40000

30000 Investment inflows
21,300 21,480 Disbursed
20000

10,200 11,500 10,000
10000 8,030
5,920
3,600

0
1999
1991
1992
1993
1994
1995
1996
1997
1998

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
5 months 2010
1988-1990

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2. FDI DISTRIBUTION BY SECTOR (1988-2007)

Oil & gas industry
FDI distribution by sector( 1988-2007)
Light industry

IPs-EZs infrastructure Heavy industry
Oil & gas
Office- industry
Light industry Food
Apartment
New
urban Building

1.78%
4.59% Agro-forestry
1.47% 11.07%
Hotel- 4.09% 15.93%
Tourism
1.08% Marine industry
7.21%
Transport Services
ation-Post 5.08%
2.53%
28.73%
Transportation-
4.71% Post
Services
Hotel-Tourism
Marine 6.90%
industry
0.53% Banking-Finance

Culture- Medical-
Agro- 4.28% Education
Heavy industry
Forestry New urban
infrastructure
Building
Food Office-Apartment
Source:
building
FIA
IPs-Ezs
infrastructure

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3. TOP TEN COUNTRIES INVESTING TO VIETNAM

No. Countries Number of Investment capital Legal capital Disbursed capital
projects

1. Korea 1857 14,398,138,655 5,168,461,054 2,738,114,393

2. Singapore 549 11,058,802,313 3,894,467,177 3,858,078,376

3. Taiwan 1801 10,763,147,783 4,598,733,632 3,079,209,610

4. Japan 934 9,179,715,704 3,963,292,649 4,987,063,346

5. British Virgin
342 7,794,876,348 2,612,088,725 1,375,722,679
Islands

6. Hong Kong 457 5,933,188,334 2,166,936,512 2,161,176,270

7. Malaysia 245 2,823,171,518 1,797,165,234 1,083,158,348

8. USA 376 2,788,623,488 1,449,742,606 746,009,069

9. Holland 86 2,598,537,747 1,482,216,843 2,031,314,551

10. France 196 2,376,366,335 1,441,010,694 1,085,203,846

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III. POST – WTO INVESTMENT CLIMATE & LEGAL FRAMEWORK

1. VIETNAM’S COMMITMENTS TO WTO

1.1 SCHEDULE OF CONCESSIONS & COMMITMENTS ON GOODS:

 Bound rates for 10,600 tariff lines
 An average cut from 17.4% to 13.4% phased over 5-7 years since 2007
 Largest reduction applied to garments & textiles, fish& fish products, wood & paper,
other manufactured goods, machinery, electrical & electronic items
 Committed to be member (fully or partially) to initiatives for IT products, garments &
textiles, medical equipment, aircraft, chemicals, construction, equipment etc. Tariffs cut
phased over 3-5 years since 2007

1.2 SCHEDULE OF SPECIFIC COMMITMENTS ON TRADE IN SERVICES

 Open door in 11 out of 12 service sectors (or 110 out of 115 sub-sectors), including:
business services, communication, construction & related engineering, distribution,
health, insurance, education, tourism, environment, finance, entertainment,
transportation, etc.
 Commitments put in force right after WTO accession. In some cases, they’re phased over
2-4-6 years since 2007

2. INVESTMENT-RELATED OBLIGATIONS

 TRIMS (effective from 11 Jan 2007): Eliminate the application of requirements on trade
balance, foreign exchange control on imports, export performance, export restrictions and
local contents
 Intellectual Property Rights: Comply with TRIPS Agreement upon accession
 Transparency: Make public draft WTO-related legal instruments for public comments;
Make public all legal documents; Provide WTO members with annual reports on
equalization program

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3. INVESTMENT OPPORTUNITIES ENTITLED TO INCENTIVES

3.1 PREFERENTIAL SECTORS:

 Manufacture of new material & production of new energy, manufacture of high-tech
products, bio-technology, information technology & mechanical manufacturing;
 Breeding, rearing, growing & processing of agricultural, forestry & aquaculture products,
production of salt, creation of new plant & animal varieties;
 Utilization of high technology & advanced techniques, protection of the ecological
environment & research, development & creation of high technology
 Labor intensive industries;
 Construction &development of infrastructure facilities & important industrial large-scale
projects;
 Professional development of education, training, health, sports, physical education &
Vietnamese culture;
 Development of traditional crafts & industries; and
 Other manufacturing & service sectors which require encouragement

3.2 REGIONS ENTITLED TO INCENTIVES:

 Regions with special difficult socio-economic conditions;
 Regions with difficult socio-economic conditions; and
 Industrial zones, Export processing zones, High-tech zones & Economic zones

4. INCENTIVES ON CORPORATE INCOME TAX

 Standard rate: 28%
 Preferential rates of 10%, 15% and 20% for a period of 15 years, 12 years and 10 years
are available depending on the scope of activities and location of the investment.
 Tax holidays: A complete exemption from CIT for a certain period (4 yrs at maximum)
followed by a period where tax is charged at half rate (9 yrs at maximum)

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 Losses: Carry forward losses for 5 years
 Other incentives: Exemption or deduction of land use tax, land use fee, land rent, and
water surface rent

5. IMPORT DUTY EXEMPTION & REDUCTION

Exemption applied to projects in investment encouraged sectors & regions on:

 Machinery & equipment, specialized means of transportation & construction materials(
which cannot be produced in Vietnam) comprising the fixed assets of certain projects
 Raw materials, spare parts, accessories, other supplies, samples, machinery & equipment
imported for the processing of goods for export and finished products imported to stock
to the processed goods

Preferential rates applied to imported goods from countries that enjoy MFN with Vietnam (89
countries). Rates vary by the category of goods.

Special preferential rates applied to imported goods from countries that signed special
agreement with Vietnam (e.g. ASEAN)

Ordinary rates are 150% of preferential rates

6. FORMS OF INVESTMENT

 100% foreign-owned enterprise
o Limited liability Company
o Joint stock company
o Partnership
o Holding company
 Joint venture
 Business cooperation contract
 BOT, BTO, BT
 Capital contribution, purchase of shareholding,
 M&A

14


7. LICENSING & REGISTRATION PROCEDURE

8. INVESTMENT LICENSING BODIES

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IV. INVESTMENT- RELATED COST

1. MONTHLY-WAGE (SOURCE: JETRO SURVEY, MAY 2009)

Monthly
Ha Noi HCMC Shanghai Hong Kong Singapore
wage(US$)

Worker 96 96 249 1294 1027

Engineer 270 270 610 2092 1892

Manager 798 798 966 3237 3139

Legal minimum
70.7 70.7 140.4 Nil _
wage(monthly)

2. LAND PRICE, OFFICE RENT (SOURCE: JETRO SURVEY, MAY 2009)

Land price, office
rent ($)

Industrial land 0.119-
0.22 1.8-3.1 309.43 0.52-1.47
( yearly, per sq.m) 0.142 (IPs)

Office rent ( monthly,
27.5-73.2 82.5 64.7 28-132 36-65
per sq.m)

Housing rent for Hanoi 2550 2,047- 1,805-3,868 2,672-4,342

16


foreigners(per tower: 4,386
month) 3600

International call
charge 0.636 0.636 2.1-3.5 0.38-1.08 0.7-1.8

( for 3 min. to Japan)

Mobile phone
7.06 7.06 7.3 29
subscription fee -

Internet connection
194.44 194.44 365.5 33 240.5
fee( per month)

3. PUBLIC UTILITY & TRANSPORTATION EXPENSES

(SOURCE: JETRO SURVEY, MAY 2009)

Public Utility
Expenses -
Transportation fee
($)

Electricity rate for
0.028-
business use 0.028-0.103 0.09 0.12 0.147
0.103
( per KWh)

Water rate for
business use ( per 0.292 0.59-1.4 0.22 4.6-11 1.39
cu.m)

17


Gas rate for
Rate per Rate per kg: rate per MJ:
business use ( per 0.25-0.28 0.135
kg: 0.9 0.9 0.026
cu.m)

Regular gasoline
0.65 0.65 0.74 1.62 1.061-1.066
price (1 liter)

Diesel oil price( 1
0.65 0.65 0.71 1.06 0.830
liter)

4. TAXATION (SOURCE: JETRO SURVEY, MAY 2009)

Taxation Hanoi HCMC Shanghai Hong Kong Singapore

Corporate income tax 28% 28% 25% 16.5% 18%

Personal income tax rate 40% 40% 45% 15% 20%

0%, 5%, 0%, 5%,
VAT 17% Nil 7%
10% 10%

Tax on interest remitted to
10% 10% 10% Nil 10%
Japan

Tax on dividend remitted to
0% 0% 10% Nil Nil
Japan

18


PART 2: FOREIGN INVESTMENT IN
VIETNAM

(INDIRECT INVESTMENT IN STOCK MARKET)

FOREIGN INVESTMENT IN VIETNAM'S
SECURITIES MARKET

19


I.FOREIGN INVESTMENT IN VIETNAM'S SECURITIES MARKET

CONTENTS

1. Who are foreign investors?
2. What must a foreign investor do?
3. What must a foreign investor not do?
4. Making the investment
5. Appointment of a transaction representative
6. Engaging a local fund manager
7. Reporting
8. What's missing? (Fee, Tax)

1. WHO ARE FOREIGN INVESTORS?

 Foreign citizens, including Viet Kieu (ie. overseas Vietnamese);
 Entities established offshore
o Branch offices in Vietnam
o 100 per cent foreign-owned enterprises incorporated in Vietnam
o Offshore investment funds
o Vietnam domiciled investment funds with 100 per cent foreign ownership.

2. WHAT MUST A FOREIGN INVESTOR DO?

Foreign investors who invest in listed and unlisted securities or participate in securities auctions
in Vietnam must:

20


 Obtain and register a securities trading code (the Code) with the VSD – a foreign investor
may have only one Code; and
 Open an indirect investment capital account at any bank that is authorized to provide
custody and foreign exchange services.

If a foreign investor chooses to invest using a local fund manager then that fund manager will
apply and register the Code for the investor.

3. WHAT MUST A FOREIGN INVESTOR NOT DO?

A foreign investor's Code may be suspended or terminated if the investor:

 Provides inaccurate or deceptive information in relation to the application for the Code or
other information as required by the SSC;
 Engages in illegal practices such as collusion, market manipulation or money laundering;
or
 Breaches foreign exchange regulations

4. MAKING THE INVESTMENT

Three ways for a foreign investor to make securities investment in Vietnam:

• The foreign investor directly carries out the transaction by instructing a securities
company to place the order;

• The foreign investor appoints a transaction representative to place the order for the
foreign investor; or

• The foreign investor engages a local fund manager to manage the foreign investor's
securities investment.

21


5. APPOINTMENT OF A TRANSACTION REPRESENTATIVE

A foreign investor may appoint only one individual in Vietnam under a power of attorney

 The attorney must hold a securities business practicing certificate issued by the SSC;
 The attorney must not be an employee of any local securities company, fund
management company or custodian bank;

6. ENGAGING A LOCAL FUND MANAGER

 A local fund manager under an investment management agreement to carry out portfolio
and asset management and make investment decisions for the foreign investor (including
decisions in relation to the type of securities, volume, price and trading date)
 A foreign investor may not engage any other individual or entity to carry out such
management activities for the investor.
 Vietnam representative offices of offshore funds which are currently carrying out these
functions are doing so illegally.

7. REPORTING

Securities companies, fund managers and transaction representatives are required to report
periodically to the SSC on the securities transactions of the foreign investor using a standard
form.

8. WHAT'S MISSING?

8.1 PERSONAL INCOME TAX ( FOR INDIVIDUAL)

• 20 per cent of the net gain or

• 0.1 per cent of the value of the securities transfer

22


8.2 ENTERPRISE INCOME TAX (FOR INSTITUTE)

• 0.1 per cent of the value of the securities transfer

8.3 CAPITAL INVESTMENT TAX (FOR INVESTOR)

• 5 per cent of the net gain

II.INVESTMENT ENTRUSTMENT PROCESS

23


III. FEE

1. FEE FOR INVESTMENT PORTFOLIO (VIPC):

2% Fee of asset
annual NAV management

2. BROKER FEE (SECURITIES COMPANY):

Transaction Broker
0,1% value fee

3. CUSTODIAN FEE AND ASSET KEEPING (CUSTODIAN BANK):

Total value Fee on
0,01% of a
transaction transaction

1/12 x Custodian
NAV
0,06% fee

24


IV. TAX (MENTION ABOVE)

1. INDIVIDUALS (ONE OF THE FOLLOWING CASE)

Personal
Net gain income
20% tax

the value
of the 0,1 Personal
income
securities
transfer % tax

2. ENTERPRISE INCOME TAX (MENTION ABOVE)

2.1 INSTITUTES

the value of
the Enterprise
securities income tax
transfer 0,1%

2.2 CAPITAL INVESTMENT TAX

Capital
Net gain 5% investm
ent tax

25


PART 3:

VIPC CAPITAL MANAGEMENT
CORPORATION

INVESTMENT HUB TO VIETNAM

26


I. OUR FIRM

VIPC Capital Management or well known as VIPC Fund Management is an independent
national licensed investment fund upon teamwork management and trustworthy pass
relationships with investors.

The legal entity shareholder of VIPC is Viet Vinh Phu Company, a highly reputation domestic
and international financial investment organization. Together with Viet Vinh Phu Company,
VIPC is established by individual investors who have comprehensive education and extensive
experience in the world and Vietnamese financial and stock market. Standing on a strong
foundation, VIPC’s shareholders now has the largest shares in Saigon Commercial Bank, major
shares in Great Truong Son project and Khanh Hoi Sugar Joint Stock Company

VIPC offers independent and institutional investors variety range of investment capacities to
match with hundreds of professional value contacts and investment opportunities in one of the
most attractive emerging markets, Vietnam in Real estate, Securities and Private Equity.

Name VIPC CAPITAL MANAGEMENT CORPORATION
Establishment
January 23, 2009

VAT Number
0306790482

Fund management and investment portfolio management (Asset
Business Scope
management)
Regulated Body
State Securities Commission of Vietnam (SSC)

Address
No. 8, Nguyen Hue St. Dist 1, HCMC. Vietnam

Tel
(+84-8) 38277078 (+84-8) 38277079

Fax (+84-8) 38277487

27


URL
www.vipc.com.vn

Chartered Capital
33.000.000.000 VND

1. VIET VINH PHU INVESTMENT FINANCE CO., LTD
2. PARAGON CORP. (http://www.saigonparagon.com)
Major Share Holders 3. Mr. Nguyen Xuan Tung
4. Mr. Doan Duc Vinh
Ms. Vu Thi Toan
Legal Consultant
Vilaf Hong Duc

Representative Director
Mr. Nguyen Xuan Tung

Mr. Nguyen Xuan Tung Chairman
Mr. Nguyen Ho Nam Board Member
Board of Directors Mr. Doan Duc Vinh Board Member
Mr. Hoang Duc Hoa Board Member
Ms. Vu Thi Toan Board Member
Legal Consultant
Vilaf Hong Duc

Auditor
AASCS

Custodian Bank
BIDV

Bank Account Number
BIDB000016

Asset under management
VND ( Vietnamdong)

28


II.VIPC PRODUCTS & SERVICES

1. VIPC PRODUCT FAMILY

2. REAL ESTATE FUND (REF)

2.1 INVESTMENT OBJECTIVE

Primarily Investment objective of VIPC Real Estate fund is by investing attractive projects at the
early stages in Vietnam.

The Fund will leverage its strong connected local networks and experience in property
development and redevelopment of upscale residential, commercial and private projects to
maximize an attractive overall return through diversified property portfolio.

29


2.2 INVESTMENT STRATEGY

To achieve a balanced risk-reward profile, the fund will be invested in three broad classes of
companies:

a. Projects, which are completed - this would comprise real estate assets, which are in use
with established, high-quality tenants. Such asset class would typically denote steady
income type characteristics.
b. Projects in development stage - where the lead-time to commercial deployment is
typically between one-three years, and the completed projects subsequently would have
contractual off-take arrangements in place.
c. Projects in the planning stage - where the lead-time to commercial deployment would
be three-six years. These projects would offer the highest amount of return, although with
a greater risk.

2.3 INVESTMENT PROCESS

Stage 1

• Best locations/lands for
investment activities nomination
(Industry Screening)
• Site visit initial evaluation for
nominated projects (Site
Inspections)
• Geological studies for project
locations ( Evaluation)

Stage 2
Drafting of feasibility studies
• Information of legal studies with

30


regards to real estate activities
• Maintenance and management plan examination.
• Real estate valuation (appraisal) services

• Due diligence

Stage 3
• Industrial real estate services
• Real estate management (market price, market rent, rent collection and follow-up)
• Real estate applications and process clearance
• Loan collateral and loan transitions services
• Loan implementation services
• Mortgage services
• Real estate segmentation services (apartments and condominiums)
• Other real estate related services

2.4 WHY VIETNAM?

 Vietnam’s economy and real estate
sector in particular are high on its ride to
prosperity. As Vietnam’s economic
growth curve rises, real estate have
emerged as one of the most appealing
investment areas for domestic as well as
foreign investors.

 Maximum growth is attributed to its
growth from the booming young
populations, since an estimated 60 per
cent of the new construction is for the
newlywed’s family.

31


 Investment scenario has certainly undergone a paradigm shift in Vietnam, rental return
from new residential apartment’s ranges from 8 to 10.5%, and that from commercial
property in Vietnam metros is around 12-14%, one of the highest in the world.
 According to the Emerging Trends in Real Estate® Asia Pacific 2010 Report published
by PricewaterhouseCoopers LLP (PwC), Vietnam is ranked 3rd in the regional list of
countries that are least impacted by global economic crisis in 2009 and 2010. Thus,
Vietnam real estate market is a promising destination for stability-expected investment
flows
 The report also states that Ho Chi Minh City of Vietnam is ranked 3rd for development
prospects in 2010 and highly graded in segment ranking. Besides, the city is projected to
achieve the world highest average real growth rate of GDP in the period 2008-2025,
reaching 7% per annum
 Also marked in the report, HCMC average yields in grade A office, retail, residential and
industrial segments in 2009 range from 11.5% to 14%- an outstanding outcome
comparing to other Asia Pacific players. Hotel and retail hold the 2nd place while
segments of industry; office and residential housing are respectively ranked as 4th, 6th
and 7th in the list.

2.5 KEY FACTS

 Selling and buying Vietnam property is now considered as the most profitable and
attractive business opportunity in the present real estate scenario in ASEAN. User
demands have added to strength of real estate markets across the commercial, residential
and retail sectors in Vietnam, especially commercial property with exceeded supply for
the past few years.
 There has also been an upward swing on the real estate price values in the recent years.
Due to the huge demand and rising prices, investment and speculative interest in real
estate is growing while excess money supply, inflation and regular depreciation of VND
to US$ are adding to the trend in favor of the real estate sector.

32


 In the last 2 years, the capital values of the commercial office spaces has increased by up
to 25% owing to the increase in the demand from global business reallocation and
domestic professional business sectors across major metros in Vietnam.
- Factors Favoring Real Estate’s Investment, easy availability of housing finance,
burgeoning income and better job prospects, increase of nuclear families have
given a boost to the demand in Vietnam. The net yields (after accounting for all
outgoings) on residential property are currently at 8-10.5 % p.a. However, these
investments have benefited from the improving residential capital values. As
such, investors can count on potential capital gains to improve their overall
returns. Capital values in the residential sector have risen by about 40-200% p.a in
the last 5 years.
 The residential market in Vietnam has been growing due to increasing demand from
retailers; higher disposable incomes. The capital appreciation in this sector is close to 20-
35% p.a. However, the risks associated with this sector are higher as retailers are prone to
cyclical changes typical of a business cycle. Changing consumer behavior combined with
increasing disposable incomes will ensure further growth of the retail sector in Vietnam
 In the present day scenario, if there is any powerful investment tool that brings
burgeoning financial returns, it is VIETNAM REAL ESTATE!!! Investors should
consider the parameters minutely and meticulously to find out why investing in Vietnam
real estate now is the best viable option.

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2.6 VIPC REAL ESTATE FUND STRUCTURE

Investment manager VIPC Capital

Investment advisor Dr. Markus Freiburghaus

Minimum investment 200 million USD

Term Vote every 5 years to wind up fund

Initial unit price 5 USD

Distribution At the end of investment

Number of calls 100% investment up – front

Withdrawal Not permitted during term (subject to charter
fund)

Auditor Ernst and Young / KPMG or Grant Thornson

Custodian BIDV / Deutsche Bank

Lawyer Vilaf Hong Duc

Management fee 2%

Investment manager VIPC Capital

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Performance Fee Incentive fee of 20% of total increase of the
NAV over a hurdle rate of 15 % annual
returns with higher watermark and catch up.

Fee & Tax See principal information section
(www.vipc.com.vn )

2.7 WHAT ARE THE BENEFITS VIPC’S REF BRING TO INVESTORS?

Liquidity: When an investor invests directly in an individual property, buying and selling proves
a complex, time-consuming process. By contrast, an investment in VIPC Real Estate Fund will
be more readily converted into cash as these units will be traded on the stock exchange when
funds fully allocated.

Affordability: Real estate has traditionally been a sound investment option but remains limited
to only a few as the amount of money required for investing in real estate directly is very high.
VIPC REF will allow common investors to reap benefits of investment in real estate without
putting in significant amounts.

Professional management: Real estate investment in Vietnam is fraught with risks related to
documentation, title of property, legal aspects and so on which would be mitigated in this
scenario.
REF would also provide new investment avenues to pension funds, endowment funds, insurance
companies, thereby bringing the institutional investor into the ambit of the real estate market.
This will further boost professionalism in the real estate sector.

VIPC REF structure is an ideal instrument for propelling investments into real estate. It
combines the best features of the real estate industry with other financial instruments, and gives

35


the investor a practical and efficient means for including professionally managed real estate in
his investment portfolio.

3. PORTFOLIO MANAGEMENT SERVICES

3.1 VIPC PORTFOLIO MANAGEMENT SERVICE (PMS) OFFERS:

Appointed Trust Agreement- we will follow your instruction and place your orders, we only act
as an executor and clear your trades.

Non Appointed Trust Agreement- a Managed Discretionary Account service and you hold your
stock trading account with us, we will on be half of you to make investment decisions and clear
all the trades for you.

VIPC has 5 qualified investment managers to manage client assets in our PMS, on the basis of
their expertise in managing fund portfolios. Based on a completed Investor Profile
Questionnaire, investment manager of VIPC will review of individual financial situation,
investment objectives, risk tolerance levels, planned investment time horizon, and recommend a
long-term target portfolio strategy.

We have six well-performed long term Portfolio Models being tested and fits to different risk
appetites of investors. All our services are designed to help you to invest your money in a
professionally managed portfolio using asset allocation principles.

3.2 INVESTMENT METHODOLOGY:

When we identify a specific sector to target for investment, deeply research the space and
identify actionable investment opportunities. Combines “top down-sectors” (evaluating and
selecting sectors based on carefully considered investment theses) and “bottom up-individual
stock” assigning a team of investment professionals to get to know, at a Granular Level.

It is a targeted, proactive, repeatable process that we apply to more than 5 sectors of stocks and
that is core value of our investment approach. This targeted process sometimes can take many
years to identify the new stocks, but we believe that it enables us to produce high quality,
proprietary investment opportunities in sectors where we face limited competition. As a result of

36


this process, more than two-thirds of the Discretionary Managed Account (DMA) and Portfolio
Management Service (PMS) made by the VIPC since our establishment in 2009 have been
internally generated.

3.3 PMS TERM

Product PMS

Term 1 - 5 years

Minimum Investment US$100,000.00

Currency USD, AUD, EURO, SGD and JPY

37


Investment Objective To generate a stable return on an annual basic with
strong emphasis on capital preservation

Trading Fee 0.1% on each transaction

Management Fee 2%/year

Early Redemption Fee Negotiable

Report Monthly/Quarterly

Withdraw notice 1 month before

3.4 VIPC 6 PMS MODELS

Name of Objectives Styles, risk and return Strategy, asset classes
PMS and allocation
VIPC VIPC 1 aims to VND denominated, selected Depends on economic
Aggressive provide superior specific sectors by morning cycles, OTC & Listed
Growth returns (before star with rigorous research to stocks in Vietnam stock
HOSE & fees and taxes) target for high growth trading market ( 95 %
HASTC over the long opportunities. allocation)
stocks term through Risk: High
capital growth, by
investing in
growth stocks.

38


Mainly consist of VND denominated, selected OTC and listed stocks in
VIPC companies with great potential of capital Vietnam stock trading
Growth above-average earnings stocks and invest to market 65% high growth,
growth in asset classes with stable 30% High Dividend
earnings that rein profit, while reserve some stocks, 5 % Cash.
vest their cash in fixed income.
earnings into Risk: Medium-High
expansion,
acquisitions, or
research and
development.

Well balanced VND denominated, invest in OTC & Listed stocks in
VIPC stable income and large cap with steady growth Vietnam stock trading
Balance capital growth in and asset classes with an market ( 40 % high
medium and fixed income. growth , 30 % large cap
long-term Risk: Medium )Vietnam Commercial
Bank Instruments (25%).
Cash 5%
Income from VND denominated, securities 40% in Large & Mid Cap
VIPC dividends of big instrument qualified with with positive earnings &
Conservative cap low volatility great potential of higher high dividend outlook ,
Balance with some return. While invests in large 20% High growth, while
exposure to cap with positive earnings 35-40% in high income
growth in outlook. bank instruments.
medium and Risk: Medium-Low
long-term.
VIPC 5 invests VND denominated, steady 50% Banking instruments
VIPC mostly in the incomes from different with superior returns
Vietnam defensive assets banking instruments with including corporate bonds

39


High Income of cash and fixed return warranted. and debentures or bills,
income, with Risk: Low 35% in large cap with
some exposure to steady dividends, 10%
growth assets. high growth, 5% in cash.
Capital VND or USD denominated, An investment mixes
VIPC conservation and including money market allocation 85% of highly
Preservation well protected instruments, benchmarking to liquidated cash assets,
from Inflation local inflation rate as a target such as VND, or USD. 10
return. % in large cap, 5% in high
Risk: Very Low growth.

40


3.5 PORTFOLIO ASSET ALLOCATION AND PERFORMANCE IN 2009

VIPC Aggressive Growth Fund
Information
Cash technology
Coal& mineral mines
5% 6.80% Banking
6.80%
10.20%
Plastic,
10.20%
rubber&
fiber 8.50% Securities

8.50%
Construction
materials &
4.30%
steel
29.80%

Consumer
services

Real estate & Construction

150.00%
125.00%
126.40%
100.00% 99.70%
Fund return
75.00% 96.90%
Hurdle rate
50.00% 70.30%
Comparative return
25.00% 29.60% 29.30%

0.00%
6 months 12 months

41


VIPC Growth Fund
Cash Information
Petroleum distribution
technology
Banking
Beers and Aquacultures 4.50% 5.00% 5.20% 7.80%
3.90%
Foods Securities
5.70% 6.50%

Pharmaceuticals 7.20%

Petroleum exploration,8.70% 22.80%
drilling & refining

5.20%
7.80%
6.50% 3.30%
Real estate &
Coal& mineral mines Construction

Plastic, Consumer
Construction services
rubber& fiber materials & steel

150.00%

125.00%
121.80%
100.00% 97.40%
Fund return
75.00% 96.90%
Hurdle rate
50.00% 70.30% Comparative return

25.00% 24.90% 27.00%

0.00%
6 months 12 months

42


VIPC Balance Fund
Information
Cash technology Banking
Securities
Fixed income 5% 3.20% 4.80%
4.00%
Real estate &
25.00%
14.00% Construction

Consumer
2.00% services
4.00%
4.50% Construction
4.80%
materials & steel
Petroleum 3.90% 3.20%
distribution 5.70% 8.70%
7.20% Plastic,rubber
&fiber
Beers &
Aquacultures
Coal& mineral mines
Foods
Pharmaceuticals Petroleum exploration,
drilling & refining

100.00%

89.20%
75.00% 73.50%
73.90% Fund return
50.00% 62.80%
Hurdle rate
Comparative return
25.00%
16.20% 18.70%

0.00%
6 months 12 months

43


VIPC Conservative Balance Fund
Securities
Information
Banking 2.00%
Cash technology
1.60% 2.40%
Real estate
Consumer services
&
7.00% 1.00% Construction materials &
Fixed income 5% Constructio 2.00% steel
n Plastic,rubber&fibe
2.40% Coal&
r
1.60%
mineral mines
35.00% Petroleum exploration,
11.60%
drilling & refining

9.60%
6.00%
5.20% 7.60%

Pharmaceuticals

Petroleum
distribution Beers & Foods
Aquacultures

75.00%
73.90%
62.80%
63.40%
50.00%
Fund return
48.70%
Hurdle rate
25.00% Comparative return
14.20%
10.40%
0.00%
6 months 12 months

44


VIPC High Income Fund Information technology

Banking

Securities
0.50%
Real estate & Construction
1% 1%
1.20%
0.80% 1.20% Consumer services
3.50%
0.80% Construction materials & steel
5%
10.20% Plastic,rubber and fibre

Coal and mineral mines
8.40%
50% Petroleum exploration, drilling
6.70% and refining
Pharmaceuticals
4.60%
Foods

Beers and Aquacultures
5.30% Petroleum distribution

Fixed income

Cash

60.00%

55.50% 49.10%
40.00% 49.10%
Fund return
39.40%
Hurdle rate
20.00% Comparative return

9.70%
6.40%
0.00%
6 months 12 months

45


Information technology
VIPC Preservation Fund
Banking
0.50%
0.50% Securities
0.30% 0.60%

1.80% Real estate & Construction
0.40% 1.90%
0.40% 0.60%
2.90% 1.30% Consumer services
2.40%
1.50% Construction materials & steel

Plastic,rubber and fibre

Coal and mineral mines

Petroleum exploration, drilling
85% and refining
Pharmaceuticals

Foods

Beers and Aquacultures

Petroleum distribution

Fixed income

25.00%
23.70%
20.00% 22.40%
20.40% 20.80%
15.00% Fund return
Hurdle rate
10.00%
Comparative return
5.00%
2.90%
1.90%
0.00%
6 months 12 months

46


4. ADVISORY SERVICES

4.1 ABOUT OUR TEAM:

Our team of seasoned analysts is a powerful tool that can provide you clarity, helping you
understand how to best achieve your overall investing goals.

 Assured that your plan goals and objectives coupled with our risk management can lead
to improved performance.
 Certain about having another fiduciary point of view when developing or evolving your
investment policies.
 Confident about your decisions by using our due diligence and evaluations of both public
and private investment opportunities.

4.2 ADVANTAGES TO DEAL WITH US

Greater independence

 Our firm is staffed by independent consultants who select products that fit your specific
investment goals - not the sales goals of a large, impersonal brokerage firm.
 Have the flexibility & capacity to match the right investment product with each investor.
These products have been reviewed by our investment committee and meet our stringent
selection criteria.
 We rely on local decision-making, internal research plus third party independent
research.
 We use a disciplined investment approach.

Accountability

 As a regulated Capital Management Firm in Vietnam, we are licensed by SSC. In
addition to adhering to our independent auditing requirements, our investment officers
regularly review the operation and investment best practices we have in place.
 We have a legal obligation to place our clients’ interest first.

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We are well connected local

 VIPC has a strong well connected local network, such as Commercial Banks, major land
banks, our real estate project focuses on commercial buildings, residential areas, service
apartments, office buildings as well as new modern complexes providing all of the above
services in one location.
 We speak global investment languages, we understand business & your needs, we are
local Vietnamese but with well perception of global investments, 50% of our staff
received MBA degree and specialized in finance field with personal proven track record.

48

VIPC Brochure: Vietnam Investment Opportunities

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