Reports
SOUTH EAST ASIA - VIETNAM
l1
The integration of Vietnam into the global economy, which started with the Doi Moi reforms of 1986 continues to scale. After Vietnam signed a bilateral trade agreement with the US in 2000, and joined the WTO in 2007, the country saw a major number of new trade agreements being signed in 2015. Namely, Vietnam signed bilateral FTAs with South Korea and the EU, as well as agreed to participate in the Trans Pacific Partnership agreement (TPP). The TPP agreement gathers 12 Pacific Rim countries, including some of the world's major economies, such as the US, Canada, Japan and Australia.
Te fourth IR project is Phu Quoc, promoted by Vietnamese group VinGroup and will include an 18,800 sq.m gaming floor over two floors, swimming pools, four and five star hotels, convention centre, spa, theatre and shopping and dining. Te casino is expected to have 200-400 tables and 2,000 slots.
l Local residents will be permitted to gamble in two casinos – Van Don and Phu Quoc - which will be part of a three year ‘experimental’ trial.
l Tis will restrict entry to locals over the age of 21, with no criminal record with a monthly salary of at least $500 and no objections from any family members. Tere will be an entry fee for locals of around $45 per 24 hour visit or a monthly pass for $1,100.
Whether the changes to permit locals into these two casinos will have an impact on the market is yet to be seen. Some fear by limiting it there will be little growth and fear the IR sector may not be so keen to invest with only a pilot project in place. Others say that by allowing locals to gamble even if restricted will make it more attractive for investors. Te law is due to be finalised by early this year.
Nearly 60 per cent of Vietnam’s population are P90 NEWSWIRE / INTERACTIVE /
247.COM
under 35, whilst the number of university graduates has spiked at 60 per cent over the last decade. Te middle to affluent class is also expected to double and reach 33 million by 2020.
Taxes remain unchanged. Te effective tax rate will be about 39-40 per cent although with deductions for marketing and promotions the rate will be more competitive especially in the VIP sector so an estimated 13.8 per cent is probably more realistic.
Tim Shepherd at Silver Heritage said: “Vietnam is taking both a very cautious and very sensible path to the liberalisation of gaming having watched carefully its neighbours in Cambodia and Laos struggle – they are forcing foreign hospitality investors to work very hard to create beautiful resorts along its pristine coastline, dangling the carrot of casinos and better still, local players.”
Te two Integrated Resorts, involved in the pilot local player project, in Van Don and Phu Quoc will also eventually be linked by new highways and international airports and bridges. Van Don is near to the Chinese border and Phu Quoc is close to Tailand and Cambodia.
Although Grand Ho Tram development was on its way to be included in the new ‘local player entry’ plans when it committed $4bn to establishing its Integrated Resort, the latest decree suggests it has been unsuccessful and it has not been included in the pilot project. It has been rumoured that the company is losing money and is down on investment.
Te Ho Tram Project has been developed by Asian Coast Development through its subsidiary Ho Tram Project Company and began in 2008. In 2013 ACDL received its gaming licence after an initial investment of $500m with a commitment to spend $4bn. Since it opened in April 2013 it can only receive foreign passport holders and
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