US businesses eager to invest in Vietnam but obstacles remain
US businesses eager to invest in Vietnam but obstacles remain
An investment wave from the US has been hitting Vietnam thanks to good developments in the Trans-Pacific Partnership Agreement (TPP).
“US enterprises, especially makers of products exported to the US such as garments and textiles, footwear and aquatic products, are seeking investment opportunities in Vietnam to benefit from TPP’s investment and trade-related incentives,” Nguyen Viet Ha, managing director of US-backed investment consultant BowerGroupAsia, told VIR.
According to the Ministry of Planning and Investment, Vietnam is now home to 665 US investment projects with the total registered investment capital of $10.6 billion. This year’s first nine months saw 24 new US projects registered with the registered investment capital of $48.5 million, up 3 per cent on-year.
“Recently a delegation of 20 US businesses operating in garments and textiles, footwear, telecommunications and finance came to Vietnam for investment windfalls,” Ha said, citing Amcham Hong Kong chairman Vuylsteke as saying that US businesses “did not want to pour too much money in only one market like China.”
“Vuylsteke affirmed that Vietnam was a potential investment spot and a new US investment wave was waiting to hit Vietnam,” Ha said.
Nguyen Duc Tiep, deputy head of Quang Ninh Provincial Investment Promotion Agency’s Investment Promotion Division, told VIR some US investors were working with the northern province in potential projects of property, tourism, service and financial sectors. For example, the provincial people’s committee and ISC Corporation inked a memorandum of understanding in mid-September on the US firm’s projected implementation of a $7.5 billion entertainment complex including a casino in Quang Ninh’s Van Don Economic Zone.
According to the Singaporean Amcham’s ASEAN Outlook Survey 2014, conducted over 475 American businesses in ASEAN last year and recently released, Vietnam ranks first among top regional target countries for US business expansion, with 58 per cent, followed by Myanmar (41 per cent) and Thailand (29 per cent).
In terms of business expansion, 61 per cent expected their workforce to increase in Vietnam in 2013, while 62 per cent expected profits to increase this year, rising to 85 per cent for 2014.
However, despite the optimism, Ha noted that “US investors are also concerned over a series of difficulties in setting up business in Vietnam, such as completed investment procedures and weak infrastructure.”
Under the Singaporean Amcham’s survey, US businesses’ satisfaction in Vietnam has declined compared with five years ago across a variety of criteria. Reduced satisfaction covered an 11 per cent drop regarding availability of raw materials, 9 per cent for laws and regulations, 32 per cent for new business incentives offered by the Vietnamese government, and 9 per cent for tax structure.
vir
