Foreign investors favour existing projects

Foreign direct investment in Viet Nam has flowed mostly into small existing businesses so far this year.

Arika Fukuda decided to double the of his Japanese restaurant in HCM City and change its location from District 3 to District 1 to improve access.

“Viet Nam became my choice when the Japanese economy ran into trouble,” he said.

At the new location he has spent US$800,000, or three times the investment he made earlier, and expects to recoup the money in three years.

The Australian-owned Boomarang Bistro&Bar has just opened in Phu My Hung, the company’s second foreign outlet after an earlier one in Singapore.

“The attraction of the Vietnamese economy brought us here,” Martin McGettigan, the company’s managing director, said.

Last year, the city led the country with 384 new and 115 expanded projects with a total investment of $1.3 billion. Of them, only 18 new and 34 existing projects are in industry and processing with the rest being in the service industry, including hospitality.

“In 2009 the actual money brought into HCM City-based small projects was $900 million and this year the city is looking for investment in real-estate projects that received their licences two or three years ago,” Lu Thanh Phong, deputy director of the city Planning and Investment Department, said.

According to the Foreign Investment Agency, in the 2007-08 period the property and oil refining sectors accounted for 80 per cent of all FDI commitments.

Usually billion-dollar projects, they require thousands of ha of land, and acquiring and clearing this land needs much time.

This year some big investors have promised to bring in their investment quickly. Malaysia’s Berjaya will begin work on its $930 million Viet Nam Finance Centre in Ky Hoa park after Tet and the US-based Winvest Investment will begin developing a 40-ha entertainment complex in southern Ba Ria–Vung Tau Province next month.

Dang Thanh Tam, chairman of the Sai Gon Invest Group, announced that Taiwanese Foxconn, which had committed to invest $5 billion in Viet Nam two years ago, would soon bring in the money.

The Ministry of Planning and Investment is set to review all licensed projects around the country to increase the effectiveness of FDI.

Those that have been delayed and not friendly to the environment will have their licences withdrawn. Big projects that require large tracts of land will be favoured. New policies will be announced giving priority to European, American, and Japanese companies.

VietNamNet/Viet Nam News

Tags: invest in Vietnam, Vietnam investment