Vietnam Increasingly Attractive to U.S. Investors
HCMC – With more than US$11 billion, the United States has become the seventh largest investor into Vietnam. U.S. businesses are now represented in 17 out of 21 of Vietnam’s industries. In the first quarter of 2015, there were eight newly registered U.S. projects and increased investment at two existing projects, collectively these investments totaled US$70 million.
According to Vietnam’s Ministry of Planning and Investment, as of March 20th, there were 735 active U.S. invested projects in the country. With seventeen projects, the hospitality sector has received the most investment, 42.3 percent, worth US$4.68 billion in total registered capital. The next largest investment area, 20.3 percent, was in the manufacturing and processing industries, with 323 projects collectively worth US$2.24 billion.
The vast majority of the American projects, 599, were in the form of 100 percent wholly foreign owned enterprises. However, there were also 111 joint ventures. The average investment size of the American projects was US$15 million – this is slightly higher than the average investment level for the foreign invested sector – US$14.3 million.
The southern coastal province of Ba Ria-Vung Tau, is the location of some of the largest American projects in Vietnam. In total, the province has attracted 18 projects, worth a total of US$5.3 billion. The largest of these projects is a US$4.1 billion resort-hotel-entertainment complex developed by Winvest Investment (Vietnam) Co. Ltd.
The next most popular investment destinations in Vietnam are the northern city of Hai Phong, with US$1.2 billion, and the southern province of Binh Duong, with US$780.6 million.
Strengthening economic relationship?
Despite a contentious history with the U.S., the Vietnamese are now among the most pro-American people in Southeast Asia. This has led to calls for building an even stronger relationship with the United States. The Trans-Pacific Partnership (TPP), a global trade agreement currently under negotiation, is but one of the many signs of this burgeoning economic relationship.
The TPP is made up of twelve countries: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Upon completion, the TPP trade area would comprise a region with US$28 trillion in economic output, making up around 39 percent of the world’s total output. If the TPP is successfully implemented, tariffs will be removed on almost US$2 trillion in goods and services exchanged between the signatory countries. Thus, Vietnam has much to gain from the implementation of the trade agreement, including drastically reduced tariffs in some of the world’s largest markets.
The United States is not the only country to have recently upped its level of investment into Vietnam. Singapore has become the third largest investor in the country. According to Vietnam’s Foreign Investment Agency, at the end February, Singapore had poured US$33 billion worth of investment capital into the country. In the first two months of 2015, Singapore implemented 12 newly-invested projects and increased investment levels at a further eight projects.
South Korea and Japan remain Vietnam’s largest foreign investors, with 4,240 projects worth US$37.84 billion in total and 2,556 projects worth US$37.37 billion respectively. Over 100 countries and territories have investments in Vietnam.
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