HCM City: Favourite Destination of US Businesses

 

Following the visit by 18 leading US companies in early April 2007, a large group of companies from states with strong business ties with Vietnam arrived in Ho Chi Minh City in late May.

 

In May 2007, a group of 25 companies from Washington State, US met many Vietnamese companies in Ho Chi Minh City. US companies are keen on infrastructure and construction projects in Ho Chi Minh City and in Vietnam as a whole. Most members of the group were visiting Vietnam for the first time. Washington State is the headquarters of world giants like Boeing and Microsoft. Since Vietnam joined the World Trade Organisation (WTO) not only mammoth groups, but small and medium enterprises as well, see Vietnam as a lucrative business location.

 

Mr Sam Reed, Secretary of State of Washington State, said when Vietnam becomes an official WTO member, the investment environment will be more widely accessible and business opportunity will grow. Reed said the potential and recent growth rate of the Vietnamese economy is very attractive to US companies. He said many service companies want to expand business operations in Vietnam. The business group, including several overseas Vietnamese, is considering tentative steps into the market, before a wave of other investors flock into Vietnam.

 

In 2000-2004, Washington State spent around US$500 million to import goods from Vietnam, and exported Boeing airplanes to Vietnam. Reed said Washington healthcare, education and commercial companies also wanted to explore the demand of the Vietnamese market, and that Ho Chi Minh City is the focus.

 

As of late 2005, Ho Chi Minh City drew 108 projects valued US$452 million from the US, accounting for nearly half of the total $1.087 billion US investment capital in southern Vietnam.

 

In 2006, Ho Chi Minh City made an impressive breakthrough, attracting US$300 million and then US$1 billion from Intel Corp. This event, coupled with investment and trade promotion activities, drew the attention of many US investors. In Dong Nai, Binh Duong and Ba Ria-Vung Tau provinces, Taiwanese and South Korean investors dominate, but in Ho Chi Minh City, US investors overwhelmed others for various reasons.

 

First of all, Ho Chi Minh City is an economic hub, not only in industrial production but also as a modern hi-tech centre. The city is home to such hi-tech zones as Quang Trung Software City and E-town 1&2. HCM City is a dynamic service and trading centre, and is an ideal place for developing restaurant, hotel, office, real estate and logistics services. The city is also the traveller destination and transport hub in Vietnam. Especially, Ho Chi Minh City has recently become known as an active financial and stock centre.

 

The advantages of Ho Chi Minh City are also in fields where US investors are strong. US firms have capital, technologies, a high managerial level and advanced production techniques. Therefore, after Vietnamese accession to the WTO, the US ratification of permanent normal trade relations (PNTR) with Vietnam, and visits by high-ranking officials of the two countries, US investment is forecast to overflow into Vietnam soon. To grasp this opportunity, Ho Chi Minh City has organised many meetings and receptions for US business delegations, and the Washington State group is one example.

 

US FDI Capital in Southern Vietnam (Da Nang Southwards)
Ord.	Locality	Project number	Total investment capital	Legal capital	Realised
10	Bac Lieu	1	10,464,816	4,116,000	4,116,000
12	Dak Lak	1	4,563,530	1,350,000	4,563,530
15	Kien Giang	1	2,000,000	2,000,000	-
16	Long An	1	1,500,000	800,000	-
17	Khanh Hoa	1	1,400,000	300,000	300,000
6	Quang Nam	2	26,283,000	18,383,000	-
11	Can Tho	2	6,451,000	5,750,000	1,340,741
13	Lam Dong	2	4,400,000	1,600,000	1,484,474
14	Vinh Long	2	3,490,000	1,650,000	-
9	Binh Phuoc	3	11,500,000	8,067,000	4,500,000
4	Da Nang	4	49,200,000	14,767,000	1,000,000
7	Phu Yen	5	26,240,000	8,120,000	3,320,000
5	Ba Ria - Vung Tau	6	32,846,218	11,207,677	15,531,318
8	Tay Ninh	6	13,100,000	4,767,000	1,500,000
2	Dong Nai	25	263,578,985	103,868,953	94,691,978
3	Binh Duong	40	179,205,400	77,024,330	66,215,803
1	Ho Chi Minh City	105	451,536,135	188,400,692	57,054,191
	Total		1,087,759,084	452,171,652	255,618,035