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Many large US corporations have invested in Vietnam. Photo: S.T

Many large US corporations have entered Vietnam

FDI capital from the US into Vietnam has recently achieved many positive results. According to statistics fromthe Ministry of Planning and Investment, the US ranks 11 out of 138 countries and territories investing in Vietnam with more than 1,000 valid investment projects, total registered investment capital of nearly US$9.4 billion, focusing mainly on areas such as hotel and catering business, processing industry, and manufacturing.

Mr. Tran Duy Dong, Deputy Minister of Planning and Investment said that US enterprises were present in Vietnam very soon after the two countries normalized their diplomatic relations and were investing in successful business in Vietnam, typically the projects of Cargill, Coca-Cola, Pepsico, Caterpillar, Intel.

These are important bricks to connect the investment relationship between Vietnam and US, thereby paving the way and promoting economic cooperation between the two countries towards sustainability, product development, manufacturing and branding in the global value chain.

The United States is currently in the top 10 out of 81 countries and territories receiving investment from Vietnam. Accordingly, Vietnam has nearly 200 valid investment projects in the United States with a total registered investment capital of nearly US$750 million. Typical projects are the investment of Viettel Corporation, Vingroup Investment Vietnam JSC, Vietnam Dairy Products JSC (Vinamilk), FPT Software Company Limited, An Phat Xanh Plastic JSC, Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB), Mobifone Global and Technology JSC.

The US is also one of the largest providers of ODA to Vietnam, after Japan and South Korea.

In fact, the US investment in Vietnam is much larger because a number of large companies invest in Vietnam through their branches and subsidiaries registered in a third country. In addition, some large US industrial groups such as Apple and Google have invested in Vietnam through their own supply chain ODM/OEM manufacturing enterprises.

The projects of investors from the United States have covered 42 of 63 localities nationwide, with many famous brands such as Citigroup, American Group, Intel, Chevron, Ford, Starwood Hotel, AIA, Dickerson Knight Group, Coca Cola, Pepsi Cola, KFC.

Evaluating the above results, Mr. Vu Tien Loc, Chairman of Vietnam Chamber of Commerce and Industry said: “Investment projects and business of US enterprises in Vietnam have been playing an increasingly vital role in the development of Vietnam, helping Vietnam to participate more deeply in the global supply chain. Not only contributing to economic growth, technology transfer, changing management skills, US multinational corporations also contribute to social development.”

Not meeting potential

With more than US$9.4 billion invested in Vietnam during the period since the two countries normalized relations, according to experts, the results are quite cumbersome, especially in the context that the United States is a country that makes relatively large annual outward investments. This is something that needs to be improved in the future, especially in the context that many US companies are making investment shifts after Covid-19 and the trade war.

According to Mr. Nguyen Van Toan, Vice Chairman of the Association of Foreign Invested Enterprises, each year the US invests about US$300 billion abroad, but the direct investment of the United States in Vietnam is quite modest. Vietnam really needs investment capital from the United States because this is a source of capital with high technology, high transparency, good management technology as well as technical technology.

Regarding why the investment flow from the US and Vietnam is still limited, this expert said, first of all, it is possible that the business environment of Vietnam is not suitable, some issues of transparency, on unofficial costs, intellectual property.

These conditions are not really guaranteed while businesses from the US take this very seriously. In the future, Vietnam must have a variation to promote US direct investment into Vietnam, because investing directly is still better than through a third country.

Regarding the promotion of US investment capital into Vietnam, Mr. Tran Duy Dong said that the Ministry of Planning and Investment has establishedclose coordination with the embassies along with many large corporations, banks, investment funds and consulting firms to promote investment relationships with the US. Currently, this Ministry is the focal point and leading an inter-ministerial working group to coordinate with the International Finance Corporation of the United States to promote funding for infrastructure development projects, one of the important foundations and essential for business operations and national economic growth.

"Through the working group, many large Vietnamese enterprises are actively working with international financial corporations to plan investment cooperation in the fields of transport infrastructure development, energy," Mr. Tran Duy Dong said.

To seize the opportunity to attract investment capital flows from the United States after Covid-19, Mr. Nguyen Van Toan said that improving the business environment is crucial.

“Vietnam's participation in the investment protection agreement with the EU may create favorable conditions for the improvement of the business investment environment and that will further boost the inflow of foreign investment from the United States to Vietnam in the near future. Because the requirements of investors from the US have many similarities with the needs of investors from the EU, therefore, it is expected that direct investment capital from the US to Vietnam will flourish when the investment environment in Vietnam is improved. Currently, according to unpublished information, there are many large corporations in the world studying the investment environment in Vietnam, including large corporations from the US and the EU,"said expert Nguyen Van Toan.