On two days 8 and 9, November 2005, the New World hotel played host to the Investment Mart 2005 organised by the Ho Chi Minh municipal people’s committee, Ho Chi Minh Authority for Planning and Investment, Investment and Trade Promotion Centre. More than 300 investors from many countries have participated in the conference and more than 130 investment projects in four sectors, namely technical infrastructure, real estate, high technology and service have been displayed at the exhibition. Investment projects owners, departments and agencies of Ho Chi Minh city were present to settle investors’ questions.
Interested projects
This is the first time there is a relatively concentrated investment promotion activity taken place in the Ho Chi Minh City creating opportunities for direct contact amongst investors and officials for calling for investment with full and specific information. Luong Van Ly, deputy head of the Ho Chi Minh Authority for Planning and Investment said that in the list of projects on offer this time, there are dozens of big projects that could change the face of the Ho Chi Minh city in coming years. Projects for drawing investment this time are ranged in different economic sectors and scales. The biggest number of projects are for infrastructure of the municipal Public Works and Traffic Department.
For an instance, the Metro system with the total capital of $1.37 billion include two projects, namely building the Metro route from Hang Xanh to the Can Giuoc bus station which has length of 17 kilometres and another route from Ba Queo to Phu Lam which has length of 6 kilometres. The projects will enjoy preferential policies from the Ho Chi Minh authorities and the Ho Chi Minh authorities commit to contribute 30 per cent of correspondent capital of the project to investors. Furthermore, investors could be able to call for other capital sources and are permitted to establish an enterprise to operate the project after investment.
The parking lot project in the central area of Ho Chi Minh City aiming at settling the shortage of parking lots has attracted many foreign investors. The project needs investment capital of around $120 million and the municipal authorities commit assigning clearance land to investors, exempt fees to investors. Cu Chi SAFARI park which has a wild animal park and entertainment areas is planned on an estimated areas of 496 hectares and the land is presently available for handing over to investors. Some construction projects of condominiums in the Eastern West of the city such as the new apartment building Thu Thiem, Cu Chi, Hoc Mon are in the process of being approved for their master plan. The Ho Chi Minh City Real Estate Association introduced 25 projects of which 21 are located inside the city and other four projects are put in Ba Ria-Vung Tau, Vinh Long, Binh Thuan. The Quang Trung software park also displayed 10 projects calling for different sectors in training, software development, apartment and office buildings, technical support services and entertainment areas. The Quang Trung Park is developing relatively quickly and drawing attention from communities of information technology in the region and in the international arena.
Initial results
At the exhibition, the Underground Space Development Joint Stock company, owner of the Building-Operation-Transfer project of building, exploiting the underground of the Le Van Tam park located in district 1, Ho Chi Minh city for parking lot and public services signed six contracts and agreements with partners such as Zublin International, Chesterton Petty, Grant Thornton, Sabeco and Bao Minh so as to deploy the project with total investment capital of up to $24 million. Le Tuan, president of the company said that it was the first biggest private project on building infrastructure, so the company has the intention of cooperating with leading firms world wide such as the construction group Zublin International, the second firm in Germany in construction sector; the Chesterton Petty (England), one of leading real estate management companies in England and Hong Kong.
Direct responses for difficulties
Investors could directly discuss and put questions to investment owners and concerned state agencies for specific conditions and policies for consideration of agreeing or rejecting a project. With the objective of “the more specific the better”, the organising board has formulated four symposium groups for four kinds of projects. Investment preferences for projects will be publicised at the exhibition and fair. Specifically, high-rise buildings, infrastructure, software industrial projects will enjoy the reduction of corporate income tax to 10 per cent in the first 15 years of the projects. Particularly for the Quang Trung software park, where the corporate income tax will be just 10 per cent for the lifeline of the project. The land leasing rate in the industrial zones will ranged from $35 to $120 per square metres per year for the duration of 50 years.
With projects outside industrial zones, the land leasing price will range from $0.09 to $12 per square metre per year. Specially, projects in high technology zones, underground parking lots, high-rise building projects are exempted from paying land leasing fees. Ho Chi Minh municipal authorities also have released a list of projects which receive investment incentives. The city has formulated three specialised teams to settle difficulties of both foreign and domestic investors concerning administrative procedures, licensing granting, taxation, customs, land in a timely manner.
Thoughts of invited guests
Bradley C. Lalonde, chief representative of Vietnam Partners LLC (United States) participated in the exhibition and fair with several plans for using the investment capital of $200 million for projects in Vietnam. Vietnam Partners LLC together with the Bank for Investment and Development in Vietnam are conducting final procedures for putting the fund management company into operation as of early next year with the total investment capital of $100 million. In 2006 also, the joint venture will establish another foreign investment fund which will have the total capital of $100 million mainly mobilised from the United States.
Walter Blocker, vice president of the US Business Association said that the Vietnam economy was coming into the third phase of a big play. The first phase begins when foreign investors flock into Vietnam aiming at mapping out new and potential market. The second phase come when the foreign direct investment flow reduces gradually as the regional crisis appears. Now the third phase is coming when efforts of the government in improving business environment will bring efficiency and the foreign direct investment capital flow is estimated to reach more than $5 billion by the year end. B.T. Park, director of the project development of the Ssangyong group (South Korea), said that there is a great attractiveness in Vietnam not only in real estate but also other areas. Lee Soon Heung – president of the Union of South Korean Oversea Traders said that details of the business opportunities in Ho Chi Minh City have been posted on the Union’s website to provide its 6,000 members worldwide with information. Ariel Stolier, chief executive officer of the Australia based Dynamic Dwellings company said that new investors coming to Ho Chi Minh City could make decisions about expanding their projects via attractive and useful information available in the exhibition and fair.
Several foreign enterprises such as HSBC, VinaCapital, Chesterton Petty which have reaped success in Vietnam also shared their experience of doing business in Vietnam with new investors. The exhibition and fair have been golden chances for investors, investment owners and officials at various levels to come closer to more specific decisions and promises new projects that will contribute to the prosperity of Ho Chi Minh City.
Song Phuong
Vietnamese
