Industry and Hi-technology: Favourite Fields for EU Investors

Investors from the EU have so far developed projects in 42 provinces and cities in Vietnam. Hanoi and Ho Chi Minh City, however, are two major cities in Vietnam to have attracted most investment capital from the EU. To date, 17 EU countries have invested around US$7 billion in 500 projects in Vietnam. The figure remains modest in comparison with an amount of US$38 billion from 21 APEC member countries but proves Vietnam’s attractiveness to EU investors.

France, the Netherlands, and the UK are leading EU investors in Vietnam. France is the biggest EU investor and is seventh among 61 countries and territories in Vietnam with 162 projects, capitalised at more than US$2 billion. One of the biggest French investors in Vietnam is Alcatel. In 1988, Alcatel began to enter the Vietnamese telecommunication market and has so far occupied 25 per cent of the market of telecommunication and multimedia. Alcatel is pursuing two major projects on building the Haiphong-Da Nang-Ho Chi Minh City undersea cable network and the launch of a satellite with a total investment of US$180 million.

The UK is just 11^th among foreign investors in Vietnam with 69 projects, mainly concentrating in the fields which require hi-tech and modern management, such as oil and gas, banking and insurance. Also, the UK’s non-refundable aid to Vietnam has seen the highest increase among those countries providing the aid to Vietnam. According to a report at a Vietnam-UK trade and investment forum, held recently by VCCI, the UK’s non-refundable aid to Vietnam increased from US$35 million in 2003 to US$100 million in 2005.

 

Among over 500 valid projects of the EU, 275 projects, capitalised at over US$4 billion, are concentrated in industry. EU investors have paid special attention to services, such as transportation, telecommunication, tourism and hotel. A major project of the EU in the 1980s was the building of the Sofitel Metropole Hanoi Hotel by the Sofitel French Group in 1989, with a total investment capital of US$26 million. The hotel has recently been selected on a list of gold hotels by two prestigious US tourism magazines. In telecommunication, an exemplary project is business co-operation contract of Comvik (Sweden) and the Vietnam Post and Telecommunication Group in launching the Mobifone network, marking the beginning of mobile phone service in Vietnam. The Swedish company contributed US$6.3 million in 1992 and around US$250 million in the 2002-2005 period.

 

Not having as many projects as the UK, France and the Netherlands, Spain is 13^th out of 17 EU investors in Vietnam with only five projects. However, the presence of the Fritta Company with a EUR 20 million project on manufacturing pottery items in Vietnam and Spanish enterprises’ exploration of the Vietnamese market during the visit of Spanish King Juan Carlos early this year prove the attractiveness of the Vietnamese market to Spanish investors.

 

At present, in Vietnam-EU investment relationship, the improvement the investment environment in Vietnam is attracting most attention. The Vietnamese Government has made great efforts to improve the local investment environment, making it more open and transparent. In 2005, the Vietnamese National Assembly approved 20 laws and codes, two of which produce direct impacts on the local investment and business environment, the Common Investment Law and the Unified Enteprise Law due to take place from July 1, 2006. The legal environment in Vietnam has improved significantly and been praised by foreign investors. This is a basis for a belief in a possible increase in foreign investment from other countries, including the EU in the future. Also, the Vietnamese Government has approved a programme of action to develop the Vietnam-EU relationship throughout 2010 and orientations until 2015. This may be a premise for a further development and promotion of the Vietnam-EU investment co-operation in the future.