Decoding the Vietnamese attraction to US businesses

In the investment promotion event between Viet Nam and the US with the theme Joining hands to cooperate in reopening, revitalizing and developing the Southern economic region, Mr. Sai Ramana Ponugoti, General Director P&G Viet Nam Group said that despite being significantly affected by the fourth ravaging wave of Covid-19 pandemic, the Group still ensures to provide products to all consumers and customers in this challenging times.

“Viet Nam has well implemented the vaccination campaign to control the pandemic, so it helps the economy quickly return to strong recovery. This creates confidence for foreign investors. We will continue to invest and turn our factory in Viet Nam into a large production center and export to countries around the world", said the head of P&G Vietnam Group.

Recent Signs of economic recovery have helped increase the confidence of First Solar Vietnam to expand its investment. (Source: The Investment Bridge)

Recently, First Solar Viet Nam also announced an investment expansion plan with a total value of USD 1 billion to upgrade technology for a solar battery factory in Viet Nam. According to Mr. KJ Ung, Director of First Solar Viet Nam, the recovery signals of the post-Covid-19 economy have helped increase business confidence and First Solar Viet Nam has kept its expansion plan as scheduled.

The belief of Mr. Sai Ramana Ponugoti or Mr. KJ Ung is also the belief of many US investors who choose to stay and firmly stick with Viet Nam in the context of the Covid-19 pandemic.

Expectations from the "eagle wings"

Viet Nam-US relations are on a strong development momentum even during the pandemic and this will be the premise to attract more high-quality investment capital from the "land of starry flag”. This statement was confirmed at the Viet Nam - US Trade Forum held by the Ministry of Industry and Trade in collaboration with the American Chamber of Commerce in Ha Noi (Amcham) in early December.

According to Deputy Minister of Industry and Trade Do Thang Hai, despite the effects of the pandemic, which disrupted the global supply chain, but the bilateral trade and investment between Viet Nam and the US have enjoyed impressive growth. The US is continuously Viet Nam's leading important partner in all aspects of cooperation; the US ranks the 11th among investors in Viet Nam with the presence of most of the large US corporations.

As of November, the American businesses have invested in 1,135 projects with a total registered capital of more than USD 10 billion.

A survey just released by Amcham shows that nearly 80% of US businesses rate very positively or positively about the medium and long-term prospects in Viet Nam. In which, nearly 30% of US companies rated very positively about their medium and long-term prospects, and they had plans to invest in expanding production and business. Along with that, nearly 50% of the reviews are positive, showing the intention to stay or invest more.

In the assessment of Mrs. Mary Tarnowka, Managing Director of AmCham Viet Nam, Vietnamese companies and AmCham members have overcome difficulties thanks to the efforts of the authorities to bring life back to the new normality.

Although things may not have been the same as before, investors are happy when the government listens to investors' expectations and aspirations and makes adjustments to fit in the changes. These positive changes have helped companies return to operating at 100% capacity, with well delivered orders.

“We see the number of AmCham members continue to grow. Many companies express their desire to invest more in Viet Nam. I think Viet Nam is still an attractive destination for the manufacturing industry, because the companies want to diversify their supply chains", said Mary Tarnowka.

And according to Prof. Dr. Cu Chi Loi, Director of the Institute for American Studies (VIAS), US FDI into Viet Nam has been increasing recently. Notably, a number of large transnational companies are interested in and making investments in Viet Nam. "If these companies enter the Vietnamese market, it will create a spillover effect, attracting companies from the US and other countries to Viet Nam", Mr. Loi said.

Various areas of potentiality

Naming some potential investment fields for US businesses in Viet Nam in the coming time, Ms. Marie Damour, Charge d'Affaires of the US Embassy in Viet Nam straightly pointed out the areas of energy, aviation, medical service and technology.

The first is renewable energy. Viet Nam committed to ambitious climate change goals at the 26th United Nations Climate Change Summit (COP26), and the United States pledged to support Viet Nam to achieve those goals.

"Although it is not an easy goal, it is these challenges that will be an opportunity for businesses of both sides to develop sustainably", said Ms. Marie Damour.

The second is medical cooperation. Representatives of American businesses say that the pandemic has revealed many gaps in this field, and the US continues to support Viet Nam to prevent the epidemic, ensuring a deeper cooperation between the two sides.

Many technology companies in Silicon Valley have plans to redirect investment in electronic equipment production to Viet Nam. (Source: Stock Brief)

The third is cooperation in digitalization, with the advantage of owning the technologies for electronic payment, artificial intelligence, smart cities, many US businesses have been providing electronic payment technology, artificial intelligence, and smart cities to Vietnamese partners.

In addition, the prospect of cooperation in aviation is also enormous. In view of current projects under implementation, such as the investment in Long Thanh airport, the US businesses are committed to supporting Viet Nam in providing virtual technology, ensuring aviation security, network security, providing public services, and the latest technology in this field.

Mrs. Marie Damour also affirmed that the opportunity for Viet Nam to attract investment from the US is huge, especially after the visit of Her Excellency US Vice President Kamala Harris to Viet Nam at the end of August 2021.

Direct incentives for taxes, fees, land rent as well as low cost labor are no longer a factor sought by US investors. According to Mr. Vu Tu Thanh, regional vice director of the US-ASEAN Economic Council, the investment motivation for US businesses comes from the growth potential, population and purchasing power of the market - these are also advantages for Viet Nam.

Along with those advantages, a fair and healthy playground for domestic and foreign enterprises also represents an important role in influencing the decisions of high-quality investors.

Viet Nam’s FDI attraction surpasses 31 bln USD in 2021 The total new, adjusted capital and share purchases by foreign investors reached 31.15 billion USD as of December 20, up 9.2 percent annually, reported the ...

FDI attraction forecast to recover in 2022 A recovery in the global investment flow will open up a bright future for Viet Nam's investment attraction, according to experts.