Vietnamese firms boost presence in foreign markets

Monday, 2018-03-19 11:38:08
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The opening of FPT Corporation's sixth representative office in Japan
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NDO – FPT Corporation opened its sixth representative office on March 13, in the Japanese city of Hamamatsu. Previously, in November last year, CMC Corporation also launched its first office in Yokohama and is expected to have a 1,000-strong staff for the Japanese market by 2020.

So far, roughly 20 Vietnamese tech companies have opened branches in the world’s third largest economy. According to VINASA, the association of Vietnamese IT firms, the value of Vietnam’s software exports could rise from the current US$300 million to US$1 billion by 2020. The number of developers working for the Japanese market could also rise from 10,000 to 300,000.

It has become a growing trend for Vietnamese enterprises to make outbound investments and for foreign countries to attract Vietnamese companies.
The Ministry of Planning and Investment attributed the boom in Vietnamese outbound investment to a Government resolution in August 2006, which details the regulations on Vietnamese investment in foreign countries.

To date, Vietnam has nearly 1,200 investment projects in 70 countries and territories, with total pledges reaching an estimated US$22 billion, 30% of which has been disbursed.

A survey by Vietnam Report shows that up to 45% of the 500 largest Vietnamese companies in 2016 said that they want to invest abroad over the next five years.

In Cambodia, approximately 190 Vietnamese-invested projects, with a total capital of nearly US$3 billion, are providing tens of thousands of jobs, helping to increase Cambodian agricultural exports to Europe, Japan and the Republic of Korea, as well as boosting socio-economic development in both countries, especially in border provinces.

In Laos, many of Vietnam’s 270 projects, for which disbursements have reached US$1.5 billion out of US$5.12 billion in total pledges, are also performing effectively in the fields of agriculture, telecommunications, mining and energy.

Vietnam is among the 10 largest foreign investors in Myanmar, while Vietnam’s investment in Russia currently stands at US$2.47 billion, compared with a mere US$100 million in 2008.

Vietnam’s outbound investment is becoming diversified (with industry accounting for nearly 55%, agriculture 25% and services 20%); larger in value (with many projects worth billions of US dollars by TH Milk, PVN, Viettel, Vietnam Rubber Group, Song Da and Hoang Anh Gia Lai) and directed towards projects that utilise a higher content of technology.

In addition to investment by major State-owned enterprises, investment from the private sector is also increasing.

The nature of international integration is creating an equal, favourable and balanced environment for both the inflow and outflow of goods, services, investment and labour. Overseas investment has great potential and is appropriate to Vietnam’s integration efforts, especially within the frameworks of free trade agreements in which Vietnam has participated and will participate.

Investing abroad is anticipated to help domestic enterprises increase their opportunity to access new markets, respond more swiftly to market and policy developments, technical barriers, trade disputes and differences in business and investment activities.

It is also expected to create and strengthen distribution chains, expand markets, open new business opportunities, create jobs and new sources of income, thereby contributing to Vietnam’s enhanced position in the international arena.

The scheme on boosting Vietnamese investment abroad was approved by the Prime Minister in February 2009 and now requires revision in order to match the current situation, which includes fine-tuning laws, enhancing state management capacity, developing institutions, increasing the responsibilities and support of embassies, trade representatives, trade associations and the Vietnamese diaspora.

In addition, it is necessary to develop information, consulting and legal services, while action is needed to prevent money laundering and other crimes in the name of overseas investment.