Vietnam : A Country of Investment Destination?

Vietnam is a country that was newly released from France colony  and  civil war colored by foreign intervention with its dark history which now is growing  very fast. Even if Hanoi city in Vietnam has not yet been a commercial city as we often see. A glance look this city  is a and city which has not been touched by  international developers.

This city of France heritage shows old architectures. People then would ask  why these old buildings must be maintained? Why aren’t they hanged like other Metropolis that have many sky buildings? May be as the Capital City of Vietnam, Hanoi more concerns with government. City beautifying is not yet a matter of concern.

Unlike other cities such as Saigon and Danang, both cities are located in the southern and central part of Vietnam which are busy to beautify themselves. Skyline  buildings become the character of these cities  even if old buildings are still maintained.

City plan looks very attractive. Cities were  planned very nice and attractive. Metropolis does not feel overloaded, with wide and tidy street access. The new city of Saigon is a wonderfully planned city.  We must give them our thumb. Vietnam  which in the past was colonized by France  and faced civil war is successfully to become a wonderful city.

Foreign investors seems racing to invest in here. Elite group of this country grows many foreign companies, that it is not difficult for us to find  restaurant Kentucky Fried Chicken (KFC) even if we have not seen yet the king of world hamburger  Mc Donald’s.

It may be that Franchisor Mc Donald’s ha sits own consideration to extend its wings into Vietnam. Local brands such café Highland coffee; Trung nyen coffee are favorites of local people. So is Ba Dang ice cream.

Fast Food Lotteria occupies many strategic location. Korea investor, Lotto Mart starts opening its supermarket. But strangely supermarkets found here do not like those in Jakarta and other big cities. May be Vietnam people have not been tend to shopping in supermarket or department store. They tend to shop at the market area such as Andong Market; Ben Thay market  and other traditional markets, especially for daily consumption. May be time will change the habit of Vietnamese people.

Globally foreign investment in Vietnam has been flowing much. But economic and financial crisis which torn world economic order also affect badly on the investment flow into this country. During the last eight month of year 2009 FDI (foreign direct investment) only reached US$ 10,45 billion, down 81,6 percent compared to that of  year 2008.

According to Foreign Investment Agency US$ 5.62  billion for new projects and US$ 4.82 billion of the current projects amounting to 149 projects. And the biggest  investors are from the United States which reached US$ 3,95 billion followed by Taiwan of US$ 1,35 billion and British Virgin island of US$ 1,24 billion.

Investment open policy of Vietnam may be still a factor of consideration for the foreign investor. Some limitation are still applied to protect local people such as opening of foreign bank and financing which are the pre conditions. Meaning that it must be followed by domestic shares.

So is the case with entertainment and amusement as well as real estate are still pre conditional. Even if Law of Investment of  2005 has been issued but some constraints are still found here and there. One of the factor to meet the investment is the matter concerning foreign title on property. Foreigners are not entitled to own land/house.

On tourist areas such as Hoi An, only local people  that can control r own land and occupy the place, except if thee is foreign investor who wants to build beach, under BOT (build operate transfer) that is building a new project where under certain period of operation the project will be delivered to the government. Or BTO (build transfer operate) that is building first, then transfer to government, then operated by foreign investor.

There are some foreign investors which build apartment project based on profit sharing system along the beach, that is by inviting foreign investors to invest in  apartment with predicted rate of  investment of return 2  percent per month from the proceeds of the apartment leasing. We have no data yet as to whether this investment runs well and beneficially? In general, for a investor  facilities are very needed, but it can not also be separated from  government factor. For sure even if Vietnam is socialist country, but its economic system is that of capitalist. Can such a model run  consequently? What concerns the investors are that socialist power are for the interest of group  or people who come to opinion that foreign investment can be nationalized. Lets see.

*) The Writer is a practicing lawyer in Jakarta.