State supports US firms ahead of TPP

The TPP will entice US firms to relocate to Vietnam from other countries in the region-Photo: Le Toan

Newly-elected Prime Minister Nguyen Xuan Phuc last week met with a group of US investors led by William Weidner, chairman and chief executive officer of Global Gaming Asset Management, LLC and principal of Weidner Holdings Group.

Weidner revealed that US investors wished to implement a wide range of projects in Vietnam, including the construction of a modern commercial centre in Ho Chi Minh City. He added that the Trans-Pacific Partnership (TPP) would help Vietnam become a great magnet to global investment, especially from the US.

PM Phuc stressed that he would ask Ho Chi Minh City’s People’s Committee to create the best conditions for this modern commercial centre project so that it could be implemented according to schedule.

“The government will continue creating the necessary favourable conditions for investors in Vietnam – including American ones – via a more business-friendly climate. The US has had many successful projects in Vietnam,” the prime minister added.

Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, told VIR that the US had a developed and diverse economy, with millions of businesses. “Although some of these businesses are not seeking opportunities abroad, a very large number were already operating in Vietnam, with many more looking forward to a bright future here.”

“The trend of US-Vietnam trade and investment continues to soar. We see the TPP as the next step and are hopeful that a better business environment in Vietnam will be a catalyst for many US companies to do business here,” he said.

According to the newly-released ASEAN Business Outlook Survey 2016 by the American Chamber of Commerce in Singapore and the US Chamber of Commerce, 84 per cent of respondents expect their profits to increase this year in Vietnam. The survey incorporates the responses of nearly 500 senior business executives representing US companies in all ten ASEAN markets.

Eighty per cent are planning to expand their business and production here. Additionally, 61 per cent said that the TPP would positively impact their future investment plans in ASEAN.

Recently, DASAN Network, a South Korean network provider for global telecommunications, and Zhone Technologies, a global US leader in fibre access transformation for service providers and enterprise networks, agreed on a merger and acquisition deal for global expansion.

“This M&A deal, which is expected to be finalised this summer, following the TPP, should help Vietnamese telecom providers avoid security threats,” DASAN Network’s chairman Min Nam Woo told VIR. “We are planning to double our research and development (R&D) headcounts in Vietnam this year to serve our clients worldwide. DASAN already has an R&D lab in Vietnam.”

Seshasaye Kanthamraju, head of corporate communications for Walt Disney in Vietnam, told VIR that his firm begun operations in Vietnam in March this year, with one local employee based out of Ho Chi Minh City. Currently, Walt Disney is looking for a studio marketing executive responsible for planning and executing movie marketing activities in Vietnam.

At present, almost all key sectors in Vietnam are home to major US investors, such as Exxon Mobil (in oil and gas) Boeing and ADC – HAS Airport (in aviation), Microsoft, Intel, Apple, HP (in IT); General Electric, General Atlantis, and AES (in electricity and equipment).

“It is important to understand that US tax laws and business considerations compared to the relatively small size of the Vietnamese domestic market, encourages many US companies to invest in Vietnam from regional headquarters, most commonly Singapore and Hong Kong, as well as to some degree from other third-party countries,” Sitkoff said.