Now that the 19-year-old U.S. trade embargo against Vietnam has been lifted, American companies will be seeking different ways to enter this market. According to Dr. Ax Wu, an international development consultant based in Atlanta and an adviser to the University of Georgia, U.S. companies that want to invest in Vietnam may choose from several ways of becoming involved.
He said that the most common way of entering the market is to choose an investment project encouraged by the Vietnamese government, and to then find an appropriate Vietnamese partner. “The Vietnamese partner then submits a contract to the appropriate agency, such as the State Committee for Cooperation and Investment (SCCI), for approval,” he said.
Upon approval the negotiated contract becomes effective, he said, but a joint venture cannot conduct business prior to the granting of the business or investment license. Small joint venture projects may be approved by provincial and local governments, but larger ones such as infrastructure and power plant projects must be approved by the central government.
U.S. companies also may want to hire a Vietnamese agent or distributor, but not all agents are permitted to import any item. Each importer is only allowed to import a pre-approved item, and “finding the right importer can be a trying process,” he warned.
Vietnam will embark on multibillion dollar projects to improve the infrastructure necessary for forging economic growth and he thinks bridges, roads, airport and telecommunication projects will be in demand. In the agricultural sector, he said that fertilizer, insecticides and pesticides will be needed to improve crop yield. Utilization of animal feed, feed additives and animal health products also will be increased.
In his view there will be many opportunities for selling consumer goods including soap, detergent and beauty aids. And even though investors from France, Taiwan, Hong Kong and Singapore already have secured prime hotel sites in Ho Chi Minh City (Saigon), Hanoi and Da Nang, many other opportunities for resort hotels exist, he said.
Dr. Wu will open a marketing office in Ho Chi Minh City in March. For other articles appearing in Globalfax about Dr. Wu see Vol.2, Issue 5; and Vol.1, Issue 20. He may be reached by fax at (404) 925-0765.