In September alone, the figure made up $480 million, in which two projects were increased in capital size of extra $100 million.

Noticeably, along with traditional investment markets namely Laos, Cambodia and Russia, Vietnamese companies also focused on other developed markets like Japan, US, Korea and Singapore.

In June, Saigontourist Corp announced it was negotiating to buy back a hotel in US. If things go smooth and as per plans, the corporation will end the deal of taking over a hotel in San Francisco City of California State by the year end. Additionally, the tourists firm plans to purchase hotels in Japan, Berlin, Hong Kong and Moscow.

According to Phan Huu Thang, head of Foreign Investment Department, since 2008, the overseas investment of local enterprises have grown impressively. Especially, many small sized projects in simple sectors are changed to larger sizes in the fields requiring higher technologies.

But, traditional markets such as Laos, Cambodia, Russia, Malaysia and Algeria are still the attractive destinations of Vietnamese investors. Apart from investing in mineral mining, forestry, hydropower, telecommunication and infrastructure construction in these nations, Vietnamese companies are eyeing other fields of aviation, banking and insurance.

The joint venture contract of setting up Cambodia Angkor Air -CAA (signed by Vietnam Airlines and Cambodian partners) in late July in Phnom Penh showed the new overseas investment trend of Vietnam. The joint venture has a total investment capital of $100 million that Cambodian government contributed 51 percent and Vietnam Airlines 49 percent.

Meanwhile, at the same time, Bank for Investment and Development of Vietnam (Bidv) officially marked its commercial investment representative office in the neighbouring country by buying back a private Cambodian bank to establish the Investment and Development Joint Stock Company of Cambodia (IDCC) with an expected charter capital of about $50 million. The IDCC will focus on investment activities, merges and acquisitions.

"Cambodia now has only 24 commercial banks with few services and this is a good opportunity for Vietnamese investors to enter into the market. Whereas, about 400 Vietnamese enterprises that are doing business in Cambodia can be promising clients for BIDC, partly contributing to investment and trade promotion between the two countries," Tran Bac Ha, Bidv chair said. Bidv also plans to set up the Vietnam Cambodia Insurance Co (CVI).

In addition, the bank plans to establish an association of Vietnamese investors in Cambodia by August to promote investment and trade between the two countries.

To date, Laos is the most important destination of Vietnamese investors. Nguyen Xuan Trung, vice head of Foreign Investment Department said that until July Vietnam had reached 186 projects in Laos with a total registered capital of more than $2.08 billion. Laos now ranks the top among 46 nations and territories having investment operation of Vietnamese companies.

Saigon Investment JSC (SGI) is one of the big investors of Vietnam in Laos. SGI spent total $800 million on building Nam Ngum 4 (200MW) and Nam Sum (280MW) hydropower plants in the neighbouring country. Also, SGI invested $5 million in a four star property in Sam Nua province.

Another investor Hoang Anh Gia Lai built trade centres, offices and apartments for lease, wood processing mill, rubber plantation, hydropower plants and invested in copper and cast iron mining in Laos with a total expense of $260 million, said the chair Doan Nguyen Duc. These are long term projects and HAGL will not stop investing in the country.

The government now encourages local firms to invest overseas in energy, power production, mineral mining especially petroleum drilling and plantation of industrial trees.

Prime minister also assigned Ministry of Finance to research the setting up of a fund in charge of supporting overseas investors to lend preferential loans.

Meanwhile, MPI is completing the government's amended draft Decree No 78/2006/ND-CP regulating on overseas investment and implying investment licensing procedures.

The Saigon Economic Times - October 1st, 2009