Vietnamese firms increase overseas investment

Metfone, a telecommunications project of Viettel in Cambodia.Vietnamese firms were increasing their overseas investments in recent years in an effort to expand their global reach — Photo Viettel

The Ministry of Planning and Investment’s report recently submitted to the Government showed that Việt Nam registered US$528.78 million in 172 projects in 33 countries and territories in 2019, representing a year-on-year increase of 10.7 per cent.

Of note, all the registered overseas projects last year were of private companies in Việt Nam and there were no new overseas projects by State-owned enterprises (SOEs).

The ministry said that more private companies were increasing investment abroad, such as Vingroup, Vietjet, Thaco, FPT, T&T, Vinamilk and TH Group, even to developed markets.

As of the end of 2019, Vietnamese firms has so far registered to invest a total of $20.6 billion in 1,321 projects in 78 countries and territories.

Five companies with more than $1 billion in registered overseas investment were PetroVietnam, Viettel, Vietnam Rubber Group, Hoàng Anh Gia Lai Group and Long Thành Golf Investment and Trading Joint Stock Company.

Of the figure, some $9.49 billion was disbursed, mainly in the sectors of mining ($3.5 billion), telecommunications ($1.61 billion), agriculture ($1.56 billion), electricity production ($809 million), financial and banking ($787 million) and real estate ($384 million).

The ministry’s statistics also showed that the the profit remitted totalled $3 billion and around $363 million in profit was kept for reinvestment.

Around 10,000 labours from Việt Nam were working at Việt Nam’s overseas projects.

Laos was the largest receiver for Việt Nam’s overseas investment with a total registered capital of $4.9 billion, followed by Russia ($2.8 billion), Cambodia ($2.7 billion), Venezuela ($1.8 billion), Myanmar ($1.3 billion), Algeria ($1.2 billion), the US ($690 million) and Australia ($400 million).

Regarding overseas investment of SOEs, the ministry’s statistics showed that SOEs registered to invest $13.8 billion abroad, $6.7 billion of which was disbursed.

PetroVietnam invested in 27 projects abroad with a total registered capital of $7.1 billion. Viettel had 10 overseas projects worth $3 billion. Vietnam Rubber Group invested in 23 projects worth $1.3 billion.

The ministry said that some overseas projects of SOEs were running efficiently while some were struggling.

Around half of overseas projects of PetroVietnam were in stagnation or could not be implemented, the ministry pointed out.

Vietnam National Coal and Mineral Industries Group was also seeking to transfer five projects in Cambodia and Laos due to inefficiencies.

Vietnam Airlines was also seeking to divest from the loss-making Cambodia Angkor Air in which it held a stake of 49 per cent.

The ministry also warned about several risks in overseas investment.

Some projects were heavily dependent of banking loans for capital, the ministry said, urging reviews to be carried out to ensure safety and efficiency for the banking system.

The ministry also warned about risks which might arise when investing in localities involved in armed conflicts or with political-social instabilities, localities with legal risks and tax havens.

Currently, there were no regulations which set requirements or limit investments in these risky localities, the ministry said.

The Government Office has asked the ministry to evaluate the results of 10 years implementing the project of promoting overseas investment and develop orientations for investing abroad by 2025 then report to the Prime Minister within the last quarter of this year.

The Ministry of Finance was asked to study amendments to the law on State capital at enterprises towards tightening overseas investment of SOEs to improve efficiency.

The State Bank of Việt Nam would cooperate with the Ministry of Planning and Investment to evaluate overseas investment of commercial banks, loans to overseas projects to ensure system safety.

A list of risky localities for investment would be developed to limit risks for Vietnamese investors.

The ministry’s statistics revealed that Vietnamese firms invested $222.67 million abroad in the first half of this year, up by 11.4 per cent against the same period last year.