Mon, 15 Sep 2014. Last updated Thu, 25 Jun 2015 08:49
A study has been published by the American Chamber of Commerce in Singapore (AmCham Singapore), which showed that Vietnam was put at the second position by the American investors in terms of potential expansion of business investment in Vietnam in the future compared with other countries in ASEAN. The survey was conducted with 588 high-ranking CEOs, representatives of American companies which have turnovers from US$ 50 million to over US$ 1 billion, and have their headquarters based in over 10 countries in Southeast Asia. According to the representatives of American investors joining this survey, the advantages of Vietnam are low labor cost and stable social security.
The result of this research pointed that 74% of American enterprises constantly increases their investments in ASEAN during the last two years. 63% of them expect turnovers to rise in this year, and 81% next year. And, 53% of investors raise their labor force this year. American enterprises highly appreciate Vietnam by the abundant work force, low cost, and stable macro environment. "The survey is a proof showing that ASEAN is an exciting area with great potential of growth, young population, and profound integration prospect", the Chairman of AmCham Singapore, James Andrade shared.
Vietnam is regarded as the second investment attractive spot for America's enterprises expand their business in ASEAN after Indonesia. Foreign investors in Vietnam evaluate that Vietnam has a great advantage of having a good relation with the US, abundant labor market with low cost, and sustainable macro environment. 66% of American enterprises looks for the increase in turnover in 2014 and 82% expect to raise their revenues in 2015. Over a half of these enterprises said that they expect to expand their scales this year, while only 5% of them will decrease. At the same time, over 80% of US enterprises shared that they no longer face financial difficulties or problems on borrowing costs. However, corruption is still the biggest problem. Nearly 70% of asked leaders in this survey are not satisfied about this problem. During the last five year, costs of labor, renting offices and housing are lower, but the efficiency of policies on business support has not pleased many investors.
The report shows the confidence of the US enterprises in the investment market of ASEAN, especially in terms of forming common economic community in 2015 which will strengthen the commercial and investing relations with reputable investors, and make this region become an appealing stop for investment. The Vice Chairman of AmCham, Mr. Tami Overby said. In addition, he told that ASEAN members joining the Trans-Pacific Strategic Economic Partnership Agreement would gain great benefits from the integration trend. Simultaneously, the survey pointed out some significant concerns preventing the development of regional enterprises. Five year ago, corruption was one of the most serious worries in ASEAN countries, except for Brunei and Singapore. Yet, the US companies still complain about the cumbersome administrative procedures, not transparent, underdeveloped infrastructural system, and difficulties at Customs.
Therefore, ASEAN countries need to maintain and improve the competitiveness to appeal more foreign investors, Mr. Overby recommended. Among 588 leads of enterprises and companies participating in this survey, there are 55% of service industry, 31% of production, and the rest of exploring minerals and other industries. These companies have turnovers fluctuating from US$ 50 million to US$ 1 billion per year.