Foreign investors scramble to get foothold in trade sector

However, many of these investors are being hampered by restrictive investment laws.
Phan Huu Thang, director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI) said that Vietnam’s state agencies were preparing to open up the country’s distribution sector in-line with the bilateral and multi-lateral agreements signed with various WTO negotiating partners.
“We have seen that several foreign investors are currently making moves to establish wholly foreign invested trading and distribution firms in Vietnam prior to the time Vietnam gains official WTO membership,” said Thang.
The opening of the trading and distribution sector will follow the opening-up of the country’s shipping logistics sector, in which two foreign firms - one Danish and one Japanese - have been allowed to establish a wholly-foreign-owned business, and a Singaporean firm is likely to receive a similar licence.
Thang told Vietnam Investment Review that Mitsui&Co was the first firm to ride a new wave of Japanese investors looking at Vietnam’s trading and distribution sector. Mitsui&Co’s application, which stemmed from its involvement with the Vietnam-Japan treaty to support Vietnam’s bid for WTO membership, was made directly to Prime Minister Nguyen Tan Dung and the MPI a month ago.
“Mitsui&Co wishes to be the first in the [trading and distribution] field.
MPI specialists have been positively working with the Japanese company on appropriate application procedures so as to meet Vietnam’s schedule for WTO’s membership,” said Thang.
“Such procedures will take time and we understand that Mitsui&Co has to make all necessary preparations to win governmental approval.”
VIR learnt that Mitsui&Co applied to start a $30 million trading firm which will provide services mainly to Japanese firms and traditional clients.
A Mitsui&Co official, who was contacted by VIR, refused to discuss any details of the project, which he described as part of a “new and sensitive” situation.
Having been present in Vietnam since 1991, Mitsui&Co has established two representative offices and has also invested either directly or indirectly in Vietnam’s steel, port management, industrial supporting and food processing sectors.
Recently, MPI turned down an application from the Danish Kjaer Group A/S to set up a firm to import and distribute auto parts and cars into Vietnam.



No. 779/September 18-24, 2006