New Capital Flows from French Businesses

Opportunities are opening for Vietnam to attract more foreign direct investment (FDI) flows from France.

As planned, during the visit to Vietnam of French Prime Minister Edouard Philippe (from November 2nd – 4th), in the afternoon of November 2nd, a series of new cooperation agreements were signed between enterprises of the two countries, to promote bilateral trade and investment cooperation. On November 4th, a business forum will also be held in Ho Chi Minh City, attracting the participation of about 200 businesses from Vietnam and France.

These moves are promising to open new opportunities for cooperation between the two countries’ businesses, which are believed to have great potentials and are on the rise. In fact, in March 2018, after a visit to France of General Secretary Nguyen Phu Trong, a series of new cooperation agreements were signed. Among them, there is an agreement between the T&T Group and the Bouygues Group (France) on investment cooperation of the no.3 urban railway project in Hanoi, with total investment estimated at 1.4 billion USD. The two Groups also signed an agreement on the BT contract (build – transfer) of a project to connect Ha Noi with Son Tay town (Nhon – Troi – Phung – Ring road 4 – Son Tay), cooperate to invest and develop the project of upgrading and expanding Hang Day Stadium…

In addition, there are cooperation contracts between Vietnam Airlines with Air France, Tre Viet (Bamboo Airlines) with Airbus…

In fact, there have been more positive trends in French investment into Vietnam since the beginning of this year. According to data released by the Foreign Investment Agency (Ministry of Planning and Investment), in the first 10 months of this year, French businesses have registered to invest 517 million USD in Vietnam.

France currently ranks in the Top 10 countries and territories with large investments in Vietnam, even ranks 1st among European investors have invested in Vietnam since the beginning of this year. If calculated cumulatively, France has invested in Vietnam 3.6 billion USD, surpassed UK.

When Prime Minister Nguyen Xuan Phuc was on a trip to Europe, the European Commission (EC) agreed to submit to the European Council for approval to officially sign the European – Vietnam free trade agreement (EVFTA), expected by the end of 2018, then submitted to the European Parliament for approval, scheduled for early 2019. Once this agreement has been formally adopted, a new door to promoting EU – Vietnam trade and investment will be opened. In this context, investment flows from France are also expected to grow strongly.

At the present, most French investment projects in Vietnam are implemented in the early stages of FDI attraction, such as BNP Paribas, Total, Schneider Electric, Renault, Technip…

Recently, some French investors started to increase their investment in Vietnam. Typical is Auchan with plan to invest 500 million USD to open retail system in Vietnam. Or Schneider Electric, with the inauguration of a new factory in Ho Chi Minh City, with 45 million USD investment capital in Phase I in 2017. In addition, Sanofi has 3 factories in Ho Chi Minh City…

Newer names, such as In Vivo and Olmix, are also boosting their investments in agriculture in Vietnam. EDF Group has been licensed to participate in Son My 1 Gas Power Project. In addition, Saint-Gobain is building a factory in Hai Phong city; Veolia, Suez and Vinci are actively pursuing water treatment projects.