FDI surges as Vietnam deemed attractive by foreign investors

At a conference on Monday on investment strategies for Vietnam, experts from Global M&A Partners (GMAP) said Vietnam has in recent years attracted investments from many Asian countries such as Japan, Korea, Singapore, Thailand, and China, but not so much from Europe and America.

But speaking on the sidelines of the conference, Ivan Alver, co-founder of GMAP and partner & president of Norwegian firm Saga Corporate Finance, said European and American investors are eyeing Vietnam for its political stability, growing consumer spending and competitive wages.

Ivan Alver, co-founder of Global M&A Partners, speaks at HCMC conference on Nov. 13, 2023. Photo courtesy of RECOF

"Investors are shifting to Asian countries, including Vietnam."

According to the Ministry of Planning and Investment, FDI in the first 10 months of 2023 was worth $25.7 billion, a 14.7% increase year-on-year.

There have been some notable M&A transactions this year involving investors from Japan and the U.S., including Sumitomo Mitsui Banking Corporation buying 15% of VPBank in a private placement (valued at US$1.5 billion) and KKR Global Impact investing US$120 million in EQuest.

Frederic De Boer, co-president of GMAP and partner at Swiss M&A firm Zetra AG, revealed that two of his clients, both in infrastructure construction and with operations in China, are looking to invest in Vietnam.

"We recognize that European investors are attracted to Vietnam’s manufacturing industry. A few firms have invested and it is possible a whole host of other companies will follow suit."

Sam Yoshida, global head of M&A consulting company RECOF, said international investors are interested in food, consumer goods manufacture, retail, education, non-bank financial technology, and logistics.

Japanese investors are particularly keen on logistics, especially cold chain logistics, he said.

To attract more FDI, especially through M&A, regulators should amend policies to make possible subsequent divestment easier, Alver said.

"When putting money in, investors consider how they can withdraw it [later]. Company registration and acquisition are already convenient in Vietnam, but the divestment process needs to be improved and made simpler to attract investors."

M&A transactions take an average of nine months to complete.

So, when considering selling a company, Alver recommended hiring a consultant at least one year ahead to find and compare buyers and negotiate prices.