Current Status of FDI in Vietnam's Service Sector

Infrastructure for service industry development is still weak such as underdeveloped transportation system, inappropriate quality and cost of using communication, water supply system facing many difficulties, entertainment system, school system not meeting people's needs.

2. Current status of FDI in Vietnam's service sector

In the 20 years since the renovation, Vietnam has had certain achievements in attracting FDI to develop the service industry. These achievements are the result of continuous efforts over a long period of time.

Our country has had many policies and created favorable conditions for the development of service business activities since the implementation of the Foreign Investment Law (1987). Thanks to that, the service sector has had positive changes to better meet the needs of production, consumption and people's lives, contributing to accelerating economic growth. Some service sectors (post and telecommunications, finance, banking, insurance, air transport, sea transport, tourism, real estate business) have grown rapidly, attracting many workers and promoting exports. Along with implementing the roadmap for service trade commitments in the WTO, Vietnam continues to promote attracting foreign investment, developing service sectors directly serving production and export.

2.1. Investment capital scale

During the period 1988-2007, investment capital in the service sector increased sharply. Within 20 years, there were 1,936 service projects in Vietnam, with a total investment capital of more than 29 billion USD and implemented capital of nearly 8 billion USD.

In 2007, FDI in Vietnam's service industry was 1,544 projects with a total investment capital of 8 billion USD and implemented investment capital of 2.5 billion (equal to 25% of the total investment capital and implemented capital of the 20 years combined). Leading in terms of investment scale in Vietnam's tourism is the Dan Kia-Suoi Vang multi-purpose resort project in Da Lat city, Lam Dong, invested by four major Japanese investment groups: Mitsui, Mitsubishi, Sumitomo and Limtec in a joint venture with a capital of up to 1.2 billion USD. A 5-star hotel-apartment-commercial center complex with an investment capital of 200 million USD in Ho Chi Minh City by the Kumho Asiana Group of Korea.

Quoc, the investor, has also started construction after a long pause due to the financial crisis. Winvest LLC (USA) has also received an investment license for the 5-star Saigon Atlantic tourist area in Vung Tau with an investment capital of 300 million USD. Also in Vung Tau, the Platinum Dragon Empire Group is surveying to invest in an entertainment and tourism project with a capital of up to 550 million USD. In addition to foreign corporations investing directly, the wave of indirect investment in this field is equally exciting. Two months ago, VinaCapital Fund bought 52.5% of the shares of the 5-star Hilton Hanoi Hotel, bringing the Fund's total shares in this hotel to 70%. Previously, VinaLand Fund also bought 70% of the shares of Sofitel Metropole, the oldest, most luxurious and most popular hotel in Hanoi today.

Several large corporations are planning to invest in Vietnam. First of all, the world's largest hotel management group, InterContinential Hotels Groups, has announced that it will build its first hotel in Vietnam in early 2009. A Macau casino management company has considered partnering with Saigontourist to open a "mini Las Vegas" in Ho Chi Minh City.

Rockingham Company (UK) has also submitted to the Ministry of Planning and Investment a project to build a marine tourism area with a scale of up to 1 billion USD in Phu Quoc.

2.2 Investment structure

2.2.1 By investment sector

Table 9: Structure of investment capital in Vietnam's service sector by industry in the period 1988-2007

Unit: USD

STT

Service	Project Number	Investment capital	Charter capital	Realized capital
1	GTVT-Electric Bus	211	4,323,882,565	2,781,446,590	721,767,814
2	Hotel-Tourism	227	6,135,310,332	2,569,935,362	2,401,036,832
3	Finance-Banking	67	915,827,080	850,404,447	714,870,077
4	Culture-Health-Education	272	1,249,195,062	573,586,594	367,037,058

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• Mobile Phone Usage in Hanoi Inner City Area zt2i3t4l5ee zt2a3gsconsumer,consumption,consumer behavior,marketing,mobile marketing zt2a3ge zc2o3n4t5e6n7ts - Test the relationship between demographic variables and consumer behavior for Mobile Marketing activities The analysis method used is the Chi-square test (χ2), with statistical hypotheses H0 and H1 and significance level α = 0.05. In case the P index (p-value) or Sig. index in SPSS has a value less than or equal to the significance level α, the hypothesis H0 is rejected and vice versa. With this testing procedure, the study can evaluate the difference in behavioral trends between demographic groups. CHAPTER 4 RESEARCH RESULTS During two months, 1,100 survey questionnaires were distributed to mobile phone users in the inner city of Hanoi using various methods such as direct interviews, sending via email or using questionnaires designed on the Internet. At the end of the survey, after checking and eliminating erroneous questionnaires, the study collected 858 complete questionnaires, equivalent to a rate of about 78%. In addition, the research subjects of the thesis are only people who are using mobile phones, so people who do not use mobile phones are not within the scope of the thesis, therefore, the questionnaires with the option of not using mobile phones were excluded from the scope of analysis. The number of suitable survey questionnaires included in the statistical analysis was 835. 4.1 Demographic characteristics of the sample The structure of the survey sample is divided and statistically analyzed according to criteria such as gender, age, occupation, education level and personal income. (Detailed statistical table in Appendix 6) - Gender structure: Of the 835 completed questionnaires, 49.8% of respondents were male, equivalent to 416 people, and 50.2% were female, equivalent to 419 people. The survey results of the study are completely consistent with the gender ratio in the population structure of Vietnam in general and Hanoi in particular (Male/Female: 49/51). - Age structure: 36.6% of respondents are <23 years old, equivalent to 306 people. People from 23-34 years old accounting for the highest proportion: 44.8% equivalent to 374 people, people aged 35-45 and >45 are 70 and 85 people equivalent to 8.4% and 10.2% respectively. Looking at the results of this survey, we can see that the young people - youth account for a large proportion of the total number of people participating in the survey. Meanwhile, the middle-aged people including two age groups of 35 - 45 and >45 have a low rate of participation in the survey. This is completely consistent with the reality when Mobile Marketing is identified as a Marketing service aimed at young people (people under 35 years old). - Structure by educational level: among 835 valid responses, 541 respondents had university degrees, accounting for the highest proportion of ~ 75%, 102 had secondary school degrees, ~ 13.1%, and 93 had post-graduate degrees, ~ 11.9%. - Occupational structure: office workers and civil servants are the group with the highest rate of participation with 39.4%, followed by students with 36.6%. Self-employed people account for 12%, retired housewives are 7.8% and other occupational groups account for 4.2%. The survey results show that the student group has the same rate as the group aged <23 at 36.6%. This shows the accuracy of the survey data. In addition, the survey results distributed by occupational criteria have a rate almost similar to the sample division rate in chapter 3. Therefore, it can be concluded that the survey data is suitable for use in analysis activities. - Income structure: the group with income from 3 to 5 million has the highest rate with 39% of the total number of respondents. This is consistent with the income structure of Hanoi people and corresponds to the average income of the group of civil servants and office workers. Those People with no income account for 23%, income under 3 million VND accounts for 13% and income over 5 million VND accounts for 25%. 4.2 Mobile phone usage in Hanoi inner city area According to the survey results, most respondents said they had used the phone for more than 1 year, specifically: 68.4% used mobile phones from 4 to 10 years, 23.2% used from 1 to 3 years, 7.8% used for more than 10 years. Those who used mobile phones for less than 1 year accounted for only a very small proportion of ~ 0.6%. (Table 4.1) Table 4.1: Time spent using mobile phones Frequency Ratio (%) Valid Percentage Cumulative Percentage Alid <1 year 5 .6 .6 .6 1-3 years 194 23.2 23.2 23.8 4-10 years 571 68.4 68.4 92.2 >10 years 65 7.8 7.8 100.0 Total 835 100.0 100.0 The survey indexes on the time of using mobile phones of consumers in the inner city of Hanoi are very impressive for a developing country like Vietnam and also prove that Vietnamese consumers have a lot of experience using this high-tech device. Moreover, with the majority of consumers surveyed having a relatively long time of use (4-10 years), it partly proves that mobile phones have become an important and essential item in people's daily lives. When asked about the mobile phone network they are using, 31% of respondents said they are using the network of Vietel company, 29% use the network of of Mobifone company, 27% use Vinaphone company's network and 13% use networks of other providers such as E-VN telecom, S-fone, Beeline, Vietnammobile. (Figure 4.1). Figure 4.1: Mobile phone network in use Compared with the announced market share of mobile telecommunications service providers in Vietnam (Vietel: 36%, Mobifone: 29%, Vinaphone: 28%, the remaining networks: 7%), we see that the survey results do not have many differences. However, the statistics show that there is a difference in the market share of other networks because the Hanoi market is one of the two main markets of small networks, so their market share in this area will certainly be higher than that of the whole country. According to a report by NielsenMobile (2009) [8], the number of prepaid mobile phone subscribers in Hanoi accounts for 95% of the total number of subscribers, however, the results of this survey show that the percentage of prepaid subscribers has decreased by more than 20%, only at 70.8%. On the contrary, the number of postpaid subscribers tends to increase from 5% in 2009 to 19.2%. Those who are simultaneously using both types of subscriptions account for 10%. (Table 4.2). Table 4.2: Types of mobile phone subscribers Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid Prepay 591 70.8 70.8 70.8 Pay later 160 19.2 19.2 89.9 Both of the above 84 10.1 10.1 100.0 Total 835 100.0 100.0 The above figures show the change in the psychology and consumption habits of Vietnamese consumers towards mobile telecommunications services, when the use of prepaid subscriptions and junk SIMs is replaced by the use of two types of subscriptions for different purposes and needs or switching to postpaid subscriptions to enjoy better customer care services. In addition, the majority of respondents have an average spending level for mobile phone services from 100 to 300 thousand VND (406 ~ 48.6% of total respondents). The high spending level (> 500 thousand VND) is the spending level with the lowest number of people with only 8.4%, on the contrary, the low spending level (under 100 thousand VND) accounts for the second highest proportion among the groups of respondents with 25.4%. People with low spending levels mainly fall into the group of students and retirees/housewives - those who have little need to use or mainly use promotional SIM cards. (Table 4.3). Table 4.3: Spending on mobile phone charges Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid <100,000 212 25.4 25.4 25.4 100-300,000 406 48.6 48.6 74.0 300,000-500,000 147 17.6 17.6 91.6 >500,000 70 8.4 8.4 100.0 Total 835 100.0 100.0 The statistics in Table 4.3 are similar to the percentages in the NielsenMobile survey results (2009) with 73% of mobile phone users having medium spending levels and only 13% having high spending levels. The survey results also showed that up to 31% ~ nearly one-third of respondents said they sent more than 10 SMS messages/day, meaning that on average they sent 1 SMS message for every working hour. Those with an average SMS message volume (from 3 to 10 messages/day) accounted for 51.1% and those with a low SMS message volume (less than 3 messages/day) accounted for 17%. (Table 4.4) Table 4.4: Number of SMS messages sent per day Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid <3 news 142 17.0 17.0 17.0 3-10 news 427 51.1 51.1 68.1 >10 news 266 31.9 31.9 100.0 Total 835 100.0 100.0 Similar to sending messages, those with an average message receiving rate (from 3-10 messages/day) accounted for the highest percentage of ~ 55%, followed by those with a high number of messages (over 10 messages/day) ~ 24% and those with a low number of messages received daily (under 3 messages/day) remained at the bottom with 21%. (Table 4.5) Table 4.5: Number of SMS messages received per day Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid <3 news 175 21.0 21.0 21.0 3-10 news 436 55.0 55.0 76.0 >10 news 197 24.0 24.0 100.0 Total 835 100.0 100.0 When comparing the data of the two result tables 4.4 and 4.5, we can see the reasonableness between the ratio of the number of messages sent and the number of messages received daily by the interview participants. 4.3 Current status of SMS advertising and Mobile Marketing According to the interview results, in the 3 months from the time of the survey and before, 94% of respondents, equivalent to 785 people, said they received advertising messages, while only a very small percentage of 6% (only 50 people) did not receive advertising messages (Table 4.6). Table 4.6: Percentage of people receiving advertising messages in the last 3 months Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid Have 785 94.0 94.0 94.0 Are not 50 6.0 6.0 100.0 Total 835 100.0 100.0 The results of Table 4.6 show that consumers in the inner city of Hanoi are very familiar with advertising messages. This result is also the basis for assessing the knowledge, experience and understanding of the respondents in the interview. This is also one of the important factors determining the accuracy of the survey results. In addition, most respondents said they had received promotional messages, but only 24% of them had ever taken the action of registering to receive promotional messages, while 76% of the remaining respondents did not register to receive promotional messages but still received promotional messages every day. This is the first sign indicating the weaknesses and shortcomings of lax management of this activity in Vietnam. 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• Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015 zt2i3t4l5ee zt2a3gsnon-credit services, joint stock commercial bank zt2a3ge zc2o3n4t5e6n7ts At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income. Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015 Unit: Billion VND 140 120 100 80 60 40 20 0 63.3 80.34 89.29 110.08 131.99 2011 2012 2013 2014 2015 Profit before tax (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services". 2.2. Current status of non-credit service development at BIDV Tien Giang. 2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times. Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,... 2.2.1.1. Payment services: In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc. Chart 2.3. Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment. 2.2.1.2. Treasury services: BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17]. Chart 2.4. Net income from treasury services in the period 2011-2015 Unit: Million VND 350 300 250 200 150 100 50 0 105 122 309 289 279 2011 2012 2013 2014 2015 Net income from treasury services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services. 2.2.1.3. Guarantee and trade finance services: BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance. Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015 Unit: Million VND 14000 12000 10000 8000 6000 4000 2000 0 5193 5695 2742 3420 8889 3992 11604 12206 5143 5312 2011 2012 2013 2014 2015 Net income from guarantee services Net income from Trade Finance (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area. are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future. 2.2.1.4. Card and POS services: As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services. In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system. Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments. Chart 2.6. Net income from card services in the period 2011-2015 Unit: Million VND 3500 3000 2500 2000 1500 1000 500 0 687 1023 1547 2267 3104 2011 2012 2013 2014 2015 Net income from card services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25]. Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area. Unit: Machine STT Bank name Number of ATMs Cumulative number of ATM cards POS machine 1 BIDV Tien Giang 23 97,095 22 2 BIDV My Tho 7 21,325 0 3 Agribank Tien Giang 29 115,743 77 4 Vietinbank Tien Giang 16 100,052 54 5 Dong A Tien Giang 26 97,536 11 6 Sacombank Tien Giang 24 88,513 27 7 Vietcombank Tien Giang 15 61,607 96 8 Vietinbank - Tay Tien Giang Branch 6 46,042 38 (Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21]) Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6). div.maincontent .content_head3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s1 { color: black; font-family:"Courier New", monospace; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; 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5

New Urban Area Construction	9	3,477,764,672	944,920,500	111,294,598
6	Office-Apartment Construction	154	9,418,878,164	3,468,469,591	1,892,234,162
7	Infrastructure construction of industrial parks and export processing zones	30	1,517,546,201	516,523,597	576,117,330
8	Other services	966	2,155,006,145	947,877,283	383,082,159

(Source: Foreign Investment Agency - Ministry of Planning and Investment)

In the trend of foreign investment capital pouring into Vietnam, the capital flow is shifting strongly into the service sector, accounting for 47.7% of the total registered capital of the whole country in 2007, mainly focusing on real estate business, including: construction of apartments, offices, development of new urban areas, business of industrial park infrastructure (42% of total foreign investment capital in the service sector), tourism-hotels (24%), transportation-postal (18%).

2.2.2 By investor country

Table 10: Structure of FDI in Vietnam's service sector by investor country in the period 1988-2007

Unit: VND

STT

Country, territory	Project Number	Investment capital	Charter capital	Realized capital
1	Korea	1857	14,398,138,655	5,168,461,054	2,738,114,393
2	Singapore	549	11,058,802,313	3,894,467,177	3,858,078,376
3	Taiwan	1801	10,763,147,783	4,598,733,632	3,079,209,610
4	Japan	934	9,179,715,704	3,963,292,649	4,987,063,346
5	BritishVirginIslands	342	7,794,876,348	2,612,088,725	1,375,722,679
6	Hong Kong	457	5,933,188,334	2,166,936,512	2,161,176,270
7	Malaysia	245	2,823,171,518	1,797,165,234	1,083,158,348
8	USA	376	2,788,623,488	1,449,742,606	746,009,069
9	Netherlands	86	2,598,537,747	1,482,216,843	2,031,314,551
10	France	196	2,376,366,335	1,441,010,694	1,085,203,846

via :

(Source: Foreign Investment Agency - Ministry of Planning and Investment)

Current status of FDI in some service sectors of Vietnam in recent times

2.2.2.1. Post and telecommunications

By the end of this month, there were 5 business cooperation contracts for the construction and exploitation of international telecommunications networks, local telecommunications and other fields of postal and telecommunications services in the postal and telecommunications sector that had been licensed with a total registered investment capital of approximately 916.6 million USD. The implemented investment projects have built a rapidly developing postal and telecommunications network in recent times. From a network with high technology quality, small scale, and average complexity of operations and management, it has now achieved many encouraging results. The international telecommunications network has been built in a modern manner, reaching a technological level equivalent to that of countries in the region, with terrestrial satellite stations and gateway switchboards in Hanoi, Da Nang and Ho Chi Minh City with a continuous fiber optic cable network directly connecting to all countries in the world. The international military cable line has been operating well.

Many important projects such as satellite communication systems, transnational submarine fiber optic cable systems, and a number of staff systematically trained in technology and business management to facilitate international integration have been given attention. The addition of foreign FDI capital is the result of long-term and effective cooperation between the two parties participating in the project and has contributed significantly to foreign currency earnings. The ability to communicate instantly with the world through direct dialing services, private leased lines, television, data transmission and other services has contributed to the increase in international trade services, providing and updating information on economics, politics, society and culture and education.

2.2.2.2 Culture - Health - Education

By the end of 2007, the Health - Culture - Education sector had nearly 200 licensed projects with a total registered capital of over 800 million USD, of which 330.2 million USD had been implemented, accounting for 41.25% of the total registered capital. This rate is relatively low compared to other sectors such as finance and banking, and infrastructure construction.

industry. The major projects of interest are investment projects in hospitals and education. In this field, the main form of investment is joint venture.

2.2.2.3. Office - Apartment - Commercial center

In this field, the number of licensed projects still in effect is 101 projects with a total registered capital of 3,465.5 million USD, legal capital of 1,203.7 million USD. Compared to business projects in the hotel sector, business projects in the office and apartment sectors currently face less difficulties.

Due to many difficulties in business, many enterprises have requested to add more business objectives with the desire to enrich their revenue sources and minimize difficulties. Usually, they request to add supermarket business functions, entertainment services, request to be licensed to sell houses to foreigners or request to build houses (for enterprises currently selling houses). A few enterprises request to switch to a 100% foreign-owned business form. In addition, many enterprises request to extend the time to compensate for losses in the first year, leading to the situation where many small-capital projects request to extend the duration to 40 or 50 years.

2.2.2.4. Hotel and tourism business

After several years of research and exploration, large companies from many different countries have boldly invested in large-scale projects. At the same time, from small-scale projects with low investment capital, mainly aimed at renovating and upgrading existing hotels and restaurants in the early years, in recent years, projects have focused on building new ones with hundreds of rooms, meeting 4-5 star international standards, with tens of millions of USD in investment capital.

In 2007, 47 FDI projects were licensed in the tourism sector with a registered capital of up to 1.86 billion USD, 3 times higher than in 2006 and equal to the capital of 7-8 years ago combined. Of these, the most notable is the project of Banyan Tree Group (Singapore) which is completing investment procedures to build an eco-tourism area in May-Lang Co Economic Zone (Thua Thien Hue) with an investment capital of nearly 1 billion USD. In addition, it is necessary to mention 3 resorts under the Ana Mandara brand in Nha Trang and Da Lat made by Six Senes Group (Thailand).

The investor, explaining this project, Thailand said that currently Vietnam's tourism development is not much, currently only using 10% of the sea area, many provinces have beautiful beaches but have not been exploited.

Thus, Vietnam's potential for hotel and tourism development is huge, and the opportunity to attract FDI capital into this sector is now in sight.

2.2.2.5. Banking and finance

FDI in the banking and finance sector mainly operates in the fields of auditing, insurance and financial consulting. This sector has really played an effective role in training a team of senior Vietnamese experts in the field of auditing and the competitive insurance market in Vietnam. Currently, there are reputable companies in the field of finance, banking and insurance investing in Vietnam such as Earns & Young, KPMG, Deloitte auditing, AIA insurance, Daihichi insurance, HSBC bank. The main form of investment in this sector is joint venture. Since April 1, 2007, 100% foreign-owned banks have officially operated in Vietnam, the stock market has developed, the demand for auditing has increased, the Vietnamese insurance market has begun to flourish, so it can be said that in the coming time, investment opportunities for this sector are very large.

However, investment capital in banking and finance is not high and it is necessary to attract more FDI to develop the capital market and banking in Vietnam.

2.2.2.6. Construction of infrastructure for industrial parks and export processing zones.

Some FDI projects in the construction of infrastructure for industrial parks and export processing zones have been licensed and have completed or basically completed the infrastructure such as Tan Thuan, Linh Trung, Nomura, Amata, Bien Hoa II, Vietnam-Singapore, Thang Long EPZs with full infrastructure items, while some industrial parks are in the process of construction and completion.

The common benefits of building industrial parks and export processing zones are to improve the investment environment, reduce investment costs, including reducing land rental prices to attract and quickly fill industrial parks and export processing zones, supplement investment capital for society, and create jobs for workers. At the same time, the construction of industrial parks and export processing zones has contributed to

attracting many FDI projects there. Investment projects in industrial parks and export processing zones are mainly industrial production with a high export rate, contributing significantly to the transformation of economic structure, promoting industrial production and export. A highlight is that industrial parks and export processing zones contribute to the improvement of labor quality and are the core of the urbanization process and service development.

2.2.3. By locality

Table 11: Structure of FDI capital in Vietnam's service sector by investment location in the period 1988-2007

(Unit: USD)

STT

Local	Project Number	Investment capital	Charter capital	Realized capital
1	Ho Chi Minh City	2399	17,013,524,750	7,100,900,289	6,347,487,062
2	Hanoi	1011	12,664,570,044	5,661,169,078	3,589,621,920
3	Dong Nai	917	11,665,711,568	4,655,087,285	4,152,591,894
4	Binh Duong	1581	8,516,393,283	3,452,028,952	2,078,979,706
5	Ba Ria-Vung Tau	159	6,111,349,896	2,397,533,861	1,267,669,334
6	Hai Phong	270	2,729,564,057	1,148,295,920	1,273,511,670
7	Vinh Phuc	151	2,034,201,656	647,926,192	438,759,582
8	Phu Yen	38	1,945,576,438	619,858,655	122,827,280
9	Long An	188	1,865,839,159	681,249,868	423,043,982

(Source: Foreign Investment Agency - Ministry of Planning and Investment)

The localities attracting the most investment capital in the service sector are still Ho Chi Minh City, Hanoi, Dong Nai, Binh Duong. It can be seen that, in services as well as other sectors, the localities attracting the most FDI capital are those with comparative advantages, technical infrastructure, mostly large cities. This shows the imbalance in attracting FDI. Especially for services, this is even more obvious because only places with high living standards can services develop strongly.