International companies would be foolish to ignore Vietnam's business opportunities AN INFLUX OF foreign investors in recent years has propelled Ho Chi Minh at breakneck speed towards economic prosperity. This year, the Ministry of Planning and Investment hopes to attract $4.5 billion in foreign investment. Though it will be years before the city can market itself as an international business destination offering the facilities of a place such as Hong Kong, it is one that foreign investors serious about the Asia market would be foolish to ignore. Conference facilities are expanding and the city is becoming an alternative option to host international symposiums. More five-star properties are adding to existing facilities. Last year, the Sheraton Saigon Hotel & Towers opened with capacity for up to 1,200 people. The Park Hyatt Saigon is due to open soon, with facilities for up to 500. As well as manufacturing and service industries wanting to hot-foot it into the country, luxury European designer and cosmetic labels have opened boutiques, or are planning to. The airport's main terminal will double in size once construction is complete in about 12 months. Stephen O'Grady, general manager at the Caravelle Hotel, said that in the five years he had been there, the past two had seen a major turnaround for business opportunities. In January, the hotel reported 80 per cent occupancy, double that of a year earlier. Mr O'Grady said the arrival of international hotels would provide more capacity for bigger conferences. 'The city doesn't have enough rooms to cope with the potential demand ... they give the city an international branding.' However, infrastructure remains a problem. Water, power, roads, container ports, telecommunications and the internet are struggling to cope with demand. In the rapidly growing property market, high-end office, commercial and residential developments are falling behind demand. 'Certainly, there is a role for foreign infrastructure developers to play, if only it could become easier and more transparent for them to do business here,' said Frederick Burke, a managing partner with law firm Baker & McKenzie who has worked in the city for more than 10 years. Hong Kong is one of Vietnam's top five investors with a heavy presence in garment exports, property development, financial and other professional services. Its exports to Vietnam in the first 11 months of last year amounted to $8.66 billion, up 25 per cent over the same period in 2003. Imports from Vietnam during the same period amounted to $3.19 billion, an increase of about 31 per cent. Edmond Yue, a Hong Kong-based businessman, has 15 years' trade experience in Ho Chi Minh and Hanoi. His company is developing a 35-storey office building due for completion in 2008, and also trades in raw materials. He said to get things done in a developing country such as Vietnam, one must see through all the apparent obstacles, such as less-developed infrastructure. He said the key to doing business was to find a good partner. Market timing was also important, as were a love of the country and its people. 'That means one must live there for a long period of time in order to appreciate the local situation and business environment, which can be very vibrant if you hit the right chord,' he said. Mr Burke, who is also vice-chairman of the Hong Kong Business Association, Vietnam (HKBAV), said that while the country was definitely on the up, one of the biggest hurdles to conducting business was still red tape and petty corruption. Stacks of paper are required for ordinary business practices. He said while this was hardly the stuff of Vietnam's World Trade Organisation dreams, it was still a dynamic place to do business. The Vietnamese government recognises it can learn from places such as Hong Kong in terms of creating a competitive business environment, and often solicits outside advice. Ho Chi Minh's business community gives the government frank opinions and recommendations, which led recently to high-speed internet connections, one-stop investment licensing procedures and lower individual income tax rates.