Pristine white sandy beaches with palm trees line the coastlines, surrounded by large tracts of dense jungle in the heat of a tropical climate. Welcome to paradise. Welcome to Phu Quoc.
For those who have not heard of Phu Quoc (PQ), it is the largest island of Vietnam and is centrally located, with Thailand, Cambodia, Malaysia, the Philippines and Singapore all only an hour or two away by air.
PQ has a total area of 589.23km2, and a population of 96,940 (2014). PQ was first administered as an island district of Kien Giang Province, which was subsequently upgraded to a second class urban area by the Vietnamese Government in September 2014. In early 2015, the Government urged the People’s Committee of Kien Giang (PC) to complete the Project Plan for developing PQ into a Special Economic Zone (SEZ). With such central Government pressure, the PC completed the Project Plan and reported back in August 2015. Given this kick start, the SEZ of PQ is well on the way to official operation in 1-2 years.
Why Phu Quoc?
Why is PQ fast becoming more attractive as a holiday and investment destination nowadays? Look first at the gifts that Mother Nature has blessed this island with. PQ’s central location and natural beauty bring competitive advantages in tourism development. The gorgeous, wild beauty of Bai Dai made it one of CNN’s Top 100 beaches in the world (2013). Short flights to PQ’s International Airport has led to low cost airfares, which have encouraged people from neighbouring countries in the region to take short getaways to the island and enjoy the sandy beaches, streams and untouched forests, as well as a variety of delicious, freshly caught seafood by local fishermen. PQ’s tropical climate also attracts foreign tourists, especially during the ideal seasons between November and April, drawn by the tranquil, isolated beaches with fine white sands, beneath clear, sunny blue skies. The Government has recognised the island’s potential and has swiftly taken FDI measures to attract investors. In 2004, the Government approved the plan to develop PQ into a modern centre for business, tourism and leisure activities (Decision 178/2004/Qg-TTg), followed by announcing a 15-day visa free policy for expatriates and overseas Vietnamese (Governmental Decision 229/2005/QD-TTg).
However, before Vietnam successfully joined the WTO and opened its market to foreign investors in 2007, tourist services in Phu Quoc had mostly been provided by local investors with limited investment quality. Historically, foreign investors have been investing in PQ since 2007, although there was little real increase in foreign investment during 2007-2013. Despite several investment incentives provided by the Government – including preferential land lease policies and tax exemptions with high priority – the lack of transparency in investment and land clearance procedures, as well as unfinished infrastructure projects, deterred many foreign investors.
Right Time To Invest In “Vietnam’s Hawaii”
Fortunately, overall investment in PQ has changed rapidly since the end of 2012, when the international airport became officially ready for international flights. Direct international flights are operating from Russia, Singapore, Cambodia, and in the future, from Incheon, Korea. In addition, on 24 December 2014, the Ministry of Transport approved the plan for mobilising social capital for aviation infrastructure where Phu Quoc International Airport (PQIA) was selected as the first target for pilot implementation (no pun intended) expansion. Then, in March 2015, the Ministry of Transport finalised and submitted a specific plan for licensing the operation rights over PQIA to private investors, along with two potential proposals from (i) T&T Group chaired by Mr. Do Quang Hien, well-known as “Manager Hien” of T&T Football Club; and (ii) Pan-Pacific Export-Import Company, chaired by Mr. Jonathan Hanh Nguyen, an internationally famous businessman in Vietnam. However, the Government has not yet made a final decision.
PQ’s investment climate has also been warmed up by the local management authority, which has employed human resources and personnel with improved English capability; who hold a long term vision for PQ’s economic growth and who are prepared for foreign investment playing a crucial part in development.
The Government’s recent concerted efforts have given added impetus to the island’s development through its Master Plan. Since 2010, the Master Plan has been adjusted to adapt to the rapidly-changing modern residential and commercial areas, complexes, casino development, resorts, golf courses, entertainment centers, theme parks, an international passenger port and also a cable car route from An Thoi Commune to Thom Island. Major Vietnamese real estate groups, such as Vingroup, Sun Group, and CEO Group, have leapt eagerly in PQ with significant contributions to infrastructure on the island. Connecting with the National Grid in 2014, meant PQ secured a stable power source, especially for the operations of large scale projects. The North-South main road and other key roads around the island are almost completed and ready for use to connect all areas. Vingroup has heavily invested into PQ, along with an international hospital, and a 500-hectare safari project which aims to be the second largest safari in the world.
In recent years, real estate development in PQ has moved to a higher new level. Projects in progress include construction of complexes with villas, condotels, condominiums and beachfront resorts, instead of merely independent hotels and resorts. Sonasea Villas and Resorts, Sunset Sanato and Grand World are real estate projects promoting beachfront views with full facilities. Following these construction trends have become key attractions for individual investors from overseas and Vietnam’s mainland. The arrival of international hotels such as Centara, Intercontinential, Novotel and Mercure since early 2015 has also contributed to PQ’s rapid growth as Vietnam’s Hawaii.
Sooner, Rather Than Later
Undoubtedly, PQ has a big and bright future. PQ has currently been given the highest priority with regard to investment incentives provided by the Government. Legislative reforms are anticipated which will allow Vietnamese citizens to gamble in casinos and may boost casino and entertainment on the island. (Feasibility is being assessed under Official Announcement No. 138-TB/TW dated 24 June 2013). Many real estate groups, especially from China and Korea are trying to find various ways to enter the PQ market.
PQ is one of the hidden island gems of Asia and one should really consider investing in this tropical paradise, sooner, rather than later.
This article was originally published in CorporateLiveWire, Foreign Investment, Expert Guide