Vietnam opens arms to flow of IZ investment
Vietnam opens arms to flow of IZ investment
Vietnam remains a bright spot in attracting foreign direct investment with continuous interest from Asia, Europe, the United States, and ASEAN, particularly from those getting involved in industrial parks in the country.
At the Vietnam Industrial Property Forum held last week in Ho Chi Minh City, co-organised by Vietnam Investment Review and BW Industrial Development JSC, participants highlighted the interest of multinational investors in building their factories in Vietnam.
Together with traditional manufacturers such as LG and Samsung, some other newcomers are joining the market, including Fuchs, LEGO, and Pandora.
Vietnam currently has 260 industrial properties in operation and 75 in the planning stage, and compared to Indonesia, Malaysia and the Philippines, the price of industrial land is still relatively low.
In the first four months of 2022, there was $10.8 billion of foreign investment registered in Vietnam, in which additional investment capital was $5.29 billion, up 92.5 per cent over the same period.
“These figures show investors’ confidence as they continue to believe in the business investment environment, as well as solutions and policies for economic recovery,” said Minister of Planning and Investment Tran Duy Dong at the forum last week.
“Vietnam has been preparing the necessary conditions to be ready to receive the new wave of investment transformation, becoming an important production base for the world by continuing to improve the institution and business investment environment. Vietnam is open for business to selectively attract and prioritise projects using modern and environmentally-friendly technologies,” Dong added.
Lance Li, CEO of BW Industrial Development JSC, said that the recent wave of investment in industrial property is a good sign for the local market, which is especially clear when looking at the economic figures for the first quarter of this year.
“You can also see that the prime minister’s visits to the United States have been fruitful. Vietnam is now attractive to many foreign investors and I believe that even more investment will be coming. From our point of view, we welcome competition that makes the market healthier and more sustainable,” said Li.
Meanwhile, Pao Jirakulpattana, vice president for Warburg Pincus in Singapore and China, is competing with many other emerging areas, including Vietnam.
“If you look at the investment flow on a global scale, although it is coming back to China from a global perspective, ASEAN is becoming an attractive destination, including Vietnam,” Jirakulpattana said.
“Vietnam has done pretty well in receiving new investment flows. We highly appreciate the determination of the government to define which sectors should be the top priority. For example, the electronics and power sectors will develop strongly in the next 10-15 years. Vietnam has a good start with intensive labour sectors – however, sustainable development must be more concentrated,” he added.
Bui Trang, general manager of Cushman & Wakefield Vietnam, also expressed that manufacturers from Singapore, the US, and the European community have been moving into Vietnam’s market. “Real estate developers have been very well connected with banks and other financial solutions to raise capital for their businesses. However, they need to focus on long-term financial sources for sustainable development,” Trang said.
Sharing investors’ concerns, Tran Quoc Trung, deputy director-general for the Economic Zones Management Department at the Ministry of Planning and Investment, said that it would be revised to minimise administrative procedures for investors, especially procedures for planning inudstrial zones (IZs) so that investors can implement projects as quickly as possible.
Currently, the ministry has submitted to the government a draft to replace Decree No.82/2018/ND-CP on the management of IZs. In the revised part, many bottlenecks that have existed for a long time will be solved, such as planning and administrative procedures. In addition, there are also a number of regulations added so that when developing an IZ, it is necessary to provide services for workers who live stably and long in the IZ.
At the same time, local people’s committees will also be empowered to issue more mechanisms to attract investment for eco-industrial parks, adding a number of mechanisms and policies so that investors can connect with each other in a smoother manner.
Along with that, a number of other preferential policies such as green credit and environmental protection funds are also added to the decree so that eco-industrial parks can be targeted.
