Quality and quantity advances sought
Quality and quantity advances sought
The scale and quality of foreign-led projects in Vietnam have been fostered thanks to the promulgation of new policies to improve the investment environment.
Last week, Do Van Su, deputy director general of the Foreign Investment Agency under the Ministry of Planning and Investment, said the quality and quantity of foreign-headed projects have improved in recent years. “Although the number of large-scale projects has decreased due to the impact of many factors, the quantity of projects overall sees an average increase of 16-19 per cent per year. The average capital of projects is $16 million,” he said.
Statistics published by Su’s agency showed that in the first four months of 2023, Vietnam attracted 750 newly registered projects, 386 added-capital projects, and 1,044 paid-in capital, signifying increases of 65.2, 19.5, and 1.8 per cent on-year, respectively.
The results are deemed positive in the context that global foreign investment capital inflow is forecasted to dip this year. In addition, these positive achievements are the result of the government’s effort to improve the business environment.
The government has set ambitious targets that in 2021-2025, Vietnam expects to lure a total registered capital of $150-200 billion and the disbursed capital of $100-150 billion. In 2026-2030, the registered capital is expected to reach $200-300 billion and the disbursed capital would be $150-200 billion.
The government and localities are accompanying investors to listen to their difficulties to issue solutions on time. For example, at a meeting with foreign-invested enterprises last month, Prime Minister Pham Minh Chinh said those who have been operating in Vietnam have also felt the sharing, understanding, and consistency of the Vietnamese government in the process of directing and implementing policies relating to foreign investments. The government still continues to review institutions and laws, and further improve the business environment on the principle of harmonising benefits, and sharing risks.
Vietnam’s attractive policies and favourable demographics also make it a market of choice for many investors and businesses from the United States and EU.
Vu Tu Thanh, deputy regional managing director and Vietnam chief representative at the US-ASEAN Business Council, said many US corporations have plans to arrive in Vietnam later this year to study opportunities via participating in high-level delegations of the government.
“Many corporations ask me about the procedures for renting facilities in Vietnam, and they want to immediately shift machinery and manufacturing lines to start operations to meet the demand of their partners. A top US bank has the intention to move its headquarters from Hong Kong to Vietnam because its customers are shifting their operations here,” Thanh said.
According to Thanh, in the logistics sector, UPS has plans to invest in six aeroplanes to expand its operation in Vietnam, while Marriott International has intentions to make Vietnam its largest market in ASEAN in the upcoming years. Marriott’s senior leader has proposed a meeting with the Vietnamese government’s leader in September.
Although the potential is available, many investors are still hesitant about some risks of the Vietnamese business environment related to the transparency of administrative procedures, tax system and procedures, and the legal system, among others.
According to information from the European Chamber of Commerce in Vietnam, 36 per cent of EU firms state that Vietnam is one of their top global funding destinations. However, to take these opportunities, the government needs to drastically resolve barriers. The current international investment trend focuses on the high-tech, green economy, and circular economy, which is a long-term strategy. Thus, Vietnam needs to ensure the stability in the business environment and avoid inconsistency and consecutive change in policies, it said.
