Leaders vow to soothe FIE project headaches

Leaders vow to soothe FIE project headaches

Focused government troubleshooting to improve the investment landscape is paving the way for billions of additional US dollars across a range of industries.

Leaders vow to soothe FIE project headaches, Photo: Le Toan

In March, Prime Minister Pham Minh Chinh hosted meetings with foreign-invested enterprises (FIEs) to hear their opinions and pending issues during their operation process, and asked ministries and related agencies to resolve such issues promptly.

During a working tour to the southern province of Ba Ria-Vung Tau last week, PM Chinh separately met with leaders of Hyosung Vina, a subsidiary of South Korea’s Hyosung Group; Thailand’s Long Son Petrochemical; and Ho Tram Project Co., Ltd., a subsidiary of Canadian group Asian Coast Development.

According to local media, at the meeting, Bae In Han, general director of Hyosung Dong Nai, shared plans to invest an additional $1.5 billion. The fresh investment will fund a biotechnology-based production plant and a carbon fibre factory in the southern province of Ba Ria-Vung Tau, Han said.

“However, to ensure smooth operations of FIEs, and Hyosung in particular, we urge the local government to soon resolve legal obstacles regarding tax levels and refunds for FIEs. In addition, we also seek incentive policies for the import of genetically modified microorganisms for bio-BDO production,” he said.

Hyosung’s Bio-BDO plant in Ba Ria-Vung Tau is one of the world’s largest biotechnology plants. To date, the company has invested approximately $4.6 billion in Vietnam.

Also at the meeting, Long Son Petrochemical Co., Ltd. general director Kulachet Dharachandra said the company had signed a contract with a US partner to supply raw materials for the venture for 15 years.

Long Son is reported to have completed the final procedures to operate the $5.1-billion Long Son Petrochemicals Complex in Ba Ria-Vung Tau. In 2018, the complex became a fully-invested entity of Thailand’s SCG Group, which completed the purchase of a 29 per cent stake from PetroVietnam.

Dharachandra suggested that the PM instruct ministries to reform admin procedures to make it more favourable for the company to operate. He also added that the company intends to invest an additional $400 million to expand the venture and potentially use imported ethane gas as raw material.

The Ho Tram project leadership is collaborating with Ba Ria-Vung Tau authorities to propose the construction of a $665 million expressway connecting Long Thanh International Airport in Dong Nai province to Ho Tram Urban Area in Xuyen Moc district. Along with this, the company plans to invest an additional $1.8 billion in Ho Tram.

Along with these three investors, FIEs from Japan and South Korea expressed their concerns and proposals to help their newly registered and expanded projects run smoothly.

In early March, Japanese businesses urged Vietnam to streamline administrative processes, speed up decision-making, and improve legal frameworks for emerging sectors like data governance. They called for the prompt resolution of bottlenecks in major projects, especially infrastructure funded by official development assistance, and highlighted ongoing issues with a number of projects like Ho Chi Minh City Metro Line 1 and Nghi Son Refinery.

Nghi Son Refinery is a $9 billion complex jointly owned by PetroVietnam, Kuwait Petroleum Europe, and Japanese groups Mitsui Chemical and Idemitsu Kosan Company.

Meanwhile, several South Korean companies also raised concerns about the impact of shifting trade policies in some countries, urging Vietnamese authorities to devise effective countermeasures and stabilise policies, especially in high-tech sectors such as AI and semiconductors and in matters related to VAT and domestic import-export tax frameworks.

Responding to the raft of concerns, the Vietnamese government has specific solutions. PM Chinh assigned the Ministry of Finance and local authorities to look at preferential tax policies for priority investment areas, particularly in high-tech, green, and clean technology projects, following the current regulations.

Regarding tax-related proposals, the PM assigned Deputy Prime Minister Ho Duc Phoc to direct relevant agencies to urgently review and respond to businesses. If the matter falls under the government’s authority, the government will decide; if it falls under the National Assembly’s authority, it will be reported at the legisture’s session during May and June.

The Ministry of Industry and Trade will, in coordination with relevant ministries and agencies, accelerate the implementation of the nation’s power plan, and ensure the progress of commissioning large-scale power source projects and critical power grid projects.

Besides this, in mid-March, during a recent working trip to the United States led by Minister of Industry and Trade Nguyen Hong Dien, the Vietnamese side made efforts to address procedures and encourage the importation of a stable, long-term gas supply from the US, worth billions of US dollars, to meet the needs of the Long Son project invested by SCG and contribute to fostering balanced and sustainable Vietnam-US trade.

VIR