Vietnam diversifies investment attraction
(VEN) - While the global economy is falling into a recession and many countries are facing high inflation and negative growth, Vietnam has maintained positive economic growth which enables it to attract foreign direct investment (FDI) in a wide range of fields.
Attractive destination
According to the Ministry of Planning and Investment, by August 20, 2022, more than 35,500 FDI projects remained valid in Vietnam with total registered capital of over US$430 billion. Their implemented capital reached US$264.4 billion, equivalent to 61.5 percent of total registered capital.
In the first nine months of 2022, 94 countries and territories invested nearly US$18.8 billion in Vietnam. Of the sum, US$15.43 billion (82.3 percent) has been disbursed, a year-on-year increase of 16.3 percent. This was the highest nine-month implemented FDI amount during the past five years.
According to survey results by the Japan External Trade Organization (JETRO), 55 percent of Japanese companies in Vietnam plan to expand their operations, the highest rate in the ASEAN bloc. Many Japanese companies have moved their manufacturing facilities from China and other ASEAN countries to Vietnam.
JETRO also surveyed more than 1,700 parent companies of Japanese firms and found that Vietnam ranks second among their destinations for expanded operations (behind only the US).
Takeo Nakajima, Chief Representative of JETRO in Hanoi, said FDI firms appreciate Vietnam’s investment environment and intend to develop new projects there.
FDI attraction efforts
During the two years of COVID-19, the Vietnamese Government helped foreign-invested firms to maintain production and trade, ensure employment and income for workers, and prevented supply chain disruptions. These efforts contributed to the implementation of the government’s dual goals of combating the pandemic and promoting economic recovery and development.
Vietnam is improving its infrastructure to receive investment shifts from other countries
Business associations of the Republic of Korea, the US, Japan and Singapore and multinational groups praised the Vietnamese government for policy changes that have created favorable conditions for FDI firms. However, they expect further improvements of the investment environment, especially policies and mechanisms in each specific field such as electricity, energy, capital, labor, transport infrastructure, land, and tax.
Foreign investors also expect a more liberal visa policy to promote tourism development.
To attract more FDI, Vietnam is making efforts to improve worker skills to meet the requirements of high-technology projects, and prepare sufficient space for production as well as infrastructure and energy to receive investment shifts from other countries to Vietnam. Digital technology and online services are under constant development to support investors.
Vietnam also plans to enhance incentives to attract high-quality projects of international groups and further simplify administrative procedures. Domestic companies are being urged to improve their manufacturing capacity to become suppliers for FDI firms.
