Attracting FDI into Vietnam is very active
FDI capital flows into Vietnam in 2023 will still grow strongly in the context of a decline in FDI attraction globally. This fact shows Vietnam’s resilience and attractiveness in the eyes of foreign investors and also clearly reflects the favorable foreign investment environment in Vietnam…
In an interview with a reporter from Vietnam Economic Magazine/VnEconomy, Mr. Lim Dyi Chang, Senior Director of Corporate Banking, UOB Vietnam, shared his perspective on the foreign investment environment. abroad in Vietnam.
Sir, although 2023 is a challenging year, in the field of attracting foreign direct investment (FDI), Vietnam still has a record FDI inflow at 23.2 billion USD. In your opinion, what are the reasons behind this?
Record FDI inflows amid global challenges underscore Vietnam’s resilience and attractiveness as an investment destination and trade partner. In my opinion, there are 5 factors contributing to this positive trend, reflecting a favorable investment environment.
First, it is the shift in the supply chain. Global supply chain disruptions caused by Covid-19 and geopolitical tensions have prompted companies to diversify production bases away from traditional manufacturing powerhouses like China. 50% of respondents in EuroCharm’s survey expressed their intention to increase investment in Vietnam. Stable political conditions, a skilled workforce and competitive labor costs make Vietnam an attractive alternative.
Second, the policies and reforms of the Vietnamese Government. The Government’s efforts to simplify business regulations and improve infrastructure aim to promote an investor-friendly environment. Notably, Corporate Income Tax (CIT) incentives for large production projects (10% for 15 years) also contribute to the attraction.
Third, industry opportunities. The focus on high-tech manufacturing and export diversification has attracted foreign investment. In 2023, electronics exports reach 57.3 billion USD, showing the strength of the industry. A thriving textile industry and growing machinery sector highlight Vietnam’s appeal in lucrative sectors.
Fourth, infrastructure development. The Government’s significant investment in infrastructure in 2023 helps complete major projects, including 475 km of new highways, enhancing connectivity and addressing business bottlenecks.
Fifth, economic recovery. Vietnam’s positive economic outlook despite a global recession in 2023 is a clear sign of the country’s resilience. Policy support measures and the recovery of external trade will further contribute to helping the country overcome challenges (according to UOB Global Outlook Q2 2024).
“UOB’s specialized FDI Advisory Center initiative was launched in 2011 at the group level, then expanded to Vietnam in 2013, meeting the growing demand for seizing investment opportunities. The Center acts as a comprehensive platform to help businesses gain a general understanding of overseas markets and the regulatory landscape, while also providing key local insights.
We have supported more than 300 companies to invest in Vietnam, contributing an estimated investment of 6.6 billion USD and creating conditions to create more than 57,800 jobs in Vietnam.”
It is known that UOB has established a specialized FDI Consulting Center in Vietnam since 2013. Can you share about the operating model and achievements that the Center has achieved after 10 years of operation?
UOB’s specialized FDI Advisory Center initiative was launched in 2011 at the group level, then expanded to Vietnam in 2013, meeting the growing demand for seizing investment opportunities. in the area. The Center acts as a comprehensive platform that helps businesses gain a general understanding of overseas markets and the regulatory landscape, while also providing key local insights.
With 10 FDI consulting centers across Asia, UOB leverages its extensive regional network and deep local knowledge to deliver integrated business solutions. Collaborating with FDI promotion agencies in Vietnam, UOB’s FDI Advisory Center has created conditions for more than 300 companies to invest in Vietnam, contributing significantly to the country’s economic growth.
How do you evaluate the quality and quantity of FDI capital flows into Vietnam? How has the list of industries attracting the most FDI changed, sir?
Since its inception, our FDI Consulting Center has witnessed a notable shift in investment structure in Vietnam, shifting from labor-intensive industries to technology, media, and technology sectors. communications and services. This reflects the growing landscape of Vietnam’s economy, focused on high-tech chip manufacturing, digital markets and tourism.
The processing and manufacturing industry continues to attract the most significant foreign investment, with Vietnam serving as a production base for many high-tech products.
Looking to the future, Vietnam has enormous potential to become a leading hub for high-tech and high-value industries, driven by the digital transformation of the economy and the pressure global climate change.
As more and more businesses look for alternatives to China, Vietnam is ready to attract quality capital flows, in line with its development goals, consolidating its position as a key country in the economy. global economy.
Recently, UOB has signed many memorandums of understanding with Vietnamese ministries and branches. How do you evaluate the Vietnamese Government’s FDI attraction policy?
UOB signed the first Memorandum of Understanding with the Foreign Investment Agency, Ministry of Planning and Investment of Vietnam, in April 2015. Since then, we have supported more than 300 companies to invest in Vietnam, contributing an estimated investment of $6.6 billion and facilitating the creation of more than 57,800 jobs in Vietnam. During the same period, we provided banking services to more than 1,800 foreign-owned companies in Vietnam.
The Vietnamese Government’s FDI attraction policies have significantly contributed to promoting a favorable business environment and developing partnerships with financial institutions such as UOB.
First, there is a dynamic legal environment. Vietnam’s commitment to legal reform is clearly demonstrated through its upward trajectory in business environment rankings. The World Bank’s (WB) 2023 Doing Business Report ranked Vietnam 70th, reflecting progress in streamlining business regulations.
Second, effective investment promotion. Investment promotion agencies, especially the Foreign Investment Agency (FIA), have played a pivotal role in attracting FDI. As of December 20, 2023, FDI into Vietnam reached 36.61 billion USD, with disbursement reaching a record of 23.18 billion USD in 2023, marking an increase of 32.1% over the same period last year. . This shows the effectiveness of these agencies in converting investor interest into significant investments.
Third, long-term vision. The Government’s ambitious economic targets, including a targeted GDP per capita of USD 5,212 by 2025, demonstrate a long-term vision. Achieving this target requires an average annual growth rate of 7.1% over the next two years, demonstrating the Government’s sustained commitment to strong economic development…
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