Vietnam is still a bright spot in Southeast Asia in attracting FDI
DIENDANDOANHNGHIEP.VN According to Mr. Nguyen Dinh Nam, CEO of IPA VIETNAM, Vietnam is still a bright spot in Southeast Asia in attracting FDI in the coming years, due to its geographical location advantages and investment costs are still quite competitive.
Mr. Nguyen Dinh Nam, Chairman of the Board of Directors & General Director of IPA VIETNAM
– How do you evaluate the trend of shifting and attracting foreign investment in the first 6 months of 2024, forecast for the last 6 months of 2024 and 2025?
According to data published by the Foreign Investment Agency, Ministry of Planning and Investment until May 2024, it can be seen that FDI capital flows into Vietnam continue to increase. Newly registered projects increased by 27.5% in number of projects (1,227 projects) and 50.8% in registered capital (7.94 billion USD) compared to the same period in 2023, especially in January. and in April 2024, the amount of newly registered capital increased significantly.
However, the bright spot in Vietnam’s FDI attraction in the first months of the year is the amount of disbursed capital with an impressive figure of 8.25 billion USD, an increase of 7.8% over the same period in 2023.
Looking at the numbers, it can be seen that the overall amount of FDI capital is still growing by 2% over the same period in 2023, but according to actual observations of IPA Vietnam, the amount of new investment capital has begun to decrease since May. 2024, instead increasing the amount of adjusted capital from existing projects. In my opinion, the picture of attracting FDI in the last 6 months of the year does not show positive signs, and may even be lower than in 2023 because the global economic growth context has not improved significantly. . According to the latest update of the World Bank (WB), global GDP growth is forecast to reach 2.6% this year and increase to 2.7% in 2025-2026.
In 2025, as geopolitical tensions and supply-demand imbalances continue, especially the US-China trade war and tensions between Russia and European countries increase in recent years. recent month. If the US and European economies have not yet escaped the current stagnation, the investment capital flows from these blocs into Vietnam will almost certainly be quite faint and the capital flows will still mainly come from countries and territories. such as China, Taiwan, Hong Kong, Singapore, South Korea, and Japan, in which the Chinese bloc is still the main partner. In addition, the growth of FDI inflows in the coming year, especially the attraction of large corporations, depends on the preferential policies and investment support of the Vietnamese Government when it has applied a comprehensive minimum tax. demand, as well as the formulation, promulgation and implementation of new policies such as the Land Law, Digital Technology Industry Law, Corporate Income Tax Law, VAT Law…
– Could you share your comments on investment trends of foreign businesses in Vietnam and opportunities for Vietnam’s industrial real estate industry?
According to the assessment of many reputable international organizations, Vietnam is still a bright spot in Southeast Asia in attracting FDI in the coming years due to its geographical location advantages and investment costs are still quite high. compete with some countries in the region such as Thailand, Indonesia, Malaysia, China and India.
Opportunities and prospects for the industrial real estate industry are still many, however the shifting trend has changed, from industries with low technology value, backward to industries with high technology value, from traditional partners such as Korea and Japan to Chinese-speaking partners such as China, Taiwan, and Hong Kong. The investment industry also focuses more mainly on manufacturing and processing industry and real estate business. Regarding the trend of moving into Vietnam, Japan tends to slow down due to internal reasons of the economy, mainly increasing capital and expanding production of projects invested in Vietnam. Capital flows from Korea have not increased much because businesses that are able to invest abroad have already invested, so perhaps it is just a shift of projects from other countries, including possibly from China, India to Vietnam. China will also be a very potential partner to expand investment in Vietnam due to its strong commitments to promoting comprehensive economic cooperation between the two countries’ senior leaders, as well as China’s desire to expand and diversify. diversifying the supply chain outside the territory, with Vietnam being a priority choice.
As for the European bloc, they are also making great efforts to promote cooperation with ASEAN also with the aim of diversifying the supply chain, focusing on the fields of clean energy, renewable energy, green hydrogen, semiconductor chips, R&D, artificial intelligence and robotics. I think this is useful and necessary information for industrial real estate developers. Understanding the trends and relocation plans of partners is the premise for building an effective investment attraction plan, creating momentum for the industrial real estate industry to develop strongly in the 4th FDI wave. next time.
Partners discussed investment opportunities in Vietnam
– Sustainable industrial park development is an inevitable trend of Vietnam and the world. In Vietnam, what is your assessment of investors’ efforts in pursuing and building sustainable industrial park models and the results achieved?
The reason sustainable industrial park development is considered an inevitable trend is because countries around the world have taken a more serious look at the impact of the natural environment on life, security and safety. of human. In recent years, industrialization and uncontrolled resource exploitation, especially in developing countries, have led to many consequences of environmental change, natural disasters, and epidemics. Therefore, developing green, sustainable industry and minimizing harmful emissions is the top priority of each country to protect the earth’s ozone layer and improve the quality of human life. This is also an issue that Vietnam is very concerned about and efforts to cooperate with other countries to implement. The Vietnamese Government Leaders have also committed to reducing net emissions to zero by 2050.
To implement the above commitment, in addition to legislating regulations and promulgating policies from state management agencies, we also need the implementation companionship of domestic and foreign private manufacturing enterprises. Due to the characteristics of industrial production, factories are mainly located in industrial parks and industrial clusters, so planning these production areas is extremely important towards a green and sustainable production.
In Vietnam, over the past many years, investment in developing industrial zones and clusters has been quite spontaneous. Most developers lack experience and management and operation capacity, so the quality of the zone’s infrastructure is poor. Industrial clusters are very low, it can even be said to be sketchy compared to current investment attraction requirements. Therefore, to meet and attract new generation FDI capital flows, investors in industrial parks and industrial clusters are required to change their development thinking and build a sustainable ecological industrial park model to meet current practical needs. The eco-industrial park model is implemented by UNIDO and the Ministry of Planning and Investment in phase 1 from 2015-2019 in 3 industrial parks and phase 2 from 2020 in 3 more industrial parks, a total of 6 industrial parks. This is a very small number compared to the total of nearly 400 industrial parks in Vietnam. Some industrial parks in the pilot project can be named such as Hiep Phuoc (Ho Chi Minh City), Amata (Dong Nai) and Deep C (Hai Phong); At the same time, continue to support the implementation of solutions to promote industrial policy in Hoa Khanh Industrial Park (Da Nang) and Tra Noc Industrial Park 1 & 2 (Can Tho).
According to the above data, it can be said that the results achieved in developing a sustainable industrial park model are still too limited. For this model to be replicated and make an important contribution to the country’s industrial and sustainable economic development orientation, it is necessary to have policy reforms and financial support from the state. cooperation in sharing international experience in building, managing and operating industrial parks according to this model and the cooperation of investors in industrial parks as well as a close connection mechanism between relevant parties.
– Investment promotion activities are very important activities, serving as a bridge for investors from other countries to know and cooperate with Vietnam. How do you rate this activity?
The concept of investment promotion has only been widely popularized in Vietnam in the past decade or so, while around the world this concept has appeared in many documents, publications and investment promotion activities. investment has been strongly deployed by them. The model of investment promotion agencies, functions and tasks of these agencies are also very clear and play an important role in managing and attracting foreign investment in each country.
In Vietnam, investment promotion agencies have also been established since 2004, however they are all affiliated units, not specialized agencies, most are investment promotion center models in at both central and local levels, investment promotion activities are still limited and not really an effective bridge to attract FDI capital into Vietnam. On the one hand, it is not a specialized unit, so the staff in charge of investment promotion has not been professionally trained, and the personnel always fluctuates, so there is a lack of stability and long-term development. On the other hand, funding sources for investment promotion activities are limited and have not been socialized, so investment promotion activities lack scale and have not really spread abroad.
However, in recent years, investment promotion activities have gradually brought about effectiveness and consistent results thanks to the efforts and drastic actions of the Party, State and Government leaders through diplomatic activities. economics, as well as activities to promote the investment environment in many countries around the world. I believe that investment promotion activities include advertising, propaganda, dissemination, information sharing, support, negotiation, and persuasion of investors, so they need to be respected and carried out regularly. even for existing investors (on-site investment promotion) as well as other potential investors.
– What is the role of private investment promotion units in Vietnam in attracting FDI capital to Vietnam, sir?
Along with the strong growth of foreign investment, the concept of investment promotion and investment promotion activities have gradually spread to the private business sector in recent years and investment promotion units themselves. This private sector has made an extremely important contribution to promoting the investment environment and attracting FDI projects to Vietnam. The “leading birds” in these private investment promotion units can be mentioned as infrastructure development units of industrial parks, industrial clusters, factories, warehouses, law firms, and private investment companies. Investment consulting and a number of industrial real estate investment promotion models have flourished in the last 2-3 years.
In my opinion, there is currently no common model for private investment promotion activities. There are still differences in skills, investment promotion experience and level of professionalism among many private units. However, in general, it can be seen that the level of effectiveness that private investment promotion units bring is quite clear by pursuing specific projects, supporting and convincing them to make investment decisions in Vietnam. Male. If the State pays more attention and considers investment promotion activities as a business and is legalized like trade promotion activities, and has support in terms of knowledge, experience, and fees, private investment promotion units will become an important link in attracting FDI and contributing to promoting Vietnam’s socio-economic development.
– It is known that IPA Vietnam is about to launch the Vietnam Industrial Conect 2024 conference. It is expected to attract a large number of investors from other countries to participate. Can you share a few details about this important event?
Vietnam Industrial Connect 2024 is an annual event launched by IPA Vietnam in 2023 with the original name Industrial Connect 2023. The purpose of this annual event is to update Vietnam’s socio-economic development, attract foreign investment, share FDI trends and shift global supply chains in the current context. In addition, the Conference is also a link to connect and share information, experience, and business opportunities between businesses in the supply chain of products and services for foreign investors such as development units. Industrial real estate development, industrial construction general contractors, law firms, investment consultants, recruitment agencies, banks, tax insurance, finance, customs, logistics…
Vietnam Industrial Connect Conference in the Northern region (Industrial Connect 2023).
In addition to Vietnamese businesses operating in the above fields, participating in the Conference are also businesses and investors from diplomatic representative agencies, international organizations, and foreign business associations such as : Thai Investment Promotion Office in Hanoi (Embassy of the Kingdom of Thailand), Hong Kong Business Association in Vietnam (HKBAV), French Chamber of Commerce and Industry in Vietnam (CCIFV), Chamber Thai Chamber of Commerce and Industry (ThaiCham), Association of Belgian and Luxembourg Companies in Vietnam.
What brings the most value to the attending delegates is accessing information and exchanging with experienced speakers in the field of foreign investment and investment promotion, especially international speakers. has been holding many important positions in multinational corporations and enterprises. Therefore, the experience and knowledge conveyed are extremely meaningful to the delegates participating in this 2nd Annual Conference of IPA Vietnam.
Sincerely thank you!
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