Incentives are among the vital tools to make Vietnam more attractive to foreign investors The Ministry of Planning and Investment (MPI) is now working on the latest draft of the next-generation foreign direct investment (FDI) strategy towards increasing investor confidence and the added value to the economy. The most important highlight of the strategy is the shift in the focus of FDI attraction from attracting investors suitable for products to attracting investors for products and kinds of investment that Vietnam needs in the future, thus contributing to maximising FDI influence and added value. To this end, investment incentives are among the vital tools to make the country more attractive to foreign investors, amid growing competition and changes in key global trends, while low salaries will no longer be an advantage. According to international experts, Vietnam relies heavily on profit-based incentives, like time-limited tax exemptions and tax reductions, as well as on … [Read more...] about Renewing Vietnam’s FDI strategy
The Hanoitimes - FDI sector`s return on asset (ROA) reached the highest among Vietnam`s economic groups in 2016 with 6.9%, followed by the state sector with 2.6% and the private sector with 1.4%. In 2016, the FDI sector recorded the highest growth rate in revenue among Vietnam's economic sectors, at 134% compared to 2011, but contributed the least to the state budget, according to the General Statistics Office (GSO). Overview of the GSO's meeting. Source: Ngoc Thuy. FDI sector among the best performers During the 2011 - 2016 period, the FDI sector's annual revenue averaged VND560.7 trillion (US$24.13 billion), up 18.6% compared to 2011. It was lower than the VND880.5 trillion (US$37.9 billion, up 12.3%) of the private sector recorded during the same period, informed the GSO in its latest report. The private sector came second in terms of revenue growth, up 78.8% in 2016 against the figure number posted in 2011, while accounting for the largest proportion … [Read more...] about Vietnam FDI sector contributes meagerly to state budget despite robust revenue
Production at the FDI New Apparel Garment Company (Photo: VNA)Remarkable contribution to economy According to Prof. Nguyen Mai, President of the Vietnam's Association of Foreign Invested Enterprises (VAFIE), from 1991 to 2017, foreign investors disbursed USD162 billion. On average, in the 1991-2000 period, Vietnam attracted USD1.95 billion each year. The figure increased to USD5.85 billion in the following ten years and USD12 billion in the most recent 7 years. Since 2001, after the regional economic crisis, there have been diverse hi-tech and modern service large projects by Intel, Nokia, Canon, Samsung and LG, heightening FDI proportion in industrial productivity and export turnover. In the past 5 years, many projects with capital of over USD1 billion have made Vietnam a place for production of the world, with hi-tech products like smart phones or tablets. In 2016, the FDI sector accounted for over 72% of total export turnover, and contributed some 20% of domestic collection and … [Read more...] about Vietnam’s FDI highlights after 30 years of attraction
FDI has become a dynamic economic sector in Vietnam. At the end of last year, nearly 25,000 FDI projects were active in the country, with a total registered capital of USD 319 billion and disbursed capital of USD 172 billion. Nguyen Van Toan, Vice President of the Vietnam FDI Association, said, “30 years is a relatively long period. It’s possible to say that foreign investment has contributed significantly to Vietnam’s development. First, it has provided capital for Vietnam’s growth. Second, it has improved Vietnam’s capacity in management and labor. Third, it has stimulated Vietnam to integrate.” Photo for illustration During the early 1990s, FDI helped Vietnam resolve its labor redundancy and improve its workforce. While working for FDI companies, Vietnamese workers have matured in several areas: working style, corporate culture, professional and technical skills, and foreign language level. Another achievement of FDI is that … [Read more...] about Vietnam’s FDI attraction in retrospect
Vietnam has very good achievements in foreign direct investment attraction, however, it needs to change its strategy and orientation to focus on the necessary sectors to improve efficiency. For sustainable future development, it is important to set the country's priorities right (Illustration photo: GE's factory in Haiphong) Sectors of current focus Numerous foreign groups have been doing business successfully in Vietnam, such as Samsung, LG, Intel, GE, Mitsubishi, and Panasonic. However, the draft of FDI attraction orientation and strategy for 2018-2030 built by the Ministry of Planning and Investment in collaboration with the World Bank noted that Vietnam needs to carefully review the priority sectors to attract FDI in the time to come. According to Simon Bell, the World Bank’s senior advisor on investment policy, experts mentioned high-added value in FDI attraction but have not pointed out sectors and what to do, and that in the new orientation, Vietnam needs to identify … [Read more...] about Vietnam’s FDI attraction: which sectors to prioritise?