Bright prospect ahead as nation welcomes new foreign investment wave

Annual foreign direct investment (FDI) poured into IPs and EZs currently accounts for 35% to 40% of the total FDI capital inflows, with the rate reaching between 70% and 80% in the processing and manufacturing industry, according to the Ministry of Planning and Investment (MPI).

The MPI stated that the nation is currently home to 403 IPs, 18 coastal EZs, and 26 border gate EZs, all of which have become key magnets for domestic and foreign investments. Indeed, many of them are accommodating large foreign enterprises such as Samsung, Canon, LG, Sumitomo, Foxconn, and VSIP.

Explaining why the country typically attracts new investment, especially in IPs and EZs, experts and international organisations stated at a recent forum that aside from political stability, the local economy is bouncing back quickly after the COVID-19 pandemic. In line with this, the Vietnamese economy boasts one of the fastest growth rates in the region, ensured major balances, and curbed inflation.

Many free trade agreements (FTAs) have also been signed and come into effect, thereby creating optimal conditions for international investment and trading activities. In addition, thanks to the State’s attention to building infrastructure, especially expressways, and the engagement of large businesses, infrastructure conditions for industrial development nationwide have been considerably improved.

However, Nguyen Anh Tuan, editor-in-chief of Nha dau tu (Investor) magazine, also pointed out certain challenges relating to the investment attraction of IPs and EZs, including complex administrative procedures. This is along with the lengthy site clearance for new IPs, issues related to law and policy enforcement, especially investment incentives and tax refunding, a general shortage of high-quality manpower, and housing and social welfare for workers in IPs and EZs.

According to economists, in order to welcome more investment, IPs and EZs need not only good infrastructure and excellent services, but also assistance for investors. In order to achieve this, they in turn also need support from the Government.

Favourable conditions provided for IPs by the Government will therefore facilitate investors, whilst difficulties facing IPs could also directly or indirectly affect investors, experts noted.

Deputy Minister Phuong noted that as the advisory body for the State management of IPs and EZs, the MPI will work alongside other ministries, sectors, and localities to continue overhauling mechanisms and policies, as well as assisting investors to create an increasingly transparent and positive environment in IPs and EZs.