26/03/2022
U&I Logistics - After 32 years since Doi Moi in 1986, Vietnam has become a destination attracting foreign direct investment (FDI) projects in Southeast Asia. Accumulated to the end of 2018, the country has more than 27,353 valid projects with a total 340 billion USD in register capital. The accumulated realized capital of foreign direct investment projects was estimated at 191.4 billion USD, making a very important contribution to enhancing economic growth and restructuring…
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Despite adverse effects of the COVID-19 pandemic, foreign investors still put their trust in Vietnam's economy and investment environment. Nearly 5 billion USD of direct investment capital from FDI enterprises "poured" into our country in the first 2 months of 2022 is a positive signal. Commenting on attracting foreign direct investment did not "fall down" amid the common difficulties caused by the consequences of the COVID-19 pandemic, Dr. Phan Huu Thang, former director of the Foreign Investment Agency (Ministry of Planning and Investment), said that, thanks to their resilience and solid foundation, FDI enterprises have handled situations relatively well and maintained invest in Vietnam. It is worth mentioning that the timely decisions of the Government such as Resolution 105/NQ-CP, Resolution No. 128/NQ-CP, etc. have reassured the FDI business community, so foreign investment flows continue to flow into our country.
Since the beginning of the year, Vietnam has attracted nearly 5 billion USD in FDI, although this figure is 91.5% over the same period last year, it shows a positive signal during the pandemic. Notably, the realized capital of foreign investment projects in the first two months of the year reached US$2.68 billion, up 7.2% over the same period last year and 0.4 percentage points higher than January/January. 2022.
Looking back in 2021, foreign investment capital into Vietnam reached 31.15 billion USD, up 9.2% over the same period in 2020. This shows that foreign investors have affirmed confidence in the business environment. Newly registered and adjusted capital both increased compared to 2020, especially adjusted capital increased sharply by 40.5%.
Despite being affected by COVID-19, Vietnam is an attractive investment destination with stable political advantages and democratic administrative procedures, and reducing unofficial fees. These are the comments of FDI enterprises in the recent Provincial Competitiveness Survey (PCI 2020) report. For example, "Reassurance because of low policy risks":
Talking about the prospect of attracting FDI enterprises in the coming time, Mr. Nguyen Hai Minh, Vice Chairman of the European Business Association in Vietnam (Eurocham) said that investors still see Vietnam as a bright spot with many potential, opportunities, in the immediate future are about new investment projects, expansion or additional investment. 2022 is expected to be favorable for attracting international capital flows. First of all, Vietnam is actively reforming administrative procedures, so the survey, investment procedures or connection and smooth circulation of goods. The global supply chain is also recovering rapidly, the world's consumer demand is gradually increasing again, which is an opportunity for businesses to boost production.
Along with that, Vietnam's external activities are expected to continue to be vibrant; including actively approaching investment promotion. Particularly during Prime Minister's trip to Europe at the end of 2021, the total value of commitments, memorandums of understanding for cooperation and investment of domestic and foreign enterprises is up to 30 billion USD and will be " sweet fruit" in 2022 and beyond. Some big investors have researched and explored the Vietnamese market before and still made investment decisions amid the pandemic. For example, LEGO Group set to start a new 44-hectare factory in Binh Duong province with a total investment of more than 1 billion USD. This is the FDI project with the largest capital from Denmark in Vietnam.
On the other hand, many small and medium-sized enterprises, or those who want to move their production chains to Vietnam and make investment decisions. These European businesses are looking forward to simplifying the procedure to pick up passengers from international routes from March 15 here.
"Many countries in the region have also really reopened, if we do not proceed in time, along with accelerating administrative reform, we will likely miss great opportunities," Vice Chairman of Eurocham emphasized.
Mr. Takeo Nakajima, Chief Representative of Japan Trade Promotion Agency (JETRO) in Hanoi, said that , recently, FDI inflows from Japan into Vietnam have also begun to adjust for participation. Many of the projects in the retail and service sectors are aimed at the domestic market of Vietnam and the export market to take advantage of opportunities from the Free Trade Agreements that Vietnam has signed.
Typical of this shift are Uniqlo - a global fashion brand from Japan and AEON Retail Group, which has continuously expanded its business in Vietnam over the past time. This is also a positive shift aimed at the potential retail market with a population of nearly 100 million people of Vietnam, as well as the economic growth prospect is forecasted to be quite positive in 2022.
Previously, JETRO also announced the survey results on the current activities of overseas Japanese enterprises in 2021. The results showed that although Vietnam will be severely affected by the COVID-19 pandemic in 2021, Japanese businesses are optimistic on the investment and business environment in Vietnam in 2021 and 2022. The percentage of Japanese businesses plan to expand their business in the next 1-2 years in Vietnam South reaches 55.3%, ranking first in ASEAN region.
In addition to Japanese or European businesses, Korean businesses are also planning new investments in Vietnam. In addition, US businesses highly appreciate the Government's efforts in response to the pandemic, thereby affirming that Vietnam remains a safe, attractive and potential investment destination for foreign investors in 2022.
FDI will continue to be a particularly important capital flow for growth and international economic integration, contributing to additional capital, technology, management capacity, business capacity, organizational capability and participation in the global supply chain.
According to the Minister of Planning and Investment Nguyen Chi Dung, to promote attraction of FDI inflows, Minister of Planning and Investment Nguyen Chi Dung, said that Vietnam continues the policy of selective investment attraction (decrease in quantity, increase in quality), bringing foreign investment to a new stage. In the context of capital supply uncertainty, countries are taking advantage of attracting external resources to maintain and recover their economies, competing to attract FDI among developing countries with markets having similar levels of development, technology and labor, are increasingly fierce. Therefore, in order to continue to maintain and attraction in FDI enterprises, our country needs to implement a number of key solutions.
First, timely review and regulate foreign investment policies to keep up with fluctuations in the global economy and changes in strategies to attract FDI enterprises across countries. At the same time, create a competitive and open investment climate, remove difficulties and obstacles in policy to create the most favorable conditions for the operation of enterprises and investors.
Second, speed up the process to move economic and social activities towards normalcy, eliminate disruptions in the supply chain of goods and labor, and build the confidence and trust in foreign investors
Third, prepare essential conditions to attract investment such as reviewing and supplementing the clean land fund, reviewing the electricity system planning and urging the implementation of power projects, enhancing the training of quality human resources, improve supplement measures to develop supporting industries, improve administrative processes...,
Fourth, The Government should develop regulations and standards as a new filter to select environmentally friendly foreign investors with advanced technology and the ability to withstand pressure from outside to maintain and ensure the national security of the country.
Fifth, actively coordinate with diplomatic agents, business associations, consulting firms, law firms, banks, investment funds to approach the list of businesses that are interested in investing in Vietnam to actively approach, exchange and invite investment in Vietnam.
At the same time, it is necessary to focus on finding big investors, supporting businesses in training and recruiting workers to meet the needs of the economy, especially the needs of the foreign-invested sector after disruptions in labor market. Besides teaching vocational skills, it is necessary to train to improve labor discipline, soft skills, ability to cooperate and share experiences so that Vietnamese workers have both high vocational skills and professionalism, meet labor needs of enterprises in the era of Industry 4.0.
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