FDI Report: Important Suggestions to 'Improve the Quality' of Foreign Capital

Vietnam - a safe and attractive destination

The 2024 annual report on foreign direct investment (FDI) with the theme "Attracting FDI into the semiconductor industry, future technology, clean energy, science and technology, and training of skilled labor force" was announced by the Association of Foreign Investment Enterprises on the morning of April 16.

Prof. Dr. Nguyen Mai presents the FDI Annual Report. Photo: NH

The report, edited by Professor, Dr. Nguyen Mai - Chairman of the Association of Foreign Investment Enterprises - reviewed Vietnam's achievements in attracting FDI in recent years, especially in 2024. Despite many challenges in the world economic and political situation, in 2024, Vietnam attracted 38.2 billion USD in FDI capital, down 3% compared to 2023, but disbursed FDI capital increased by 9.4%.

According to Professor, Dr. Nguyen Mai, FDI capital flows into Vietnam in 2024 will still be quite positive. In particular, the bright spot is that operating projects have adjusted their investment capital to increase by more than 50%, proving that operating investment projects are operating effectively, investors trust and appreciate the investment environment and the business prospects are very positive in the coming years.

The FDI report also shows that international organizations and foreign investment business associations have given quite positive assessments of Vietnam's investment environment. Specifically, a survey on the current situation of Japanese enterprises abroad, including Vietnam, by the Japan External Trade Organization (JETRO) showed that the rate of enterprises investing and doing profitable business in Vietnam reached over 64%, the first time in 5 years it has exceeded 60%.

Among Japanese enterprises investing in Vietnam, 56.1% of enterprises plan to expand their business in Vietnam in the next 1-2 years, the highest number in the ASEAN region.

The wave of Japanese enterprises moving to ASEAN countries has increased significantly, of which a large number are moving to Vietnam. This will create opportunities for domestic enterprises to become suppliers for Japanese enterprises.

Similar to Japan, Professor, Dr. Nguyen Mai said that European businesses also highly appreciate Vietnam's investment environment. The optimism of the European business community towards Vietnam's investment environment has pushed the Business Confidence Index to 61.8%, despite challenges from the volatile global economic context.

The majority of European business leaders in Vietnam (75%) believe that Vietnam will continue to be the priority choice of foreign investors thanks to the Government's continuous efforts to improve the investment and business environment.

"This shows not only confidence in the prospects of the Vietnamese market but also being reinforced by the restructuring and streamlining plan of the Vietnamese Government, aiming to build a more transparent and effective business environment," said Professor, Dr. Nguyen Mai.

Prospects for foreign capital flows in 2025

Forecasting the opportunity to attract FDI in 2025, Professor, Dr. Nguyen Mai said that in 2025, the world's political, economic, trade and investment situation will fluctuate unpredictably, creating challenges for Vietnam's economic growth and FDI attraction.

However, Vietnam is still considered a successful model in attracting FDI thanks to its increasingly perfect institutions and business environment, stable political foundation and high economic growth potential. In particular, the fields in Vietnam that are attractive to foreign investors are the semiconductor industry, future technology, clean energy, science and technology...

Increase the proportion of state budget investment in research and development. Illustrative photo

On that basis, to "improve the quality" of foreign capital flows, in order to achieve the goal of the digital economy accounting for about 30% of GDP by 2030, Vietnam needs to focus on a number of groups of factors, including: Increasing the proportion of investment from the state budget for research and development (R&D), innovation, encouraging businesses to establish R&D centers and technology transfer through tax incentives and financial support; attracting domestic and international resources to invest in developing new industries such as artificial intelligence, information technology, and industries that create a lot of added value.

Vietnam also needs to focus on investing in training digital generation citizens, reforming education and training so that the new generation of citizens has knowledge, skills and adapts to the circular economic growth model and digital economy; have policies to attract Vietnamese and foreign experts with knowledge and skills in priority development sectors.

In addition, to "improve the quality" of foreign capital flows, Vietnam needs to transform its growth model based on modern technology and high-quality human resources, increasing national competitiveness. In addition, it is necessary to reduce licensing procedures, implement investment projects, and increase support for investors and businesses when facing difficulties.

"Along with Vietnam's inherent advantages of political stability, macroeconomics, and social security, shortening the time to implement investment projects will contribute to bringing businesses into the market, creating more resources for economic growth," the FDI report stated.

Prof. Dr. Nguyen Mai - Chairman of the Association of Foreign Investment Enterprises: Along with the state-owned economy, cooperative economy, and private economy, the FDI sector continues to be considered an important growth driver, helping Vietnam achieve the growth target of 8% or more in 2025.

Nguyen Hoa

Source: https://congthuong.vn/bao-cao-fdi-goi-y-quan-trong-de-nang-chat-von-ngoai-383277.html