Production activities at a FDI enterprise in Dong Nai. (Photo: Hong Dat/VNA)
Many economic experts believe that with great attraction, proactive and positive preparation, if there are soon enough competitive investment incentive policies, Vietnam can welcome a booming wave of foreign investment in high-tech fields.
2024 will be a breakthrough year in attracting FDI to Vietnam.
Recently, within the framework of the Prime Minister's delegation attending the Special Summit to celebrate the 50th anniversary of ASEAN-Australia relations and an official visit to Australia, Minister of Planning and Investment Nguyen Chi Dung had bilateral meetings and worked with a number of partners in Australia in the field of promoting cooperation in training human resources in the electronics and semiconductor industries.
Specifically, during the meeting with Mr. Pat Conroy, Australian Minister for International Development and the Pacific, the two Ministers expressed their desire to promote economic-investment-trade cooperation through specific and effective cooperation projects that are suitable to the advantages and development orientations of both sides.
In particular, Minister Nguyen Chi Dung hopes that the two sides will continue to promote comprehensive cooperation in the fields of education and training, developing high-quality human resources, especially human resources for the electronics and semiconductor fields.
In fact, many technology "eagles" have "nested" in Vietnam and are constantly increasing their investment scale such as Samsung, Foxconn, Goertek, Intel...
Samsung Electronics leads the information technology industry with high-quality products at Yen Binh Industrial Park. (Photo: Minh Duc/VNA)
Although Apple does not have a direct manufacturing plant in Vietnam, it has more than 30 factories of partners producing original equipment for Apple in many provinces and cities of Vietnam.
Mr. Nguyen Van Toan, Vice President of the Association of Foreign Investment Enterprises, said that recently, a series of the world's leading semiconductor corporations from the US, South Korea, China, Japan, and the Federal Republic of Germany have come to Vietnam to discuss cooperation opportunities, especially in the semiconductor field.
The Vietnamese government has also been very active in preparing to receive new capital flows and meet requirements to attract investors in this field.
“According to observers, the US is looking to diversify its chip supply chain amid concerns about tensions in the Asia-Pacific region. Especially when most of the world’s chip production capacity is concentrated in Taiwan (China) and Vietnam has many advantages in this strategy,” said Mr. Toan.
Notably, recently, global credit rating agency Fitch Ratings upgraded Vietnam's national credit rating to BB+ with a stable outlook. Thanks to that, in just the first two months of this year, foreign capital inflows into Vietnam reached nearly 4.29 billion USD, an increase of 38.6% over the same period in 2023.
Efforts to promote investment and improve the business environment have also been effective, and along with that, Vietnam is also receiving favorable conditions thanks to the wave of businesses expanding investment to Southeast Asia.
The Ministry of Planning and Investment said that this is the right time for Vietnam to consider reforming the investment incentive system. Specifically, it is necessary to introduce breakthrough, focused, key investment incentive policies with a screening nature to select strategic investors and high-quality investment projects. At the same time, diversify investment incentive policies according to international experience to attract new generation investors, focusing on investment to increase value.
Although facing prospects from attracting FDI, according to Mr. Tim Evans, General Director of HSBC Vietnam, Vietnam also needs to identify obstacles and bottlenecks in attracting foreign investment and find ways to remove them.
According to Mr. Tim Evans, the first is the quality and accessibility of labor resources. The second is that Vietnam's logistics efficiency index lags behind China, Malaysia, and Thailand with many shortcomings in logistics capacity, delivery time, and traceability. Finally, it is about the legal environment.
Intel's factory in Ho Chi Minh City High-Tech Park. (Photo: VNA)
The HSBC Global Connection survey found that regulatory changes are one of the two biggest challenges for foreign businesses operating in Vietnam, with 30% of companies having difficulty adapting to rapidly changing policies and regulations.
In addition to removing bottlenecks in attracting FDI, Mr. Tim Evans recommended that Vietnam needs to have a strategy to attract more FDI, starting with understanding and understanding the competitive situation between Vietnam and the remaining countries in ASEAN.
As for the application of the global minimum tax (from January 1, 2024), many experts believe that this is not a decisive factor affecting the flow of foreign investment capital into Vietnam this year.
Mr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR), said that the FDI investment flow from the end of 2023 and the beginning of 2024 into Vietnam will not change as Vietnam has promptly issued policies to respond and reassure investors. In fact, large enterprises have prepared strategies and adjusted production and business activities to the impact of the global minimum tax.
According to Mr. Nguyen Van Toan, Vice President of the Association, the global minimum tax has not had any major negative impacts so far. The actions of the National Assembly and the Government are very urgent, issuing a resolution of the National Assembly on the global minimum tax is a very good technical solution.
In fact, the new capital flow has increased sharply, when put on the scale, with the same tax, traditional investors still feel many opportunities from Vietnam's investment environment. The Government's policy solutions have and will help investors feel secure to increase new investments and no company has left Vietnam due to the application of global minimum tax.
However, to compensate for the possible loss of comparative advantages, international experts believe that Vietnam should pay attention to creating more favorable conditions for foreign investors. Especially reducing costs related to infrastructure, providing more incentives for investment, receiving new technology; training human resources suitable for the business orientation of foreign investors.
“The Vietnamese Government has been and will continue to make every effort to prepare the best conditions to welcome FDI investors; especially those in the semiconductor industry. In the near future, we believe that Vietnam will become a reliable partner and an important link in the global semiconductor value chain,” Minister Nguyen Chi Dung emphasized./.
According to VNA
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