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| In 2024, attracting foreign investment is still a bright spot. (Source: VnEconomy) |
A series of large projects "landed", confidence was strengthened
Six projects, with a total capital of 390 million USD, were granted investment certificates at the Conference to announce the 2021-2030 Planning Period, with a vision to 2050 of Nghe An on January 13, 2024. Notably, there are the projects of Radiant Opto-Electronics Corporation (Taiwan), with an investment capital of 120 million USD, and the projects of Everwin Precision (Hong Kong), with an investment capital of 115 million USD. At the end of October 2023, Everwin Precision also started the 200 million USD project at VSIP Nghe An.
Right before Nghe An, Hai Duong granted investment certificates to 27 projects, with a total capital of more than 1.5 billion USD. In addition to a number of domestic projects, there are a series of large-scale foreign investment projects, such as the Stationery Factory Project of Deli Vietnam Office Technology Co., Ltd. (270 million USD); Biel Crystal Technology Production Co., Ltd. Project (260 million USD); or Boviet Hai Duong Solar Photovoltaic Cell Factory Project (120 million USD)...
Dong Nai also made a similar move. Of the 9 projects granted registration certificates in early January 2023, there were 4 foreign investment projects, with a total registered capital of 156.4 million USD.
In addition to newly licensed projects, there are also 4 projects with increased capital, with a total registered capital increase of 217 million USD. Nestlé, Hyosung, and Kenda are major investors, because they continue to trust in Dong Nai's investment environment, so they have decided to expand their investment in this province.
Of these, Nestlé’s project alone has an additional capital of 100 million USD. Adding this capital, Nestlé’s total investment capital in Dong Nai amounts to more than 500 million USD. “This project is a testament to Nestlé’s long-term investment commitment in Vietnam,” said Mr. Binu Jacob, General Director of Nestlé Vietnam.
The beginning of the year is usually the time when localities organize investment promotion conferences or meet with foreign investors. Here, more projects will be granted investment registration certificates or investment policies. This year is no exception, and there is even a more positive trend with many large-scale projects "landing". This promises that 2024 will continue to be a successful year for Vietnam in attracting foreign investment.
At the recent Government Conference with localities, Deputy Prime Minister Le Minh Khai mentioned the figures of 36.6 billion USD in registered capital and 23.2 billion USD in disbursed capital - the highest ever, to emphasize a bright spot of the economy. "Vietnam remains an attractive destination for foreign investors," the Deputy Prime Minister emphasized.
Meanwhile, Mr. Luong Van Khoi, Deputy Director of the Central Institute for Economic Management, said that attracting foreign investment in 2024 is still a bright spot. Mr. Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, also expressed his belief that Vietnam's foreign investment attraction in 2024 will continue to be very positive.
“We have received a lot of information about Japanese corporations looking for opportunities to cooperate with domestic units, such as VinaCapital, to invest in Vietnam’s real estate sector,” said Mr. Michael Kokalari, adding that other sectors that promise to attract large capital flows are manufacturing, retail, etc.
Rare opportunity, not to be missed
Vietnam has a huge opportunity to attract foreign investment. However, there are still difficulties. In a recently published report, HSBC Bank mentioned a point to note, which is that the global minimum tax will be applied from February 1, 2024 in some countries.
It may be too early to assess the impact, and even foreign investors' investment decisions are not entirely based on investment incentives, but clearly, global minimum tax and additional incentive mechanisms are a "big deal" for an investment-receiving country and an economy that depends on foreign investment like Vietnam.
A piece of information that has been mentioned quite a lot recently is Intel's decision to invest up to 25 billion USD in Israel. Besides the reason that Israel is still an important market for Intel, the fact that this country provides a subsidy of up to 3.2 billion USD, equivalent to 12.8% of the total investment, is considered one of the fundamental reasons why Intel decided to pour a huge amount of money into the region that is still experiencing armed conflict.
Previously, Intel also decided to invest 4.6 billion USD in Poland, more than 30 billion Euro in Germany and received huge financial support.
Experts have mentioned the urgent need to study and promulgate additional investment support mechanisms. According to information, the Draft Decree on the establishment of the Investment Support Fund is being submitted by the Ministry of Planning and Investment for public consultation. The Ministry is also reviewing all investment incentive policies, to study and amend these policies in general to suit the practical situation.
The current context shows that competition to attract foreign investment is increasingly fierce. In a recent report to the Government, the Ministry of Planning and Investment said that in 2024, the outlook for global investment flows may be more uncertain.
“Foreign investment flows have slowed down and are increasingly concentrated among countries with geopolitical links, especially in strategic sectors. The implementation of the global minimum tax regime and related policy groups in many countries may also affect foreign investment movements,” the Ministry of Planning and Investment said.
Therefore, the story is not only about investment support, but also about administrative procedures, infrastructure, human resources, etc. When announcing the report on the Business Confidence Index (BCI) of European enterprises in the fourth quarter of 2023, Mr. Gabor Fluit, Chairman of EuroCham, said that "the positive trend is still happening", but also emphasized that Vietnam needs to improve issues of administrative burden and inefficiency of the apparatus.
The foreign investment sector has long been an important growth driver for the economy, especially in the current difficult context. Therefore, Mr. Hoang Van Cuong, member of the National Assembly's Finance and Budget Committee, said that it is necessary to not only attract investors, but also "accompany them".
“To do that, we need to strongly reform institutions, create a legal environment and create opportunities, not remove obstacles,” said Mr. Hoang Van Cuong, adding that 2024 is a “rare year that will never happen again,” so we need to seize the opportunity, otherwise we will lose the opportunity.
| According to the Ministry of Planning and Investment, the recovery momentum in Asian economies, associated with FTAs, could create more momentum to retain foreign investors and attract new ones. However, geopolitical competition among major economies, associated with new standards and even interventions by some governments to orient investment activities/redirect investment, could affect the trend of foreign investment flows, including the trend of repatriation and relocation of production to and near close allies, which has increased after the Covid-19 pandemic and the Russia-Ukraine conflict. |
(according to Investment Newspaper)
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