Investors reinforce trust in Vietnam

The latest statistics published by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment showed that the northern city of Haiphong attracted the largest foreign-invested capital in 2021 at $5.26 billion, making up 16.9 per cent of registered capital inflow to the country and 3.5-fold higher than the figure of 2020. The added capital in the city was $2.73 billion, $2.15 billion of which comes from the two ventures from LG Display Vietnam Haiphong Co., Ltd. The promising figures are a result of breakthrough reformation in administrative procedures in the city.

At LG Display Haiphong, it took only five days to grant the investment certificate for the first adjustment with a capital addition of $750 million and three days to approve the second adjustment of $1.4 billion.

Nguyen Van Tung, Chairman of Haiphong People’s Committee said, “When the pandemic broke out, on-spot investment promotion was taken advantage of thoroughly via organising online meetings to connect with investors and focusing on supporting enterprises during the process from completing the procedures to operating the factories.”

Such localities as Long An, Binh Duong, and Ho Chi Minh City are in the top five destinations attracting the largest foreign investment capital inflows in the country. Binh Duong held over 20 online investment promotion meetings in 2021, with one particular highlight being the signing ceremony between Vietnam Singapore Industrial Park and Danish toy producer LEGO Group. The latter will invest over $1 billion in constructing its first-ever carbon neutral factory, including investment in solar energy on a 44-hectare site in this southern province.

Holding dialogues

The success of the business community is backed up by local governance. Kim Huat Ooi, vice president of Intel Products Vietnam’s (IPV) manufacturing and operations and its general manager, said, “IPV is an important part of Intel’s manufacturing worldwide, and we will continue to invest in our local operations. Last year marked the 15th anniversary of IPV, and we are extremely pleased with the progress we have made in Vietnam so far, which is contributed significantly by the support of local authorities.”

The company has generated $60 billion of export value since 2010. At the end of November 2021, IPV generated an export value of $11.8 billion. In 2020 alone, IPV exported $13.1 billion, making up about 70 per cent of the total export turnover of the Saigon Hi-tech Park where it is located, and 29 per cent of Vietnam’s total export turnover in electronic components and accessories; and 30 per cent of Ho Chi Minh City’s total export value.

Every November, Ho Chi Minh City authorities organise meetings and dialogues with foreign-invested enterprises in the city to remove troubles that they are struggling with, especially in administrative procedures, goods circulation, import and export, and legal policies.

“Around 90 per cent of obstacles have already been overcome, while the remaining are being looked at by higher-level authorities,” said Cao Thi Phi Van, deputy director of the Investment and Trade Promotion Centre of Ho Chi Minh City.

During the pandemic, digital transformation has been applied widely to strengthen transactions and trade promotion, accepting electronic invoices and documents for customs clearance. Besides this, the compliance inspection and assessment for businesses with no signs of violations have been suspended temporarily to facilitate enterprises.

Localities with a moderate position are also making efforts to create a vigorous change in attracting capital inflows. The north-central province of Thanh Hoa is delving into investment promotion via establishing the Japan Desk Thanh Hoa, managed by Thanh Hoa Investment Trade and Tourism Promotion Agency. The desk focuses on supporting Japanese companies to secure vaccines for experts and deal with problems relating to the entry of experts and skilled workers, as well as employee recruitment.

“After listening to the difficulties and proposals of Japanese enterprises, the desk immediately started working with each business and state agency to thoroughly resolve their problems, so that they can operate smoothly,” said Hoang Si Tuan, deputy director of Thanh Hoa Investment, Trade and Tourism Promotion Agency and head of the Japan Desk Thanh Hoa.

“Accompanying enterprises during the investment and operation will help reinforce investors’ trust in the province’s investment environment, creating a foundation for their expansion and reputation for calling new investors,” Tuan said.

Offering potential

Thanks to the desk’s influence, a compromise was reached so that it takes only five working days to approve an entry file for a foreign expert and his family members. Regarding foreign experts who hold work permits, Thanh Hoa Department of Foreign Affairs will submit the dossiers to the People’s Committee for approval without requiring an opinion from other departments. This is much faster than elsewhere.

Yashiro Hiroki, senior advisor of the FIA said, “Since the pandemic emerged, many Japanese companies suffered losses, but still trust Vietnam’s investment environment and the opportunities here. Seeing the desk’s support for enterprises, I am also happy to recommend the province to other Japanese businesses, who are looking to invest overseas.”

According to the FIA, as of December 20, Vietnam wooed $31.15 billion in foreign investment capital, up 9.2 per cent on-year. There were 1,738 newly-registered projects registered at over $15.2 billion, up $4.2 per cent on-year. Meanwhile, there were 985 added-capital projects with an adjusted capital sum of $9 billion, up 40.5 per cent on-year.