Hanoi rolls out red carpet for technology-led investors

October 26, 2021 | 11:05
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With the capital’s orientations towards technology-driven economic development and new actions to support business recovery, more new opportunities are expected to come for potential investors in Hanoi.
Hanoi rolls out red carpet for technology-led investors
Hanoi authorities often meet with the business community in order to find solutions to smooth the way for further investment

Hoa Lac High-tech Park is now working with a number of domestic and international technology groups who eye potential growth in the local market.

“Several businesses from Europe, South Korea, and Japan, are working with us on the possibilities of investing in our park. Being an innovation area with developed infrastructure, preferential investment incentives, one-door policy and other advantages, we are ready to welcome more investors,” Luu Hoang Long, president of Hoa Lac Hi-Tech Park Management Board, told VIR.

Technology is one of Hanoi’s target sectors for its development orientations. The capital wants to focus on renovation of the growth model and restructure its economy towards sci-tech application and innovations. Hanoi plans to develop its digital and IT infrastructure to create a foundation for the development of a digital economy and society.

Hanoi will thus prioritise modernisation and the development of socioeconomic infrastructure, together with transport development to link the central business districts with its outskirts and neighbouring cities and provinces, while promoting smart city development in a green and sustainable manner.

Moreover, the city aims to tackle environmental pollution, traffic jams, hospital overloads, and other pressing issues, as well as continue to improve its overall management.

The capital also aims to further develop an e-government to save time and cost for enterprises towards simplifying procedures like business registrations, tax declarations and payments, social insurance, and others, while improving workforce quality.

Dinh Tien Dung, Secretary of Hanoi Party Committee asserted at last week’s conference on solving difficulties for foreign-invested enterprises (FIEs) that the capital is ready to welcome potential foreign investors with more favourable conditions. “Hanoi pledges to ensure the legitimate rights and benefits of investors,” Dung promised.

These strategies are expected to create more opportunities for businesses and investors to venture further in the city, especially in the technology-driven sectors. Japan, South Korea, Singapore, and the EU are now among the most interested players.

Vice Chairman of Hanoi People’s Committee Nguyen Manh Quyen told VIR, “Hanoi will accelerate international cooperation in sci-tech, investment promotion, trade, and tourism, while preparing to welcome a wave of investment shifts in the region and the world in the post-pandemic landscape.”

Nguyen Hai Minh, vice chairman of the European Chamber of Commerce (EuroCham) in Vietnam said, “Hanoi is a promising investment destination for EU businesses. If continuing to accelerate administrative reforms as before, the city will be the go-to destination for high-quality foreign direct investment (FDI) from the EU. We believe that these investment inflows will continue to rise strongly in the upcoming time.”

At the conference, representatives of embassies, international organisations, business associations, and FIEs focused their discussion on the reduction of taxes, vaccinations, social insurance payments, commuting, and work permits for foreign labourers, among others.

In response, Hanoi’s leaders asked departments, agencies, and units to consider these ideas and discuss the upcoming issuance of policies to solve business difficulties within their power.

Several tasks were also assigned to departments, agencies, and the district people’s committees for their implementation. They include strict implementation of Resolution No.128/NQ-CP dated October 11 on the safe and flexible adaptation and effective control of the pandemic to increase foreign investment attraction; the acceleration of the city’s action plans and programmes, and the government’s resolutions to support businesses.

According to the vice chairman, Hanoi’s authorities have acted quickly to control the pandemic, while supporting businesses and investors to mitigate negative impacts and recover their activities.

Thus far, the city asked Hanoi Tax Department to immediately extend VAT payments, corporate income tax, personal income tax, and land rents for 2021 for more than 31,000 taxpayers.

A reduction of 30 per cent in land rents is applicable for 650 taxpayers for a total of $10.87 million, in line with Decision No.27/2021/QD-TTg dated September 25 on reduction of land rental for 2021 for businesses affected by COVID-19.

The city is now step-by-step adapting to the new scenario, thus enabling business recovery. Hanoi is expected to issue a plan on recovery and economic development aligned with COVID-19 prevention and control measures, as well as a plan on business recovery.

The National Assembly and the government are considering the issuance of additional policies on tax cuts and exemptions which are expected to be announced soon to continue supporting businesses and people hit by the pandemic.

Hanoi is one of the most attractive investment destinations in Vietnam. As of to date, the city has been home to 6,625 foreign-invested projects with the total registered capital of $48.7 billion.

In the 2018-2019 period, Hanoi took the lead among cities and provinces in Vietnam in FDI attraction, with the total registered capital of $7.5 billion and $8.67 billion, respectively. In 2020, the city ranked third, luring $3.83 billion.

In the first nine months of 2021, Hanoi attracted $1.28 billion worth of FDI, thus significantly contributing to the socioeconomy and contributing about 10 per cent to local state coffers.

Dinh Tien Dung - Secretary, Hanoi Party Committee

Hanoi rolls out red carpet for technology-led investors

While Hanoi’s area and population make up just 1 per cent and 8.5 per cent of the country’s total, respectively, it contributes about 16 per cent of the country’s GDP, 18.5 per cent of the total state budget, and 8.6 per cent of the total import-export turnover.

Hanoi is increasingly strengthening its role as a centre of economics and international transactions, an important development impetus of the Red River Delta region and the country. Foreign investment is an important driving force for the city’s development. The city encourages and creates favourable conditions for long-term development and cooperation, as well as healthy competition with other economic actors.

To attract more investment, Hanoi has been focusing on solving the barriers faced by investors, such as administrative reform and improvement of the investment climate to improve its competitiveness.

Nguyen Hai Minh - Vice chairman, EuroCham

Hanoi rolls out red carpet for technology-led investors

The business community has rejoiced after social distancing was loosened in Vietnam. We welcome the government’s new guideline on safe and flexible adaptation and effective control of the pandemic.

Hanoi has adequate factors to develop faster. EU businesses expect more cooperation with Hanoi, and with their strong expertise in technology, eco-friendly solutions, and financial capacity, EU investors are willing to invest more into Vietnam, especially in infrastructure, energy, water, and high-tech manufacturing, thus helping the country to join the EU-led global supply chain more deeply.

Hanoi will be a promising destination for EU businesses. Hanoi should also be able to receive high-tech projects such as research and development centres from large multinational groups, and thus not only preparing for land but also for high-quality workforce, infrastructure, and services.

By Bich Thuy

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