|Hanwha Techwin at HHTP is the first facility in Vietnam to produce aircraft engines
Recently, Saigon High-tech Park (SHTP) has been busy supporting new investors to complete necessary procedures for investment certificates to locate in the park, heralding more opportunities ahead.
Located in Ho Chi Minh City, SHTP, the most successful attractor of international investment among the country’s three national high-tech parks, wrapped up 2018 with more action from foreign investors. The park is estimated to lure in $150 million worth of foreign direct investment (FDI) during the year.
“Seeing growing interest among overseas investors, we set a target of $600 million FDI for 2018. However, we also missed a lot of chances because of limited land funds. We are expanding the park by another 200 hectares to pick up the trend,” Le Bich Loan, deputy director of the SHTP Management Board, told VIR.
In Vietnam’s northern region, big improvements were reported at Hoa Lac Hi-tech Park (HHTP), with its plan to license more new projects in the coming months.
Last year, HHTP attracted 11 projects worth VND17 trillion ($739.1 million), a record high over the past 20 years. Outstanding names including Nidec, Mitsubishi and Hanwha Techwin.
With the government’s never-before-seen special incentives on corporate income tax (CIT), land rents and others, HHTP strongly believed that it is likely to increase FDI to around $1 billion this year.
Like SHTP and HHTP, 2018 marked an important year for Danang High-tech Park (DHTP), located in the central city of Danang. It is estimated to have licensed seven projects worth over $204 million in total, thus significantly contributing to increasing the park’s accumulated total investment to $390 million so far.
DHTP aims to further increase the figure this year by strengthening promotional programmes, completing infrastructure and policies, especially land rents to win the confidence of investors.
“This year, we will focus on large-scale projects with high-tech advancements. We will prioritise investment attraction from multi-national corporations (MNCs) from Japan, South Korea, the US, Taiwan, the EU, Singapore, and member countries of the Asia-Pacific Economic Cooperation (APEC) to tap into their advanced technology and strong financial capacity,” said a DHTP representative.
The positive results of the parks prove how attractive the high-tech sector is. According to the Ministry of Planning and Investment (MPI), FDI in science and technology was one of the highlights in the country’s FDI picture last year, reflecting an obvious trend among tech firms, driven by growing market demands and the country’s supportive policies.
As shown in MPI statistics, sci-tech gained the fourth-most attention among foreign investors in 2018, an improvement from the ranking of seventh in 2017. In particular, foreign-invested enterprises (FIEs) financed a total of $2.15 billion in 386 new sci-tech projects in the year, just behind processing and manufacturing, realty and retail. Of the sum, $183.37 million is newly-registered capital and $144.05 million is added capital.
Looking forward, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) already taking effect, and the EU-Vietnam Free Trade Agreement (EVFTA) set to go live this year, industry insiders forecast that Vietnam is expected to see a new wave of foreign investment in advanced technology ahead of Industry 4.0 when technology firms from Japan, the US, South Korea, France and the EU are making business and investment plans in Vietnam on the back of their countries’ new policies to the south. Thus far, the US announced the US-ASEAN Smart Cities Partnership, President Moon Jae-in announced the New Southern Policy, and Japan piloted the Nurturing New Industries scheme within the ASEAN.
Last week, e-commerce giant Amazon Global Selling entered the Vietnamese marketplace by announcing co-operation with the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency.
Amazon is one of several American tech giants seizing the immense market opportunities that the ASEAN and Vietnam offer. The company’s move is in line with the US government’s US-ASEAN Smart Cities Partnership, and proves that Vietnam is an attractive destination for both high-tech manufacturing and trade activities, driven by on-year growth in exports. Now, high-tech parks in Vietnam are becoming a magnet for foreign investors.
Bastien Faugeroux, head of Tech and Services at France’s trade promotion agency Business France Vietnam, said, “Vietnam’s high-tech is quite promising for French companies in particular. There are around 300 French companies in the country now. I think that more high-tech French companies will expand operations here this year.”