Vietnam expects stronger FDI inflows with large-scale projects

Production at Foster Electric Bac Ninh Co., Ltd at VSIP Bac Ninh.(Photo: baodautu.vn)

Hanoi – Foreign direct investment (FDI) inflows into Vietnam have gradually recovered with many large-scale investment projects following the COVID-19 pandemic as well as political and economic uncertainties in the world.

Several days ago, the south-central province of Binh Thuan granted an investment licence to a series of gas and electricity projects using liquefied natural gas (LNG), enabling the implementation of four large-scale projects invested by Vietnamese and foreign businesses.

Accordingly, Son My electricity centre project, including Son My 1 and Son My 2 power plants, will have a total investment of 4 billion USD, while Son My LNG Terminal project will be implemented at a cost of nearly 1.34 billion USD.

Meanwhile, Secretary of the Party Committee of Bac Ninh Nguyen Anh Tuan has had a working session with Chen Tao, Chairman of China’s Victory Giant Technology Group - a producer of electronic components and semiconductors - on the firm’s plan to construct a factory in the northern province.

According to Chen, his company has chosen Vietnam-Singapore Industrial Park (VSIP) Bac Ninh as the location for its 400-million-USD factory, which is designed to produce about 1 billion USD worth of products each year.

After a project valuing more than 1.6 billion USD of Amkor Group that is scheduled to be put into operation later this year, Bac Ninh is welcoming another large-scale project in the field of semiconductors.

Other localities across the country are also working hard to call for FDI. The central province of Nghe An has recently granted an investment licence to Innovation Precision Vietnam Ltd. of China to implement a 165-million-USD project on aluminum alloys for consumer electronics manufacturing and green energy, which will become operational in November 2024.

Presenting a report in the Government's recent meeting, Minister of Planning and Investment Nguyen Chi Dung said that FDI inflows into Vietnam have gradually recovered.

He noted that in July, Vietnam received over 2.8 billion USD of FDI, a rise of nearly 9% year on year, raising the total amount in the first seven months of this year to 16.24 billion USD, up 4.5%. Of the total, 11.58 billion USD had been disbursed, a rise of 0.8% over the same period last year.

Director of the Foreign Investment Agency under the Ministry of Planning and Investment Do Nhat Hoang said that the situation will be even better in the time to come.

A report released by HSBC in mid-July showed that FDI has still been poured into Asia, including Vietnam. The majority of investment projects are in the fields of manufacturing, it said.

However, EuroCham's Business Climate Index (BCI) for Vietnam in the second quarter of this year pointed to challenges that European investors in Vietnam are facing, including those from infrastructure system and administrative procedures. It said that investors are also worried about the implementation of the global minimum tax rate.

It also underlined that the transition of production activities from China to Vietnam is slowing down, requiring the country to make timely response.

Minister Dung said that Vietnam will continue to complete mechanisms and policies to give non-tax support and incentives to foreign investors in the context of the global minimum tax rate application, thus creating competitive advantages to attract more large-scale projects using high technologies.