Vietnam going for gold with Fortune Global 500 attraction

July 01, 2022 | 14:59
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Vietnam targets to attract at least half of the 500 largest global corporations as ranked by Fortune Magazine to offer a presence and operations in this country.
Major tech-based companies like Samsung and Intel already have a presence in Vietnam, but the country is seeking even more, Photo: Le Toan
Major tech-based companies like Samsung and Intel already have a presence in Vietnam, but the country is seeking even more, Photo: Le Toan

The Fortune Global 500 goal is a highlight of Vietnam’s strategy for foreign investment cooperation for the 2021-2030 period.

At a conference on strengthening Vietnam-Japan cooperation and development organised in the northern province of Vinh Phuc last week, Masuoka Hiroyoshi, general director of Thang Long Industrial Park Company, said that the group is continuing to survey locations to develop industrial zones, following Thang Long I and II industrial parks (IPs) in Hanoi and the northern province of Hung Yen and Thang Long IP in the northern province of Vinh Phuc.

Sumitomo Corporation is one of the groups listed on the Fortune Global 500, and has operated IPs for over 20 years in Vietnam.

“Since first entering Vietnam, the corporation has received support from the government, relevant authorities, and localities in completing administrative procedures and getting licensed and land clearance. Thus, all of our projects have been implemented on schedule,” he said. “We are impressed with Japan Desk Vinh Phuc, which always listens to our problems and supports us, as well as other Japanese enterprises.”

Vinh Phuc has been a particular destination for many groups in the Fortune Global 500, such as Sumitomo and Honda.

Intel Corporation, another Fortune Global 500 group, is making new moves. Earlier in June, CEO Patrick Gelsinger worked with the Ministry of Planning and Investment, likely related to the American group’s next phase of investment in Vietnam. The previous month, Keyvan Esfarjani, Intel executive vice president and global COO, met with Prime Minister Pham Minh Chinh in the framework of his business trip to the United States.

At the meeting with the prime minister, Esfarjani said that during 15 years of operation in Vietnam, the corporation has received strong support from the government and the country boasts an industrious and creative workforce.

Therefore, Intel has decided to scale up its investment multiple times over, he added, perceiving that Vietnam is an attractive destination for investors thanks to its dynamic economy, high potential, and numerous cooperation prospects in areas Intel is strong in, such as manufacturing and research and development.

Intel Products Vietnam (IPV) is the largest assembly and test factory in the Intel manufacturing network. With more than 2,800 employees and a total investment of $1.5 billion, it is the largest US high-tech investment in Vietnam. By the end of last year, IPV had shipped more than three billion units to Intel customers worldwide since operations began 15 years ago.

The number of corporations on the Fortune Global 500 list investing in Vietnam is currently modest. Among those already here include Samsung, Foxconn, Ford, Mitsubishi, Microsoft, Siemens, Nestlé, HSBC, LG, Coca-Cola, and Heineken.

“To improve the numbers, ensuring transparency and a safe investment environment is one of the key drivers for Vietnam to increase its attraction to the list. Global corporations, especially units from the US and Europe, pay attention to transparency in legal policies and professionalism,” said Dau Anh Tuan, head of Legal at the Vietnam Chamber of Commerce and Industry.

Big groups are also still concerned that problems relating to intellectual property rights have yet to be respected in Vietnam. “Piracy, counterfeit, and imitation goods are still common. Administrative procedures have been improved, but are still troublesome,” Tuan added. “These disadvantages are the main obstacles to attracting foreign-invested enterprises from the EU and the US.”

In early June, Deputy Prime Minister Pham Binh Minh signed Decision No.667/QD-TTg approving a strategy for foreign investment cooperation during 2021-2030.

The strategy targets to increase the share of registered foreign investment capital from countries including South Korea, Japan, Singapore, China, India, the United States, the United Kingdom, and several EU member states to more than 70 per cent of total foreign investment inflows to Vietnam by 2025 and 75 per cent by 2030.

By 2030, the government expects Vietnam to join ASEAN’s top three and the World Bank’s top 60 in business environment criteria.

The strategy proposes nine solutions to improve the efficiency of foreign investment cooperation, including effectively implementing solutions, improving the business environment, and developing an ecosystem for sci-tech and innovation.

Vu Kim Thanh - Deputy director Vinh Phuc Industrial Zones Management Authority

Vietnam going for gold with Fortune Global 500 attraction

The province implements investment promotion programmes in the direction of the government’s high-tech investment attraction policy. Vinh Phuc is selected as the production hub of big corporations such as Toyota, Honda, Sumitomo, and more, and the list will be continued thanks to the efforts of the province.

These companies highly appreciate the province’s investment environment, which is advantageous to luring other big groups because, before investing in Vietnam, these investors will consult the comments from the business community in the host country.

To lure the world’s leading groups, we should foster investment promotion programmes overseas during business trips of the state and the government leadership.

In the country, the cities and provinces need to provide land for industrial zones (IZs). In Vinh Phuc, foreign investors, such as Japan, can study investment opportunities in IZs in which the province is building infrastructure facilities, such as Son Loi, South Binh Xuyen, Song Lo 1 and 2, and Phuc Yen.

Besides this, the province has plans to add four IZs by 2030, combining over 477 hectares in Binh Xuyen and Yen Lac, 183ha in Lac Yen, 115ha in Dong Soc Yen Lac, and 259ha in Song Lo.

Mihara Daiki-General director Honda Vietnam Co., Ltd.

Vietnam going for gold with Fortune Global 500 attraction

The reason Honda wants to continue to expand its operations in Vietnam is the trust in the investment environment here. The provincial leadership often work with the company and listen to our difficulties. Authorised agencies are willing to guide and support the company to complete its mission in terms of tax and customs procedures. They always maintain social security so that we can assure stable operations.

The attention of the provincial leadership to the business community was shown by its efforts to support enterprises to overcome the pandemic. During the past two years, Honda has faced difficulties with maintaining production and business activities, as well as difficulties in logistics and supply chain management. With all these problems, the province was eager to offer vaccines and issued green channel transport permits to create favourable conditions for goods to be transported smoothly.

Local authorities submitted important opinions on Decree No.103/2021/ND-CP prescribing the rates of registration fees for motor vehicles, trailers, and the likes which are domestically manufactured or assembled. The decree regulated a reduction of 50 per cent of registration fees for domestically assembled cars for six months from December to May, which contributed to boosting people’s demand for automobiles and led to an increase in our sales.

By Nguyen Kim

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