Vinh Phuc improves foreign investment appeal despite pandemic

The total foreign capital inflows to Vinh Phuc reached more than $1 billion in 2021

According to Vinh Phuc Department of Planning and Investment, the province was attracted about 50 new foreign investment projects with a total newly-registered and adjusted capital reaching more than $1 billion in 2021, equaling 253 per cent of the annual target and up nearly 50 per cent on-year. Of this, 35 newly-licensed FDI projects had a total registered capital of $880 million while the adjusted capital amounted to $135 million.

The soaring foreign investment inflows were triggered by the provincial authorities’ efforts to build up enterprises’ trust in the province’s open and transparent investment and business climate. The synchronous implementation of solutions on holding direct dialogues and accompanying investors and businesses to promptly ease their difficulties, has not only made local companies feel more assured in their production and business but also yielded positive spillover effects to foreign investors.

Vinh Phuc was selected by Thai-Japanese joint venture Kraft Vina to expand its operations in Vietnam. The successful attraction of the $611 million project invested by a joint venture where Kraft Vina holds more than 60 per cent into Binh Xuyen Industrial Park, has brought Vinh Phuc to the list of top 3 localities leading the country in attracting new foreign direct investment (FDI) projects in processing and manufacturing in 2021.

In addition to Kraft Vina, King Duan Vietnam decided to launch a new factory worth $510.8 million in Vinh Phuc while Key Technology Hanoi increased investment by $37.96 million in its current project in the province.

Nguyen Van Do, director of the provincial Department of Planning and Investment attributed the increasing FDI inflows amid the COVID-19 pandemic to efforts to provide continuous and timely support to businesses and investors.

“Vinh Phuc has set up a team to assist the Chairman of the Provincial People’s Committee to remove difficulties and obstacles facing businesses. The province also set forth a new investment process that cut the needed to handle administrative procedures by about 20 per cent and introduced online administrative procedures to aid foreign-invested enterprises that could not the province for a fact-finding tour but still wanted to go ahead with investment procedures amid the epidemic,” he said.

Besides, the province maintained a weekly dialogue between top leaders and businesses to promptly remove difficulties and obstacles, as well as listen to their opinions and suggestions on key mechanisms to improve the local investment environment.

The provincial authorities’ close companionship was lauded by companies as local agencies spared no efforts to solve labour issues during the pandemic when a string of businesses had to temporarily downsize personnel, give workers unpaid leave, extend unpaid leave, reduce production and business, or suspend operations.

In the face of labour issues, the provincial People's Committee urged the implementation of support measures to ease difficulties for businesses, create favourable conditions for foreign experts and managers as well as labourers to work online. Measures were also introduced to provide dormitory accommodation for labourers and negotiate with local hotels to reduce rent for experts and labourers working in the province. At the same time, local employment service centres and vocational education institutions made more attempts to encourage and support labourers to return to work.

High-tech FDI attractions targeted

For many years, investors have been finding Vinh Phuc an attractive destination with an open and transparent investment climate. As a result, the province has been luring in steady foreign investment flows as foreign investors have expanded their investment and drew more satellite projects.

In its long-term strategy, Vinh Phuc emphasises the attraction and use of foreign capital in accordance with the province's overall socioeconomic development plan by 2030.

By 2025, Vinh Phuc strives to become an industrial production, service, and tourism hub for the northern region and the whole country while maximising its potential advantages and mobilising all resources for local development, especially eco-friendly and high-tech projects.

To improve the efficiency of FDI attraction, Vinh Phuc will perfect its selective investment attraction policy; upgrade infrastructure and services to draw additional investment inflows; reform administrative procedures; improve the provincial competitiveness index (PCI) and its national ranking; and build a more favourable business and investment environment.

Regarding its selective investment attraction policy, Vinh Phuc will compile a list of priority projects in line with the socioeconomic development orientations set for each year and period. It will also roll out a blacklist for potentially risky projects with out-of-date technologies and environmental pollution and those likely to affect national defence and security.

Furthermore, the northern province will review and adjust industrial parks (IPs) and clusters, establishing new ones to specifically support industry products. It will also study and create a pilot IP model for high-tech manufacturing and agriculture.

According to the provincial People's Committee, Vinh Phuc’s planned industrial land area is a total 2,041 hectares. The total industrial land leased and registered for rent to date amounts to 893ha while the occupancy rate of local IPs has reached 50.72 per cent. Notably, Vinh Phuc now has more than 500ha of clean industrial land ready for handover to investors. In the context of the increasing demand for industrial real estate, this large land fund puts Vinh Phuc in a good position to seize opportunities from the wave of foreign investors shifting factories and expanding production to Vietnam.

Meanwhile, with the aim of creating a more favourable business and investment environment, Vinh Phuc is determined to pursue the implementation of “three good practices”, including good regulations, good technical infrastructure, and good business services.

Le Duy Thanh, chairman of Vinh Phuc provincial People’s Committee underlined that the province would make more efforts to enhance administrative reforms, better the local investment and business environment, and ease difficulties and obstacles for businesses and investors.

He also affirmed that if businesses and investors meet any difficulties during their operations in Vinh Phuc, they can discuss them directly with the province’s officials and heads of competent agencies to promptly solve them.

“We are also determined to set standards for local authorities and civil servants to handle the requests and proposals of businesses to build service-oriented governance and a friendly administrative environment,” added chairman.