Many localities have already exceeded their targets in foreign investment capital for the whole year, thanks to large projects being registered and administrative improvements being made.
|Provinces like Nghe An are home to several major electronic equipment manufacturers, photo Le Toan |
According to Bac Giang Department of Planning and Investment, in the first eight months of this year, the northern province lured $1.62 billion in foreign direct investment (FDI), overcoming the figure of $1.3 billion expected for the whole year. The province licensed 59 newly registered projects worth $1.26 billion, a 4.7-fold increase compared to the same period in 2022.
The momentum for this soaring increase is the large-scale projects invested by Foxconn. These projects combine the $270-million Fukang technology factory by Foxconn Singapore and the $621-million Fulian precision technology factory invested in by Ingrasys Singapore Pte.
The Management Board of Dong Nam Nghe An Economic Zone released information that Nghe An province in the central region is preparing to license two foreign-invested projects with the total registered capital of $153 million, which will contribute to taking the province to the $1 billion mark for the year, doubling the initial target. Between January and August, the province was reported to hit $890 million in FDI.
According to the Foreign Investment Agency under the Ministry of Planning and Investment, in the first eight months, Hanoi ranked first in attracting FDI with a total registered capital volume of $2.34 billion, accounting for 12.9 per cent of the capital inflow in the country, up nearly threefold on year.
The runners-up were Haiphong with $2.08 billion, up 72 per cent on-year, followed by Ho Chi Minh City, and Bac Giang and Binh Duong provinces.
Such growth contributed to investment capital inflows to the country increasing again. Vietnam pulled in close to $18.15 billion in FDI from the beginning of this year to August 20, up 8.2 per cent.
In this period, there were just over 1,920 newly registered projects with a combined capital of $8.87 billion, up 69.5 per cent and 38.6 per cent compared to the same period last year, respectively.
Improvement in administrative procedures was the key to growth for many of these localities.
Mai Son, Deputy Chairman of Bac Giang People’s Committee said, “When foreign investors have the intention to come here, the province immediately establishes task forces to take care of them. These groups, which are led by leaders of various departments and relevant authorities, will be responsible for supporting them to complete administrative procedures and resolve difficulties on time.”
Meanwhile, in early August, Chairman of Nghe An People’s Committee Nguyen Duc Trung signed a document to strengthen responsibilities and improve the efficiency of administrative procedures in the province.
Trung assigned local management agencies to simplify at least 20 per cent of internal administrative procedures and cut down at least 20 per cent of compliance costs for internal procedures before October.
Improving custom procedures is also receiving the attention of the province to reinforce foreign investors’ trust because Nghe An is currently home to a growing number of large investors in electronic equipment production and exports, such as Goertek with $500 million, Ju Teng with $200 million, and Everwin with $200 million.
Director of Nghe An Customs Department Chu Quang Hai said, “Motivated by the plan of digital transformation of the customs sector by 2025, Nghe An’s customs will provide solutions and change operational processes by applying IT software for maximum efficiency. The department would also improve the efficiency and quality of customs control as well as support businesses, reduce costs and time, boosting business and export production.”
Tran Van Mi - Deputy Chairman Binh Phuoc People’s Committee
So far this year, Binh Phuoc has become one of Vietnam’s top 10 foreign-invested recipients for the first time, marking a more than 12-fold increase on-year and representing 200 per cent of the annual target.
These achievements come for many reasons. The province directed the implementation of the “two quick actions, three good actions” motto, which were quick site clearance and quick investment procedures, alongside good policy, good infrastructure, and good sentiment.
We organise four business trips per year to call investors. Before organising the investment promotion programmes, we study carefully the potential investor profiles and their demands. After the trips, we regularly keep in contact with them to continue to introduce the investment environment advantages and incentive policies, and welcome them to arrive in the province to do field studies. This interaction between the two parties is important to help investors make a final decision.
However, the province has yet to unlock the potential to draw in foreign investment capital due to bottlenecks in regional links and transport infrastructure. Thus, the province, together with the surrounding localities, is trying to develop two expressways: the $1.09 billion Gia Nghia-Chon Thanh section of the western part of the North-South Expressway, and the highway connecting Ho Chi Minh City, Binh Duong, and Binh Phuoc. We expect to double the coming capital once the regional links are smooth.
Kurihara Kiyokazu - General director Sumidenso Vietnam Co., Ltd.
Sumidenso Vietnam was established in 2004 in Hai Duong and continuously expanded production scale to the fourth facility in the province.
The factor making the company have a strong attachment with this locality for the past 20 years is the potential and the convenient investment environment.
During our operation, local government leaders have always created good conditions for enterprises to invest here. Annually, business dialogues are organised to share and to tackle difficulties for enterprises.
For example, for quick investment procedures, a one-stop system is applied to generate requests from multiple agencies, to help us solve issues smoothly and promptly create advantages for enterprises. In addition, specialised management agencies such as the Department of Labour, the management board of industrial zone, and others always follow up with enterprises, as well as guide on and remove obstacles.
Marko Walde - Chief representative for Vietnam, Myanmar, Cambodia, and Laos Delegation of German Industry and Commerce
The investment situation from Germany to Vietnam in the first eight months of 2023 has demonstrated positive momentum and increasing confidence among German businesses. Despite the challenges and risks, the Vietnamese market remains attractive, and German companies are keen on expanding their presence and operations in the country.
German businesses are expressing high expectations for the prospects of business development and strong commitment when investing in Vietnam. In July, Ziehl-Abegg, a German company specialised in electric motors, air conditioning equipment, and fans, announced its plan to launch a factory for products related to air ducts in Vietnam with an capital about $20 million.
This marks a significant step towards expanding its global presence and committing to sustainable development by using natural resources responsibly.
In the financial and banking sector, Deutsche Bank revealed its plan to invest an additional $100 million into its branch in Ho Chi Minh City in May. Furthermore, STADA Vietnam, a leading manufacturer of high-quality pharmaceuticals, also established its new office in Ho Chi Minh City in August.
This milestone underscores STADA Vietnam’s dedication to enhancing healthcare in Vietnam and its substantial long-term investment in the region.
The company also aims to export top-notch Vietnamese-made products, certified with prestigious EU-GMP standards, to the global market, thus contributing to the growth of the Vietnamese pharmaceutical industry.
This is also a living proof to the expectations of German investors in the development of Vietnamese market as well as their commitment to creating a green and sustainable economic environment.
Nguyen Thi Hong Chuyen - Deputy general director Capella Land JSC
We currently have industrial zones in Bac Giang, Ha Nam, and Bac Ninh provinces, and are completing the procedures for others in Quang Nam and Quang Binh provinces. We see that transport infrastructure development and local authorities’ support are two key factors for investors to make their investment decisions.
For example, in Quang Binh, we are impressed with the progress of this locality. We have received support since we started to study the project, including from the leaders of provinces, districts, communes, and the management board of the economic zone.
All information about the planning of industrial areas is public and transparent, which is useful for us in evaluating investment efficiency. One of the complicated aspects of the work is procedures to change the use of forest land to industrial land, which is approved by the Ministry of Agriculture and Rural Development. At this stage, we still receive support and close collaboration from the local authorities.
Every year, we are invited to participate in meetings between provincial leaders, investors and businesses to discuss difficulties and proposals to accelerate projects.
Thanks to the support, Cam Lien zone is seeking approval on investment planning and changing the forest land use purpose. These are the final procedures for us before starting construction. Under the plan, the construction will be deployed within five years, and we will implement investment promotion at the same time. In addition, the company will also develop an urban-service area for Cam Lien Economic Zone worth $70 million to create synchronised infrastructure for the zone.
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