(VOVworld) – Vietnam is renewing its policies to attract more Foreign Direct Investment (FDI) as part of the effort to reform its economy. The renewal is underway in a coordinated way at both the central and the grassroots level.
The focus in FDI attraction has shifted from the amount to the quality, investment areas, and the ability to disburse FDI sources.
Attracting quality FDI projects
Deputy Minister of Planning and Investment Nguyen Van Trung said that Vietnam is selecting FDI projects suitable to each period of development. Vietnam now prioritizes environment-friendly, high-tech, and energy-and resource-efficient projects. At the same time, Vietnam is focusing on major projects, widespread enough to attract other investment projects. Vietnam encourages joint ventures between foreign and domestic companies in a number of specific areas. Nguyen Van Toan, Vice President of the Vietnam Association of Foreign-invested Enterprises, said: “Most Vietnamese enterprises provide simple accessories and materials. According to our survey, foreign-invested enterprises really want support industries in Vietnam because they will help them reduce costs. State management agencies should work out preferential policies and state-owned enterprises should take part in this process.”
Coordinated implementation from central to grassroots levels
At the end of 2013, the Vietnamese government issued a resolution on orientations to improve the attraction, use, and management of FDI in the coming years. The Ministry of Planning and Investment has put in place a number of measures to fine-tune the legal framework for FDI including revising the Enterprise Law and reviewing decentralization in FDI attraction and management, as well as investment promotion activities. Deputy Minister Trung said that Vietnam is mobilizing all available resources to attract major projects: “Administrative procedures have been simplified for investors. The National Assembly has approved the Law on Corporate Income Tax to encourage investment projects. State priority has been expanded from investment in economic zones to industrial parks, high-tech, environment-friendly, and energy-and land-efficient projects.”
Localities nationwide have changed their ways of attracting FDI. Ha Nam authorities have vowed not to allow frequent power shortages and any business with doubts can directly contact the chair of the Provincial People’s Committee. Ha Nam has reserved land for enterprises to build houses for their workers and trimmed administrative procedures in investment licensing. Binh Duong, Vietnam’s leading province in FDI attraction in the first quarter of 2014, is encouraging investment in high-tech industries such as electricity, electronics, and precision engineering. Mai Hung Dung, Director of the provincial Department of Planning and Investment, said: “Limiting investment outside industrial parks has affected investors who harm the environment and use many workers. But we encourage investors outside industrial parks who use clean technology, particularly in northern districts, while in the south we prioritize services. Most investors are satisfied with our policies.”
Vietnam attracted more than 20 billion USD in FDI in 2013. With a change in attraction policy, FDI projects are expected to further contribute to Vietnam’s economic development this year.