(VOVworld) – Vietnam’s law on foreign investment will mark its 25 years of enforcement by the end of this year. It’s time to review Vietnam’s direct foreign investment attraction and outline measures to improve the environment. VOV’s reporter To Tuan has more….

FDI into Vietnam continues to fall: down 27.3% in first half of 2012 (Photo: amcharmvietnam.com)

In recent years, due to the global economic crisis impacts, foreign direct investment, FDI in Vietnam has declined. Over the past 10 months, Vietnam has attracted 10.5% of the FDI including both newly registered and expanded capital, a 25% reduction from last year. Beside external factors, the contraction is due to a drop in large-scale real estate and unrealistic projects. Vietnam has recently prioritized projects invested by multi-national groups with major financial and technological capacity from the US, EU, Japan, and the Republic of Korea instead of the un-environmentally friendly projects. Vietnam has successfully attracted groups that have been listed one of 500 world leading corporations. They are pouring money into 214 projects with registered capital of almost 12 billion USD, three fourths of which have been implemented. The capital accounts for 20% of Vietnam’s total FDI. Phan Huu Thang is an economist of the Ministry of Investment and Planning ‘Since the launching of Vietnam’s open door policy to attract FDI, it has targeted those projects having financial, technological, and market potential and capacity to help Vietnam access international capital sources and advanced technologies. This has been a consistent trend for 25 years.’

However, the number of such groups investing in Vietnam and large projects in technology transfer remain modest. Lawyer Phan Hong Bach recommended that Vietnam should continue to improve its investment environment, synchronize related policies, and create a more stable and transparent legal corridor for FDI investors ‘When making investment in a market, investors should complete all required legal procedures. This is a way to secure their capital in a synchronized legal system.’

To further tap FDI source, the Prime Minister has approved a plan to improve the efficiency of FDI management in Vietnam to encourage the FDI economic sector to develop synchronously. The investment attraction should be in line with regional and provincial planning while decentralization in investment administration should be enhanced. The plan underlines a new mechanism to resolve investors’ difficulties timely to attract more FDI projects.

To Tuan