Experts consider how Vietnam can attract greater investment from global firms

Vietnam must stay active in inviting multinational corporations and renowned companies to invest locally, especially those from countries with advantages in terms of technology, capital, and management skills, including the United States, the EU, and Japan, according to insiders.

The past five years has seen the foreign-invested sector make significant contributions to Vietnamese socio-economic development.

Furthermore, the country has always represented an attractive investment destination for foreign investors due to Vietnamese FDI attraction increasing from US$24.1 billion in 2015 to US$38 billion in 2019, with the figure being recorded at US$28.53 billion in 2020 despite the impact of the novel coronavirus (COVID-19) pandemic.

Do Nhat Hoang, director of the Foreign Investment Agency under the Ministry of Planning and Investment, attributes investment inflows into the country to a number of recently-signed free trade agreements (FTAs). This includes the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP).

The enforcement of these various FTAs has created a wealth of opportunities for large foreign corporations, especially those in hi-tech fields, to invest domestically as they can maximise the benefits and incentives from these FTAs, Hoang adds.

Furthermore, he underscores the importance of attracting technology projects relating to AI, blochain, fintech, and training high-quality human resources that can meet the requirements for Vietnamese socio-economic development.

Nguyen Hoa Cuong, deputy director of the Central Institute for Economic Management (CIEM), emphasises the need to effectively invest in innovation for businesses whilst helping small firms gain access to funding sources from banks.

He therefore stressed that although the country can be considered vulnerable to the spread of the COVID-19 pandemic, the international community has highlighted Vietnamese containment efforts and determination to improve the local business environment and turn the country into an ideal destination for investors.

Nakajima Takeo, chief representative of Japan External Trade Organization (JETRO) in Hanoi, says while other countries are still struggling with the impact of the COVID-19 pandemic, the Vietnamese economy has rapidly recovered, with Vietnam becoming the first nation to enjoy the various advantages of the diversification of the global supply chains.

Moreover, with keen interest from foreign investors, including Japanese investors, the country should strive to improve the local business climate to attract more high-tech investors whilst fine-tuning the legal system and supporting firms to overcome the adverse impact of the COVID-19 epidemic, the JETRO representative states. 

According to Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign Investment Enterprises, it is essential to promote technology transfer and corporate governance for Vietnamese enterprises, while also being proactive in inviting multinational corporations and companies with popular brands to invest in the country.

Economic experts have therefore stated that it is necessary to complete the legal framework regarding anti-transfer pricing, revise regulations on tax management, whilst also increasing fines and penalties for acts of transfer pricing to ensure the strictness of law. This should be done alongside building and perfecting the database system and national information on FDI projects and enterprises.

Source: VOV