According to experts and some international organizations, Vietnam is facing many opportunities to attract a new wave of investment from foreign enterprises, especially investment in economic zones and industrial zones.
Golden opportunity to attract new investment wave
According to economic experts, there are many important factors that create a golden opportunity to attract a new wave of investment from foreign enterprises in Vietnam such as political stability, Vietnam's economy is recovering quickly after the pandemic, achieving the highest growth rate in the region; macro balances were ensured, inflation was controlled.
After 2 years of being heavily affected by the Covid-19 pandemic, Vietnam's economy in the first 9 months of this year had a positive recovery. Data from the General Statistics Office shows that GDP in 9 months of 2022 increased by 8.83% over the same period last year, which is the highest increase of 9 months in the period 2011-2022; macroeconomic stability, FDI, and export activities continued to prosper.
Realized foreign direct investment in Vietnam in the first nine months of 2022 was estimated at $15.43 billion, up 16.3% over the same period last year. This is the highest amount of foreign direct investment capital realized in 9 months in the past 5 years. The processing and manufacturing industry reached $12.05 billion, accounting for 78.1% of the total realized foreign direct investment capital.
Along with that, the Government's implementation of the program on socio-economic recovery and development, improving the investment and business environment promises to increase the flow of domestic and foreign investment capital into industrial zones and economic zones. In addition, with the state's attention to investment in infrastructure development, especially the expressway system, and the participation of leading enterprises in infrastructure development investment and development, infrastructure conditions for industrial development for all 3 regions have been improved markedly.
In addition, new-generation free trade agreements such as CPTPP and EVFTA continue to act as a positive driving force for economic growth in general and Vietnam's international trade activities in particular in the post-pandemic period.
At the Vietnam Industrial Park Forum 2022, Deputy Minister of Planning and Investment Tran Quoc Phuong said that up to now, the system of industrial parks and economic zones nationwide has been present in 61/63 provinces and cities with 403 industrial parks, 18 coastal economic zones, and 26 border gate economic zones were established.
Industrial parks and economic zones have attracted more than 10,000 domestic projects and nearly 11,000 valid foreign direct investment (FDI) projects with a total registered investment capital of about $340 billion, respectively (in which, the total FDI investment capital is about $230 billion).
Vietnam has been preparing the necessary conditions to be ready to receive a new wave of investment transformation, becoming an important production "base" of the world. Investors from Asia, Europe, the United States, and ASEAN are continuing to promote investment in Vietnam, especially in industrial zones.
In recent years, on average, annual FDI capital in industrial parks and economic zones accounts for about 35-40% of the country's total increased registered FDI capital. If only in the field of processing and manufacturing, FDI capital in industrial parks and economic zones accounts for 70-80% of the total registered capital of the country.
At the same time, industrial parks and economic zones have really become key areas to attract investment capital and large projects at home and abroad. Currently, it is the destination of many leading corporations such as Samsung, Canon, LG, Sumitomo, and Foxconn, ...
Many domestic enterprises, which started out as investors in developing and trading in industrial park infrastructure, have developed into multi-industry and multi-field investment corporations, gradually reaching out to foreign markets and contributing to affirming the position of Vietnamese enterprises in the international arena such as Phu My 3, Viglacera, Truong Hai, Becamex, Sonadezi, Kinh Bac... These are remarkable contributions of industrial parks and economic zones in attracting investment and developing production and business.
The Foreign Investment Department (Ministry of Planning and Investment) assessed, FDI disbursement in the past 9 months still increased over the same period, reflecting the need to increase capital and expand the operation scale of existing projects, which continued to increase despite the impact of the epidemic. Many FDI enterprises are recovering and gradually expanding their projects, production, and business activities.
Vietnam continues to be evaluated by the foreign investment business community as an attractive investment destination with stable political advantages and gradually opening administrative procedures. Some large corporations have implemented the process of moving production supply chains to Vietnam such as Apple, Dell, Foxconn, Pegatron...
With the above favorable factors, international organizations and economic experts assess the opportunity to create a new wave of investment in economic zones and industrial zones in Vietnam as huge.
Remove barriers, open capital to attract investment
Although the opportunity to attract FDI into Vietnam's industrial zones is great, managers and economic experts estimate that there are still many barriers that need to be removed. Currently, there are 4 major barriers that can cause the capital flow to be "clogged": Firstly, administrative procedures are cumbersome and overlapping, and the implementation time is too long, increasing costs and time, reducing the efficiency of investment projects; Second, the ground clearance for newly established industrial parks still has many problems and lasts a long time; Third, issues of law enforcement, especially investment incentives, tax refund for export processing enterprises; Fourth, the problem of shortage of high-quality labor supply for industrial zones, housing problems, social welfare for workers working in industrial zones - economic zones.
The Ministry of Planning and Investment also said that, at present, the development of industrial parks and economic zones in width is facing difficulties because labor, land, and natural resources have reached the limit while labor productivity is limited, resource exploitation efficiency is not high; harmonization between economic development and requirements on environmental protection and social security has not been ensured. In particular, maintaining the competitive advantage of industrial parks and economic zones in the context of tax and land incentives tends to decrease gradually; association and cooperation in industrial production in industrial parks and economic zones of Vietnam are still limited...
Recently, the Ministry of Planning and Investment has advised the Government to issue Decree No. 35/2022/ND-CP regulating the management of industrial parks and economic zones. This Decree has added new types of industrial parks and economic zones abolished the procedures for establishing industrial zones to reduce administrative procedures and added and amended a number of regulations to improve the efficiency of use. land in the development of industrial zones, economic zones…
At the forum "Implementing Decree 35/2022/ND-CP on the management of industrial parks and economic zones", the Vietnam Federation of Trade and Industry (VCCI) said, Decree 35 is considered to be a breakthrough, practical, and omits cumbersome administrative procedures. Specifically, Decree 35/2022/ND-CP on the management of industrial zones and economic zones has many progressive amendments compared to Decree 82/2018/ND-CP such as Specific classification of types of industrial zone construction planning; Allowing cases where planning tasks are not required, such as Making planning of subdivisions for construction of industrial zones in areas with approved general construction planning or economic zone construction general planning, formulation of detailed construction plannings; to build an industrial zone in an area with an approved construction zoning plan…
In addition, the Decree promotes decentralization and decentralization for authorities at all levels and grassroots levels, approaching the "one-stop shop, on-site" mechanism; The management boards of industrial zones and economic zones are assigned specific tasks and authorized for each type, almost "one-stop" work but more specific than before.
According to economic experts, Decree 35/2022/ND-CP is expected to be a "magic wand", removing bottlenecks in mechanisms and policies in industrial park management creating a strong attraction in attracting investment, especially foreign investment, saving project implementation time and reducing costs for investors.
In addition, Vietnam also clearly defined the orientation and goal of attracting foreign investment by 2030. The Prime Minister has signed and promulgated Decision 667/QD-TTg approving the foreign investment cooperation strategy for the period of 2021-2030. Accordingly, the goal is to increase by 50% the number of multinational corporations in the group of 500 largest corporations in the world ranked by Fortune Magazine (USA) having a presence and operations in Vietnam; By 2030, Vietnam will be among the top three countries in ASEAN and the top 60 countries in the world according to the World Bank's business environment ranking.
The strategy also proposes specific solutions to improve the efficiency of foreign investment cooperation, notably the requirement to improve the business investment environment, improve the quality, efficiency, and competitiveness of the economy; innovate and enhance competition in attracting foreign investment (foreign investment); developing supporting industries, promoting linkage and spreading; promote internal capacity and take advantage of competitive advantages to improve the efficiency of foreign investment cooperation.
In addition to solutions to remove difficulties and open capital sources into economic zones and industrial zones of the Government, economic experts also proposed a number of solutions to enhance investment attraction in the new context, special emphasis is placed on the early completion of institutions and policies to attract foreign investment in a balanced and reasonable manner among regions and regions; developing supporting industries, promoting linkage and spreading; improve the quality of human resources; modernize and diversify investment promotion, improve the effectiveness and efficiency of state management of foreign investment...
Hopefully, the bottlenecks and obstacles in mechanisms and policies in the management of economic zones and industrial zones will be gradually removed; moving towards building an increasingly transparent and favorable environment for business and investment in industrial zones and economic zones; creating a strong attraction to attract domestic and foreign investors and a premise for the sustainable development of Vietnam's economic zones and industrial zones.
(Figures and Events Review)
Read more: List of companies/factories in Industrial parks in Bac Ninh province