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Many foreign manufacturers increased investment capital in export processing zones and industrial parks in Ho Chi Minh City. Photo: N.H

Maintaining leading position

It can be seen that the activity of attracting foreign investment of Ho Chi Minh City has maintained the leading position of the nation in recent years. Since 2017, Ho Chi Minh City officially holds the “throne” in the ranking of 30 years of attracting FDI of the country, with 7,494 projects issued withvalid investment certificates,total investment capital of US$44.5 billion,accounting for 13.9% of the country's total FDI. In 2018 and 2019,Ho Chi Minh City continued to maintain its leading position with total attracted FDI of US$7.39 billion in 2018(up 11.8% over the same period) and US$8.3 billion in 2019,an increase of 39.45% over the same period in 2018.

According to experts, it is thanks to the contribution of "billion-dollar" projects and large-scale production complex projects creating a "push" for growth and restructuring of the city.In addition, one of the strengths of HCMC in attracting investment compared to other localities is to create the first "model" in the country.

In particular, Tan Thuan Export Processing Zone is the first "model" that Ho Chi Minh City has created. This is also considered a milestone marking the success of FDI attraction in Ho Chi Minh City with the introduction of the first EPZs and IPs in the country. From the early days of its formation in 1991, Tan Thuan Export Processing Zone had attracted over 100 enterprises to invest here and is becoming a model export processing zone, the production and export value occupy a very high proportion.

EPZs and IPs have transformed over 3,500 hectares of alum, saline and low-yield agricultural land to become industrial areas with sufficient electricity and water, convenient roads, creating jobs for about 250,000 workers from provinces and cities nationwide.

From this wave, Ho Chi Minh City has also become the first locality in the country to welcome investment of "big companies" such as Intel, BP, Samsung, Toshiba, Mercedes, Isuzu and Nidec, and create a strong transformation in production and development.

Compared to the decline in FDI capital in the country's investment attraction activities (total newly registered capital, adjusted and contributed capital to purchase shares of foreign investors of the whole country in the first four months of 2020 reached US$12.33 billion, down 15.5% compared to the same period in 2019) due to the impact of Covid-19, the situation of attracting investment in EPZ-IPs in Ho Chi Minh City still maintains high growth.

Accordingto Mr. Tran Viet Ha, Head of Hepza's Investment Management Department, the reasonwas that many existing projects at EPZs and IPs continued to increase capital as planned. These were active investors in Vietnam. For example, Meizan CLV Co., Ltd (Singapore) had been operating in HiepPhuoc industrial zone since 2015.In January 2020, it registered to increase the investment capital to implement a new production project with a total investment capitalincreased from US$13.4 million to US$21.46 million.

Strongly improve investment environment

According to Tran Viet Ha, although the attraction of new FDI projects in the first months of 2020 had decreased compared to the same period (only six newly licensed projects in the first four months, the registered capital of US$5.48 million, decreasing by 74.25%) due to the impact of Covid-19, but FDI attraction activities in Ho Chi Minh City were also showing positive signs. Some countries such as Japan, the EU and the US tended to look for new investment locations to reduce risks and diversify investment markets, in which some countries like Japan were encouraging their enterprises to moveinvestment activities to Southeast Asian countries. Meanwhile,compared to other countries in the region, Vietnamhas beenhighly appreciated for the prevention of epidemics and if Vietnam could end the epidemic early, there would be more opportunities to attract foreign investment activities.

“Since the beginning of the year, some foreign investors have come to learn about renting large land areas in EPZs and IPs in the city to prepare ground for investment projects in the future. A number of large foreign-invested funds are also interested in this activity. In addition, some enterprises in high-tech zones also tend to invest in high-rise factories in EPZ-IPs to serve the activities of supporting industrial enterprises, these factors will have a positive impact on attracting investment in EPZs-IPsofHo Chi Minh City in the future,” Mr. Ha said.

With the commitment to ensuring the stability and consistency of the mechanisms and policies, the leaders of Ho Chi Minh City said that they would continue to strongly improve the investment and business environment.According to HCM City People's Committee Chairman Nguyen Thanh Phong, the investment inter-sectoral working group would meet as soon as there was an investment project in the city.

This is a special working group of Ho Chi Minh City which is chaired by the Chairman of People's Committee, which is responsible for supporting and handling all investment procedures for enterprises until the project is licensed to operate.Enterprises just need to submit documents and receive results at the working group.The working group set a goal of reducing at least 50% of the processing time compared to the regulations.The overall view of the cityis thatboth private enterprises and FDI enterprisesareequalbefore the law.

Ho Chi Minh Citycommits to solving all difficulties of enterprises and assigns the Department of Planning and Investment to be the focal point for implementation as well as acquiring, researching proposals, recommendations and feedbacks for each enterprise.

Regarding orientation of attracting FDI, Ho Chi Minh City prioritizes to attract investment of enterprises with creative innovation capacity and advanced management capacity; encourage investment in the development of production and business industries that create a direct motivation for growth, economic competitiveness such as high technology, scientific and technological intensive fields. Therefore,the city attractsand selects large-scale corporations and companies with high scientific and technological qualifications for investment. So thatsupportive industrial enterprises are created conditionsto participate in supplying these enterprises.

“In 2020, Ho Chi Minh City People's Committee also identifies that one of the important tasks is to focus on improving the quality of growth and competitiveness of the city's economy; quickly developingindustries, products and services with high scientific and technological content, and high added value,hi-tech agriculture and eco-agriculture. At the same time,continuing to strongly improve the business investment environment in the direction of increasingly favor and transparent;promptly solving the difficulties and problems of investors under the authority of the city,"saidthe leader of Ho Chi Minh City People's Committee.