FDI enterprises continue to plan to expand operations in Vietnam

FDI enterprises highly appreciate the investment environment in Vietnam. Illustration: H.Dịu

Over the past time, Vietnam's investment and business environment have improved a lot, helping to attract foreign investors. Talking to a reporter for Customs Magazine, Mr. Hyun Soo Jun, General Director of Sangwoo Vietnam Co., Ltd. shared that in 2018, with the consent of the parent company in Korea, the Company's representative came to survey to establish a factory in VSIP Industrial Park (Nghe An). With support from the locality and the management of the industrial park, by 2019, Sangwoo Vietnam was licensed to operate and import machinery and equipment as a production base.

Mr. Hyun Soo Jun said that businesses currently receive many incentives regarding infrastructure, land, and tax policies. In particular, import-export activities and customs clearance procedures have received timely and quick support from Nghe An Customs Department, Vinh Customs Branch, so carrying out orders with international customers is very convenient.

In a recent conference between businesses and foreign investors with Prime Minister Pham Minh Chinh, Mr. Nakajima Takeo, Chief Representative of the Japan Trade Promotion Organization (JETRO) in Hanoi, said; Japan's foreign direct investment (FDI) inflows to the world will grow by only 3% in 2021 and have fallen to 49% in the first half of 2022, as the global economy is facing many challenges. However, among Japan's top investment partners, Vietnam has experienced impressive growth, over 59% in 2021 and more than 45% in 2022.

Similarly, US businesses in Vietnam are very optimistic about Vietnam's prospects for continued economic growth in 2022. Besides, these businesses assess Vietnam's investment policy are very competitive and can attract huge investments.

Therefore, many large enterprises have decided to invest and expand their investment in Vietnam. According to Ms. Adeline Angeline Josephine Chouraqui, General Director of CMA-CGM (a global company in port, air and logistics solutions), the Company sees many opportunities that can be exploited for growth in Vietnam. Therefore, the South will continue to have plans to develop infrastructure as well as new transportation routes. In addition, CMA-CGM partnered with a Vietnamese startup to help customers reuse containers and continue to work with international and Vietnamese companies to create a digital ecosystem and logistics in Vietnam.

Mr. Marukawa Yoichi, a Panasonic Vietnam Co., Ltd. representative, said that the economic recovery process in Vietnam has helped the Company realize the potential for development and business expansion in one of its Panasonic strategic markets. As a result, Panasonic has set its vision and commitment for the next fifty years in Vietnam and has become a company that provides comprehensive health solutions.

With that vision, Panasonic is expanding investment in projects such as establishing a production and research centre for IAQ devices (indoor air quality solutions) for the Asian market in Binh Duong province; establishing a centre for production and research and development of smart washing machines and refrigerators for the Asian market in Hung Yen and Hanoi provinces.

However, in many consultation meetings, FDI enterprises expressed their desire for a transparent and predictable business and investment environment, especially the streamlining of administrative procedures.

Representatives of the Bosch Group expect consistency in the business environment, as the policy is guided by many legal documents, which can lead to a lack of consistency and clarity in the implementation process. For example, the Law on Investment recognizes a Bosch production investment project as a "new investment", but the Law on Corporate Income Tax defines this as an "expansion investment" and applies less attractive tax incentives.

In addition, many businesses reflect on the time and cost of carrying out procedures for business establishment. The representative of the Singapore Business Association in Vietnam (SBG) suggested that it is necessary to add warehousing services and e-commerce support services to the list of business activities carried out in industrial zones industry to serve the development of logistics and e-commerce sectors, as well as the shift of production to Vietnam.

With the expectations and recommendations of FDI enterprises, Prime Minister Pham Minh Chinh has repeatedly affirmed that the Vietnamese Government welcomes and commits to continue creating the most favourable conditions for foreign enterprises to invest effectively and successfully in Vietnam with the spirit of "Overcoming challenges, seizing opportunities, cooperating for development".