Investment News

Attracting foreign direct investment: End of 'nesting' time with incentives


Attracting foreign direct investment (FDI) in the coming time aims to focus on high technology and modern services. According to experts, with this goal, what Vietnam is preparing to welcome the "eagle" is not enough. FDI into Vietnam still lacks "eagles" from the US and Europe.

More than 2 years since the Free Trade Agreement (EVFTA) and the Investment Protection Agreement between Vietnam and the European Union (EVIPA) took effect, contrary to expectations, the picture of attracting FDI from Europe Europe has not changed much. Data from the European Statistical Office (Eurostat) and the General Statistics Office show that the proportion of investment in Vietnam by European Union enterprises only accounts for 2-5% of the total FDI capital that the EU allocates to Vietnam. Around the world.


Attracting FDI in the coming time aims to focus on the high-tech sector. Illustration: Nhu Y

Dr. Phan Huu Thang, former director of the Foreign Investment Department, Ministry of Planning and Investment (MPI), said the number of advanced and modern technology projects, source technology from European countries and the US. .. very low (only about 5%). FDI projects in Vietnam are currently mainly medium technology, of which a large proportion originates from China; Outdated technology accounts for 15%. “There are few large-scale projects, so far there are only about 26 billion USD FDI projects. This amount accounts for nearly 70% of the total investment capital, the rest are small and micro projects, "said Mr. Thang.

According to Mr. Thang, attracting FDI is facing a very difficult problem, how to bring in a lot of capital, but ensuring the goal of having a large, high-tech project, creating a spillover effect, not to mention meeting the criteria. technology can be transferred. Recently, the Planning and Investment has proposed a set of criteria to evaluate the effectiveness of foreign investment including 36 criteria; including 25 economic indicators, 7 social indicators and 4 environmental indicators.

Mr. Thang said that having this set of criteria is necessary, creating a filter to eliminate investors who carry great risks in terms of national security and society. Despite having a clear set of criteria for attracting FDI, Vietnam's preparation is still not enough to welcome the "eagle".

“We want to direct FDI into the high-tech sector, but we don't prepare 'food' for them. As with the electronics industry, investors need a convenient location, accompanied by a logistics system, transshipment, and high-quality labor. We are still quite confused when most of the large-scale projects in the past time have come to Vietnam by themselves. Most large-scale projects are not on the national list of projects calling for FDI", Thang analyzed and said that the preparation for implementation should be paid attention and made more effective. “If businesses invest in projects, what incentives do localities have, what infrastructure and policies need to be prepared, 3 months to be able to license. Currently, large projects take 6-7 years to license. The time is too long," said Mr. Thang.

Offer has no weight

Dr. Le Dang Doanh, former director of the Central Institute for Economic Management, said that in the coming time, in attracting FDI, priority and preferential policies will no longer be a strength. New generation FDI into Vietnam needs a transparent institutional environment, developed infrastructure, and high-quality labor. According to Mr. Doanh, the improvement of the investment environment cannot rely on local efforts like the way of competition recently, launching tax and land incentives. To improve, it is necessary to cooperate between ministries and agencies.

With the Politburo's Resolution 50 and the Government's action plan, clear objectives and tasks, Mr. Doanh said, the monitoring and implementation stage should be stepped up. “At the action program, who does what, who is responsible, investors, people need to be monitored, by publicizing information online, applying digitization. As in public investment, it is possible to increase the responsibility of the head", Mr. Doanh emphasized.

Along with that, the problem of how Vietnamese enterprises can take advantage and participate in the supply chain through FDI is also something that experts and businesses wonder about. Ngo Huu Hoang, General Director of Giza Vietnam, expressed his wish that the Government and ministries would listen and pay attention to policies, organization of promotion and cooperation activities between the FDI and domestic sectors. . “There are many investment promotion forums organized, but many are not substantial. In fact, many auxiliary manufacturing enterprises are not eligible to join the supply chains of large corporations. In order to develop supporting industries, management agencies need to plan capable manufacturers and create linkages, "said Mr. Hoang.

The foreign investment cooperation strategy for the period 2021-2030, developed by the Ministry of Planning and Investment, specifically aims to increase the proportion of registered investment capital of some countries in the total FDI capital of the country to more than 70% in the period of 2021-2030. period 2021 - 2025 and 75% in the period 2026 - 2030, including: Korea, Japan, Singapore, China, Taiwan (China), Malaysia, Thailand, India, Indonesia, Philippines; France, Germany, Italy, Spain, Russian Federation, Great Britain; USA.