Vietnam seeks to attract half the world’s 500 largest firms

By

Thanh Khe

Sat, June 4, 2022 | 2:06 pm GTM+7

VSIP Quang Ngai industrial park in Quang Ngai province, central Vietnam. Photo courtesy of the company.

The government has approved the Foreign Investment Cooperation Strategy for the period of 2021-2030, with plans to boost the Fortune Global 500 largest corporations’ representation in Vietnam by 50%.

The strategy, signed by Deputy Prime Minister Pham Binh Minh, aims to raise the ratio of capital from certain countries and territories to over 70% of the country’s total foreign investment in the years 2021-2025, and 75% over the 2026-2030 period.

The key investors include Asian economies South Korea, Japan, Singapore, mainland China, Taiwan, Malaysia, Thailand, India, Indonesia, and the Philippines; European countries France, Germany, Italy, Spain, Russia, and the UK; and the U.S.

It also seeks to make Vietnam one of the top three ASEAN nations and top 60 countries in the World Bank’s Doing Business rankings by 2030.

The strategy proposes nine solutions to improve the efficiency of foreign investment cooperation. Some include improving the economy’s competitiveness; developing the ecosystem of science, technology, and innovation; as well as enhancing competition in attracting foreign investment.

Other solutions are developing the supporting industry to bolster synergies and spillover effects; increasing the efficiency of international economic integration and strengthening Vietnam’s position on the global arena; modernizing and diversifying investment promotion, and improving the efficacy of state management on foreign investment.

The strategy also proposes beefing up modern, new and high technologies in line with the Industrial Revolution 4.0, and aiding domestic firms in partnering with foreign companies via capital contribution or stake acquisitions in the new, high technology field in a bid to own and master these technologies in future.

Vietnam’s post-pandemic economy received $7.7 billion from foreign direct investment (FDI) disbursement in the first five months of the year, up by 7.8% year-on-year.

In the period, FDI capital for additional registers and stock purchases soared 45.4% and 51.6% year-on-year to $5.61 billion and $1.98 billion, respectively, but newly registered inflows shrank 53.4% to $4.12 billion, according to the Foreign Investment Agency.

Processing and manufacturing topped in attracting FDI with $6.8 billion, or 58.2% of the total. Real estate came second with almost $3 billion, accounting for 25.6%.