16:03 | 14/05/2015 Investment
(VEN) - International economic integration has offered huge opportunities for the Vietnamese garment and textile sector to attract investment capital. In an interview with Vietnam Economic News’ Cong Duy, Pho Noi B Textile and Garment Industrial Park Chairman of the Board of Directors Nguyen Hai Ha said that Vietnam needed to concretize advantages to attract more investment capital.
Vietnam is participating in negotiations of numerous free trade agreements. How do these agreements affect investment attraction in the Vietnamese garment and textile sector?
Through conferences and seminars with international investors, we see that ASEAN is an attractive destination in the eyes of the global garment and textile manufacturers.
Vietnam must compete with Indonesia, Myanmar, Cambodia and the Philippines in ASEAN. However, thanks to free trade agreements with the Republic of Korea, the European Union (EU), Chile and the Eurasia Economic Union as well as the Trans-Pacific Partnership (TPP) Agreement, Vietnam has had many advantages in attracting foreign direct investment (FDI) capital compared to other countries in the region.
We also focus on attracting domestic investment capital as integration will provide opportunities for domestic manufacturers to dominate the market. Domestic investors have understood the market and had long-term commitments to industrial zones.
How has the industrial park dealt with challenges in attracting investment capital?
The Pho Noi B Textile and Garment Industrial Park is dedicated to garment and textile businesses and relevant support industries. We have to concretize our advantages to attract more investment capital.
Handling environmental issues is critical for garment and textile manufacturers. Therefore, the industrial park has invested in the construction of a modern wastewater treatment center based on Dutch technology. A center is capable of handling all the waste posed by the garment and textile sector and support industries. And investors benefit by the construction of this wastewater treatment center.
Labor force is the key issue in attracting investment capital in the Vietnamese garment and textile sector. Therefore, we have strengthened links with vocational training centers to introduce and provide human resources with high garment and textile expertise for investors. Moreover, the industrial park is deploying the project on building houses for workers covering on a total area of 6.5ha.
In terms of legal procedures, we assist investors in working with the authorities of Hung Yen Province. Businesses have been granted investment certificates after 15 working days. Regarding to dyeing projects, thanks to cooperation with the industrial park, investors have received environmental impact assessments as soon as possible.
What is the biggest problem for foreign investors in the Vietnamese garment and textile sector?
Legal procedures are considered the main concern. Therefore, we have worked together with the tax authorities and state management agencies in the province to clarify tax incentives, especially value-added tax (VAT) for export processing businesses.
When garment and textile businesses export all their products abroad, VAT deduction faces difficulties, especially for land rents. The Vietnamese land policies distinguish two types of companies including FDI companies and domestic-invested companies. Therefore, land rents also vary in duration and stability.
According to the Ho Chi Minh City Export Processing and Industrial Zones Authority, the garment and textile sector ranked first in attracting FDI capital, accounting for 95.54 percent of total FDI capital in this city, meaning that international garment and textile investors are ready to make the most of opportunities from free trade agreements that are nearing the conclusion of negotiations.