Foreign investors trust Vietnam business environment

06:00 | 27/07/2020 Economy

(VEN) - Its success in controlling the spread of the Covid-19 pandemic is making Vietnam an attractive investment destination.

foreign investors trust vietnam business environment
Japanese investors continue expanding operations in Vietnam

Deputy Minister of Planning and Investment Vu Dai Thang said that while global foreign direct investment (FDI) flows might decrease by 40 percent this year due to the impact of Covid-19, Vietnam achieved satisfactory FDI attraction results in the first half of the year. Total capital registered by foreign investors in the first six months of 2020 reached US$15.67 billion, equivalent to 84.9 percent of that in the same period last year. The decline was attributed mostly to a 56.8 percent decrease in M&A (merger and acquisition) deals. Total capital of newly registered projects and increases in the capital of ongoing projects reached US$8.43 billion and US$3.72 billion, respectively, up 13.8 percent and 26.8 percent.

“These positive results reflect foreign investors’ trust in the Vietnamese business environment,” Deputy Minister Thang said.

Vietnam has become the destination of more than 32,000 FDI projects with total registered capital of US$378 billion from 136 countries and territories.

According to Envoy Okabe Daisuke from the Japanese Embassy in Vietnam, while other countries are still suffering from the Covid-19 pandemic, the Vietnamese economy has shown its quick recovery. Vietnam has also become the first nation to take advantage of diversifying supply chains. Global investors are interested in Vietnam as a post-pandemic investment destination.

Although considered a safe investment destination, Okabe Daisuke believes Vietnam needs to rebuild and adapt its economy to a “new normal”. In his opinion, travel between Vietnam and Japan should be resumed, and public investment projects should be accelerated. “No economic policy can yield better results than accelerating existing public investment projects. This can be said to be the Vietnamese version of a new economic policy,” Okabe Daisuke said.

Construction of Ho Chi Minh City’s Urban Railway Line No. 1 and of the Ben Luc-Long Thanh Expressway is underway, while preparations are being accelerated for construction of Hanoi’s Urban Railway - Line No. 1 to begin in the near future. These projects will contribute to stimulating the Vietnamese economy. To attract FDI, Vietnam needs to offer sound preferences and ensure equality and transparency.

Vietnam has amended a number of laws, such as the Law on Investment, Law on Enterprises, and Law on Public-Private Partnership, creating a favorable and transparent legal framework for foreign investors. Vietnam is also preparing resources such as land, labor and energy to attract major high technology FDI projects.

The results of a February 2020 survey by the Japan External Trade Organization (JETRO) on the actual state of Japanese firms investing in Asia and Oceania show that 63.9 percent of Japanese companies in Vietnam want to expand operations - the highest percentage among ASEAN countries.

Tue Minh