HCMC remains top draw for foreign investors

15:36 | 16/10/2018 Economy

(VEN) - In the first eight months of 2018, Ho Chi Minh City (HCMC) attracted US$5.18 billion of foreign direct investment (FDI), maintaining its position as the country’s top investment draw.

hcmc remains top draw for foreign investors
The Saigon High Tech Park has attracted investment from major groups worldwide

Foreign investors

In the first eight months, the city granted licenses for 640 FDI projects with total capital of US$558.63 million, a 22.2 percent increase in the number of projects and equivalent to 70 percent of total project capital licensed in the same period last year. Processing and manufacturing industries were most attractive to foreign investors, with 24.5 percent of FDI concentrated in these sectors. The real estate sector ranked second with 23.1 percent, followed by wholesale, retail and auto repair, motorcycles and other types of motorized vehicles (22.4 percent); technical activities, science and technology (14.5 percent); information and communications (six percent).

Business investment from the Republic of Korea accounted for the highest percentage of FDI in the city in the first eight months, with 28.6 percent. Singapore ranked second with 22.2 percent, followed by Norway (12.5 percent), Japan (9.7 percent), and Hong Kong (China) with 6.4 percent.

Also in the first eight months, the city allowed 178 FDI projects to increase their capital by US$480.77 million, and accepted capital contributions and stock purchases totaling US$4.14 billion by 1,912 foreign investors, up 34.5 percent in the number of investors and 2.4 times in the amount of capital compared with the same period last year. Capital contributions and stock purchases were concentrated in the fields of real estate, technical activities, science and technology.

Simplifying conditions

At a recent meeting with more than 100 European businesses currently operating in Ho Chi Minh City, Dinh Ngoc Thang, Director of the municipal customs department, affirmed that improving the investment and business environment and enhancing competitiveness is crucial to promoting sustainable growth of the Vietnamese economy, in general, and Ho Chi Minh City’s economy, in particular.

To promote investment in industrial production, especially support industries, the municipal department of industry and trade has intensified the dissemination of the city’s industrial development policies among domestic and foreign companies. The department has requested the municipal people’s committee to abolish Decision 15/2017/QD-UBND regarding support for business investment in industrial production and support industries. At the same time, it submitted to the municipal people’s council a draft resolution on an investment stimulation program that facilitates investment in support industries.

The Ho Chi Minh City People’s Committee recently promulgated its provincial competitiveness index (PCI) improvement plan aimed at taking the city up 8-18 places on the World Bank’s ranking list. Under the plan, the city will eliminate/simplify 50 percent of investment and business conditions; cut in half the list of goods subject to specialized inspections; reduce the percentage of imported goods subject to specialized inspections from 25-27 percent at present to below 10 percent; and minimize business inspections.

The committee has requested departments, sectors and the people’s committees of districts to accelerate administrative reforms and intensify the application of information technology in providing public services.

Ngoc Thao