A top priority for high-tech FDI projects

The year 2024 represents a turning point in the five-year economic era from 2021 to 2025. As a result, the government, ministries, sectors, and communities will all work together throughout this critical year. As one of the economic drivers, attracting FDI is projected to remain a priority, with Vietnam maintaining the preferred destination for FDI capital.

Mr. Koen Soenens, Sales and Marketing Director of DEEP C Industrial Zones, believes that Vietnam's appealing investment criteria include a strategic location, a well-trained youthful labor, and a constantly growing investment climate.

"With numerous new trade agreements negotiated that are particularly beneficial to FDI firms, Vietnam, as a developing market, is presently a focal point of world interest. Mr. Koen Soenens believes that the investment process of FDI firms in Vietnam would continue to grow in the future.

Mr. Nguyen Hai Minh, Vice Chairman of the European Chamber of Commerce in Vietnam (Eurocham), agrees that there are sectors in which European companies are confident in their technology and finances to implement in Vietnam, bringing profits and momentum to the country, such as energy, renewable energy, and infrastructure investment.

As per Eurocham's most recent business confidence index poll, European firms not only regard Vietnam as one of the top ten investment locations in the world, but over 20% of questioned company executives prioritize Vietnam.

According to the Ministry of Planning and Investment, numerous significant firms and organizations in the electronics and semiconductor sectors have a presence in Vietnam and want to grow their investments, including Intel, Samsung, Synopsys, Qualcomm, Infineon, and Amkor. Nvidia (USA) has committed to make Vietnam its second home; Hana Micron (South Korea) has launched phase 2 and boosted its total investment in Vietnam to 1 billion USD; and LG Innotech (Hai Phong) has enlarged its electronic device manufacturing project by an extra 1 billion USD.

Furthermore, many foreign investors believe that in order to attract more active investment, Vietnam must provide both essential and adequate circumstances. As previously stated, the necessary condition is the advantages, which reflect Vietnam's current position in the eyes of investors, whereas the sufficient conditions are other factors such as the investment environment, executive management perspective, legal documents, and procedures... to maximize the conditions for businesses to grow and develop.

"The most pressing issue continues to be administrative processes, including the licensing load. Vietnam is currently doing well in terms of public investment disbursement, and infrastructure projects are being deployed decisively, but the utilization of private capital, particularly PPP funds, remains constrained, making it difficult for foreign investors to participate," said Eurocham's Vice Chairman.

Addressing these challenges, Mr. Nguyen Anh Tuan, Deputy Director of the Foreign Investment Agency, stated that difficulties for FDI enterprises stem from a variety of factors, some of which are related to the government's role in developing policy mechanisms and fostering an encouraging, developing environment.

"We already have a green growth strategy and an action plan to reach our objectives, but that is insufficient. The government must continue to direct ministries and sectors to examine and ensure that the legislative framework is actually beneficial and encouraging. It is critical to develop realistic and effective preferential policy measures to assist firms," Mr. Nguyen Anh Tuan noted.

It is recognized that Vietnam's FDI attraction strategy will remain selective in order to boost production capacity and strengthen the spillover effect between the FDI sector and the domestic economy. The approach seeks to limit  negative environmental consequences, eliminate the use of obsolete machinery and technology, preserve resources and energy, minimize labor-intensive procedures, and provide low value-added, low science and technology content...

In terms of FDI recruitment orientation in 2024 and beyond, Minister of Planning and Investment Nguyen Chi Dung believes Vietnam would selectively attract and collaborate in foreign investment, concentrating on quality, efficiency, technology, and environmental protection. Priority will be given to projects with high value-added, high technical content, and links to local firms, resulting in a wider effect and integrating global production and supply networks.

Vietnam promotes foreign investment in the following industries in the foreseeable period: electricity, electronics, semiconductors; renewable energy, high-efficiency agriculture; digital economy, digital transformation; innovation, R&D; and financial centers.