Remove obstacles to promote investment into the high-tech sector

Highlights in Attracting Investment

According to financial analyst Dinh Trong Thinh, Vietnam's foreign direct investment (FDI) attractiveness in 2023 would be a bright light in the country's economic development and progress, with total registered FDI reaching about 37 billion USD, an increase of more than 32% over the same time.

Many contemporary technology businesses have arrived in Vietnam, creating facilities and foundations for chip and semiconductor manufacture, as well as associated electronic components, thereby altering the structure to attract international investment.

Moving away from a country that primarily seeks foreign investment to address labor-intensive issues, by the end of 2023, many modern technology corporations will have established facilities in Vietnam for chip and semiconductor production, as well as related electronic components, changing the structure to attract foreign investment.

This suggests that Vietnam is attracting more modern technology, higher-skilled personnel, and a desire to increase the real value of products, which is consistent with Vietnam's goals. As a result, this is an opportunity to spread the use of high technology, implement new labor productivity, and change the entire manufacturing structure in Vietnam, all while geopolitical changes and global economic factors create conditions for foreign investors to see Vietnam as a suitable location for electronic chip production and components to meet global demand.

It is evident that international investors highly regard Vietnam's position in developing artificial intelligence (AI) and semiconductors. Financial expert Dinh Trong Thinh believes there are two main reasons:

First, Vietnam has signed 17 Free Trade Agreements (FTAs) with many countries worldwide, primarily focusing on opening international trade, reducing tariff and non-tariff barriers, thereby facilitating the easy export of goods.

Second, Vietnam has a stable political environment, with the economy growing at a high rate for decades. Even in 2023, Vietnam remains among the top 20 countries with the highest growth rates in the world, offering potential for investors to achieve high profits.

However, alongside these positive aspects, there are concerns, such as the demand for high-tech labor, not just in packaging, assembling, and simple manufacturing, but reaching higher in the total value of technology products.

Although Vietnam has oriented towards training experts and high-skilled labor, it still hasn't immediately met the demands of large corporations, posing a challenge for universities and training centers to collaborate in solving the manpower issue for this sector's production activities.

Not Too Concerned About Global Minimum Tax

Recently, many economists have suggested that one of the incentives to attract FDI is taxation, but the global minimum tax has begun its implementation phase this year, potentially impacting Vietnam's ability to attract foreign investment.

In reality, many foreign investors have shared that they do not see tax incentives as the main reason to invest in Vietnam, but rather desire a favorable investment environment with high production efficiency.

With the global minimum tax, all multinational companies will be subject to a minimum tax rate of 15% worldwide, not just in Vietnam. Therefore, this issue should not be overly concerning; the focus should be on attracting more foreign investment, especially in technology.

Additionally, efforts should be made to improve the investment environment, such as in infrastructure. Major corporations require basic amenities like stable electricity and water supplies. Large R&D centers of corporations are ready to invest billions of USD, but if electricity, water, and connectivity are not stable, they cannot conduct research and applications.

According to Mr. Thinh, it is critical to prevent scenarios such as frequent power outages in 2023 and to pay greater attention to waste and emission treatment in order to satisfy the needs of greening the economy and manufacturing, hence assisting companies' goods in meeting global emission reduction criteria.

Another important element cited by the high-tech specialist is human resources, in which labor stability is critical. Also, it is critical to continue learning from the experiences of other countries in the area and across the world, so when Vietnam implements the global minimum tax, it must solve a number of other concerns in order for businesses and investors to cut costs while retaining high profits.