Đỗ Nhất Hoàng, Director of the Foreign Investment Agency under the Ministry of Planning and Investment. — VNA/VNS Photo

With dedicated endeavours to enhance the investment landscape and bolster infrastructure, coupled with prudent policy implementations, foreign investors remain resolute in their confidence toward Việt Nam's investment ecosystem. Đỗ Nhất Hoàng, Director of the Foreign Investment Agency under the Ministry of Planning and Investment, talks to Vietnam News Agency (VNA) about his belief that the forthcoming period will witness a flourishing influx of foreign direct investment (FDI) into Việt Nam.

Could you provide insights into Việt Nam’s efforts to attract Foreign Direct Investment (FDI) so far this year?

Việt Nam’s initiatives have been multifaceted, commencing with the maintenance of macroeconomic stability, accompanied by the bedrock of political and social steadfastness. Moreover, Việt Nam has embarked on the trajectory of enhancing its investment landscape, deploying judicious and timely strategies. Notably, we have persistently pursued the refinement of three pivotal pillars: institutional frameworks, infrastructural augmentation, and nurturing a skilled human resource pool.

Concurrently, earnest policy dialogues are being undertaken to augment the investment milieu and to surmount obstacles encompassing infrastructure, fire safety protocols, work permits, and immigration visa matters. Our preparedness extends to provisioning pristine land, energy provisions, a reservoir of high-calibre human capital, and bolstering support industries. Parallelly, strides are being taken to streamline investment protocols, simplifying procedures, and the establishment of dedicated task forces catering to the needs of foreign-invested enterprises.

Presently, Việt Nam’s strategic focus lies in meticulous investment attraction, characterised by the judicious selection of sectors and a well-calibrated equilibrium between various realms of investment. This encompasses the domains of the digital economy, the verdant green economy, and the sphere of renewable energy.

Subsequent to this, the Foreign Investment Agency is poised to forge collaborative ties with international entities to identify and engage with prospective corporations. Firms endowed with financial prowess and modern managerial acumen shall be proactively invited to participate in Việt Nam. This entails a concerted approach to engage investment partners through diverse channels, culminating in the deployment of propitious investment ventures.

Furthermore, the Foreign Investment Agency is proactively implementing advanced information systems to facilitate streamlined online procedures, catering to the needs of both individuals and enterprises. These comprehensive initiatives, combined with other strategic resolutions, are set to offer prospective investors enhanced convenience and efficacy. Notably, foreign investors are increasingly bolstered in their confidence towards Việt Nam’s investment ecosystem.

Presently, Việt Nam has made substantial strides in global rankings, a testament to its noteworthy progress. Esteemed international institutions hold a favourable view of Việt Nam’s economic achievements, envisaging promising prospects, upgraded credit ratings, and a positive outlook on GDP growth.

The outcomes of a 2022 survey conducted by the Japan Trade Promotion Organization (JETRO) among Japanese enterprises operating in Việt Nam are particularly enlightening. It revealed that an impressive 60 per cent of these enterprises plan to expand their operations within Việt Nam over the next one or two years, marking the highest proportion within the ASEAN region.

This sentiment is underpinned by Việt Nam’s inherent potential for robust growth, affording businesses the opportunity to amplify revenues through market expansion and increased exports. Moreover, an encouraging 56.5 per cent of companies intend to elevate their engagement in localised procurement in Việt Nam, concurrently ramping up investments in equipment, automation, and digitisation to optimise production efficiency and mitigate costs.

According to a January 2023 survey by the European Chamber of Commerce in Việt Nam (EuroCham) on the business climate, Việt Nam has secured a coveted spot among the world's top five investment destinations. Adding to this affirmation, Việt Nam ascended 12 positions in the World Happiness Report, solidifying its position at 65 out of 137 countries.

These achievements stand as clear and tangible testament to the resolute backing and trust by the business community upon the insightful decisions and effective solutions of the Government and the Prime Minister in recent years.

Could you shed light on the resurgence of FDI inflow in July 2023 following a prolonged period of decline, and the contributing factors behind this positive trend?

This remarkable uptick can be attributed to the collective efforts of the entire political apparatus, with particular emphasis on the swift and adaptable responses of the Government and the Prime Minister in alleviating challenges faced by businesses. Concurrently, various ministries, sectors, and local administrations have been attuned to these challenges, swiftly dismantling barriers and fostering an atmosphere of assurance that emboldens businesses to amplify their investment endeavours and expedite disbursements.

Consequently, foreign investors are bolstered by a palpable sense of confidence. Over the past seven months, Việt Nam has demonstrated an array of favourable indicators. Notably, the aggregate newly registered capital, adjusted capital, and contributions for share acquisition from foreign investors have surged to almost $16.24 billion, registering a 4.5 per cent growth compared to the corresponding period in 2022. This growth is remarkably accentuated, showcasing an 8.8 percentage point surge when contrasted with the initial six months of this year.

Delving into specifics, some 1,627 new projects have been granted investment registration certificates, reflecting a robust 75.5 per cent escalation compared to the analogous period, with the cumulative registered capital amounting to nearly $7.94 billion, indicating a substantial 38.6 per cent elevation.

Simultaneously, 736 projects have sought adjustments in their investment capital, manifesting a commendable 27.1 per cent rise in comparison to the same timeframe, albeit the total supplementary investment capital has exhibited a 42.5 per cent decrease.

Further underlining this trajectory, there have been 1,627 instances of capital contribution and share acquisition by foreign investors, collectively amounting to over $4.14 billion, marking an impressive upsurge of 60.7 per cent over the same interval.

As gleaned from data compiled by the Foreign Investment Agency, while a diverse array of prominent investors can be observed within the total investment capital, the majority largely comprise mid-sized enterprises. A significant proportion of these investments are channeled towards Việt Nam’s traditional regional partners such as Japan, Korea, China, Taiwan (China), and Singapore.

It's pertinent to note that European and American investors also participate, often via intermediary countries such as Singapore or Hong Kong (China), as opposed to a direct route from Europe or the United States.

How would you evaluate the forthcoming potential for attracting investments to our nation?

The paramount factor for Foreign Direct Investment (FDI) enterprises is a proficient workforce. Việt Nam’s distinctive advantage lies in its human resources, characterised by elevated labour productivity in relation to labour costs.

Also, Việt Nam is diligently crafting training initiatives designed to elevate technical proficiencies and labour productivity within its workforce. This involves a transformative shift towards training programmes tailored to the precise demands of enterprises, emphasising applicability over conventional training paradigms.

Concurrently, our unwavering commitment to proactively enhance the investment ecosystem, coupled with the steady enhancement of infrastructure, judicious policy formulations, and other pertinent measures, has fortified foreign investors' confidence in Việt Nam’s investment climate. Driven by this encouraging dynamic, I am sanguine that the forthcoming period will usher in positive strides in attracting foreign investments to Việt Nam.

How has Việt Nam positioned itself to address the challenges posed by the global minimum tax?

Our foremost focus lies in enticing investment ventures characterised by elevated technological intricacies within Việt Nam. Enterprises operating in the technology sector that choose to invest here are poised to reap judicious investment incentives.

At present, the Ministry of Planning and Investment is collaboratively working alongside pertinent ministries and sectors to formulate policies pertinent to investment facilitation for foreign investors. These policies are intended for governmental presentation to the National Assembly during the forthcoming session scheduled for October.

This proactive stance has been embedded within our Investment Law for several years. Notably, Resolution No. 50-NQ/TW, issued by the Politburo on August 20, 2019, elucidates our guiding trajectory in refining institutions and policies, with a paramount emphasis on enhancing the quality and efficiency of foreign investment cooperation until 2030.

This strategic compass advocates a discerning approach to attracting investments, specifically targeting high-tech ventures characterised by efficacy, environmental safeguards, and substantial socio-economic augmentation. In my view, this policy stands as a judicious foundation, necessitating ongoing refinement, synchronisation, and timely implementation to harmonise with the evolving landscape. — VNS