At the Forum “Vietnam’s Industrial Parks in 2022: Opening up new investment capital flows”, experts offered solutions to improve the efficiency of foreign direct investment cooperation (FDI) in industrial parks (IPs) of Vietnam in the near future.
Speaking at the forum, Deputy Minister of Planning and Investment (MPI) Tran Quoc Phuong said that in recent years, FDI capital in IPs and economic zones (EZs) accounts on average for about 35 – 40% of the national total registered FDI capital; processing and manufacturing sector alone, FDI capital accounts for 70 – 80%.
Besides, IPs and EZs have really become key areas that attracted domestic and foreign investment capital sources and large projects including leading corporations of Samsung, Canon, LG, Sumitomo, Foxconn and VSIP, etc.
Domestic enterprises, starting up as investors in developing and trading IPs infrastructure, have developed into multi-industry and multi-field investment groups, gradually reaching out to foreign markets, contributing to affirming their position internationally such as Phu My 3, Viglacera, Truong Hai, Becamex, Sonadezi and Kinh Bac, etc. It is remarkable contributions of IPs and EZs in attracting investment and production development.
In particular, specialized IPs in green growth and sustainability are attracting foreign enterprises. Mr. Ta Quoc Bao, Deputy General Director of Phu My 3 Intensive IP, said the area is an intensive ecological and symbiotic IP with 1,028 hectares, the only zone in Vietnam being approved for establishment in 2014. The IP is synchronously invested with high-quality technical infrastructure qualifying international standards. Since 2015, Phu My 3 specialized IP attracted 31 investment projects with a total investment capital of 36,000 billion VND. It is expected that by late 2022, it will attract about another US$ 1 billion, bringing the total FDI investment in Phu My 3 to 60,000 billion VND.
Mr. Ngo Hoang Ho, Director of Sales Division, Vietnam NOK Co., Ltd., Amata Industrial Park, said that the company’s products are mostly exported to high standard markets on quality, labor and environment of Japan and the United States. To meet the customers’ requirements, since 2018, NOK applied a cleaner production process, controlled CO2 emissions, efficiently used materials, improved and replaced energy consumed equipment. With a sustainable industrial production process, it helps enterprises reduce production costs, increase economic efficiency, contribute to environmental protection and meet the requirements of international corporations wishing to participate in the global supply chain.
However, at the forum, according to experts and enterprises, the FDI attraction in IPs currently faces challenges such as: complicated administrative procedures, overlapping regulations, long implementation time and costly leading to reducing the efficiency of investment projects. Besides, issues of law enforcement, especially investment incentives, shortage of high-quality labor supply, etc. are their concerns.
Ms. Huong Vu, General Director of EY Vietnam, stated in recent years, attracting investment capital into Vietnam has been conducted good, however the process of fulfilling legal documents much depends on the consultant. For example, the definition of an export processing enterprise having the right to enjoy preferences showed limitations and then amended by Decree No. 18 with the goal of solving problems about tax refund and input. However, other issues still remain.
Furthermore, according to Mr. Nguyen Cong Ai, Deputy General Director of KPMG, Vietnam is currently the most attractive destination for international investors. However, it is a caution for a so-called a golden opportunity. Especially, in this period, IPs and EZs should focus on investment quality, environmental friendliness, high technology investment and it should not necessarily be large investors.
As the liaison and advisory agency on state management of IPs and EZs, Deputy Minister Phuong said MPI has been fulfilling the tasks and solutions for IPs and EZs development. Recently, MPI advised the Government to issue Decree No. 35/2022/ND-CP dated 28/7/2022 regulating the management in IPs and EZs with addition of new types of IPs and EZs, removing establishment procedures with a view to simplify administrative procedures as well as amend certain regulations to improve land use efficiency in the development of IPs and EZs. In the coming time, MPI will work with Ministries, Agencies and localities to continue finalizing mechanisms and policies and accompanying investors to build the investment and business environment of IPs and EZs more transparent and convenient.
