Opening the door to attracting high-quality FDI from Europe and America

The Nestle Tri An factory in Dong Nai has received investments for modern technology production lines.

Numerous advantages to attract investment

Since the early months of 2024, FDI capital registered in Vietnam has witnessed a remarkable acceleration. According to the latest data from the Foreign Investment Agency (Ministry of Planning and Investment), as of February 20, 2024, the total of newly registered capital, adjustments, and capital contributions to purchase shares or capital contributions by foreign investors reached nearly $4.29 billion, marking an increase of 38.6% compared to the same period in 2023.

Several large-scale projects have received investment registration certificates, including the $454 million project by Trina Solar Cell in Thai Nguyen, the $275 million project by Gokin Solar Hai Ha Vietnam in Quang Ninh, and the $120 million electronic component product design factory project by Radiant Opto-Electronics Corporation in Nghe An.

In the initial days of 2024, in addition to investors from traditional markets such as Singapore, Japan, China, and South Korea, Vietnam is also attracting investment capital from European and American partners.

Dr. Phan Huu Thang, the former Director of the Foreign Investment Agency, stated that the substantial increase in FDI flow to Vietnam in 2023 lays a solid foundation for attracting more FDI into Vietnam in 2024. Vietnam's vast experience in FDI attraction and the enhancement of diplomatic relations between Vietnam and the United States have spurred the flow of FDI from the US and Europe.

As a European company operating in Vietnam for nearly 30 years, Nestle Vietnam recently announced an additional investment of $100 million to double the processing capacity of its high-quality coffee lines at the Nestle Tri An plant in Dong Nai Province. To date, Nestle has invested nearly $830 million through Nestle Vietnam Limited with four factories and two distribution centers.

The Business Confidence Index (BCI), surveyed among over 1,400 members of the European Chamber of Commerce in Vietnam (EuroCham) by Decision Lab, has shown recovery signs in the confidence of European businesses operating in Vietnam. Specifically, the satisfaction level of these companies increased significantly as the percentage of companies confident in their current situation rose from 24% in the third quarter to 32% in the fourth quarter. The outlook for the first quarter of 2024 is also optimistic, with 29% of businesses rating their outlook as "excellent" or "good," 31% planning to expand their workforce, and 34% intending to increase investment levels.

Unlocking resources

For American investors, at the end of 2023, the Minister of Planning and Investment, Nguyen Chi Dung, held discussions with Mr. John Neuffer, President of the Semiconductor Industry Association (SIA) in the US, along with leaders from prominent semiconductor and high-tech industries such as Intel, Qualcomm, Ampere, ARM, Synopsys, Infineon, and Marvell. This meeting opened up opportunities and expectations for a more robust acceleration of investment capital from this industry powerhouse.

Significantly, the semiconductor sector in Vietnam is emerging as a prime destination, attracting interest from major corporations like Intel, Samsung, Hana Micron Vina, Amkor Technology, and many others with projects ranging from hundreds of millions to billions of dollars for factory construction, production expansion, and assembly. Notably, the world's leading technology corporations are also planning to establish research and development (R&D) centers in Vietnam, a critical component in production for launching high-tech modern products.

During his visit to Vietnam at the end of 2023, billionaire Jensen Huang, Chairman of the Nvidia semiconductor corporation (US), lauded the significant potential and opportunities in Vietnam's semiconductor and AI industries, particularly highlighting the quality of Vietnam's human resources in this field. Mr. Jensen Huang committed to exerting the utmost effort to make Vietnam Nvidia's second homeland and to establish a legal entity in Vietnam.

However, to attract more FDI projects from various countries and territories in general, and from US and European investors in particular, Mr. Nguyen Van Toan, Vice Chairman of the Foreign Investment Business Association (VAFIE), emphasized that improving the business environment to facilitate investors' entry into Vietnam is crucial. Future policies should diversify investment support forms, especially post-tax support measures, following the general trend and in line with international commitments.

Similarly, according to Mr. Michael Kokalari, Chief Economist and Market Research Director of VinaCapital, to enhance the ability to attract FDI capital, Vietnam needs to first continue investing in infrastructure development, particularly in power supply, and transportation and warehousing infrastructure. Secondly, enhancing the openness of the business environment is essential, especially by creating favorable conditions for FDI investors to collaborate with regulatory agencies during the investment licensing process. Thirdly, Vietnam should continue to improve the quality of advanced training and vocational education to ensure the quality of the workforce supplied to the market in the future.