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Remove barriers, open investment capital flows to industrial zones

19:48 | 15/08/2022

VCN - On August 11, at a forum entitled "Vietnam's Industrial Zones 2022: Opening up new investment capital flows", experts came up with many solutions to improve foreign investment cooperation (FDI) in industrial zones (IZs) in Vietnam in the future.

Industrial production continues to grow in first five months Industrial production continues to grow in first five months
Large industrial zones set up to attract FDI Large industrial zones set up to attract FDI
Expanding industrial zones to welcome waves of foreign investment Expanding industrial zones to welcome waves of foreign investment
The speakers exchanged ideas at the discussion session. Photo: the organizer
The speakers exchanged ideas at the discussion session. Photo: the organizer

Golden opportunity for investment

Speaking at the forum, Deputy Minister of Planning and Investment Tran Quoc Phuong said that in recent years, on average annually, FDI capital in IZs and EZs has accounted for about 35-40% of the total additional registered FDI capital of the whole country; in the field of processing and manufacturing only, FDI capital in IZs and EZs accounted for 70-80% of the total registered capital of the country.

IZs and EZs have become key areas to attract investment capital and large projects at home and abroad. They are the destination of many leading corporations such as; Samsung, Canon, LG, Sumitomo, Foxconn, and VSIP.

Many domestic enterprises with the beginning as an investor in developing and trading IZ infrastructure have developed into multi-industry and multi-field investment corporations, gradually reaching out to foreign markets, affirming the position of Vietnamese enterprises in the international arena such as; Phu My 3, Viglacera, Truong Hai, Becamex, Sonadezi, and Kinh Bac. These remarkable contributions of IZs and EZs attract investment and develop production and business.

In particular, specialized, green and sustainable IZs are attracting foreign businesses. Ta Quoc Bao, Deputy General Director of Phu My 3 specialized Industrial Park, said that Phu My 3 specialized Industrial Park, a specialized ecological and symbiotic industrial zone with a scale of 1,028ha, was the only Vietnam’s specialized industrial park be approved and established in 2014. It was synchronously invested with high-quality technical infrastructure that meets international standards. Since 2015, Phu My 3 specialized industrial zone has attracted 31 investment projects with a total investment capital of about VND36,000 billion. It is expected that by the end of 2022, it will attract about US$1 billion more in FDI, bringing the total FDI investment in the IZ to about VND60,000 billion.

Ngo Hoang Ho, General Manager of Sales Division of Vietnam NOK Co., Ltd., Amata Industrial Park, said that most of the company's products are exported to Japan and the US, which are very demanding markets in terms of product quality and factors related to environment and labor. To meet the customers’ requirements, since 2018, the company has applied a cleaner production process, controlled CO2 emissions, used efficient materials, and improved and replaced equipment using lots of energy. Thanks to the sustainable industrial production process, the enterprise has reduced production costs, increased economic efficiency, contributed to environmental protection, and met the requirements of international corporations for businesses who want to participate in the global supply chain.

Remove barriers

However, according to experts and businesses at the forum, besides great opportunities, attracting FDI in IZs has faced challenges such as; cumbersome and overlapping administrative procedures; long implementation time, which increases the cost and time and reduces the efficiency of the investment project; law enforcement issues, especially investment incentives; and shortage of high-quality labor supply.

Huong Vu, General Director of EY Vietnam said that in recent years, attracting investment capital into Vietnam has been good, but the process of implementing legal documents is dependent on the consultant. The concept of an export processing enterprise, which enjoys priority is an example. In the past, there were many limitations, when the Government issued Decree 18 to solve problems about tax refund and input, there are still other problems that have not been resolved.

According to Nguyen Cong Ai, Deputy General Director of KPMG, Vietnam is the most attractive destination for international investors. However, if this is called a golden opportunity, there is still need to be cautious. In my opinion, IZs and EZs should focus on investment quality, environmental friendliness, high technology investment, and not necessarily large investors.

As the focal agency advising on state management of IZs and EZs, Deputy Minister of Planning and Investment Tran Quoc Phuong said that the Ministry has performed tasks and solutions on the development of IZs and EZs. In particular, the Ministry has advised the Government to issue Decree No. 35/2022/ND-CP dated May 28, 2022 regulating the management of IZs and EZs, which added new types of IZs and EZs, abolished establishment procedures to reduce administrative procedures, and supplemented and revised a number of regulations to improve the efficiency of land use in IZ, EZ development.

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In the future, the Ministry of Planning and Investment will join other ministries, branches, and localities in continuously studying and improving mechanisms and policies, and will accompany investors to build transparent and favorable business investment environment of IZs and EZs.

By Thu Diu/ Ha Thanh