Vietnam – new “diamond” in the race to attract foreign investment capital into Southeast Asia
According to experts, the attractiveness of the Vietnamese market to foreign investors must be mentioned including: The legal system has been revised and completed according to the international common standards. Moreover, a series of expansive investment policies, satisfactory regulations for the foreign investment sector such as corporate income tax exemptions, import tax exemptions for some categories, and land use rents exemption and reduction … are issued, creating favorable conditions for foreign investors.
Along with that are factors such as: Infrastructure is invested and developed, especially in main economic zones and industrial zones in recent years. In addition, the political situation is stable, the population is dense, the number of people in the working age is abundant, the salary for employee is low, the education sector of Vietnam focuses on promoting the training of skilled workers, encouraging innovation and the use of new technology … are factors that also contribute to enhancing the investment capital of foreign investors in Vietnam.
However, it is impossible not to mention the US-China trade war that has promoted the increase in FDI inflows into Vietnam.
The evidence is that from April 2018 to August 2019, out of 56 investors leaving China due to the escalating US-China trade war, up to 26 companies moved to Vietnam, 11 companies moved to Taiwan and 8 companies went to Thailand. Only 2 companies moved to Indonesia.
The above factors are also the basis for “News and World Report” of the US, that Vietnam is currently ranked 8th in the list of 29 best economies to invest and at the top of the Association of Southeast Asian Nations (ASEAN) in terms of attracting foreign investment, based on an assessment of around 7,000 business decision makers on eight criteria:
- Economic stability,
- Favorable tax environment,
- Skilled workforce,
- Technological capacity,
- Corporate spirit,
- Corruption problem …
Meanwhile, other competitors of Vietnam including Malaysia, Singapore and Indonesia are ranked 13, 14 and 18 respectively on this list.
According to the International Investment Report (World Investment Report) 2019, Vietnam is currently ranked 21st in terms of FDI worldwide, in which investment flows are mainly from countries in the same ASEAN region and other countries. Other Asian economies are China, Japan and South Korea. In the ASEAN region, separately, Vietnam is ranked 3rd, behind Singapore (ranked 5th globally) and Indonesia (ranked 18th globally).
It can be said that the assessment of preferential policies to attract FDI of ASEAN member countries, the assessment of the relative position between Vietnam compared to other countries in the region, and the world judgments and rankings is the basis, motivation for Vietnam to have more specific directions in attracting FDI in the spirit of Resolution No. 50/NQ-TW on the orientation of perfecting institutions, policies, improving the quality and effectiveness of cooperation, foreign investment by 2030 has just recently been issued by the Politburo./.
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