According to Vietnam's "**Recently, Vietnam has attracted more EU direct investment, but its share of the EU's total global direct investment is relatively small, only 2% to 5%. Experts believe that this figure is not yet commensurate with the potential of both sides. In the future, Viet Nam's long-term strategy is to attract EU direct investment through appropriate measures.
Optimize the quality and effectiveness of attracting foreign direct investment.
Nestlé Vietnam, a European company that has been operating in Vietnam for nearly 30 years, has just decided to invest US$100 million to expand the production of high-quality coffee products at the Nestlé security plant in Dong Nai province. Commenting on the investment, Binu Jacob, General Manager of Nestlé Vietnam, said that when the project is put into operation, the production scale of the Nestlé security plant will be doubled to meet the needs of the Vietnamese market and effectively tap the potential of the export market.
General Manager Binu Jacob said: "To date, the Nestlé Group has invested 8$300 million to build four factories and two distribution centers. Dong Nai province alone has three factories. Nestlé Security Factory is one of Nestlé's largest factories in Vietnam. Through this project, we hope to create more jobs and expand the scale of investment in Vietnam. ”
According to the results of the quarterly survey of the Business Confidence Index (BCI) for European investors in Vietnam just released by the European Chamber of Commerce in Vietnam, confidence in European investors in Vietnam tends to rebound, reaching 46 in the fourth quarter of 20233。As a result, there has been a marked increase in the satisfaction of the business community, with confidence in their current situation rising from 24% in the third quarter to 32% in the fourth quarter.
The outlook for the first quarter of 2024 is positive. 29% of companies assess their outlook as "excellent" or "good"; 31% plan to increase headcount in the first quarter of 2024; 34% of companies plan to scale up their investments. Since 2023, this growth has been significant. In addition, excessive concern among companies has dropped from 9% to 5%, implying that the level of concern is gradually decreasing.
Commenting on this trend, Vice Chairman of the Vietnam Association of Foreign Enterprises (VAFIE) Nguyen Van Quan said that the Vietnam-EU Free ** Agreement, which came into force on August 1, 2020, has always had a positive impact on attracting investment, especially EU investment in Vietnam. As of August 2023, 25 of the 27 EU countries have invested in Vietnam, with a total investment of US$27.6 billion and 2,384 investment projects, accounting for 624%。Then, among the partners with the largest foreign direct investment in Vietnam, the EU ranks sixth.
Given the advantages of developing high-tech industries, European companies have contributed to green growth and laid the foundation for the sustainable development of industries in which Vietnam has advantages, such as textiles, agriculture, processing and manufacturing, renewable energy.
"European investment funds not only optimize the quality and effectiveness of foreign direct investment in Vietnam, but also meet the needs of the country in the process of vigorously pursuing reforms, enabling innovation, building a digital economy, and advancing the Fourth Industrial Revolution," said Mr. Nguyen Van Quan. and Vietnam's commitment to achieving zero emissions."
Vietnam has a long-term strategy.
Although the number and value of EU investment projects in Vietnam tend to increase, their share of the EU's total foreign investment is relatively small and has not yet been commensurate with the potential of both sides. In terms of funding, EU direct investment in Vietnam accounts for only 6.0% of the total investment attracted by VietnamBelow 41%, while EU investment in Vietnam accounts for only 2-5% of the EU's total FDI around the world. In terms of the value of investment projects, the average registered capital per project peaked at US$14.62 million in 2014, decreased to US$9 million in subsequent years, and has increased since 2022, but has averaged US$11.57 million.
Analysing the reasons for this, Mr. Nguyen Van Quan said that the scale of global FDI has been reduced due to geopolitical tensions and the impact of the world economic recession. Developing and even developed countries have a need to attract investment from large groups and therefore tend to promote production and the return of FDI funds to their home countries.
Mr. Nguyen Van Quan said: "EU countries promote a strategically autonomous economy by controlling foreign investment funds. For example, Germany and France have regulations on strict control of outward direct investment in strategic industries; France is implementing the "Made in France" strategy to promote high value-added industries in the country, such as automotive, aviation, digital technologies, etc."
Therefore, Viet Nam's long-term strategy in the future is to attract EU direct investment through appropriate measures. In addition to optimizing the business environment and creating convenient conditions for investors in Vietnam, a series of future policies should enrich the forms of investment assistance, especially after-tax assistance measures, on the basis of tracking the overall trend and complying with international commitments.
"In the past, we used to attract investors with 'clean' land, but now we can build and provide infrastructure for free instead of using tax incentives to attract investors," suggested Nguyen Van Quan. In addition, all ministries and localities should formulate policies on attracting and nurturing human resources, so that enterprises can hire them as soon as they come to invest. ”
Speaking at the launch ceremony of 2024, Gabor Fruit, President of the European Chamber of Commerce in Vietnam, said that although the global economy is in a complex stage, the Vietnamese economy is still showing the ability to recover flexibly. As a result, Vietnam's status as an investment destination has been greatly enhanced, with 62% of respondents ranking Vietnam first; 53% of the respondents** FDI in Vietnam showed an increase in the fourth quarter of this year.
However, in the context of increasing economic competition in the region, it is even more important to continue to improve our policies and strategies to attract and sustain European direct investment.
"One important area where greater efforts should be made is to streamline the administrative approval process, as it is a hindrance for businesses. In addition, it is important to invest in infrastructure to reduce logistics costs and improve the quality of workers. This is conducive to maintaining the country's competitiveness and growth momentum."
*: Vietnam News Agency.