Developers of industrial and export processing zones told in the meeting last week that the number of foreign-invested projects shrank “in a threatening way” in the first eight months of this year.

Chairwoman of Vietnam Investment and Development Joint Stock Company (VID), Nguyen Thi Nguyet Huong, said the company’s 10 industrial zones o­nly attracted three foreign-invested projects totaling USD16 million between January and September.

“Seven other contracts were from local investors,” she said. “In fact, the three foreign-invested projects were the results of last year’s negotiations.”

The new contracts are a worry for the park’s owners who point to previous years when the company would attract 35 to 50 projects in the first five months of the year, she said.

The same situation is playing out with her competitors. Becamex IDC Corporation, which runs six industrial zones in southern Binh Duong Province. The company o­nly attracted five projects totaling USD 212 million in the first eight months of this year.

Up north, the Thang Long 2 Industrial Zone in Hanoi said not a single investor has walked through the compound’s doors in the past nine months.

Representatives of industrial zones said the global economic downturn is just o­ne of the reasons for the lack of foreign investment.

They said the revocation of corporate income tax incentives since early this year has left Vietnam unable to compete with China and Thailand to attract foreign investors.

Before 2009, projects into industrial zones enjoyed a 25 percent reduction of corporate income tax in the first three to four years, and 50 percent in the following nine years. But the revocation of this law has made investors reconsider their investment.

“The law change made investors feel insecure,” said the representative of Japanese Investors Association in Ho Chi Minh City.

The director of Thang Long Industrial Zone, Akito Shiraishi, said the government should have better policies in place as investors continue to look at China and India as better destinations.

Foreign direct investment (FDI) between January and August fell 78 percent from the same period last year to USD10.45 billion, according to the Foreign Investment Agency.