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Refresh to attract FDI
Date: 5/25/2023 1:39:51 PM
Recently, the issue of attracting foreign direct investment (FDI) has become hot with the story of the global minimum tax. The imposition of this tax at 15% will lead to fierce competition between countries and territories to attract FDI.

 Because at this time, tax incentives are no longer an advantage for foreign investors to choose to "put down money" in a country; countries are also required to have different policies and factors to attract investment.

Ho Chi Minh City is no exception, always pondering and finding ways to renew itself in the race to attract FDI. Recently, the People’s Committee of Ho Chi Minh City has directed the Department of Planning and Investment together with the Research and Development Institute, the Center for Trade and Investment Promotion to collect opinions to urgently complete the project "To attract foreign direct investment of Ho Chi Minh City". period of 2023-2025, vision to 2030".

A corner of Ho Chi Minh City Hi-Tech Park in Thu Duc City

A corner of Ho Chi Minh City Hi-Tech Park in Thu Duc City

This is very necessary and urgent because of the importance of FDI for HCMC. Statistics show that, in recent years, Ho Chi Minh City has always led the country in attracting FDI. Particularly in 2022, the total value of foreign investment capital in Ho Chi Minh City will reach more than 4.33 billion USD, including newly granted capital, additional investment capital and capital contribution, share purchase, purchase of contributed capital. According to the Ho Chi Minh City Statistics Office, FDI accounts for more than 13% of the total social investment capital in the city; budget revenue from this area in 2022 will reach more than 78,000 billion dong, accounting for 17.07% of the city’s total budget revenue; import and export turnover reached 25 billion USD, accounting for 61% of import and export turnover of the city.

However, FDI inflows into Ho Chi Minh City in the first 4 months of this year decreased by 23.4% compared to the same period last year. This difficulty is expected to continue, because of the global economic downturn, causing FDI inflows to slow down. In that context, what should Ho Chi Minh City prepare to retain and continue to welcome new investors? In a recent seminar held at the Ho Chi Minh City Development Research Institute on FDI attraction, economic experts pointed out that the city must strive to improve the investment environment, identify strengths to increase the attractiveness of FDI flows. foreign capital. The limitations that must be overcome are urgently upgrading transport infrastructure, increasing connectivity for Ho Chi Minh City as well as the region; solutions to reduce housing costs. For digital infrastructure, it needs to be deployed quickly and effectively. Investing in and improving the qualifications of human resources is something that must be done regularly. Regarding policies, it is necessary to be transparent, clear,

Besides renewing itself, Ho Chi Minh City also needs to frankly "require" more clearly from the FDI sector. According to the Department of Planning and Investment of Ho Chi Minh City, 85% of FDI enterprises are 100% foreign capital, but technology transfer to Vietnamese enterprises is very limited. Phone production is 100% exported, but the localization rate is only 20%-25%, while this rate in China and Thailand is up to 75%. Worryingly, Vietnamese enterprises have not been deeply involved in the value chain of FDI enterprises. There are very few large FDI projects, mainly small and small outsourcing projects. Some operating FDI projects still have limitations, bad effects on the environment, transfer of outdated machinery... This fact shows that, although we are very hopeful, we also need to be very alert, not attractive. FDI at all costs. A clear system of criteria for attracting FDI with a roadmap will benefit both sides.

In the context of general difficulties of the world economy and the whole country, Ho Chi Minh City has low growth, innovation to attract FDI inflows will be one of the solutions contributing to achieving the immediate growth goals and long-term stability. Clearly identifying the weaknesses to overcome, and at the same time knowing their strengths to select investors, forcing investors to follow the "problem" given by Ho Chi Minh City is absolutely necessary. Surely, the biggest wish, thanks to FDI, what we receive is not only wages or taxes, but through that, we have quick access to the world’s advanced science, gradually becoming self-sufficient. built a modern industry, blossoming in their own homeland.

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