Foreign investors commit US$3.7 billion for Vietnam in 2023

Three international corporations from Germany, Japan, and South Korea plan to invest a total of US$3.7 billion in Vietnam this year, Deputy Minister Le Minh Khai said on April 22.

Vietnam's Prime Minister Pham Minh Chinh talks to foreign investors during a conference on April 22. Photo: VGP

The three companies have worked and discussed their operations with the Ministry of Planning and Investment, he told a conference between the Vietnamese Government, local authorities, and foreign investors.

The three foreign investors will lay out projects in green manufacturing, renewable energy production, logistics, and production of medical equipment, the deputy PM said.

Antonia Zahn-Weber, managing director of the German firm VFT Industry UG, revealed in her video call that the company will invest in a stainless steel plant in Vietnam and join the country’s power sector.

The plant, worth US$1.5 billion, will produce an estimated 600,000 tons of stainless steel for Vietnamese and European markets, she said.

VFT Industry UG also expects to produce some 700 million kWh of power each year, the German business executive said.

Antonia said that the company has thoroughly studied the possibility of the projects and that the projects are in line with the trade and investment agreements signed between Vietnam and Germany, and the European Union (EU).

The company has met Minister of Planning and Investment Nguyen Chi Dung and other high-ranking officials to discuss the implementation of the project, she added.

Antonia was confident that the company is technically capable of minimizing the volume of carbon emissions released into the environment by the projects.

The company targets to achieve net zero emissions in the very first days of the project and create 800,000 CO2 certificates each year, she said.

Attending the conference, other enterprise executives and business association officers acknowledged that Vietnam remains one of the finest destinations for international investors.

Nitin Kapoor, Chairman and General Director of AstraZeneca Vietnam, appreciated that the Government has been a creative, proactive force to drive the Vietnamese economy out of difficulties amid the Covid-19 pandemic and global recession.

He praised Vietnam for proper solutions to stabilize the nation’s macro-economy, restrain inflation, and adapt to the era of digital transformation.

Some 47% of the questioned Japanese companies said they will expand operations in 1-2 years, according to Takeo Nakajima, Chief Representative of the Japan Trade Promotion Organization (JETRO) in Hanoi.

There are a lot of opportunities for further cooperation between Vietnamese and Japanese enterprises, the Japanese official said.

Takeo said that Japanese investors are looking for opportunities in the coastal provinces of Vietnam such as Thanh Hoa, Quang Ninh, and Thai Binh for their huge potential for socio-economic growth.

Japanese firms expect a proper legal framework for the production of electricity, renewable energy, and relevant products, such as hybrid and electric cars, he added.

Major concerns in administrative and legal regulations

Despite positive traits, foreign investors considered existing laws and regulations as the biggest challenge that are holding them back from further improving their Vietnamese operations.

Representatives of international enterprises and organizations participate in the conference on April 22. Photo: VGP

JETRO official Takeo reported that two-thirds of the Japanese companies in Vietnam think administrative progress is slowing down, comparatively higher than the average rate of 47% measured among Japanese firms in ASEAN.

Vietnam needs to eliminate “unofficial fees” and outline reasonable charges as investors, regardless of their nationalities, expect a thorough and transparent legal system.

According to Hong Sun, Chairman of the Korean Business Association in Vietnam (Kocham), South Korean firms will expand their presence in the country if the conditions are secure.

The companies expect simpler, more effective, and encouraging regulations, he said, adding the investors will feel “more comfortable” when investing in Vietnam.

He urged the Vietnamese Government to resolve existing issues with the rules on work permits/licenses and fire prevention so that foreign investors will be less stressed and become more confident in the local authorities.

Gregory Testerman, Chairman of the Board of Governors of the American Chamber of Commerce in Vietnam (AmCham), credited Vietnam for having reformed and simplified the regulatory system to facilitate private-funded projects.

The American official expected the Government to clear obstacles in the administrative organization to tap into the potential of several sectors such as clean energy and power, tourism, healthcare and medical, and retail.

In response to the recommendations of foreign investors and organizations, Prime Minister Pham Minh Chinh said that the Vietnamese Government takes the people and enterprises at the center of all actions and that the country will not exchange sustainability for short-term growth.

PM Chinh added that the regulations will be reviewed constantly to better attract foreign investment and that the foreign-investment projects will guarantee the requirements of both central and local governments.

“There will be solutions to facilitate proper business operations and assist them to cut costs. The solutions will involve debt restructuring, interest rate exemption, and reduction,” he said.

He also urged government officials to always listen to the opinions of investors, thus developing suitable ways to work on their problems.