Hanoi reinforces status as Vietnam’s top FDI destination
Hanoi targets to draw US$30 billion-$40 billion of FDI into projects focused on sustainable development, high value-added creation, and with a competitive edge in 2021-2025.
A favorable investment environment, a high socio-economic development pace, and an abundant skilled labor force have cemented Hanoi’s status as one of Vietnam’s top localities in attracting foreign direct investment (FDI).
|Samsung's new R&D center in Hanoi. Source: Samsung
On December 23, Samsung Vietnam opened an R&D center in western Hanoi, the largest of its kind in Southeast Asia, with an investment capital of US$200 million.
Covering an area of nearly 80,000 square meters, the project was completed after two years of construction, making the South Korean tech giant the first foreign investor in Vietnam to have its R&D center on such a large scale in Vietnam.
CEO of Samsung Electronics Roh Tae-Moon at the launching ceremony expected the majority of around 2,000 engineers at the R&D center would be sourced from major cities such as Hanoi and Ho Chi Minh City.
Since starting operations in Vietnam in 2008 with a smartphone manufacturing plant in the northern province of Bac Ninh, Samsung has expanded its investment capital in the country to $18.2 billion and is on track to surpass the $20 billion mark by the end of 2022.
Chairman of the Hanoi People's Committee Tran Sy Thanh, during his meeting with Samsung Vietnam CEO Choi Joo Ho in September, appreciated Samsung Vietnam's contribution to the development of the country in general and Hanoi in particular.
The city's mayor reiterated the city's commitment to creating favorable conditions for foreign investors operating in the city, including Samsung.
At the “Hanoi – Korea Trade and Investment Promotion 2022” conference in Seoul held in November, the Counselor of the Embassy of Vietnam in South Korea, Nguyen Viet Anh highlighted the critical role of Hanoi as the political, cultural, and economic hub of Vietnam, as well as the country’s gateway to the world.
According to Anh, Hanoi currently makes up nearly 10% of the country’s trade turnover, 25% of the number of projects, and 10% of South Korean investors' FDI commitments in Vietnam.
During the first 10 months of 2022, Hanoi attracted $116.2 million of FDI from South Korea, including 110 fresh projects worth $33.7 million. Investors from South Korea also pumped an additional $45.3 million into 66 existing projects in the city.
A report from the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment noted Hanoi and Ho Chi Minh City remain on the top list of foreign investors for new projects, thanks to their high-quality infrastructure systems and favorable geographical locations.
|Production of smartphone components at JNTC Vina. Photo: Vu Sinh
Meanwhile, the Hanoi Promotion Agency (HPA), an agency that specialized in promoting investment, trade, and tourism in the capital, asserted the city is emerging as a financial, innovative, and hi-tech production hub in Southeast Asia, opening up new opportunities for local businesses and their foreign peers to strengthen cooperation in fields of environment, clean energy, infrastructure, R&D.
Two years following the disruption of the Covid-19 pandemic, Hanoi has been pushing ahead with trade and investment promotion, especially in key markets such as Japan, South Korea, Singapore, Taiwan, China, the US, and the EU, said HPA.
They also make up the bulk of major investment projects in Hanoi, focusing on trade, distribution, IT, telecommunications, manufacturing and processing.
FDI to drive Hanoi’s further development
The municipal Planning and Investment statistics revealed that the city's FDI commitments totaled $1.54 billion during the 11 months. Of the figure, 328 new projects amounted to $206 million, while investors added $791 million to 181 existing projects.
These figures have put Hanoi in the top bracket of FDI attraction among localities in Vietnam, stated the agency.
Vice Director of municipal Planning and Investment Nguyen Ngoc Tu said the city has given priority to economic recovery once the pandemic is fully contained, providing a platform for businesses to resume, and later expand their operational activities.
“Hanoi considers the business community, including foreign-invested firms, the driving force for growth and global integration,” Tu said.
As part of the process to further attract foreign investment capital, Tu said Hanoi is accelerating the construction of new industrial parks and clusters, referring to the program of setting up two to five industrial parks in the city during the 2021-2025 period.
Vice Chairman of the Hanoi People’s Committee Nguyen Manh Quyen during a working trip to the US and Belgium encouraged investment from major corporations into the city’s priority fields namely environment, waste treatment, finance-banking, digital tech, and real estate.
“In line with infrastructure development, Hanoi is also focusing on simplifying administrative procedures and creating new incentive policies in terms of taxes and land to attract FDI,” Quyen said.
During the 2021-2025 period, Hanoi sets the target of drawing $30-40 billion of FDI, in which the disbursement rate should be $20-30 billion.
“The city prioritizes FDI projects focusing on sustainable development, creating high-added value and competitive edge, especially in fields of urban development, supporting industries, tourism, finance-banking, human resource development or hi-tech farming,” Quyen added.
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