According to Dr. Alan Phan, despite the difficulties posed by the global economic slowdown, Vietnam offers favourable conditions and preferential policies for foreign investors.
For example, Samsung can earn a profit of USD6 billion in Vietnam annually, but pays only USD50 million in taxes, he said, adding that a similar situation is hard to find.
In the Chinese market, production costs and inflation have risen, causing difficulties for multi-national companies. In particular, South Korean and Japanese investors have to consider the relationship between their countries and China before making the investment decisions there.
Foreign investors expected to have good business in the emerging markets of Laos and Myanmar. However, these countries’ policies are less favourable than was hoped. They have turned to Vietnam, where they see big potential.
Vietnam has a good geographical position with many seaports, he added.
In 2010, Intel opened its USD1 billion chip plant in Vietnam. Three years later, Samsung built its third plant in the country.
Answering reporter’s questions about whether Samsung’s mobile phone plant, the largest in the world, being built in Vietnam would turn the country into “a giant mobile phone producer” or not, Dr. Alan Phan said, “The giant producer is Samsung, not Vietnam as the country. The brand still belongs to the group.”
He noted, however, that Samsung’s investment may have a good impact on the country as more mobile phone investors are expected to come to Vietnam.
Regarding the massive foreign investment in Vietnam, Dr. Alan Phan said that now foreign companies operating in Vietnam include the high-tech sector, not only labour-intensive areas such as footwear and garment production.
According to him, the biggest impact is that the domestic market will be dominated by foreign investors, adding pressure to domestic companies. “We must keep good policies to attract foreign investors to keep them doing business in our market,” he said.
Nonetheless, foreign investors will help to bring more jobs for Vietnam.