31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Dec 09, 2022 / 16:56

Vietnam stands as credible partner for foreign investors

The Vietnamese Government has made efforts to create favorable conditions for local and foreign businesses to ensure their long-term operation.

Vietnam's strong economic fundamentals and bright prospects remain a pull factor for foreign investors.

 Production of electronics parts at 4P Company in Bac Ninh Industrial Park. Photo: Pham Kien

In November, the International Finance Corporation completed the disbursement of a loan worth VND3.7 trillion (US$150 million) to Vietnam Prosperity Commercial Bank (VPBank).

The five-year loan would help VPBank have more resources to address the urgent credit needs of small and medium-sized enterprises (SMEs), women-led businesses, and environmental protection and climate change response projects in the country. 

In the context that the world economy and Vietnam are facing several challenges, the disbursement of the $150 million loan to VPBank affirmed the bank’s capacity and reputation in the international arena, noted the IFC.

The Technological and Commercial Securities (TCBS) on December 2 signed an unsecured loan syndication contract worth $125 million, bringing the total mobilized value of the international capital market to more than $300 million in the past year.

The above $125 million syndicated loan is the third successful international capital raised by TCBS in 2022, after a syndicated loan of US$170 million in April from four leading institutions (Cathay United Bank, CTBC Bank, Taipei Fubon Bank, and Taishin International Bank), and bilateral loan cooperation with HSBC Singapore Bank with a limit of US$30 million in September.

 “The prestige and credit rating of an enterprise is the first condition for international financial institutions to consider a loan,” said Nguyen Tuan Cuong, Deputy General Director of TCBS.

Brook Taylor, CEO of asset management at VinaCapital, said driving factors for Vietnam’s growth remain unchanged.

He suggested Vietnam’s open economy with strong export capability and growing demand for domestic consumption remains attractive to foreign investors.

Vietnam is on the same pathway as major Asian economies such as South Korea and Japan.

Creating favorable business environment

Vice Minister of Planning and Investment Nguyen Thi Bich Ngoc noted the Vietnamese Government always strives to create the best conditions for businesses, including foreign-invested ones.

“The Covid-19 pandemic has been the catalyst for Government agencies and localities to improve the business environment and lay the foundation for investors to settle long-term in Vietnam,” Ngoc said.

According to Ngoc, Vietnam’s FDI policy prioritizes projects in high-tech fields with high spillover effects and promotes the development of the digital economy.

Chief Economist of the ASEAN+3 Macroeconomic Research Office (AMRO) Hoe Ee Khor said for Vietnam to maintain the current development pace, its strategy should vie for higher ranks in the global value chain.

In this process, Vietnam should prepare for a possible investment wave, from the infrastructure system and high-quality workforce to the higher capability of local suppliers.

The AMRO’s economist expected the Vietnamese Government to further invest in R&D centers and offer more incentives for local firms to enhance their competitiveness.

As of November 2022, the actual FDI to Vietnam rose by 15% year on year to $19.68 billion, the highest 11-month figure in the past five years, the Foreign Investment Agency under the Ministry of Planning and Investment reported.

The high confidence of foreign investors in Vietnam’s outlook has also been reflected through over 1,812 new projects worth $11.52 billion committed during the period, up 15% in the number of projects.

Among economic fields, the manufacturing and processing sector attracted the largest FDI, with $14 billion, accounting for 66.5% of the total, followed by real estate with $2.76 billion, or 13.1%.

FIA also highlighted the injection of additional funds worth $9.54 billion into 994 ongoing projects, a year-on-year increase of 23.3% in value and 13.3% in the number of projects.