More FDI poured into Vietnam in the first month

In January 2007, Vietnam attracted a total foreign direct investment (FDI) of US$350 million, up 2 percent over the same period last year. In particular, service development was considered the most promising sector.

In the first month of this year, as many as 29 new projects were licensed with a total registered investment capital of US$305 million, and 10 projects expanded the US$45 million mark. According to the Department of Foreign Investment Management under the Ministry of Planning and Investment, there is an increasing number of investors keen on the Vietnamese market. Recently, the Taiwanese Hon Hai Group has studied markets in the northern province of Bac Ninh and plans to build a high-tech manufacturing factory worth billions of US dollars.

In January, Japan was the largest registered investor with a US$100 million project to develop a new urban area in Ho Xuong Rong in the northern province of Thai Nguyen. This has demonstrated that the service sector is gradually becoming a new investment area for foreign investors.

Phan Huu Thang, head of the Department of Foreign Investment Management, said that service, financial and banking sectors will develop strongly in the coming period, and there will be a boom in the number of five-star hotels in big cities to lure foreign investors.

According to US Ambassador to Vietnam Michael Marine, US enterprises’ investment is expected to reach approximately US$8 billion in 2007. At present, Vietnam is one of the most attractive investment destinations for US and other foreign enterprises. The positive result is attributed to Vietnam’s efforts in implementing economic reform over the past three decades. In particular, Vietnam’s officially becoming the 150th member of the World Trade Organization (WTO) has help consolidate foreign investors’ trust in the country’s investment prospects. However, he said Vietnam should fully tap its potential, implement its WTO commitments and enforce new laws.

Peter Landsiedel, CEO Asia Pacific, DHL Danzas Air & Ocean, said if Vietnam wants to attract more foreign direct investment, it should open up its market as soon as possible.

As a member of the WTO Vietnam’s economy will develop strongly and more foreign investors will come to Vietnam. “We believe in bright prospects for investment in your country”, he said.

To further attract foreign direct investment capital, investment policies should be implemented synchronously. In addition, procedures for issuance of investment licenses should be simplified.

Mr Frank Huang from Tan Thuan EPZ said that investment policies should be clear and transparent, so that all investors are fully aware of regulations. When foreign investors decide to pour investment into any country, they often carefully study policies, especially regulations on enterprise operation, income tax and land lease right. If these policies have been put in place for two or three years, there must be some additional incentives to keep foreign investors staying on the country.

In January, the total of newly-registered and additional FDI capital was rather low and has not reflected the results of the investment environment in the country.

Prime Minister Nguyen Tan Dung will meet enterprises in March. The event will be a good opportunity for foreign businesses to talk about their difficulties and proposals for attracting foreign direct investment capital. This year, the country plans to attract around US$10 billion in foreign direct investment capital.

(Source: VOV)