Vietnam - Most Investor Friendly Country in ASEAN: US Paper

Vietnam is expected have the second highest annual GDP-growth rate worldwide. Photo: VNA

This is not an exaggeration about Vietnam's current investment environment as well as its potentiality but is in fact based on valid and practical grounds, where improved economic diversification, international integration, reformed investment legislation and good economic policy must be counted, the article said.

In terms of economic recovery and stable development, the author cited "The World in 2050" study by PwC consulting firm, which predicted that Vietnam will have the second highest annual GDP-growth rate worldwide.

There will be an average growth by 5.3% each year, from 2014 till 2050. That means Vietnam will have the fastest growing economy within Asia till 2050. In addition, the inflation rate is controlled by the Government with consumer price index to be in the range of 3-5% for the whole year, which is far below the maximum allowed inflation rate of 4.5% in 2023. These two important macroeconomic indices have proved the Government's success to a certain extent in recovering and maintaining stable development of the economy, he said.

According to the article, the Vietnamese Government is fiercely improving the business and investment environment and making great attempts to achieve key economic indicators of top regional countries. For that reason, Vietnam encourages FDI on projects that utilize advanced, emerging, high, or clean technology, modern management methods, and contribute positively to global production and supply chains.

Until now, Vietnam has negotiated, signed and put into effect a number of bilateral and multi-lateral free trade agreements (FTAs) with almost all the big economies in the world. Of the figure, 16 FTAs involving more than 60 partners have become effective, covering all continents with a combined GDP accounting for nearly 90% of global GDP. Looking at the liberalization level of market access under the World Trade Organization (WTO), Vietnam is on par with Singapore - the most developed country in the Southeast Asia.

Vietnam is a country of changes and currently offering increasing opportunities for foreign businesses. Photo: VNA

Vietnam has concluded an FTA with the European Union and joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Thus, from an international trading and investment perspective, Vietnam is unmatched when it comes to partnership and openness of market access.

The article pointed out that the new laws considered the most liberal and investor-friendly in the region, such as the Enterprise Law, Investment Law, and Public Private Partnership Law, have been adopted. Barriers to business and investment are removed to pave the way for an open, transparent, and full-of-opportunity environment for foreign investors.

In an attempt to ease burdens on investors, the Government issued a Decree in 2015 to provide more flexibility in the foreign ownership ratio in publicly listed companies, up to 100% in certain cases, and allow foreign investors to make unlimited investments in Government bonds, bonds guaranteed by the Government, bonds of the provincial authorities or enterprises.

Concluding the article, the author said Vietnam is a country of changes and currently offering increasing opportunities for foreign businesses. The underlying strength of the economy is reflected in, among others, controlled macroeconomic indicators, strong productivity gains and extensive integration into regional and global economy.

It is now exactly time for foreign investors to start their business plans and grasp the upcoming clear opportunities, the article said.

FDI inflow surges nearly 39%

Vietnam has lured more than $4.29 billion in foreign direct investment (FDI) in the first two months of 2024, a year-on-year increase of 38.6%, the Ministry of Industry and Trade (MoIT)’s Foreign Trade Agency reported.

During the period, 405 new projects with a total registered capital of $3.6 billion were granted investment certificates, up 55.2% in volume and doubling the value recorded in the same time last year.

Meanwhile, 159 projects had their capital adjusted, with a total amount of $442.1 million, up 19.5% and down 17.4% year-on-year, respectively.

Foreign investors inject capital into 16 out of 21 economic sectors. Photo: VGP

Capital contributions and share purchases fell 68% year-on-year to $255.4 million.

As much as $2.8 billion in FDI was disbursed in the two months, expanding 9.8% from the same time of 2023.

Hanoi, Quang Ninh, Thai Nguyen, Ba Ria–Vung Tau, Bac Ninh, Dong Nai, Bac Giang, Ho Chi Minh City, Hai Phong, and Hung Yen topped the country in terms of FDI attraction, the Foreign Trade Agency said, elaborating the ten localities made up a lion share of 81.7% of the foreign capital in the period.

Among 48 countries and territories with investment in Vietnam during the January-February period, Singapore was the biggest investor as it poured more than $2.08 billion into the country, followed by Hong Kong (China), Japan, and China.

The investors injected capital into 16 out of 21 economic sectors, of which the processing and manufacturing industry took the lead with total investment of nearly $2.54 billion. It was followed by the realty sector, whole and retail sale, and scientific and technological activities.

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