Enhancing competitiveness to welcome investment flows from ASEAN
Throughout the past 25 years since its accession to the Association of Southeast Asian Nations (ASEAN), Viet Nam has been gradually becoming a hot spot to attract global foreign direct investment (FDI) as well as investment flows from ASEAN member countries.
Promoting investment in general and ASEAN’s investment in particular will contribute to reviving economic growth, creating jobs, enhancing cohesion and improving competitiveness and the strength of the ASEAN business community.
In the context of the COVID-19 outbreak having paralyzed the global supply chains, ASEAN has become an increasingly attractive destination for investment shift. Investors from Europe, the US, Japan, and the Republic of Korea all consider ASEAN a potential alternative destination.
As for Viet Nam, with its fast-growing economy, stable politics, a young population and quite competitive labor costs, Viet Nam has emerged as one of the countries attracting the most FDI in the ASEAN region.
Thus far, ASEAN investors’ FDI pledges to Viet Nam have reached about US$82.2 billion, accounting for 21.6% of the total FDI inflows into the country.
The average size of an investment project of ASEAN countries in Viet Nam is US$19.9 million, higher than the average size of FDI projects in Viet Nam. Singapore is the leading ASEAN member country in terms of FDI inflows into Viet Nam with a registered capital of US$54.9 billion, representing 15.5%, followed by Malaysia and Thailand with US$12.7 billion and US$12.4 billion, respectively.
These are not only Viet Nam’s leading investment partners in ASEAN, but also the leading investment partners of the country in general. Singapore, Thailand and Malaysia are among the top 10 countries and territories with large investments in Viet Nam.
Chairman and CEO of SCG Group (Thailand) Roongrote Rangsiyopash said that his firm has invested nearly US$4.2 billion in Viet Nam, mostly in the petrochemical industry.
Currently, many enterprises from Singapore, Thailand and Malaysia are exploring opportunities to promote investment in southern provinces, especially Dong Nai, Binh Duong, Ho Chi Minh City, and Ba Ria-Vung Tau.
They are interested in projects in the fields of transport infrastructure, commercial services, real estate, social housing, solar energy and waste treatment.
According to the Ho Chi Minh City Business Association, Viet Nam has many advantages to draw FDI from the ASEAN region, with the successive signing of new-generation FTAs such as the CPTPP, EVFTA, EVIPA, and most recently the RCEP; the successful control of the COVID-19 pandemic; a young workforce with high mobility; and labor costs and the average land rental at industrial zones 45-50% lower than that of other nations in the region (Thailand, Malaysia, Indonesia).
In addition, Viet Nam’s corporate income tax is currently in the lowest group in Southeast Asia, while businesses in the country’s industrial zones enjoy many preferences in terms of tax and visa./.
source: news.chinhphu.vn
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