Producing electronic components at Japanese MTEX Company in Tan Thuan Export Processing Zone in Ho Chi Minh city (Photo: SGGP)

According to economic experts, this comes from the advantage of Vietnam’s successful signing of the Europe - Vietnam Free Trade Agreement (EVFTA).

Statistics from the Ministry of Planning and Investment showed that, including additional registered capital of projects licensed from the previous years, FDI capital into the electricity and gas production and distribution, water and air conditioning reached over USD3.8 billion, accounting for 68.1% of total registered capital. Meanwhile, the capital to the processing and manufacturing industry reached over USD1.4 billion, accounting for 25.3%; while the remaining industries reached USD371.8 million USD, accounting for 6.6%.

Currently, 38 countries and territories have newly licensed investment projects in Vietnam. In particular, Singapore rose to be the largest investor with USD4.111 trillion, accounting for 82.2% of total newly registered capital, followed by China with USD418 million, accounting for 8.4%. As of 2019, the EU is the fourth largest investment partner in Vietnam with over 2,240 valid projects having total registered capital of USD24.67 billion, equivalent to 7.6% of total FDI into Vietnam. The EU has invested in 18 of 21 sectors and is present in 54 provinces and cities across the country.

According to the Japan Trade Promotion Organization (Jetro) Vietnam, Vietnam is the leading destination for Japanese businesses in 2020. Specifically, 42.3% of 122 surveyed enterprises answered that they will move production to Vietnam.

Japanese enterprises invested mainly in processing and manufacturing in combination with supporting domestic enterprises to improve their capacity to deeply integrate into the global supply chain. On the other hand, Japanese consumer goods companies are also expanding their presence through Japanese retail distribution system, or opening a series of stores. Aeonmall, for example, has changed its investment strategy and identified Vietnam as the most important market in Southeast Asia.

A representative of this group affirmed that the group initially invested in Ho Chi Minh city and Hanoi; however, thanks to unexpected business performance, it will invest nationwide. It has invested USD200 million for each trade center in Ho Chi Minh city, Dong Nai, Hanoi and Hai Phong, considering it a major turning point in the strategy of building 20 trade centers. Recently, Japan’s Fast Retailing Group has opened and put into operation Uniqlo stores in Ho Chi Minh city and Hanoi.

To further attract FDI, Vietnam is gearing efforts to address any businesses’ possible obstacles. The Ministry of Industry and Trade has confirmed that the authorities are currently reviewing the Intellectual Property Law in order to adjust it in accordance with the commitments in EVFTA and new generation FTAs, in order to ensure the optimal benefits committed to investors and FTA members.

In addition, Vietnam has also been reviewing a series of important laws such as the Law on Investment, the Law on Enterprises, the Law on Land and some tax laws, to suit the regulations and principles of cooperation in FTAs Vietnam has signed./.

Compiled by BTA