A government’s task force on promoting foreign direct investment (FDI) in Vietnam has been in contact with a number of global tech firms that are considering investing in large scale projects of up to US$1 billion each in Vietnam, according to Do Nhat Hoang, director of the Ministry of Planning and Investment’s Foreign Investment Agency.

Overview of the online conference. Photo: VGP.

Details of those in discussion, however, remained classified, Mr. Hoang, who is also a member of the task force, said at an online discussion on attracting FDI to Vietnam on September 4.

According to Mr. Hoang, Vietnam remains a favorite investment destination for foreign businesses. While global FDI is projected to decline by 40% year-on-year in 2020, FDI commitments to Vietnam in the first eight months went down by 13% year-on-year to US$19.54 billion, and the disbursed amount was down 5.1% to US$11.3 billion.

Such a decline remains acceptable given the dim outlook in regional countries and around the world, Mr. Hoang commented.

Notably, year to August 20, registered FDI capital for fresh projects in Vietnam increased by 6.6% year-on-year to US$9.73 billion while existing projects have been injected an additional US$4.87 billion, up 22.2%.

Mr. Hoang said through various contact channels, the task force saw growing interests in Vietnam from foreign investors.

In its semi-annual industrial production report released in July, the Ministry of Industry and Trade also tipped big tech firms such as LG, Panasonic and Foxconn are looking to shift or expand production in Vietnam in the post-Covid-19 period.

In early 2020, Apple recruited a series of senior positions in Hanoi and Ho Chi Minh City, fueling rumors that the US-based tech giant is moving to build a plant here.

However, Nguyen Van Toan, vice chairman of the Association of Foreign Invested Enterprises (VAFIE), said Vietnam is not the only country to draw attention from foreign investors, adding the race for new foreign investment capital is becoming fiercer.

Mr. Toan pointed to China’s new foreign investment law which targets greater openness and transparency for potential firms, while India and Indonesia have also offered new incentives to attract new investors. Meanwhile, countries like the US and Japan are encouraging companies to return home.

Former Director of the Central Institute for Economic Management Nguyen Dinh Cung noted the majority of FDI to Vietnam are from Asian countries, while those from Europe and the US only make up a small proportion of the total.

Mr. Cung said for Vietnam to attract high quality FDI projects, more improvements are needed to ensure a predictable and transparent business environment.

Mr. Hoang from the Foreign Investment Agency said Vietnam has been focusing on improving the legal framework by simplifying administrative procedures for investors. In addition to current incentives, Vietnam also offers tailor-made ones for hi-tech projects that support local firms to further integrate into global value chains.