Prime Minister Dung tells Vietnam Global Investment Forum of country's efforts to attract and assist foreign investors.
Vietnam is keen to continue welcoming foreign investors and is committed to its policies for attracting foreign investment, Prime Minister Nguyen Tan Dung told the Vietnam Global Investment Forum, organized by Euromoney and the Ministry of Planning and Investment on September 30.
With seven sessions focusing on the issues of growth, prospects for foreign direct investment, development of capital markets, equitization of State-owned enterprises (SOEs), the real estate sector, investment in agriculture, and infrastructure development, the forum was attended by nearly 700 delegates representing leading corporations in the world from 32 countries.
Foreign investors have stated that Vietnam is becoming an attractive investment destination due to a range of factors, such as impressive growth, low cost and abundant human resources, and an extensive integration process.
According to Mr. Tony Shale, Chief Executive Officer, Asia, of Euromoney Institutional Investor, investors see investment opportunities in Vietnam because it is an emerging market with a prominent position. It has overcome the global challenges, growing and recording significant achievements in the past few years, and been one of just a few countries to maintain continuous economic growth.
Agreeing, Mr. Jonathan Choi, Chairman of VinaCapital, said that despite the fluctuations in the economy increasing amounts of foreign direct investment (FDI) capital are coming to Vietnam and this is certain to continue into the future. “Vietnam has solid economic relations with major partners such as South Korea, the US, and Japan,” Mr. Choi said. “This represents a good opportunity for long-term investment in the country.”
A representative from Euromoney said that Vietnam’s economy is experiencing very good growth, forecast at 6.5 per cent this year and 7 per cent in 2016. It has also become a destination for global supply chains. Samsung in particular continues to expand its investment in Vietnam, adding $3 billion recently.
Vietnam has also made strong commitments in the financial sector, has removed limits on foreign shareholdings in listed companies, and continues to promote the equitization of SOEs. These present a range of opportunities to foreign investors and enterprises, the representative said.
Mr. Le Phuoc Vu, Chairman of the Ton Hoa Sen Group, meanwhile, believes that improved government administration over recent years has had a clear effect, bringing many investment opportunities to both domestic and foreign enterprises. “But transfer pricing is still common among foreign enterprises, crowding out local enterprises,” Mr. Vu said.
In response, Minister of Planning and Investment Bui Quang Vinh said attracting foreign investment from developed countries like the US, Japan, and South Korea is very much required. “Foreign companies investing in Vietnam will promote the competitiveness of domestic enterprises, forcing them to innovate to improve their productivity and competitiveness,” Minister Vinh said.
Regarding transfer pricing, he added, there must be clear evidence. “Vietnam has a consistent policy of attracting foreign investment and follows international practice,” he said.
Four major solutions
The Prime Minister said Vietnam’s business investment environment has remained limited and is subject to certain difficulties. The government is trying to implement many measures to overcome specific challenges and take advantage of opportunities for rapid and sustainable development. There are four matters Vietnam should focus on resolving.
The first is the investment environment. Vietnam is trying to perfect its market economy, improving the quality of its human resources and developing infrastructure. Many important laws have been amended or introduced, such as the Law on Investment, the Law on Enterprises, the Law on Housing, and the Law on Real Estate Business, as well as a decree on investment in the public-private partnerships (PPP) model, a decree on securities, and many other legal instruments that are being continuously developed and will be issued in 2016.
Second is investment in infrastructure under the PPP form, with the Prime Minister saying that modern infrastructure will provide a breakthrough in Vietnam’s development strategy. It has implemented public investment reform, creating a favorable environment for private domestic and foreign investors to participate in infrastructure development, with priority given to projects using high technology or those in support industries.
The third is the equitization of SOEs, with increasing numbers to be listed on the stock market. This is a good opportunity for foreign partners to explore the opportunities available in mergers and acquisitions (M&As). Vietnam encourages foreign corporations that have the financial resources and technology to join the equitization process and conduct M&As in the future.
The fourth is Vietnam’s financial market. As its market is of small scale, Vietnam is continuing to amend and introduce policies and services consistent with international standards. It has implemented regulations to expand the percentage of shareholdings held by foreign investors in the stock market, removed restrictions on foreign investors purchasing government bonds, and facilitated foreign enterprises to be part of its financial market.