Favourable environment needed to attract foreign investment

Attracting investment from large corporations has been a success, but keeping the “eagles” is also a great challenge, requiring Vietnam to continue to make improvements on institutions, business environment, infrastructure and especially the quality of human resources, as well as unify regulations before their promulgation, to avoid overlapping regulations, leading to difficulties for the business during the compliance process.

On May 18, Apple, a technology corporation from the US, officially opened an online store in Vietnam to provide personalized services and support to customers, like other Apple Stores around the world.

This move was considered a step for the US technology "eagle" to pave the way to opening a direct store in Vietnam in the near future, as well as showing that Apple has made a good assessment of the Vietnamese market, to the presence of the Apple brand in Vietnam.

From 2016 to 2022, Vietnam was the destination for many suppliers and support for Apple. The suppliers of electronic components and accessories for Apple located in Vietnam increased from 18 to 27 production facilities, ranking seventh in the world and second in Southeast Asia following Thailand (28 facilities).

In May, Boeing inaugurated a representative office in Hanoi and is expected to invest in developing the supply chain of spare aviation parts and equipment in Vietnam.

Previously, LEGO Group (Denmark) started construction of a new factory worth 1 billion USD in Binh Duong Province, which is expected to be put into operation in 2024. The Group also planned to recruit 4,000 workers with intermediate to advanced qualifications. This is the Group's second-largest factory in Asia and its products have mainly been exported to the Asia-Pacific market.

The fact that a series of large corporations in the technology and industry sectors have been pouring capital to expand investment in Vietnam proved that the policy reforms and the improvement of the business investment environment, as well as the preparation of infrastructure from the Vietnamese Government, has brought tangible results.

Although the global economic downturn has had a certain effect on attracting foreign direct investment (FDI), his capital source in Vietnam has still grown well over the past years. According to data from the Foreign Investment Department under the Ministry of Planning and Investment, the country’s FDI reached nearly 10.86 billion USD in the first five months of 2023, equaling 92.7% over the same period and up 10.6% over the first four months of the year.

However, many economic experts are also concerned about Vietnam's challenge in attracting FDI as it competes not only with other countries which are attracting investment but also with countries that have long been “exporting investment capital”, especially in the context that large corporations are cautiously considering the policy of continuing their large investments in Vietnam, under the influence of the global minimum tax. The country is facing the requirement of how to both ensure the interests of investors and help the Vietnamese economy continue to develop. Because if it wins the right to tax, Vietnam must have the opposite support for FDI businesses to attract and retain them.

This will be the main tool for Vietnam to keep these corporations from shifting their investment, along with thousands of other FDI enterprises in the ecosystem and supply chain to other countries.

In addition, it is crucial to have breakthrough solutions to help improve the capacity of domestic enterprises, thereby supporting Vietnamese enterprises to participate more deeply in the global supply and production chain and received orders from supporting industries and investment flows, from global supply chains to Vietnam.