Vietnam should redefine its competitive advantages in order to attract foreign direct investment flows from the United Kingdom (UK), experts have suggested, as reported by Viet Nam News.
Despite its cheap labor costs and abundant human resources, Vietnam needs to focus on new factors such as an attractive and transparent investment environment, streamlined and digitalized administrative procedures, and infrastructure development, according to the experts.
Furthermore, the UK has a well-developed high-tech industry, and in order to attract FDI effectively from the UK, Vietnam should create an ecosystem that can support domestic suppliers with sufficient management capacities to meet the needs of British foreign-invested enterprises in Vietnam, especially tier 1 and tier 2 suppliers, the experts stated.
Experts anticipate that the UK’s investment in Vietnam will increase due to several favorable factors. These include close relationships in various areas such as education, science and technology, industry, and energy, as well as the UK’s support for Vietnam’s commitment to achieving net-zero energy emissions by 2025. The UK plans to provide technical support, expertise, and establish partnerships and programs for energy transition and climate change in Vietnam.
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| A part of HCM City. The city takes the lead with 244 UK-financed projects with capital totaling over $909 million or equivalent to 21.6% of the total UK investment in Vietnam. Photo: VNA |
As of August 20, 2023, the UK had 542 direct investment projects in Vietnam with registered capital of about $4.29 billion, ranking 15th out of 143 countries and territories investing directly in Vietnam.
The processing and manufacturing industry attracted the majority of UK investment with 117 projects worth $1.59 billion, accounting for 38.1% of the total investment capital.
The property sector followed with seven projects valued at $701.44 million or 16.7% of the total. This was followed by the mining sector, wholesale and retail, car and motorbike repair, accommodation and food services, water supply and waste treatment, science and technology, and education.
UK investors have invested in 36 localities and offshore areas in Vietnam. Ho Chi Minh City is the leader with 244 projects totaling over $909 million, equivalent to 21.6% of the total UK investment in Vietnam. Offshore areas followed with five projects capitalized at $688 million, and Dong Nai province with 11 projects valued at $670.8 million. Others include Hai Duong, Long An, and Binh Duong provinces.
During the first eight months of 2023, the UK had a total of 34 new investment projects in Vietnam with registered capital of $48.3 million. Among European countries, the UK is now the second-largest foreign investor in Vietnam, after the Netherlands.
According to Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan, the UK-Vietnam Free Trade Agreement (UKVFTA), which came into effect in May 2021, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the UK joined on July 16, 2023, will contribute to further developing bilateral relations, especially in investment, in the future.
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| Over $15.29 billion was invested in 2,608 new foreign direct investment (FDI) projects as of October 20. Photo: thesaigontimes.vn |
Statistics show that over $15.29 billion was invested in 2,608 new foreign direct investment (FDI) projects as of October 20, representing a 54% increase in investment and a 66.1% increase in project numbers compared to the previous year.
This brings the total FDI during the period to over $25.76 billion, a 14.7% increase, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
Of the total, over $5.33 billion was added to 1,051 existing projects. While the additional capital decreased by 39%, the number of projects increased by 19.4% compared to the previous year, indicating investors’ confidence in Vietnam’s investment climate and their decision to expand their projects.
Meanwhile, foreign investors spent over $5.13 billion on contributing capital to and purchasing shares of domestic companies through 2,836 transactions, a 35.4% increase in capital and a 5.4% decrease in transaction numbers.
During the period, approximately $18 billion was disbursed for FDI projects, a 2.4% increase year on year, according to the FIA.
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