Thursday, January 24, 2008

Vietnam attracts 9,500 foreign invested projects

Nhon Trach 1 Industrial Zone in southern Dong Nai province.

Nhan Dan – The Foreign Investment Law was issued on December 29, 1987. It was one of the first laws issued during the renovation period. The promulgation of the Foreign Investment Law has institutionalised the Party and State’s policies in effectively attracting foreign investment capital. It is regarded by the international community to be a transparent, attractive code and basically conforms with the international norms. Within the context of fierce competition in attracting foreign investment regionally and globally, the Foreign Investment Law in Vietnam has been a vital lever in attracting foreign investment to Vietnam.

Since the promulgation of the Foreign Investment Law in 1987, the law has been amended four times in 1990, 1992, 1996 and 2000. The issuance of the law as well as of other legal documents relating to foreign investment has created a legal environment for foreign investment activities in Vietnam.

Thus, though the market mechanism in Vietnam has yet to be perfected, foreign investors in Vietnam can still carry out their investment activities in Vietnam without any big differences compared to other countries.

Importance has not only been attached to perfecting legal environment, during the past 20 years, the business and investment environment and the decentralised administration of foreign investment have received due attention. These efforts have contributed to the encouraging foreign investment activities in Vietnam, affirming the significant position of the foreign-invested sector in national industrialisation and modernisation.

By the end of 2007, Vietnam has attracted over 9,500 FDI projects with a total registered capital of US $98 billion, including additional registered capital.

Excluding expired projects and those that have been dissolved ahead of duration, currently 8,590 projects are still valid with a total registered capital of US $83.1 billion. Total registered capital experiences a trend of increasing from 2003 to date.

In 2003, total registered capital increased by six times compared to 2002. In 2004, the figure was up 42.9% compared to 2003; it was 58% in 2005; 75% in 2006 and 69% in 2007.

From 2001 to 2005, Vietnam attracted a total of US $20.8 billion, up 73% against the targeted figure set at the Resolution 09/2001/NQ-CP.

In 2006 and 2007, foreign investment flow to Vietnam increased remarkably with the registry of many large-scale projects in heavy industry and services.

Foreign investment to heavy industry and construction occupies the biggest proportion, accounting for 66.8% of the total number of projects, 60.2% of the total registered capital and 68.5% of the total implemented capital.

From 1988 to the end of 2007, northern localities attracted 2,220 FDI projects with a total registered capital of US $24 billion, accounting for 26% of the project quantity, 19% of registered capital and 24% of the total implemented capital.

Specifically, Hanoi has attracted half of the total registered investment and implemented capital of the whole northern region, followed by Haiphong, Hai Duong and Quang Ninh.

Southern localities from Ninh Thuan southwards have attracted 5,452 projects with total registered capital of US $46.8 billion and total implemented capital of US $15.7 billion, equivalent to 48% of the total number of projects, 56% of registered capital and 51% of implemented capital.

Foreign investment in the Mekong river delta region was the lowest in the country, accounting for only 3.6% of the total number of FDI projects to the country, 4.4% of total registered capital and 3.2% of total implemented capital.

Quang Nam, Da Nang and Phu Yen are currently topping the localities in the central region in terms of foreign investment attraction, though their rate of attraction is still low compared to their potential.

To date, 80 countries and territories have been investing in Vietnam. As many as 68% of these are from Asia; 16.2% from the EU and 11% from America.

The foreign-invested sector is underlining its significance in Vietnam’s economy and is the sector enjoying the most dynamic growth.

Vietnam’s investment and business environment is improving, thus the country is becoming more attractive to both foreign and domestic investors.