Illustrative image (Photo: VietnamPlus) Hanoi (VNA) – The issuance of policies by the Government and the National Assembly to attract foreign investment from hi-tech enterprises is an essential step to gradually elevate Vietnam's position in the global supply chain, said insiders.
A task that cannot be deferred
The early building of policies for hi-tech investment will benefit Vietnam in the new context.
According to statistics from the Ministry of Planning and Investment (MoPI), Vietnam has attracted foreign investment from 142 countries and territories around the world.
Major technology conglomerates such as Intel, Google, Boeing, and others are considering expanding their supply chain in Vietnam to ensure long-term stability across the entire supply network.
In a significant shift in the firm's global supply chain strategy recently, Apple has finalized the relocation of 11 audio device production facilities to Vietnam.
Meanwhile, Intel has initiated the expansion of its Phase 2 chip verification plant, involving a staggering investment of 4 billion USD in Ho Chi Minh City, Vietnam.
Besides the recent strategic moves and multi-billion-dollar commitments from Apple and Intel, Danish conglomerate Lego is investing in a factory in the southern province of Binh Duong with an outlay of 1 billion USD.
Particularly noteworthy is the colossal shift by the Korean technology giant – Samsung in relocating its entire mobile phone production line predominantly to Vietnam and India. Remarkably, 60% of Samsung's global smartphone output is now manufactured in Vietnam.
Additionally, trips by foreign firms to Vietnam to explore business opportunities in the country in recent times indicate that US enterprises are genuinely interested in establishing new facilities or expanding their production and business operations in the Southeast Asian nation.
However, the MoPI said the expansion of investments in existing projects also faces the risk of declining, while Vietnam has set a target of disbursing 20-30 billion USD per year for the 2021-2025 period and 30-40 billion USD per year for the 2026-2030 period.
Many large-scale projects in the high-tech sector currently benefit from preferential investment policies with a tax rate lower than 15%. However, if the new tax rule of 15% is applied, the benefits that companies operating in Vietnam are currently enjoying will no longer be available, impacting the attractiveness of the Vietnamese market for foreign investment.
In response to those challenges, in late August, the Government reported to the National Assembly and the National Assembly Standing Committee an investment attraction policy for the high-tech industry, which it said aims to ensure the competitiveness of the investment climate in accordance with the Party's and the State's direction of prioritizing high-tech projects.
Retaining strategic investors, attracting new investors
In this context, policies to support hi-tech investors are hoped to help Vietnam overcome challenges posed by new international tax policies as well as fully tap opportunities brought by the production shift from major technology "eagles" in the world.
Experts said foreign investment in new projects and expansion of existing investment in Vietnam, especially by multinational companies, is primarily driven by the stability of the investment environment and the assurance of business policies in case of changes in laws.
Experts underline the need for Vietnam to have additional policies to attract investment from hi-tech businesses. (Photo: VietnamPlus) The presence of hi-tech giants such as Samsung, LG, Canon, and Intel in Vietnam has made significant contributions to the remarkable development of Vietnam's economy. Vietnam should accompany these companies in the context of global economic changes in order to encourage them to increase their investment in the country.
Experts emphasized that Vietnam should consider adjusting its legal framework regarding taxation to be in line with current conditions, while reinforcing Vietnam's advantages in attracting investment.
Without timely solutions to support businesses, it will impact investment decisions, expansion, or the continuation of investments by multinational companies operating in Vietnam, experts said. They added that this, in turn, can lead to a decrease in investment from other satellite companies, and new investors which have plans to pour capital into Vietnam.
This will affect Vietnam's competitive position compared to other countries in the region, as well as affecting the attraction of high-quality foreign investment capital, they said. /.
