Facilitating and Getting Ready for EU Investment

11:41:48 AM | 17/7/2019

Vietnam always highly appreciates EU investors for their capacity in capital, technology and management level. Preparing necessary conditions to absorb this high-quality investment capital flow is very important for sustainable economic development, which is compared to “making the nest for phoenix”.

As the head of the investment authority, Planning and Investment Minister Nguyen Chi Dung affirmed that the Vietnamese government has solid ground to believe that the signing of the Investment Protection Agreement (IPA) will help draw high-quality funds from EU investors and generate good opportunities for Vietnamese investors to access the EU market.

With the signing of EU - Vietnam Free Trade Agreement (EVFTA) and the EU - Vietnam Investment Protection Agreement (EVIPA), the Vietnam’s investment and business environment will be substantially improved, especially for European businesses, affirmed Minister Dung. Together with investment capital attraction, Vietnam is also motivated to promote appropriate administrative procedure reforms to catch this capital flow. The investment environment, through the Vietnamese government's mechanisms, laws and administration, will be fundamentally upgraded, said Mr. Nguyen Dinh Cung, President of the Central Institute for Economic Management.

Accordingly, a series of major investment protection issues as well as investment dispute settlement will be developed and organized according to international laws and adapted for Vietnamese and EU laws. At the same time, investment protection commitments like no illegal distrainment and nationalization or adequate compensation for expropriation and nationalization of EU investors' assets is also guaranteed by the Government of Vietnam.

Mr. Luong Van Khoi, Deputy Director of the National Center for Socio-economic Information and Forecast, said the Ministry of Planning and Investment of Vietnam will liberalize the investment market, not discriminate any investors when they study the market, provide equal treatment, open the market of Vietnam to the European Union (EU) at a higher level than other countries and in the World Trade Organization (WTO), according to EVIPA commitments. EU investors will also have the opportunity to access markets with FTAs signed by Vietnam or countries joining CPTPP and ASEAN.

EVIPA will help facilitate investment from the EU and make Vietnam one of EU trade and investment centers in Southeast Asia. According to Mr. Nicolas Audier, Chairman of EuroCham Vietnam, 72% of businesses agree that EVFTA will make Vietnam a center of European businesses in ASEAN.

To truly appeal to EU investors, Vietnam needs to make efforts to have a more competitive investment environment, said Dr. Phan Huu Thang, former Director of Foreign Investment Agency (FIA). Only when it has a more competitive, more prominent investment environment than other countries in the region, will Vietnam have a winning position in a race to draw investment capital from the EU in particular and from the world in general. Thus, Vietnam needs to overcome current limitations of the investment environment and continue to improve the legal and policy system. The country must ensure consistency, understandability and clarity of all investment and business-related contents for investors. One of necessary requirements to catch the attention of European high-tech investors is that Vietnam needs to pay attention to training high-quality human resources, said Mr. Michele D’Ercole - Chairman of the Italian Business Association in Vietnam.

Dr. Pham Tat Thang, Senior Researcher at the Institute of Trade Research under the Ministry of Industry and Trade, said, the role of Vietnamese businesses in the course of “nesting for phoenix” is very important. He said, to attract EU investment, Vietnam must prepare ready infrastructure, electricity, water, human resources and industrial parks for EU investors. Otherwise, trade deals are meaningless no matter how many incentives they offer.

Nguyen Thanh