Teaming Up to Attract more FDI

What are foreign investors interested in when they invest in Vietnam?

According to foreign partners, the two most favourable factors are the cheap and high quality labour force and the country's top socio-political stability in Asia.

Foreign investors are also interested in the system of legal documents and policies of Vietnam. Currently, Vietnam's legal system is in need of perfecting while the country goes through a transitional period and integrates into the regional and international economy. However, investors will acknowledge that previous constraints and shortcomings have been settled if they look at the international integration commitments of Vietnam in its bilateral and multilateral cooperation agreements signed with ASEAN/AFTA, APEC, the EU, the US and Japan, as well as Vietnam's efforts to join the World Trade Organisation (WTO) in 2005. In the future, healthy prospects will become far greater and present difficulties will be overcome for investors.

Foreign investors have expressed their great concern in administrative procedures and project appraisal. Due to various reasons, it takes a longer time to complete procedures stipulated by the law. These are significant obstacles to Vietnam's attraction of foreign investment. Therefore, the government is accelerating administrative reform, removing unnecessary procedures with the 'one door, one stamp' mechanism. The Vietnamese government has also listened to complaints and comments from foreign investors about the obstacles and difficulties they run into, and has, in turn, made great efforts to reduce the hindrances. The removal of discrimination in prices of services, electricity and water between Vietnamese and foreign investors is considered an important step in stabilising the investment environment. These efforts have been highly praised by investors.

To promote its support for localities and enterprises in investment promotion activities, what further cooperation between VCCI and the Ministry of Planning and Investment can we expect?

In the coming time, VCCI will sign a cooperation agreement with the Department of Foreign Investment under the Ministry of Planning and Investment. This is to boost the implementation of investment promotion and international cooperation functions of the Department of Foreign Investment and improve the effectiveness in the implementation of VCCI's function of representing and supporting the Vietnam business community. The cooperation agreement will also help develop the advantages of each organisation in mobilising ministries, agencies and localities, combining investment promotion and international cooperation with support for enterprises and localities.

Within the agreement, the two organisations will be responsible for supporting localities and enterprises in providing information, strategies and updates in the investment environment in Vietnam and foreign countries. The two sides will study the establishment of a website for investment promotion to better the serve the business community. The Department of Foreign Investment will also cooperate with VCCI to provide consultancy services for localities and enterprises on opportunities and foreign partners, negotiation and contract signing techniques and skills, and project development. The organisations will support Vietnamese and foreign enterprises in organising investment promotion activities. We will also organise training courses to increase the capability, knowledge, skill and experience in investment promotion for managers and relevant bodies.

What prospects do you see in Vietnam's attraction of foreign investment?

Up to 70 per cent of Japanese investors in Vietnam want to expand their investment after positive development in the Vietnam investment environment. According to a survey conducted by the American Chamber of Commerce (AmCham), up to two thirds of American investors in Vietnam have planned to recruit more Vietnamese workers for business and production expansion, and up to 80 per cent of investors believe that their profits will increase in the following years. The president of the International Data Group, (IDG) in a recent visit to Vietnam, decided to increase the groups' investment in Vietnam to US$750 million over the next 20 years. The director of the Hanoi Daewoo Hotel said he wished to invite and encourage his friends to invest in new projects in Vietnam. This demonstrates that in the eyes of foreign investors, Vietnam is an attractive market.

To promote foreign investment attraction, Vietnam will continue to perfect its legal system and foreign investment policies, which are applied for both foreign and domestic investment. The country will implement its international commitments, gradually expand its investment fields, and remove discrimination. Project appraisal will be improved while investment licence registration will be sped up. Investment promotion activities will be implemented effectively.