Vinh Phuc Province: Destination for Investors

Vinh Phuc considers IZ development as the backbone of industrialization and modernization of the province, “the bridge between local industry and developed world industry in both technology and economic relations”.

With the support of the local authorities for the development of IZs, the IZ Management Board will make greater efforts to contribute to the socio-economic development of the province, promoting the international economic integration, and making Vinh Phuc an industrial province by 2015.

Possibly, the highest barrier to investors is administrative procedure. It takes too much time although it has been considerably streamlined in the past three years. Vietnam should perfect its administrative formalities to catch the eyes of investors when they come to Vietnam to explore business opportunities. Except entirely protected industries, the Government should widen market-based liberation in industries for enterprises to compete and develop.

Vinh Phuc province boats a good investment environment. The province has tried to create favourable conditions for investors, such as investment procedure simplification and supporting site clearance. Many investors are keen on the province’s investment environment.

 

Vinh Phuc is one of provinces applying easy-going investment policies and many investment incentives. Remarkably, the province is near Hanoi, the capital of Vietnam, and Noi Bai International Airport. More importantly, the locality has strong and capable workforce.

Before we built our factories, we surveyed several localities and decided to locate in Vinh Phuc province. We saw this was a good place to invest and local authorities actively assisted investors. Investment procedures and other difficulties of our company are quickly solved. The consideration of local authorities for enterprises assured investors and improved the investment climate.

 

Vinh Phuc is one of the leading northern provinces in foreign investments. FDI has boosted socio-economic development of the province in recent years. However it is also affected by the world economic crisis. Vietnam Business Forum reporter has interviewed VCCI Vice President Hoang Van Dung on the issue.

 

Vinh Phuc is next door to Hanoi and with favourable location to attract foreign investments. In recent years, Vinh Phuc authorities have applied several measures to attract local and foreign investments. The industrial value in 2008 was VND33,000 billion (VND28,000 billion by FDI projects). Vinh Phuc is one of leading provinces in industrial production with high growth rates in products for home consumption and export as automobile, motorbikes, brick and tile.

 

In 2008, Vinh Phuc attracted 124 investment projects, increasing the total number to 365 including 100 FDI projects worth US$1.98 billion and 265 FDI projects worth VND15,500 billion. Some 100 enterprises are involved in import-export activities including 60 FDI enterprises accounting for major part of export volume.

 

With correct development orientation and appropriate mechanism to attract investors, I believe that Vinh Phuc will record bigger success in coming years.

 

It is indeed important to have the confidence of investors to attract local and foreign investments. The young Vinh Phuc Business Association has developed plan to unite young entrepreneurs and businesses of different industries, using with priority products and services within the association. The Association has also organized tourist and study tours to learn from major enterprises, local and foreign economic organizations.

 

The association has also promoted cooperation and partnership between young entrepreneurs to increase their potentials and posture, as well as exchanges between associations and clubs. It has established relations with 53 associations nation-wide and expanded cooperation with mass media to increase public awareness, develop trademarks and competitiveness in international economic integration.

 

The world economic crisis has adversely affected Vietnamese economy and Vinh Phuc itself. With important foreign companies operating in the province such as Honda, Toyota, etc., Vinh Phuc authorities have appropriate policy to facilitate their business activities.

 

I think, Vinh Phuc authorities should meet businesses and listen to them and find solutions to their problems. The Local Industry Department (MPI) and Vinh Phuc Industry and Trade Department should encourage and develop rural industry. Vinh Phuc People’s Committee should implement new Government policy and mechanism on capital, taxes, trade promotion, investment and construction stimulus. It must also follow closely automobile import-export and export activities in general. Vinh Phuc Industry and Trade Department should develop a road map for industry and handicraft development and submit the government for approval.

Vinh Phuc is known as a province rising from agricultural province to industrial province. Since the year for re-establishing 1997, Vinh Phuc’s economy has been hitting consecutive growth rate. 

 

The economic mechanism is strongly changing tend to accelerating the proportion in industry and service while lowering the proportion in agriculture. In 2008, the proportion in industry-construction-service accounted for nearly 84 percent and the proportion in agriculture was 16 percent. The provincial industrial production value rose from VND 892 billion in 1997 to VND 30,554.7 billion in 2008. In 2004, Vinh Phuc balanced its provincial budget and completed duties with the country. Breakthrough directions of paying attention to developing industry and attracting investment by provincial leaders themselves are attributed to the aforementioned achievements.

 

Vinh Phuc considers reforming administrative procedures as a solution to create a favourable environment for attracting investment for the provincial development, industrialisation, modernisation and global economic integration. Being fully aware of policies on reforming administrative procedures by the Party and the Government, the provincial People’s Committee timely concretised policies through issuing direction and adjustment documents. The provincial authorities often assigned relevant agencies to be fully aware of reforming administrative procedures and create favourable conditions to help investors in completing investment procedures, compensate, site clearance and implementation projects.

 

Since December 2002, the management boards of industrial parks were disconnected from the Department of Planning and Investment and became agencies to attract investment, consult, appraise and grant investment licenses to investors, helping investors complete investment procedures as well as directly keep a close watch on the implementation projects to timely solve difficulties for investors. Investors who have poured investment in Vinh Phuc have reduced two thirds of the given time for completing administrative procedures asking for investment licenses. Documents and the order of solving investment procedures have posted publicly in order to minimise difficulties for investors. Post-licensed procedures such as introducing locations, site clearance, grating construction licenses and appraising environment impacts have been solved at the receiving offices and their results have been answered in line with one-door mechanism at relevant agencies. Receiving offices and relevant agencies announce publicly the results, rights and duties of related people and enterprises. 

 

The provincial People’s Committee stipulated the receiving, the solving difficulties and petitions on administrative procedures from organisations and enterprises. Accordingly, duties of state offices in receiving, solving difficulties and petitions from enterprises and organisations as well as duties of individuals, organisations and enterprises in petitioning administrative procedures are stipulated specifically, timely detecting administrative procedures making difficulties for investment and production of enterprises.

 

At annual enterprise conference, the province conducts polls on difficulties of enterprises in completing administrative procedures for their investment and production and business, helping to appraise the degree of satisfactoriness and difficulties of enterprises in completing administrative procedures as well as to appraise the quality of civil officials in contacting and solving works with enterprises.

 

The provincial investment environment has been appreciated through the results from reforming administrative procedures to attract investment. According to the ranking table of province competitive index (CPI) by the Viet Nam Chamber of Commerce and Industry (VCCI), Vinh Phuc always ranks among the top ten, the fifth in 2005, the eighth in 2006, the seventh in 2007 and the third in 2008. Norms on aggressiveness and pioneer of provincial leaders, on obviousness, and on time for completing regulations are also appreciated.

However, besides obtained achievements, over the past years, the province has been meeting difficulties in reforming administrative procedures, hampering to attract investment. Facing difficulties and challenges in the innovation, the provincial leaders decided to continue boosting investment environment improvement with the focus on reforming administrative procedures:

-Doing well investment promotion; establishing relationships with foreign diplomatic and commercial representative offices in Viet Nam and Vietnamese diplomatic offices abroad; taking place in foreign and domestic conferences and exhibitions; timely solving difficulties for foreign enterprises operating in the province in order to preparing for foreign investment promotion.

-Promptly solving administrative procedures for investors; timely solving difficulties especially in site clearance and compensate; paying attention to developing infrastructure; creating steady confidence for investors doing business in Vinh Phuc and for attracting other investors to invest in the province.

-Drawing up in echelon in implementing infrastructure projects, especially infrastructure projects in and out barriers at industrial parks; quickly carrying out the projects in order to ensure favourable conditions for investors.

-Building, raising ability on awareness, attitude, responsibility, virtuous character and knowledge for staff relating to attracting investment.

-Caring about enterprises to timely detect inadequate problems in completing and adjusting administrative procedures.

Besides available favourable conditions on point, Vinh Phuc has been boosting building urban areas and industrial parks; preparing land, human resources and investment for infrastructure projects including roads, power projects, water projects, telecommunications; boosting domestic and foreign investment promotion; especially actively solving difficulties for domestic and foreign investors.