June 29, 2022 | 13:14 GMT +7

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Friday- 14:26, 10/06/2022

Large IZs lack services to attract European and American investors

(VAN) Foreign investments in Vietnam's industrial and economic zones are mainly from Singapore, Japan, Korea, and Taiwan and have not yet attracted large investors from Europe and North America.
Overview of the workshop 'Roadmap and Notes for Investors in Industrial Parks and Processing Zones'. Photo: Nguyen Thuy.

Overview of the workshop "Roadmap and Notes for Investors in Industrial Parks and Processing Zones". Photo: Nguyen Thuy.

Such information was shared at a workshop themed "Roadmap and Notes for Investors in Industrial Parks and Processing Zones" held by Ho Chi Minh City Investment and Trade Promotion Center (ITPC) in collaboration with the Vietnam International Arbitration Center (VIAC).

The workshop aimed to provide domestic and foreign investors with information about policies on attracting and calling for investments in industrial zones (IZs) and processing zones (PZs) in Ho Chi Minh City. It also aimed to propose solutions on removing obstacles, make it easier for investors to access investment policies, guide them in the roadmap, and easily complete procedures when investing in industrial parks and processing zones.

Prof. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said that investments in IZs and economic zones (EZs) in Vietnam are mainly from Singapore, Japan, Korea and Taiwan but have not yet attracted large investors from Europe and North America. There are too few large industrial zones in the country, especially the industrial-urban-service complex zones.

According to Prof. Vo, there are many shortcomings that need to be removed for continuous reform. For example, he said, the market development for Vietnam's IZs is still weak and there is a lack of encouragement for market incentives. Large IZs are still too few and lack sufficient infrastructure and modern services to develop key industries, making it difficult to attract big investors from Europe and America. In addition, the policy on integrating them with services and urban areas was implemented too slowly, causing a lack of vitality for IZs.

The development of high-tech zones is not highlighted as a key factor so the IZs cannot connect with technological practices as well as high-quality human resources training.

Prof. Vo said the occupancy rate of IZs in Vietnam is currently about 50-70%, of which the Southeast is a dynamic area with a very high rate. Land rent in the IZs for building production facilities has increased by 15% along with an increase in financial investment indexes.

"Investors should choose IZs associated with urban areas which have developed infrastructure, adequate accommodation for workers, and best service conditions...", Prof. Vo recommended.

Meanwhile, Mr. Bui Le Anh Hieu, Business Development Director of Long Hau Joint Stock Company, said that when foreign investors wanted to invest in Vietnam's industrial zones, what they were most interested in was the locations of key traffic connections, then construction costs, land rent, labor, utilities and preferential policies...

Dr. Vu Tien Loc, President of the VIAC said foreign investors were paying more attention to investing in Vietnam in the process of restructuring the supply chain, before the pandemic and political changes.

Loc said to attract investors, the State needed to provide more support and guidance for investors to properly understand Vietnam's regulations and procedures. At the same time, the country needs to conduct more institutional reform and find solutions for upgrading services in EZs and IZs, creating favorable conditions for investors, according to him.

ITPC Deputy Director Nguyen Tuan said that with its role as the country's economic locomotive and southern key economic region having synchronous infrastructure, developed science and technology, and a qualified workforce, HCM City now has the highest attraction amount of FDIs with nearly 11,000 projects with a total investment capital of nearly USD54 billion. 

"When the economy reopens after the pandemic, it has recovered like a compressed spring. Investors are more interested in IZs and PZs," said Tuan.

Data from the Department of Economic Zones Management under the Ministry of Planning and Investment shows the country has now established 335 IZs on a total area of ​​97,840ha, of which 260 have been put into operation and 75 others are on the way to building. The occupancy rate of IZs reached 53.5%, especially those that have been put into operation reach more than 76.10%.

In addition, the whole country currently has 17 EZs established on a total land and water surface area of ​​nearly 850,000ha. Among them are 38 IZs covering a total area of ​​15,200ha of which 17 are operating and 21 others are under construction.

IZs and EZs nationwide have attracted 9,784 FDI projects with a total registered capital of USD194.69 billion and realized capital of USD109.79 billion and 1,387 domestic investment projects with a total registered capital of VND1,461 billion and implemented capital of VND533 billion. Investment projects in IZs and EZs have contributed about 55% of the total export turnover in the period 2016-2020 and 11.7% of the total state budget revenue in the period 2016-2018...

Author: Nguyen Thuy

Translated by Trang Nguyen

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