By November 20th, 2017, according to the Foreign Investment Agency (under the Ministry of Planning and Investment), Vietnam has attracted more than US$316.9 billion of registered FDI (foreign direct investment) capital.
Over US$170.8 billion has been disbursed and invested. This source now accounts for nearly 25% of the total social investment in the year, contributing significantly to national economic growth.
TheLEADER talked with high-profile economic Prof. Nguyen Mai, Chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE) and former Vice Chairman of the State Committee for Investment Cooperation (SCCI), who played a remarkable role in attracting Japan's Nomura Group to Vietnam.
Could you share those memorable first years when Vietnam started to implement FDI-attraction policies?
Prof. Nguyen Mai: Right after the Law on Foreign Investment came into operation, foreign investment did not significantly affect the economic situation. In three years (1988 - 1990), Vietnam had only attracted less than US$1 billion, most of which were disbursement for small-scale projects.
In 1992, Tabuchi, Chairman of Nomura Corporation (Japan's largest securities group) invited me to Japan. The visit was for Nomura not only to introduce its economic potential but also understand about Vietnam's policy on attracting foreign investment.
After the one-week visit, Tabuchi and key Nomura officials arrived in Vietnam to learn about investment policies for industrial parks. Tabuchi had a good impression on Vietnam's investment policy.
At that time, Dao An, Chairman of Hai Phong city, invited Tabuchi to Hai Phong to research and invest here.
Finally, Tabuchi decided to invest in Hai Phong, making it one of the first foreign-invested municipalities in Vietnam.
What do you think about that initial success on the FDI-attracting process of Vietnam?
Prof. Nguyen Mai: It can be said this was not a small success. Nomura was then a leading Japanese securities corporation, and the role of its chairman was no less than the Prime Minister. Later, with the prestige of a large corporation, Tabuchi has brought 70 other investors to Vietnam.
Developed industrial parks have attracted many enterprises in various fields such as high technology, textile and garment, machine-building and consumption.
Thus, they have greatly contributed to the overall growth of the economy; created jobs; enhanced the proportion of industrial production, increased the proportion of industrial exports; and increased tax revenues for the society.
In your opinion, what has made Vietnam a great destination over the last 30 years of attracting foreign investment?
Prof. Nguyen Mai: I think the Law on Investment of Vietnam offers many advantages for businesses.
In particular, the following three factors are the most important. Firstly, Vietnam has the most open Law on Foreign Investment comparing with some other Asian countries.
Secondly, foreign investment procedures are issued and managed by the State Committee for Investment Cooperation. Therefore, administrative procedures are simplified, making it easier for investors.
Thirdly, incentives are quite generous. According to current regulations, the highest preferential level of corporate income tax for some prioritised sectors, which is being applied in economic zones and high-tech zones, is 10% in 15 years. The tax is exempted for four years and reduced by 50% for the next nine years.
Besides, in the draft law on Special Economic Administrative Units, the preferential tax rate of 10% is extended up to 30 years, while many other incentives for land use fees, excise taxes, and import taxes are added. So, I believe that Vietnam will strongly attract more FDI in the future.
Thank you, Sir!