FDI in Vietnam needs to be boosted keeping in view role in GDP growth

Official data show the country garnered $38.23 billion in FDI last year, positioning itself among the top 15 developing countries for FDI inflows.

Deputy prime minister Nguyen Chi Dung said the FDI sector has left a significant milestone in bolstering Vietnam’s collaboration with global tech giants, technology transfer and high-quality human resources development.

FDI now accounts for over 70 per cent of the country's total export turnover.

Issues that warrant attention include cases of non-compliance with Vietnamese laws, violations of environmental protection regulations, labour and wage infractions, and tax evasion.

Besides, transfer pricing has become increasingly sophisticated, raising questions about why some FDI enterprises report losses while simultaneously proposing expansion of their investments in Vietnam. Although regulatory authorities have identified and penalised many companies, combating transfer pricing remains challenging, according to a report by a domestic media outlet.

To enhance FDI's impact on domestic economic growth, experts suggest laying stress on the significance of maintaining preferential policies to lure capital and making them more transparent, attractive and competitive.

FDI policies should accord priority to quality, efficiency, technology and environmental protection, they feel.

Administrative reforms should enhance support for the FDI sector, while management should be tightened with proactive post-inspection measures, creating conditions for investors to shorten preparation and implementation time of projects.

They also suggested that Vietnam should prioritise projects featuring advanced and clean technologies, modern governance, high added value, spillover effects, and global connectivity between production and supply chains.

ALCHEMPro News Desk (DS)