Want to be in the loop?
subscribe to
our notification
Business News
NEW FDI CHALLENGES FOR SOUTHEAST
The southeast continues to take the lead in attracting overseas investment despite the increasing problem of land availability.
Despite gloomy forecasts about global economic prospects, the southeast of the country continues to welcome an influx of foreign direct investment (FDI). Ho Chi Minh City and Binh Duong were the top two regions for attracting foreign investors, enticing $3.94 billion and $3.14 billion from overseas in 2022 respectively.
The volume of FDI for other localities in the region, such as Dong Nai, Ba Ria-Vung Tau, Tay Ninh, and Binh Phuoc also showed a slight increase on-year.
An increasingly apparent challenge to attracting future FDI to the region is ensuring that the amount of quality land reserved for industrial development remains significant. Dao Xuan Duc, from Ho Chi Minh City Industrial and Export Processing Zones Management Authority, noted that the city has only 46 hectares of clear space for investors to lease in 2023 and that this sum is distributed over several districts rather than in a single zone.
Duc added that the city has several other land funds, such as a 320ha space in Hiep Phuoc Industrial Zone (IZ) and more than 100ha in the Northeast Cu Chi, but they have so far been unable to sign land lease contracts with the state.
Duc voiced concerns that amid an investment wave into Vietnam, Ho Chi Minh City may be unable to entice large investors with such meagre land availability.
Similarly, Dong Nai is facing obstacles in expanding its land fund to attract more overseas finance.
According to Pham Van Cuong, deputy head of Dong Nai Industrial Zones Management Authority, the province’s available land for FDI has reached capacity and five new intended IZs comprising more than 7,100ha are yet to commence development.
“Due to a lack of land for industrial development, Dong Nai has been missing opportunities to entice huge foreign-led projects with capital touching billions of dollars over the past two years,” said Cuong.
Binh Duong, Binh Phuoc, Tay Ninh, and Ba Ria-Vung Tau currently have an advantage in the southeast as they accommodate parks for attracting investment. For instance, Binh Duong has attracted Lego Group to invest in a $1.3 billion factory covering more than 40ha.
Despite the available land, location remains a challenge for these provinces as they are some distance from the major seaports and airports and much of the infrastructure requires upgrading. Construction projects are underway to improve the connectivity of several routes in the region such as the Ring Road 3 in Ho Chi Minh City, Bien Hoa-Vung Tau Expressway, and a number of other planned improvements.
While these projects will do much to alleviate the challenges associated with the lack of connectivity in some parts of the region, they are not expected to be open until 2025.
The southeast has established some major industrial centres, hosting the most extensive IZs in the country. The region's private sector has also witnessed vibrant development, accommodating the greatest number of enterprises in the country and taking the pole position for attracting FDI with over 40 per cent of Vietnam’s total volume. In particular, Ho Chi Minh City has been growing into a science and IT innovation hub for the region and beyond.
Source: VIR
Related News
![Card image cap](/uploads/news/Industrial%20Zone.jpg)
VIỆT NAM TARGETS FULL MOBILE BROADBAND COVERAGE ON HIGHWAYS, INDUSTRIAL ZONES BY 2025
By 2025, Việt Nam aims to achieve one hundred per cent mobile broadband coverage on all national highways, expressways and railways under a plan to enhance the quality of Việt Nam’s mobile telecommunications network by 2025, which has been approved by the Ministry of Information and Communications (MIC).
![Card image cap](/uploads/news/Investment6.jpg)
VIETNAM ONE OF FASTEST-GROWING E-COMMERCE MARKETS IN SOUTHEAST ASIA
The report released on July 16 highlighted that the total GMV of Southeast Asia’s eight leading e-commerce platforms rose to $114.6 billion in 2023, up 15 per cent from 2022. The key drivers for the region's e-commerce GMV expansion in 2023 are Vietnam and Thailand, growing 52.9 per cent and 34.1 per cent on-year, respectively.
![Card image cap](/uploads/news/eco2.jpg)
FOOTWEAR EXPORTS SEEN REACHING US$27 BILLION THIS YEAR
This optimistic forecast reflects the industry’s efforts to expand and diversify its markets. Lefaso indicated that Vietnam’s footwear sector will concentrate on traditional markets like the U.S. and the European Union, alongside markets with free trade agreements to maximize opportunities.
![Card image cap](/uploads/news/Security.jpg)
2025 PIVOTAL FOR STOCK MARKET UPGRADE EFFORT
The Ministry of Finance (MoF) is expected to soon publish the entire content of the draft circular amending and supplementing four circulars on transactions, registration, depository, and clearing, as well as operations of securities companies and information disclosure. This move, along with feedback and explanations, aims to meet the criteria for upgrading Vietnam’s stock market.
![Card image cap](/uploads/news/bn-01.jpg)
VIETNAM INTENSIFIES E-COMMERCE TAX SCRUTINY
The department plans to offer guidance for and hold direct dialogues with e-commerce taxpayers to ensure compliance. Efforts will also include updating the e-commerce database, conducting risk analysis, and leveraging artificial intelligence (AI) to manage data and issue alerts.
![Card image cap](/uploads/news/FDI.jpg)
FDI INFLOW INTO VIETNAM REACHES NEARLY 15.2 BILLION USD
Vietnam attracted nearly 15.2 billion USD in foreign direct investment (FDI) in the first six months of this year, a year-on-year increase of 13.1 per cent, according to the General Statistics Office.