Amidst complex global economic developments negatively impacting both the world economy and the domestic economy, Vinh Phuc province has implemented numerous solutions to enhance the effectiveness of attracting Foreign Direct Investment (FDI) and sought new growth drivers for the province. As a result of these efforts, FDI attraction activities have flourished since the early months of the year, serving as a crucial catalyst for economic development, particularly during challenging economic periods like the present. As of May 15, 2024, the province has granted new licenses to 22 FDI projects with a total investment capital of USD 154.2 million, marking a 43% increase compared to the same period last year. Among these projects, there are 9 projects from South Korean investors, 4 projects from Taiwanese investors, 4 projects from Chinese investors, and 5 projects from other investors. By sector, 20 projects are in the manufacturing industry and 2 projects are in the services sector.
Many foreign investors choose Vinh Phuc province as their destination due to its well-developed and modern infrastructure
Alongside new projects, there have been 19 instances of investment capital adjustments since the beginning of the year, totaling an increased investment capital of USD 259.8 million, marking a 68% increase compared to the same period last year. The total combined investment capital from new and adjusted projects in the first five months of 2024 is estimated at USD 414 million, reflecting a 57% increase from the same period in 2023. Cumulatively, Vinh Phuc province hosts 472 FDI projects with registered capital exceeding USD 8.3 billion from investors spanning 20 countries and territories worldwide.
According to the Department of Planning and Investment, alongside the achievements, the foreign investment attraction situation in the province faces risks due to ongoing complex global military conflicts. Economic activities have also seen widespread declines in many countries, and global minimum tax policies have affected the expansion of foreign investors' investment activities. Furthermore, there is an increasing shortage of trained labor, especially skilled technicians and engineers, which is becoming more critical as many large FDI projects commence operations. The attraction of high-tech investment projects and large strategic investor projects, as well as technology transfer, has been slow to generate high-value-added products. Land clearance efforts still face many limitations and delays in resolution, hindering the timely allocation of land for infrastructure development and handing over land for large-scale projects as committed.
Furthermore, inconsistencies and overlaps in legal regulations pose barriers for investors when approaching and understanding the investment environment in Vietnam overall, and specifically in Vinh Phuc province. Currently, the industrial sectors driven by FDI projects mainly involve assembly industries, with fewer in manufacturing industries and a limited number of high-tech products being produced. This limitation hinders domestic production linkages and advancements. Intense competition among provinces and cities nationwide has also affected the expansion of foreign investment activities in Vinh Phuc province.
To tackle these challenges, the Provincial People's Committee has issued the Plan for Implementing the Foreign Investment Cooperation Strategy for the 2021-2030 period and the Project to attract strategic investors to invest in the province by 2030. This includes identifying 9 groups of tasks and solutions, totaling 40 specific tasks and solutions directly assigned to implementing agencies to promote investment activities in the province. In the short term, the province will proactively attract strategic investors, focusing on building a list of strategic investors for immediate and medium-term investment promotion in sectors such as automobiles, motorcycles, computers, semiconductors, electronic devices and components, telecommunications, high-capacity batteries, pharmaceuticals, and medical equipment. They will organize engagement activities to solicit investments from domestic and foreign enterprises with connections in manufacturing, processing, and supplying goods to enterprises with advanced technology, particularly those producing computer products, semiconductors, electronic devices and components, telecommunications, high-capacity batteries used in the automotive industry, or energy storage.
In addition, there are plans to develop and implement a project to expand high-tech industrial parks in the semiconductor and electronics sectors to attract strategic investors in these fields. There's also an initiative to study amendments to the Land Law to ensure preparation of clean land ready for strategic investors to commence investment projects within 12 months from the issuance of investment certificates. Concurrently, efforts will strengthen the operations of the Investment Promotion Center to be more professional and modern. Research will focus on streamlining administrative procedures to expedite the processing of investment applications and other requests from investors in Vĩnh Phúc province. Furthermore, rebuilding the information system on investment attraction needs, investment procedure processes, investment incentives, and the province's advantages will be prioritized. This includes enhancing the electronic information portals of the province, departments, sectors, and districts. Additionally, developing monitoring and supervision software to improve the outcomes of attracting strategic investments and global supply chains (Dashboard) will also be pursued.
Recognizing the difficulties and challenges, a plan with specific solution groups, tasks, and efforts is being formulated. There is confidence that investment attraction in Vĩnh Phúc will continue to thrive, with inflows of high-quality capital aligned with the province's development goals, solidifying its position as a key locality in the Red River Delta and the Hanoi Capital Region for economic growth and investment attraction.
According to the Department of Planning and Investment, alongside the achievements, the foreign investment attraction situation in the province faces risks due to ongoing complex global military conflicts. Economic activities have also seen widespread declines in many countries, and global minimum tax policies have affected the expansion of foreign investors' investment activities. Furthermore, there is an increasing shortage of trained labor, especially skilled technicians and engineers, which is becoming more critical as many large FDI projects commence operations. The attraction of high-tech investment projects and large strategic investor projects, as well as technology transfer, has been slow to generate high-value-added products. Land clearance efforts still face many limitations and delays in resolution, hindering the timely allocation of land for infrastructure development and handing over land for large-scale projects as committed.
Furthermore, inconsistencies and overlaps in legal regulations pose barriers for investors when approaching and understanding the investment environment in Vietnam overall, and specifically in Vinh Phuc province. Currently, the industrial sectors driven by FDI projects mainly involve assembly industries, with fewer in manufacturing industries and a limited number of high-tech products being produced. This limitation hinders domestic production linkages and advancements. Intense competition among provinces and cities nationwide has also affected the expansion of foreign investment activities in Vinh Phuc province.
To tackle these challenges, the Provincial People's Committee has issued the Plan for Implementing the Foreign Investment Cooperation Strategy for the 2021-2030 period and the Project to attract strategic investors to invest in the province by 2030. This includes identifying 9 groups of tasks and solutions, totaling 40 specific tasks and solutions directly assigned to implementing agencies to promote investment activities in the province. In the short term, the province will proactively attract strategic investors, focusing on building a list of strategic investors for immediate and medium-term investment promotion in sectors such as automobiles, motorcycles, computers, semiconductors, electronic devices and components, telecommunications, high-capacity batteries, pharmaceuticals, and medical equipment. They will organize engagement activities to solicit investments from domestic and foreign enterprises with connections in manufacturing, processing, and supplying goods to enterprises with advanced technology, particularly those producing computer products, semiconductors, electronic devices and components, telecommunications, high-capacity batteries used in the automotive industry, or energy storage.
In addition, there are plans to develop and implement a project to expand high-tech industrial parks in the semiconductor and electronics sectors to attract strategic investors in these fields. There's also an initiative to study amendments to the Land Law to ensure preparation of clean land ready for strategic investors to commence investment projects within 12 months from the issuance of investment certificates. Concurrently, efforts will strengthen the operations of the Investment Promotion Center to be more professional and modern. Research will focus on streamlining administrative procedures to expedite the processing of investment applications and other requests from investors in Vĩnh Phúc province. Furthermore, rebuilding the information system on investment attraction needs, investment procedure processes, investment incentives, and the province's advantages will be prioritized. This includes enhancing the electronic information portals of the province, departments, sectors, and districts. Additionally, developing monitoring and supervision software to improve the outcomes of attracting strategic investments and global supply chains (Dashboard) will also be pursued.
Recognizing the difficulties and challenges, a plan with specific solution groups, tasks, and efforts is being formulated. There is confidence that investment attraction in Vĩnh Phúc will continue to thrive, with inflows of high-quality capital aligned with the province's development goals, solidifying its position as a key locality in the Red River Delta and the Hanoi Capital Region for economic growth and investment attraction.
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