Vietnam: A breakthrough in the Law on Foreign Investment

After more than 30 years (1987-2021) attracting foreign direct investment (FDI), Vietnam has made a strong impression on international investors, becoming a favorable investment destination of many leading economic groups in the world.

The plan to attract foreign investors

The 1987 Foreign Investment Law was a “push”, a very respectable thought breakthrough. Because the domestic economic situation at that time was very difficult, in order to attract FDI, we had to offer incentives and incentives that were truly “open”, and this “openness” also created new opportunities. debated quite fiercely at the forum of the National Assembly. However, the law was still passed, marking a “turning point” for Vietnam in attracting FDI inflows.

In the following years, FDI inflows into Vietnam have grown strongly. Specifically, in the first 3 years after the Law on Foreign Investment (1988-1990), Vietnam only attracted 211 FDI projects with a total registered capital of 1.6 billion USD, however, in the period 1991-1995 FDI into Vietnam has grown dramatically with 1,409 projects, total registered capital reaching 18,379 billion USD.

According to data from the Ministry of Planning and Investment, by August 2021, after more than 30 years since the Law on Foreign Investment took effect, Vietnam has attracted nearly 34,000 FDI projects, with a total registered capital of nearly 400 billion USD from 140 countries and territories around the world.

The World Investment Report 2021 of the United Nations Conference on Trade and Development recently also showed that, in 2020, for the first time, Vietnam is in the group of 20 countries attracting the most FDI in the world. Many foreign investors highly appreciate Vietnam’s investment environment and say that they will come to Vietnam to implement their projects, even in the context of the complicated development of the Covid-19 epidemic and to attract foreign direct investment (FDI). demand tends to decrease, Vietnam is still a name that many foreign investors pay attention to. Thereby, proving that Vietnam’s position on the “investment map” and “economic map” of the world is being established more and more firmly.

FDI brings Vietnam’s image to the world

Among the 34,000 FDI projects in effect in Vietnam up to the present time, there are many projects of major corporations in the world that are investing and doing business effectively in Vietnam, such as: Samsung, LG South Korea); Canon, Honda, Toyota, AONE (Japan); Piaggio (Italy); Bosch (Germany)…

Assessing the contributions of the FDI sector to the economy, Deputy Prime Minister Pham Binh Minh once said that the FDI sector accounts for a large proportion of the total value of industrial production and exports of the country. Along with that, the amount of revenue and remittance of the FDI sector has also increased steadily over the years.

“With a significant increase in its contribution to GDP, the FDI sector has become an important driving force for Vietnam’s economic growth,” said Deputy Prime Minister Pham Binh Minh.

According to economic expert Le Dang Doanh, the FDI sector is currently creating jobs for about 4 million workers in Vietnam, of which not only workers with university and college degrees, but also many unskilled workers. They also get jobs and stable incomes at FDI enterprises. This has a positive impact on economic development and social security in Vietnam.

Obviously, after more than 30 years of appearance in Vietnam, the FDI sector has become an indispensable part of our economy, the contributions of the FDI sector to the socio-economic development are difficult to estimate.

But perhaps, the most important contribution of the FDI sector during the past years is the repositioning of the Vietnamese economy through annual export growth, while indirectly promoting the image and people of Vietnam to the world through products labeled “made in Vietnam” exported to countries around the globe. This is the most effective way to promote the investment and business environment as well as the image of the country and people of Vietnam to the world.