Speaking at the Vietnam Industrial Park Forum 2024, held on December 19 in Ho Chi Minh City, Mr. Nguyen Dong Trung, Deputy Director of the Foreign Affairs Department (Ministry of Foreign Affairs), shared that FDI globally had declined in 2022 and 2023 due to macroeconomic instability and geopolitical tensions. However, foreign investors remain positive about Vietnam’s prospects, as evident from the approval and licensing of numerous investment projects. The realized FDI in Vietnam for the first eleven months of 2024 is estimated at $21.68 billion, a 7.1% increase compared to the same period last year. According to forecasts, the total realized FDI in Vietnam by the end of 2024 will be higher than in 2023, setting a new record in the 2019-2024 period.
Notably, FDI inflows into Vietnam are led by high-value sectors such as processing industry, electronics, automotive components, semiconductors, and green technology. As of Q3 2024, the processing and manufacturing industry attracted the largest newly registered FDI with a capital registration of $9.02 billion, accounting for 66.6% of the total newly registered capital. Vietnam is undergoing a significant transition from attracting traditional manufacturing projects that leverage low labor costs to luring investments in high-tech and specialized sectors with high production capabilities.
Dr. Bui Thanh Minh, Deputy Director of the Office of the Research Commission on Private Economic Development (Commission IV), pointed out that favorable land in key industrial zones is becoming scarce, while infrastructure development lags, and legal procedures within industrial parks (IPs) remain cumbersome.
“There is limited room for IP development, so IPs need to evolve into comprehensive ecosystems. IPs must become innovation hubs, supporting businesses, especially small and medium-sized enterprises, in accessing policies related to capital and technology,” emphasized Dr. Minh.
Policies to Promote Sustainable Development of IPs in the New Era – Photo: VGP/Anh Le
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IPs and EPZs are the focal points for local investment attraction
According to experts, industrial parks (IPs) and export processing zones (EPZs) are hubs for enterprises operating in the fields of industry and long-term investment services (including enterprises investing in infrastructure business). With well-invested technical infrastructure and strategic locations in terms of transportation connectivity, IPs and EPZs are the focal points for attracting domestic and foreign investors to develop the industrial production of local areas. Additionally, in some localities, IPs and EPZs are formed in conjunction with regional raw material sources to leverage local potential and relocate polluting industrial facilities from densely populated areas to ensure environmental protection.
Therefore, IPs play a crucial role in Vietnam’s socio-economic landscape, and their sustainable development will significantly contribute to realizing the commitments towards the net-zero emissions target by 2050.
However, the current reality reveals that enterprises in EPZs and IPs encounter legal obstacles due to overlapping laws. This situation calls for mechanisms to encourage enterprises to diligently and harmoniously implement the regulations within IPs to achieve high efficiency and avoid situations where some enterprises comply while others do not.
During the panel discussion on “Policies to Promote Sustainable Development of IPs in the New Era,” Mr. Phan Duc Hieu, a member of the Standing Committee of the National Assembly’s Economic Committee, shared insights on the new Land Law for IPs. According to the law, the state restricts land revocation for investors, leaving it to enterprises to negotiate. Only when an enterprise fails to revoke, the state intervenes. Additionally, IPs have the most flexible approach to land rent, allowing them to choose to pay annually or in a lump sum, and they can even mix these approaches for different areas within the IP.
Mr. Hieu also emphasized the need for a holistic ecosystem to support the balanced development of IPs, including economic and social aspects. The new Land Law mandates the provision of housing for workers within IPs, ensuring security, and allocating land for small and medium-sized enterprises, not just large corporations.
Sharing a similar perspective, Mr. Che Van Trung, Director of Cat Lai IP, suggested the need for mechanisms and policies to support well-established IPs that have reached full capacity and wish to gradually transform into new-generation smart and sustainable IPs.
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