(VOVworld) – Vietnam’s negotiations for a number of free trade agreements and regional security developments have impacted Vietnam’s investment environment. The 2014 mid-term Vietnam Business Forum (VBF 2014), which opened on Thursday, is aimed at increasing investor trust in the new context.
Foreign investors are interested in Vietnam’s banking and capital markets as well as investment, trade, infrastructure, and employment. This year’s forum focuses on the impacts, opportunities, and challenges for Vietnam when it signs free trade agreements with the world’s biggest partners. The theme of this year’s forum is “From agenda to action – preparing for new trade agreements”.
Consistent policy on investment attraction
Vietnam is finalizing its FTA negotiations with the world’s biggest partners. These FTAs include the Trans-Pacific Partnership Agreement (TPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the ASEAN Economic Community. Vietnam now needs to brace itself for the challenges and opportunities that these FTAs will bring about. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry and Co-chair of VBF 2014, said Vietnam has carried out a number of reforms to create an investment environment attractive to foreign businesses: “We have established a legal system that does not differentiate domestic and foreign businesses. Foreign businesses in Vietnam are treated equally. We are encouraging joint ventures between domestic and foreign businesses. Ministries and local governments have actively supported foreign-invested projects.”
Breakthrough solutions
To improve its investment environment Vietnam has been simplifying administrative procedures, which have not satisfied foreign investors. Government decree 19 issued in March is considered a breakthrough in administrative reform. Its aim is reducing the cost, time and risks of doing business in Vietnam. The licensing period will be shortened to 6 days, tax payments to 171 days and customs clearance to 14 days for exports and 13 days for imports. Procedures for declaring bankruptcy will be cleared within 30 days and investors will be given greater access to credit. These reforms have helped to increase investor trust in Vietnam.
Creating internal strengths for business production
Political and economic complications since early May as a result of China’s illegal placement of oilrig Haiyang 981 in Vietnam’s exclusive economic zone have affected the operations of foreign companies in Vietnam. Vietnam is facing the challenge of maintaining trade relations with China while striving to reduce dependence on this market.
When Vietnam joins FTAs, especially the TPP, spearhead sectors such as garments and textiles, leather, footwear, and fisheries are expected to create great opportunities for Vietnam’s economy. Domestic businesses are trying to improve their competitiveness, expand investment, and seek material resources for their production. Le Tien Truong, Deputy Director of the Vietnam National Textile and Garment Group, says: “Vietnam’s textile and garment sector has invested in localizing material resources. We now can produce yarn and are focusing on producing fabrics. With the coming into force of the TPP, we expect that 60% of our products will be localized by 2015.”
VBF 2014 is an important channel between the Vietnamese government and investors toward creating a favorable business environment and boosting sustainable economic development in Vietnam.