[NEWS] – How is EU FDI in Vietnam in the context of EVFTA and EVIPA implementation

EU’s FDI into Vietnam after 2 years of decline has increased again in 2021, but to improve the quality of this capital flow, Vietnam needs to improve the investment environment.

Vietnam fights 2-5% of European FDI to the world

On the morning of October 25, the Institute for Economic and Policy Research (VEPR) - University of Economics - Hanoi National University held a seminar on "EU FDI into Vietnam in the context of EVFTA and EVIPA implementation". Information given at the event said that, despite being a significant trading partner of Vietnam, in recent years, the EU’s foreign direct investment capital into Vietnam is still very limited, not commensurate with its potential. capabilities of both parties.

Specifically, according to data from the Ministry of Planning and Investment, as of August 2022, Vietnam has attracted 35,539 valid foreign direct investment projects from about 140 countries and territories around the world. the world, with a total registered capital of 430 billion USD.

That means, in terms of capital, EU FDI into Vietnam only accounts for less than 6.41% of the total capital attracted by Vietnam. In terms of projects, it only accounts for about 6.69%. This is a very small percentage compared to the potential cooperation between Vietnam and the EU. In particular, according to the statistics of Eurostat and the General Statistics Office, the proportion of investment in Vietnam only ranges from 2-5% of the total amount of FDI that the EU allocates worldwide.

EU FDI projects in Vietnam focus mainly on the manufacturing and processing industry. EU enterprises have invested in 18/21 sectors in the national economic sub-sector system in Vietnam. In, 3 main areas of interest and investment are: Processing and manufacturing industry; electricity production and distribution, and real estate business. Recently, EU businesses have tended to be interested in service industries such as logistics, post, telecommunications, finance, offices for rent, retail, clean energy, supporting industries, food processing, etc. High-tech agriculture…

Raising the "quality" of EU FDI in Vietnam

Information at the Talks also shows that the new context of the world economy, especially the context of Vietnam and the EU implementing the EU-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement EVIPA will bring Vietnam many opportunities and challenges in attracting FDI from the EU.

In particular, in terms of the opportunity to be a new generation FTA with a wide scope of commitments, the EVFTA is expected to promote the next wave of FTAs ​​in Vietnam and also help improve the quality of FDI projects. This is consistent with Vietnam’s orientation in the Government’s Resolution 50-NQ/TW on attracting high-quality FDI.

From the above statement, the report "EU FDI into Vietnam in the context of EVFTA and EVIPA implementation" by the Hanoi National University research team proposes a combination of solutions to increase the efficiency of this capital attraction in the current period. In the coming time, including First, strengthening research, propaganda, and dissemination on EVFTA and EVIPA; Second, institutional reform; Third, improving the quality of the business and investment environment; Fourthly, improving the types of consulting services and facilitating investment; Fifth, focus on training human resources; Sixth, improve the quality of infrastructure.

Thanh Long (Source: Collector)