Business

HCMC paves way for investment attraction

SGGP
Ho Chi Minh City has been seeing a sudden increase in domestic investment capital. Since the beginning of this year, the total investment capital of domestic enterprises has reached nearly US$193 million, up 58.75 percent over the same period last year. 

The factory of Jotun Vietnam is under construction in Nha Be District in Ho Chi Minh City. (Photo: SGGP)

The factory of Jotun Vietnam is under construction in Nha Be District in Ho Chi Minh City. (Photo: SGGP)

Of which, 27 new projects with registered investment capital of nearly $162 million, up 55.97 percent, and 22 projects with adjusted capital increased by more than $31 million, up 74.85 percent.

In the context that foreign direct investment (FDI) attraction has not been satisfactory, the sudden increase in domestic investment capital is a good sign for HCMC. The most worrying issue is that the land fund for investors in the city has begun to be scarce.

Ms. Le Bich Loan, Deputy Head of the Management Board of Saigon High-Tech Park, said that many foreign investors had come to learn and have investment needs, but the land fund of the high-tech park for large enterprises is no longer available. There is only a small land fund left to attract the model of product research and development centers. The Board has reported to the city’s People's Committee on the proposal of export processing zones and industrial parks to share difficulties with the high-tech park, contributing to increasing the efficiency of foreign investment attraction in the city.

At the same time, increasing the review and termination of ineffective or behind-schedule investment projects is essential, creating opportunities for more effective investment projects. The city has just terminated 35 projects, of which, there are 11 FDI projects and 24 domestic projects.

This is also seen as a positive move of the city to create favorable conditions for the new wave of more effective investment attraction. Besides, the city needs to strengthen the expansion of the export processing zones and industrial parks and diversify the areas of land for lease to meet the land use needs of enterprises.

According to Mr. Dao Xuan Duc, Deputy Head of the Ho Chi Minh City Export Processing Zone and Industrial Park Authority (Hepza), besides the increasing inflows of domestic investment, the wave of foreign investment will strongly land in Vietnam soon. Therefore, along with reviewing the progress of investment projects in general, the city suggested the export processing zones and industrial parks urgently investing in building infrastructure to meet the investment needs of enterprises.

Currently, three out of 17 export processing zones and industrial parks have made plans to build high-rise factories and warehouses. Specifically, Tan Thuan Export Processing Zone is building a 3-story workshop with a total floor area of 18,156 square meters, which is expected to be put into operation in September this year. Binh Chieu Industrial Park is building two high-rise factories with a total area of 181,000 square meters; Of which, more than 5,000 square meters can receive enterprises at the beginning of next year. The remaining factory will start construction by the end of this year. Vinh Loc Industrial Park proposed a project of a logistics center that includes a cold storage warehouse, a cool storage warehouse, and a normal warehouse with a total area of 59,573 square meters, and will be put into use in 2022.

Along with that, Hepza has worked with the export processing zone and industrial park infrastructure development companies to come up with solutions to support investors. Of these, the factory rent has seen an average reduction of 10-30 percent for 2-3 months. Up to now, 77 enterprises have been supported with a total reduction of VND40 billion.

Moreover, enterprises also received a reduction in premises rent and wastewater treatment fees and extension for the payment of infrastructure maintenance and renewal fees. Currently, Hepza has surveyed, made statistics, and transfer information about enterprises with the demand for bank loans to commercial banks for timely support.

Enterprises have also proactively implemented some solutions to overcome difficulties, such as proactively seeking new customers, finding new suppliers, and searching alternative sources of materials in the country and from other foreign countries except China. However, currently, there are still some enterprises lacking orders, so their employees must temporarily leave their jobs until they receive new orders.

Therefore, enterprises have proposed to the Government and leaders of Ho Chi Minh City to urgently deploy some supporting solutions to soon restore the stability of production and business activities.

In which, they focused mainly on increasing the tax payment rescheduling to 10 months or one year instead of only five months as currently. For foreign investors, they asked the city to shorten the time for handling administrative procedures, especially procedures on land, at the same time, create conditions for foreign investors and foreign workers to work in Vietnam.

Mr. Nguyen Phuong Dong, Deputy Director of the Department of Industry and Trade of Ho Chi Minh City, said that the department and 12 joint-stock commercial banks and four state-owned commercial banks have supported 17,215 customers who are enterprises, organizations, and individuals affected by the Covid-19 pandemic for a total amount of more than VND87.63 trillion. In which, the debt repayment restructuring is above VND14.63 trillion, interest rate exemption or reduction is VND11.38 trillion, and new loans with low-interest rates are VND61.62 trillion.

By Ai Van – Translated by Gia Bao

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