Despite the sluggish global and domestic economy, Vinh Phuc province’s socio-economy has continued to prosper, especially in attracting investment; many domestic as well as foreign investors have chosen Vinh Phuc as a potential destination. To learn more about this topic, Vietnam Business Forum interviewed Mr Phung Quang Hung, Chairman of the Provincial People’s Committee. Le Hien reports.
For many years, Vinh Phuc has been known as one of the top spots in attracting investment, an attractive destination for investors. So can you please tell us about the investment attracting of Vinh Phuc and how the province has become so popular among investors?
In 2013, Vinh Phuc's economic growth reached 7.89 percent. The province attracted 42 direct investment projects, including 21 FDI projects with total registered capital of US$314.8 million and 21 DDI projects with VND6,247 billion ( US$310 million). Accumulated by the end of 2013, the province had 675 valid projects, including 137 FDI projects from 13 countries and territories with a total investment of US$2,767.6 million and 538 DDI projects with total capital of VND31,727 billion (US$1,420 million).
The main reasons for these favourable results are:
Along with the advantage of local economy and culture and the determination of provincial authorities, Vinh Phuc has made continuous efforts to improve the investment environment and to enhance the province’s competitiveness such as: Stepping up investment planning and preparing; paying attention to land clearance and developing land fund for investors; investing essential infrastructure for industrial zones; providing mechanisms and policies supporting investment; training human resources; developing urban, services and tourism; conducting administrative procedures under the one-stop shop mechanism to reduce investing procedures; giving timely direction to help businesses deal with difficulties and obstacles in order to create the best conditions for effective investment.
Along with synchronously implementing measures to improve investment environment and to enhance competitiveness, the province has also innovated investment promotion activities. Besides, Vinh Phuc has also given special attention to promoting on-site investment through successful investors in the area; creating the link between domestic and foreign investors. The content of promotion activities has also been built with professionalism; communication information has had more attention and therefore more complete. Thus, investment promotion and support has shown great results, attracting investors and new projects inside and outside the country to Vinh Phuc.
Can you tell us the unique competitive advantages of Vinh Phuc compared with other Vietnamese localities in attracting investment?
Vinh Phuc Province has many potential and advantages in investment, namely:
Convenient geographical location: located in the three planning areas of North Delta, Northern Key Economic Zone and Capital Region, Vinh Phuc is contiguous to the capital Hanoi, adjacent to Noi Bai international airport and has a transportation system of national roads, railways, waterways running through.
Favourable meteorological, hydrological and geological conditions: Vinh Phuc rarely has disasters like floods and earthquakes, while having good geological structure and hilly land favourable for industry and urban development.
High potential for tourism: The provincial topography of Vinh Phuc has all three ecologic types: the plains, the midland and the mountainous. The province also has large forest covering, many rivers, lakes and ponds along with many famous scenic spots and hundreds of ranked historical and cultural monuments.
Abundant labour resources to meet requirements of investors: The province currently enjoys a golden demographic structure. The province has 20 universities, colleges and vocational schools of central and local level, ready to provide labour for businesses in the area as well as the whole region.
Clear and efficient administrative procedures: The province has a specialised agency in charge of land compensation and clearance, preparing available land for investors; administrative procedures for investment is carried out under the one-stop shop mechanism, reducing procedures’ time; the province also has many policies to support and create favourable conditions for investors in implementing projects.
Completed, closed and synchronous planning: All planning from provincial planning, urban planning of Vinh Phuc City to detailed planning of the subdivision has been completed, ensuring sustainable development investment.
Attractive investment environment, a destination of success for investors: There were 13 countries and territories, many large economic groups and global names like Toyota, Honda, Piaggio, Foxconn, Compal and many others that have come to invest in Vinh Phuc.
So far Vinh Phuc Province has completed its Provincial Planning, General Urban Planning to 2030 and vision to 2050; development planning to 2020 of 20 industrial parks with an area of over 6,000 hectares. Can you tell us the province’s direction in attracting investment in the future?
For the upcoming time, Vinh Phuc will pay attention and give priority to investment in the sectors of industrial electronics, telecommunications and supporting industry; mechanical industry (manufacturing, automotive assembly); construction materials, light materials, food processing; development of industrial parks infrastructure, world-class tourism projects; service sectors such as finance, banking, insurance, healthcare, education - training, logistics, etc. (
http://www.ipavinhphuc.vn/hotrodautu/)
The province will focus on attracting investment projects in industrial parks and complexes, connecting industrial development with environmental protection, thoroughly handling environmental pollution in industrial parks and complexes.
Vinh Phuc is striving to become an industrialised province by 2015, a modern industrialised province by 2020 and the city of Vinh Phuc in the 20s of the twenty-first century. These goals require Vinh Phuc to exploit all available resources for development purpose, especially the development of enterprises. Vinh Phuc welcomes all investors, domestically and globally, to invest in the province. Japan is the first country who has investment projects in Vinh Phuc, also the one laying the groundwork for the development of the provincial industry. As of the end of 2013, Japan ranked the third among countries investing in Vinh Phuc in terms of number of projects (21 projects), ranked second in terms of capital investment (US$717.26 million) and number one in terms of realized capital ratio (90 percent). Japanese investors are fast in implementing projects, effective in producing business and well observe Vietnamese laws; an active member in social programs and activities in the province. Toyota, Honda, Nissin and Exedy to name a few. The province currently has reserved a land fund for factory construction dedicated to Japanese small and medium enterprises.
List of Projects Calling for Investment in Vinh Phuc Province
1. Construction of Ba Thien Industrial Park
Location: Ba Hien and Thien Ke Communes, Binh Xuyen district, Vinh Phuc province.
Total investment: VND2,000 billion (US$100 million)
Agency of management: Board of Management of Vinh Phuc Industrial Park
Project progress: mobilising investment.
Type of investment: BT, JV or 100 percent private capital.
2. Construction of Tam Duong I Industrial Park
Location: Tam Duong district, Vinh Phuc province.
Projected total investment: VND6,300 billion (US$310 million)
Agency of management: Board of Management of Vinh Phuc Industrial Park
Type of investment: BT, JV or 100 percent private capital.
3. Construction of Tam Duong II Industrial Park
Location: Tam Duong district, Vinh Phuc province.
Total investment: VND800 billion (US$40 million) for Phase I
Agency of management: Board of Management of Vinh Phuc Industrial Park
Type of investment: BT, JV or 100 percent private capital.
Preferential policies:
4. Construction of the Binh Xuyen II Industrial Park
Location: Binh Xuyen district, Vinh Phuc province.
Projected total investment: VND3,500 billion (US$170 million)
Agency of management: Board of Management of Vinh Phuc Industrial Park
Type of investment: BT, JV or 100 percent private capital.
Preferential policies:
5. Construction of Dong Van Industrial Complex
Location: Dong Van Commune, Yen Lac district, Vinh Phuc province.
Total investment: VND197.6 billion (US$9.36 million)
Agency of management: Board of Management of Vinh Phuc Industrial Park
Type of investment: BT, JV or 100 percent private capital.
Preferential policies for these projects:
1. Land rent: Investors are charged no rent during construction of their facilities, exempt from rent for 11 years from the date of projects complete and come into operations;
- Land rent = 0.75 percent (the lowest rate) x land price.
- Land rent fixed for five (05) years.
2. Tax policy:
- Personal Income Tax: Vietnamese and foreigners working in the project who are subject to income tax receive support of 50 percent of income tax;
- Investors receive preferential treatment on import tariffs for imported materials for construction of their facilities under law provisions on export and import tax.
3. Provincial preferences:
Infrastructure investors who conduct activities of construction, business, and exploitation of industrial parks’ infrastructure in the province are supported as follows:
- Funded for assessment and reporting environmental impact of infrastructure investment projects in industrial parks.
- Supported in technical works within the parks including garbage collection, wastewater treatment.
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