Continuously Enhancing Investment Climate and Elevating FDI Quality

2:05:46 PM | 3/27/2024

As the national capital and an economic, political and cultural center of the country, Hanoi always takes the lead in investment attraction, especially high-quality foreign direct investment (FDI). Mr. Le Anh Quan, Director of Hanoi Department of Planning and Investment, said: The city has continuously improved the investment and business environment, actively reviewed and simplified administrative procedures and sped up the time of handling procedures to facilitate and reduce costs for people, organizations and businesses.

The Business Support Center collaborates closely with both domestic and international organizations to facilitate training programs and foster trade connections, empowering small and medium-sized businesses in Hanoi

How do you evaluate Hanoi City’s results in investment attraction and business development?

In 2023, Hanoi attracted more than US$2.91 billion of FDI capital, up 64% year on year. Foreign investors invested US$4.16.8 million in 406 new projects, increased US$307.2 million for 175 projects and US$2,186 million in 294 equity deals.

At present, Hanoi ranks second nationwide in FDI value with US$54.43 billion with 7,373 valid projects. Foreign investors have largely invested in real estate, manufacturing and processing, goods trading, commercial services, science and construction, administration and support, finance, banking and insurance. The city has focused on attracting intensive foreign investment towards sustainable development, prioritized quality projects, value-added products and highly competitive products, especially high-tech projects. In 2023, Hanoi attracted US$23.9 million SRS Biosciences high-tech pharmaceutical production project licensed by Hoa Lac High-Tech Park Management Board.

Besides, creating a healthy competitive environment, rapidly increasing new corporate entities and companies of innovation, green transformation and digital transformation; and reducing input costs and legal compliance costs in investment and business activities are also the city’s important policies to encourage businesses.

As a result, in 2023, Hanoi granted business registration certificates to 31,660 new companies with a total registered capital of VND353,973 billion, up 7.1% and 7% year on year, respectively.

Together with economic growth and investment attraction, Hanoi also leads innovation, administrative reform and competitiveness improvement in the country. As a strong catalyst for these achievements, what solutions and activities has the Department of Planning and Investment advised and implemented?

In recent years, Hanoi has made much progress in improving the investment environment and enhancing competitiveness. The city always actively conducts surveys to grasp hardships as well as proposals from businesses and foreign investors and focuses on solving matters within its authority and forwarding matters beyond its jurisdiction to competent authorities. Hence, although the city’s Provincial Competitiveness Index (PCI) dropped 1.86 points in 2022 and lost 10 places to rank No. 20 out of 63 provinces and cities from 2021, its business support and labor training indicators still ranked Top 10 in the country.

In this success, the Department of Planning and Investment advised the City People's Committee to adopt many solutions to improve the business investment environment and enhance competitiveness. Right from the beginning of 2023, the department issued plans to implement administrative reform tasks for the whole year; established an expert group to research and develop mechanisms and policies and a general group to review and urge the implementation of the responsible task of synthesizing, consulting, reporting and proposing overdue and existing matters to the Department's Board of Directors for guided solutions.

The department advised the City People's Committee to issue Decision 2647/QD-UBND dated May 10, 2023 to approve the list of 130 administrative procedures within the jurisdiction of the department, including 109 administrative procedures at the city level and 21 administrative procedures at the district level. To date, 100% of administrative procedures have had their internal processes approved by the City People's Committee in Decisions 3534/QD-UBND dated September 29, 2022; 2030/QD-UBND dated May 15, 2020; and 3828/QD-UBND dated July 27, 2023.

In 2023, its affiliated units were assigned to review and propose the construction of internal processes of non-administrative procedures. In November 2023 alone, the department approved 42 internal processes of non-administrative procedures under its authority and advised the City People's Committee to approve two internal administrative procedures regarding planning and investment under the authority of the committee: (1) Process for handling appraisal work and submitting State-funded investment/revised investment policy proposals for approval; and (2) Process for cessation of operations or partial cessation of investment projects in the cases specified in Clause 2, Article 47 of the Investment Law.

Every year, by actively advising the City People's Committee to approve plans for simplification of administrative procedures, the department ensures that 20% of administrative procedures are simplified. In particular, in 2023, it counseled the City People's Committee to issue Decision No. 4935/QD-UBND dated October 2, 2023 and approve a plan for simplification of 15 administrative procedures under the jurisdiction of the department.

Also in 2023, the Department compiled and published 50 questions and answers on business registration and 36 questions and answers on SME support; applied the Zalo Official Page for administrative reform to answer questions and support the implementation of administrative procedures. At the same time, it reported to the City People's Committee the results of research on compilation of a handbook on the order and procedures of implementing public investment projects in Hanoi City to improve quality and efficiency of management and implement public investment projects in the city.

In particular, the department has sped up digital transformation. Currently, 100% of business records are registered online and authorities review application forms and grant business licenses when all filed documents are valid. In 2023, about 159,000 results were delivered to headquarters or registered addresses of companies, bringing the rate of Level 4 public services regarding business registration to 92% (leading the country).

In addition, to improve the Market Entry Index in general and the Business Registration Indicator, the department improves the quality of handling business registration documents and ensures quality and timeliness of settlement; effectively coordinates with consultants to provide guide and inform relevant legal documents; organizing thematic seminars on business registration to review, evaluate, adjust and propose related solutions.

Hoa Lac Hi-Tech Park

Hanoi is reportedly leading the country in green and high-quality investment attraction. Could you please tell us more about this?

Green and sustainability are one of the important criteria for localities and businesses. To move towards a green economy and sustainable development, the Hanoi People's Committee issued many policies to promote green development and clean production, in which forming green industrial zones is one of the important solutions.

Resolution 15-NQ/TW dated May 5, 2022 of the Politburo on Hanoi development directions and tasks to 2030, with a vision to 2045, states: Promoting research, transfer, application and development of science, technology and innovation; building Hanoi into a leading center of innovation, research, development and transfer of technology of the country and the region, with the nucleus being Hoa Lac High-Tech Park. The Hanoi People's Committee will soon submit to the Government specific mechanisms for Hoa Lac Hi-Tech Park to support investment attraction, engage more socialized capital sources and call national and regional sci-tech facilities to the park. The city will closely connect Hoa Lac Hi-Tech Park with Vietnam National University of Hanoi (in Hoa Lac) to focus on building a strategy to develop this area into a startup, innovation, science and technology center; develop Hoa Lac Hi-Tech Park into a national hub of innovation, research, development, technology transfer and a core area of Hoa Lac urban area where there are high-quality human resources training centers and scientific and high-tech research centers of the country.

In 2024, Hanoi is expected to attract over US$3 billion of FDI.

In the future, the city will continue to actively attract selective investment projects and ensure investment quality and environmental protection; prioritize projects with advanced technology, new technology, high added value and strong influential effects; connect production chains with human resource training facilities; boost selective FDI attraction, focusing on urban infrastructure development, smart city construction and supporting industries; approach high-tech corporations; and enhance management capacity and efficiency of processing and manufacturing technology.

Accompanying businesses and investors, the Department of Planning and Investment will continue to reform investment promotion, clearly identify key markets, countries and large corporations to introduce the city’s potential and advantages; focus on encouraging existing investors to introduce new ones; give priority to projects with high added value in agriculture, tourism, education, health, high-tech, supporting industries and biotech.

Thus, the department will help boost socioeconomic development, build a modern, smart city, lead and create strong ripple effects, connect urban areas and development drives for the region and the country. Hanoi will hence develop on par with capital cities in developed countries in the region.

Thank you very much!

By Ha Thanh, Vietnam Business Forum