Assembly line of Vespa motorbikes at Piaggio Vietnam Co Ltd in Binh Xuyen industrial zone in Vinh Phuc Province.(Photo: VNA)
Hanoi (VNS/VNA) - Foreign investors have been encouraged to takeadvantage of the double benefits Vietnam is offering through its commitments inthe many trade pacts signed with other countries.
Foreign investment in Vietnam is expected to increase significantly after thecountry signed two important trade deals – the Comprehensive and ProgressiveAgreement for Trans-Pacific Partnership (CPTPP) and the European Union-VietnamFree Trade Agreement (EVFTA).
According to experts, foreign investors in Vietnam will enjoy the benefits ofboth the international market and preferential domestic policies.
The agreements also offer a great opportunity for businesses that are not fromthe EU or CPTPP’s 10 other member countries. When investing in Vietnam, theycan take advantage of tax incentives Vietnam has agreed upon with thosecountries.
Investors originating from the EU or CPTPP would enjoy the full range ofincentives, especially in terms of investment conditions, Vice President of theNational Economics University Hoang Van Cuong told vov.vn.
"These investors are on Vietnam’s priority list as they can help bringadvanced technology that will transform domestic enterprises," Cuong added.
According to Luong Van Khoi, deputy director of the National Centre forSocio-Economic Information and Forecast (NCIF), EVFTA and the investmentprotection agreement (EVIPA) will open the market at a higher level than theWorld Trade Organisation (WTO) and EU investors will receive the same treatmentas domestic enterprises.
In addition, Vietnam is committed to protecting the benefits of EU investorswith measures such as forbidding the illegal nationalisation of EU investors’assets.
This agreement also allows foreign contractors to bid for projects that useState capital.
“With such strict regulations, EVIPA will have a positive impact on attractinginvestment in Vietnam – not only from the EU but also other countries – to takeadvantage of tax incentives when exporting to the EU market,” Khoi said.
Minister of Planning and Investment Nguyen Chi Dung said "EVFTA and CPTPPare high-quality, new-generation free trade agreements that will contribute tostrengthening the confidence of foreign investors in Vietnam’s attractive, safeand friendly investment environment".
Vietnam is a large market with more than 96 million people. The CPTPP is thethird largest free trade area in the world by GDP after the North American FreeTrade Agreement and the European Single Market.
Strict rules of origin in the two agreements would encourage increasedinvestment in Vietnam to take advantage of the country’s access to the EU andCPTPP’s member markets, Dung said.
According to Nguyen Dinh Cung, director of the Central Institute for EconomicManagement, EVFTA will help Vietnam improve the quality of foreign investment, attractingmore capital in a number of industries in which the EU is strong such asprocessing and manufacturing, hi-tech applications, clean energy and financialservices.
Production value chains are changing and this is an opportunity to reducereliance on Asian investors and increase investment from the EU. However, toattract high quality investment from this region, Vietnam needs to make swiftprogress in reforming administrative procedures.
According to the Ministry of Planning and Investment, EU investors have 2,244projects in Vietnam with total registered capital of US$24.67 billion. - VNS/VNA
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