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Dong Nai attracts investment selectively

​Up to the date of March 14, Dong Nai attracted US$ 439.8 million in foreign direct investment (FDI), up 55 percent compared to its yearly target and 34 percent year-on-year. This is an outstanding achievement in the economic-social context of Dong Nai province in the first quarter of the year 2014.


​An attractive destination for investors

The province attracted 15 new projects worth US$ 119.6 million and 10 projects registering additional capital of US$ 320 million. Thirty of newly-registered and capital- added projects come from Japan with total capital of over US$ 40 million. Therefore, up to now, Dong Nai has cumulatively attracted over 1,398 FDI projects with total registered capital investment of US$ 24.5 billion, of which there are 1,080 valid projects with total registered capital of more than US$ 20.1 billion. It is remarkable that Dong Nai has attracted many projects in the field of high technology and support industry. A typical example is the US$ 20 million investment project of Pegasus - Shimamoto Auto Parts Vietnam Co., Ltd of Japan, which specializes in manufacturing components and spare parts for automobiles and motorbikes, sewing machines and components for other industries. And there are projects of companies such as: Fuji Vietnam Co., Ltd (producing chemicals for construction and industry sectors like liquid glass, waterproofing chemicals for concrete and so on); Kuk IL Vietnam Co., Ltd (manufacturing fiber for textile and garment industry); Inoue Vietnam JSC (Japan) producing and assembling machinery parts and equipments in relation to food processing industry, chemical industry, medicine & pharmacy industry, automobile industry and textiles & garment industry. In addition, Robert Bosch Vietnam Co., Ltd registering additional capital of US$ 208 million is expanding its investment in Long Thanh Industrial Zone. 


Noticeably, in this first quarter, many companies inaugurated, went into production and celebrated ground-breaking ceremony. For example, On Semiconductor Co., Ltd. (an American firm in Bien Hoa 2 Industrial Zone), specializes in manufacturing integrated circuits, the semiconductor components for automobiles, household appliances and other industrial application. Besides that Metecno Vietnam Co., Ltd. (a Netherlands company in Bien Hoa 2 Industrial Zone), focuses on supplying insulation panels for roofs and walls in air-conditioned and clean room, thermal and sound insulation iron for roofs and walls, and accessories made from color coated steel or zinc - aluminum coated steel of high quality. Moreover, CJ VINA AGRI Co., Ltd. (a Korean business in Dau Giay Industrial Zone), specializes in producing and processing animal feed. 


Mrs. Bo Ngoc Thu, Director of Department of Planning and Investment stated that in recent years, Dong Nai province has substantially lured FDI worth over US$ 1 billion in yearly average. Because Industrial Zones have been completed infrastructure and transportation system has been taken into consideration. Besides that, provincial leaders always “accompany with enterprises” in get-togethers and meetings to listen and solve investors’ difficulties timely. 

Workers of Tae Kwang Vina Company during working hours 
 
 
In addition, Dong Nai leaders’ visits to Japan to promote investment in April, 2013 and celebration of annual conference groups of Taiwan enterprises have produced efficiency. As a result, investors have conducted more practical survey in Dong Nai and decided to invest in Dong Nai. Currently, the provincial leaders’ policy is to become more selective in investment attraction; and their focuses are environmental-friendly projects that use advanced technology and operate in crucial areas like support industry, service industry and infrastructure. 

A wide variety of priority policies
For the purpose of achieving nearly US$ 700-900 million in FDI attraction for the year 2014, provincial leaders have announced many preferential policies, especially prioritizing corporate income tax for new projects and expanded projects under the proposals of FDI enterprises.

Accordingly, the expanded or brand-new projects will receive preferential treatment with tax rate of 22 percent, tax exemption for the first two years and tax reduction of 50 percent for the next four years. Common tax rate imposed on investment projects in Industrial Zones can be reduced from 25 percent to 22 percent. Provincial People’s Committee also established its branch offices where enterprises can contact directly for assistance. The provincial People’s Committee has recently decided to implement specific supporting mechanisms for small and medium FDI enterprises to carry out new projects. The provincial leaders emphasize on supporting investment promotion for investors with new projects along with establishment of small and medium sized enterprises in Vietnam. There are priorities and supports in administrative procedures for new FDI projects that are associated with small and medium enterprises in Dong Nai province. These projects shall have total registered capital of below 100 billion VND, and less than 300 employees per year in average. At the same time, these above enterprises will enjoy expense support to handle procedures for application for investment certificate; seal making and tax code registration; and receive cost support for request for approval and report on evaluating environmental impact. 

Vice Chairwoman Phan Thi My Thanh of provincial People’s Committee said that these enterprises do not often have good access to local government due to small-scale investment and language barrier; therefore they should be supported in administrative procedures. Estimated cost to support small and medium FDI businesses is nearly 1.9 billion VND, allocated from local budget and supporting capital of investment promotion. These above priority mechanisms will be conducted in two years and 70 enterprises will enjoy the mechanism in 2014 and 2015.

Dr. Tran Dinh Thien, Director of Vietnam Institute of Economics valued that the most obvious evidence of the appeal for institutions and investment environment in Dong Nai is increasing FDI attraction; particularly luring fastidious Japanese investors. It is undoubtedly that Dong Nai authorities have gained trust and confidence in investors.

Diem Quynh 

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