Vietnam has reaffirmed its efforts to support foreign investors who develop long-term, sustainable, and environmentally responsible business strategies in the country.

At the largest conference ever to create stronger conditions for foreign investors in late April, Prime Minister Pham Minh Chinh emphasised the potential for overseas financiers to get involved in emerging fields such as digital transformation, green transition, circular economy, innovation, and climate change adaption.

Regarding the global minimum tax (GMT) on corporates set to come into effect in 2024, the government has ordered reviews and will take measures to draw investment that is not contrary to the international commitments to ensure the harmonisation of interests of all relevant sides, and assure equitable treatment for enterprises.

The GMT was initiated by the Organisation for Economic Co-operation and Development (OECD), means enterprises with annual revenues of $827.18 million or more are eligible for a tax rate of 15 per cent. In 2024, most EU member states and Japan, South Korea, Singapore, Indonesia, China, and Australia will implement the GMT.

Currently, Vietnam has over 335 projects working in the domains of processing and manufacturing in economic and industrial zones, each with the registered investment capital of more than $100 million. The majority of them are funded by high-tech groups such as Samsung, Intel, LG, Bosch, Sharp, Panasonic, Foxconn, and Pegatron, all of which are likely to be subject to the GMT if it is implemented in Vietnam.

Nitin Kapoor, co-chair of the Vietnam Business Forum and president of AstraZeneca Vietnam, said that it was right for studies to be carried out on the impact of the GMT in the interests of investors and the business environment in Vietnam. “Thereby it can help devise practical, effective, and timely solutions to ensure investment and offset benefits for businesses if tax incentives are reduced or canceleld out,” he said.

Dominik Meichle, general director of Bosch Vietnam, expressed optimism that Vietnam will be able to develop a secure and predictable economic environment. “The anticipated implementation of the GMT in 2024 will likely have an impact on tax benefits for investors, as well as the effectiveness of investments and policy transparency,” Meichle said.

Meanwhile, according to Hong Sun, chairman of the Korean Chamber of Commerce in Vietnam, many South Korean enterprises already in this country, particularly those in high technology, finance, and energy, were considering increasing their investments and placing new funding if the business environment remained stable.

“To attract more investment, Vietnam needs to convince international investors that the country is making considerable progress in administrative changes and giving broader incentives,” he said.

According to the prime minister, the government would specifically support enterprises with land, sci-tech research expenses, administrative reform, social and worker housing, human resource training, and infrastructure development to promote greater foreign investment into the country.

Related to work permits and visas, Dao Ngoc Dung, Minister of Labour, Invalids, and Social Affairs, stated that the government is aiming to streamline related legislation and that foreign specialists and managers will be among the top priority in developing new regulations controlling work permit issuing.

PM Chinh also stressed the visa policy is being revised to provide the best conditions for overseas visitors.

Up to April 20, the country had 37,065 valid projects registered at nearly $445.9 billion; in which, the accumulated capital of foreign ventures is estimated at more than $279.8 billion.

Vietnam Investment Review