- Overview of FDI inflows into Vietnam in the first quarter of 2023:
The data released by the Foreign Investment Agency indicates that FDI inflows in the first three months of the year reached nearly $5.45 billion. This figure represents a 38.8% decrease compared to the same period in 2022. Recently, a report revealed that the rate of FDI decline in Q1/2023 has narrowed down to only 19.3%. While this change in the percentage decline brings some optimism… the truth is that FDI into Vietnam is still decreasing.
- The reasons for the decline in FDI into Vietnam? Is it due to the impact of the Global Minimum Corporate Tax?
In general, the decline in FDI is not only a specific situation in Vietnam. It is a pressing issue for all countries worldwide… Due to the impact of “Pillar Two” – the Global Minimum Corporate Tax, investment scenarios in various countries are experiencing difficulties.
There are signs that major corporations are being cautious about continuing their investments in Vietnam. Perhaps they are awaiting the government’s response to the current situation.
Further in-depth research reveals that the main reasons for the decline in FDI inflows into Vietnam are related to investment business environment issues… Additionally, there are issues related to absorptive capacity and preparations to attract significant capital. These include concerns about land, labor, infrastructure, and supporting industries…
- Urgent solutions to cope with the decline in FDI into Vietnam
In addition to the need to urgently propose policies regarding the Global Minimum Corporate Tax, Vietnam must address the root causes of policy-related obstacles to investment and business. To do this, the government issued the Foreign Investment Cooperation Strategy for the period 2021-2030 in June 2022. Vietnam has gradually implemented the outlined strategy. Among these measures, the Green Growth solution is recommended by experts to counter the impact of the Global Minimum Corporate Tax.
Regarding domestic investment environment issues, notable efforts include the implementation of draft amendments to several laws. Of these, the most anticipated are the draft amendments to the Land Law, Housing Law, and Real Estate Business Law… These drafts aim to stabilize the real estate market.
Through thorough preparation at every stage, Vietnam asserts its readiness for global challenges. It also demonstrates itself as a safe and attractive destination for foreign investors.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
