Foreign Investment Needed for Infrastructure and Agriculture Projects in Vietnam

Posted by Reading Time: 3 minutes

HANOI – Prime Minister Nguyen Tan Dung has approved a list of projects that require foreign investment. These projects will take place over the next six years, with a tentative completion date of 2020.

The list includes 127 projects in several industries and will require US$58 billion in investment to complete. The sectors that should benefit the most are infrastructure, which received the majority of the capital invested into 35 projects, and the agricultural sector, with 44 projects planned.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Business Advisory Services

One of the biggest projects is a US$8 billion refinery located within the Nam Van Phong Economic Zone. Foreign investors can contribute up to 75 percent of the capital for this particular project.

Another major infrastructure project is the Long Thanh Airport in Dong Nai Province (US$5.6 billion for Phase 1). However, this project has some obstacles to overcome due to concerns about its long-term feasibility.

In particular, there are worries that Long Thanh cannot become a transit airport since there are already two existing transit points in Thailand and Singapore. Additionally, the decision to build just one runway instead of two has raised further doubts as to whether it can reach its target of 17 million passengers per annum – a failure to reach this target would drastically devalue the investment.

RELATED: Vietnam Releases New FDI Statistics

Additional projects include:

  • The Noi Bai-Ha Long highway, US$1.8 billion;
  • The Bien Hoa-Vung Tau railway, US$5 billion;
  • The Dau Giay-Lien Khuong highway, US$3.5 billion;
  • The power center in Binh Dinh Province, US$4 billion; and
  • The North-South highway project, US$1.9 billion in the form of public-private partnerships.

In the agricultural sector, the city of Can Tho, situated in the Mekong delta, is set to attract a US$26 million investment project to build a high-tech agricultural zone in Co Do district. This zone, called the Thoi Hung High-Tech Agricultural Zone, will cover up to 500 hectares of land.

The project is expected to produce plant varieties, breed livestock under international standards and apply cutting-edge technology in processing agricultural and aquatic products. Another objective of the project is to expand the application of advanced agricultural technology in Vietnam – a network of satellite farms and businesses will be linked with the zone.

Key advantages for foreign investors in the zone include having to pay only half of the land-use fee, as well as being permitted to acquire land without charge for the purpose of constructing residential buildings for workers and public facilities.

As an increasing number of foreign businesses look to expand their operations to the country, Vietnam’s government knows that it must continue improving its infrastructure in order to increase the ease of doing business. These newly approved projects are a step in the right direction.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email vietnam@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading

An Introduction to Doing Business in Vietnam 2014 (Second Edition)
An Introduction to Doing Business in Vietnam 2014 (Second Edition) provides readers with an overview of the fundamentals of investing and conducting business in Vietnam. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, annual compliance, taxation, human resources, payroll, and social insurance in the country.

Apple Takes a Bite Out of Vietnam’s Market

Vietnam TPP Update: Edging Closer to Completion

Vietnam and the U.S. Look to Strengthen Relationship

Manufacturing on the Move: Airbus’s Operations take Flight in Vietnam

Has Vietnam Fallen into the Middle Income Trap?

Leave a Reply

Your email address will not be published. Required fields are marked *