Waiting for concrete solutions.

Vietnam Business Forum (VBF) Annual Meeting 2024: Awaiting Concrete Solutions

There are no objections to the pioneering role of foreign direct investment (FDI) enterprises in implementing green strategies, but the business community still sends a message that it is very much looking forward to concrete and strong solutions from the Government .

The Prime Minister's meeting with the FDI business community and the annual Vietnam Business Forum were held in Hanoi on March 19. Photo: Duc Thanh

Heartfelt words from a business committed to "long-term investment" in Vietnam.

“Intel has been present in Vietnam for 17 years and will continue to grow in Vietnam. We want to see Vietnam maintain its competitiveness in attracting FDI.” Mr. Phung Viet Thang, Country Director of Intel Vietnam, stated at the Prime Minister's meeting with the FDI business community and the annual Vietnam Business Forum, held yesterday (March 19).

Beyond just a message of commitment, Intel's leadership also submitted three very specific recommendations that Mr. Thang called "crucial for Vietnam not to miss out on development opportunities." These were: investing in human resources, especially for the semiconductor, chip, and artificial intelligence (AI) industries; developing next-generation data centers; and specific tax measures.

"The government has very determined plans to build human resources, and there have been discussions about implementing a global minimum tax in Vietnam. However, we want to see specific regulations," Mr. Thang emphasized.

Present and speaking at the recommendations session aimed at improving the investment and business environment in Vietnam, the leaders of Samsung Vietnam and Bosch Vietnam presented similar recommendations and shared similar challenges with the head of the government as well as leaders of ministries, sectors, and localities.

Furthermore, Mr. Choi Joo Ho, General Director of Samsung Vietnam, frankly stated that to enhance the confidence of FDI enterprises, he suggested that the Government fulfill its commitments to businesses regarding mechanisms and policies to attract investment, closely monitor the consistent implementation of policies, and minimize legal uncertainties.

"Currently, many administrative procedures take up to 2-3 years to resolve," Mr. Choi Joo Ho shared, clearly stating that, "Samsung is a long-term investor in Vietnam, wanting to contribute to and develop the Vietnamese economy."

This is the first time within the VBF framework that FDI enterprises have participated independently, alongside business associations and VBF working groups. However, the message that these enterprises sent to the head of government during the Prime Minister's meeting with the FDI business community reflects the common concerns of the FDI business sector.

On behalf of the Government, at the VBF Forum, Prime Minister Pham Minh Chinh expressed his hope and belief that the Forum will continue to be an important and effective policy dialogue channel between the Government and the domestic and foreign business community in the future, and continue to make significant contributions to Vietnam's reform, integration, and development.

Prioritize digital transformation

Looking back at the issues that business associations submitted to VBF, concerns about complex and inconsistent procedures still seem to dominate.

Representing the VBF's associate members (including the Singapore Business Association in Vietnam, the Australian Business Association in Vietnam, the Swiss Business Association, the Taiwan Chamber of Commerce in Vietnam, the Thai Business Association in Vietnam, the Hanoi Business Association, the Indian Business Association in Vietnam, and the Hong Kong Business Association in Vietnam), Mr. Seck Yee Chung, Vice President of the Singapore Business Association in Vietnam, suggested that Vietnam could significantly boost foreign investment by simplifying and streamlining procedures for granting and renewing business licenses, certificates, and other permits.

“This is especially important for foreign investors who are often wary of complex bureaucratic procedures. To date, the licensing procedures and time it takes for FDI businesses to obtain business licenses for sectors including retail, equipment leasing, and e-commerce from the Ministry of Industry and Trade remain very cumbersome and time-consuming. Typically, businesses have to submit documents multiple times and go through several rounds of explanations and clarifications with the Ministry of Industry and Trade and the Department of Industry and Trade. This can take up to 12 months,” Mr. Seck Yee Chung reported, citing a typical example.

This is why associations have submitted very specific recommendations, hoping for corresponding concrete and clear solutions to ensure effective implementation. Specifically, the group affiliated with VBF proposed expanding the online portal and electronic application submission, hoping to allow more government applications and procedures to be completed online, making the process faster and more convenient.

In addition, businesses want government agencies to accept electronic signatures and email communication, reducing reliance on paper documents.

In fact, some procedures, such as company registration, have been done online, but Seck Yee Chung said that many processes related to foreign investment still require in-person meetings and document submissions. These include investment registration, M&A approval, foreign loan registration, establishment of representative offices, and applications for retail business licenses for foreign investors.

"By providing online options for these procedures, Vietnam can attract more foreign capital and partners," Mr. Seck Yee Chung conveyed the expectations of businesses.

Prioritize investment in human resources.

Concerns about the quality of human resources have also emerged quite clearly, especially in the context of Vietnam's green economic development needs. The results of the ESG survey conducted by VBF and reported at the Forum show that continued investment in workforce development is of paramount importance.

“Upgrading and retraining the Vietnamese workforce will not only increase overall productivity but also position Vietnam as a more attractive destination for FDI businesses seeking skilled and adaptable labor,” said Stuart Livesey, Country Director of Copenhagen Offshore Partners Vietnam.

However, businesses also stated that fulfilling this requirement is not simple, as surveys show that only 15% of foreign businesses consider labor quality an attractive factor, mainly in Hanoi and Ho Chi Minh City.

Previously, the Human Resources Group submitted detailed reports to VBF, highlighting numerous obstacles hindering the plan to develop a highly skilled industrial workforce.

“International skills transfer requires the participation of foreign experts coming to Vietnam to transfer high technology and other skills. We fully agree with and respect Vietnam’s cautious approach in managing this process to ensure that only the most suitable foreign experts are granted work permits. However, as is often the case with work permits, clearer and more specific explanations would benefit both the foreign investment community and Vietnam’s development goals,” explained Colin Blackwell, Head of Human Resources, regarding the rather lengthy bullet points related to the administrative burden faced by businesses and foreign experts.

This difficulty is not limited to manufacturing businesses. In his speech, Denzel Eades, Vice President of the British Business Association, also shared his views on the challenges Vietnam is facing in its strategy to attract global talent to Vietnam.

"Given the intense competition in the region, Vietnam needs to continue to reduce the burden on talent and other visitors (such as tourists) and accelerate progress in the application of digitalization and technology use at airports," Denzel Eades emphasized.

The main objective of these highly detailed proposals, as Denzel Eades shared, is for Vietnam to leverage international treaties to simplify and eliminate the requirement for legalization of foreign documents, as more than 100 other countries have already done.

More importantly, Dominik Meichle, General Director of Bosch Vietnam, said that businesses have high expectations for this dialogue, which they believe will benefit all parties.

"Many of the projects we are undertaking are aligned with the government's green and circular development needs, but are facing procedural obstacles. Therefore, having specific guidelines and clear mechanisms will accelerate implementation," shared Mr. Dominik Meichle.

This conference affirms the particularly important role of the business community, especially FDI enterprises, in implementing green growth.

With its potential and geoeconomic position in the global supply chain, Vietnam is facing a tremendous opportunity in green growth to transform itself, catch up, keep pace, surpass others, and create momentum for a leap forward in economic, social, and environmental development. A green growth orientation is key to ensuring the successful achievement of the goals in the 10-year Socio-Economic Development Strategy for the period 2021-2030; creating opportunities for Vietnam to continue its innovation momentum, accelerate the transformation of its growth model towards depth, and prioritize quality, efficiency, and sustainability at the national economic scale as well as at the enterprise level.

The selection of the theme "FDI Enterprises Pioneering the Implementation of the Green Growth Strategy" for this conference strongly demonstrates the Government's determination and affirms the particularly important role of the business community, especially FDI enterprises, in implementing green growth to realize strategic goals on reducing greenhouse gas emission intensity; greening economic sectors; and strongly promoting the green transition process on the principles of inclusiveness, equality, mutual benefit, enhanced resilience, and ensuring that no one is left behind.

- Mr. Nguyen Chi Dung, Minister of Planning and Investment

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