Vietnam's Ho Chi Minh City ranks first nationwide in FDI attraction

As the end of December 2014, a total of 17,499 FDI projects from 101 countries and territories are still validly operating in Vietnam, with a total registered capital of 250.667 billion U.S. dollars, according to the Vietnamese Ministry of Planning and Investment.

Of the above-mentioned figures, southern economic hub Ho Chi Minh (HCM) City ranked first among 63 cities and provinces nationwide, with 5,191 FDI projects and more than 37.98 billion U. S. dollars.

In the first three months of 2015, Vietnam received 1.83 billion U.S. dollars in FDI from 33 countries and territories. With 540.24 million U.S. dollars, HCM City ranked first among 28 cities and provinces having the FDI in the reviewed period.

Of the total FDI projects operating in HCM City, 35.3 percent are made in real estate, 34.3 percent in industries and 10.9 percent in trading, hotel and restaurant services.

Among foreign countries and territories doing business in the city, Singapore ranked first, followed by Malaysia, China's Hong Kong, South Korea, Japan, China's Taiwan, and other nations.

According to Miao Ren Lai, President of the China Business Association in HCM City, there are three main factors that made the city successful in attracting the most FDI in many years.

First, regarding the investment policy, HCM City has not only implemented effectively the government's policies on foreign investment, but also applied timely appropriate preferential policies to foreign investors' business.

Second, HCM City has provided a favorable environment for foreign investors, with cheap and qualified human resources. The city is home to 54 national universities, 25 colleges, 11 vocational training schools, and nearly 450 vocational training centers, which annually turn out abundant and qualified human resources to the labor market, including to foreign-invested enterprises. Advantages in the high-tech and scientific advance also boost the city's FDI attraction.

Third, geographically, HCM City is the largest city in Vietnam, a bustling and dynamic economic, trading and services hub not only of Vietnam, but also the whole Southeast Asia.

The city has a synchronous infrastructure, including land, water and air transport ways. Tan Son Nhat International Airport, located about 6 km north of the city's downtown, is the largest airport in the country, which handled almost 22 million passengers in 2014.

In addition, the city has 74 big and small river and sea harbors, divided into four groups including the Saigon Port, the New Cat Lai Port, the Nha Be Port and the Soai Rap River Port. Total amount of goods handled through these ports is estimated to reach 100 million tons in 2015, and 135 million tons annually by 2020.

Those above-mentioned advantages, together with the city's fast upgrading network of roads, highways and city's belt ways, have helped facilitate foreign investors' business activities.

Eventually, the FDI has contributed notably to HCM City's gross domestic product (GDP) growth over the past years. The city's GDP increased from 9.5 percent in 2001 to 10.3 percent in 2011, of which the FDI sector contributed 18.4 percentage and 22.9 percentage, respectively.

In 2014, the FDI sector accounted for 23.8 percentage of the city's GDP growth of 9.5 percent. Meanwhile, Vietnam's GDP reached only 5.9 percent, in which the FDI sector made up 21.7 percentage.

Currently, HCM City has more than 3,000 foreign representative offices established by 60 countries and territories doing business in Vietnam.

Thai Van Re, Director of HCM City Department of Planning and Investment, attributed HCM City's success in attracting the most FDI nationwide in many consecutive years to the local renewals in simplifying administrative procedures and efficient management of the FDI source.

"Due investment from the city's budget in upgrading local infrastructure, timely updating investors with information, and reducing time to grant them business licenses, are among effective measures that HCM City has applied to encourage more FDI in the city," said the city's official.