Major foreign investors are not leaving Vietnam but are shifting their investments to key industries like semiconductors and artificial intelligence, Trang Bui, country head of Cushman & Wakefield Vietnam, a commercial real estate agency, has told The Investor.
However, it was reported last week that several global tech giants have considered Vietnam but then chosen to invest elsewhere.
Notably, LG Chemical proposed a battery production project and suggested supporting 30 percent of the production cost in cash, but eventually chose to invest in Indonesia. Similarly, Austria Technologie & Systemtechnik Aktiengesellschaft, a producer of high-end printed circuit boards, had proposed an investment project in Vietnam, but then invested in Malaysia.
Vietnam has used tax incentives as a financial lever to influence investment trends. Preferential tax rates for foreign projects are available at rates of between 10 to 17 percent, depending on the field and location, with some enjoying special tax rates as low as 5 percent. However, these tax incentives have been significantly diminished by the Global Minimum Tax–about 122 foreign companies have been impacted by the new tax in Vietnam, according to a review by tax authorities.
Of note, total registered FDI capital in the first six months reached nearly US$15.2 billion, up 13.1 percent over the same period last year, according to data from the Ministry of Planning and Investment.