According to a document from Vietnam’s investment ministry reviewed by Reuters, the country has lost out on investments totaling billions of dollars from companies like Intel and LG Chem due to insufficient investment incentives. Intel, for example, had proposed a $3.3 billion investment project in Vietnam but asked for 15% cash support, leading them to instead move the project to Poland. Similarly, LG Chem opted to invest in Indonesia for a battery project after Vietnam did not agree to cover 30% of the investment cost.
The document also mentioned other companies like AT&S and Samsung Electronics, who have either moved their investments elsewhere or shifted production to different countries due to a lack of investment support in Vietnam. Foreign-invested companies play a significant role in Vietnam’s economy, with about 70% of total exports coming from these companies.
Multinationals have been paying close attention to Vietnam’s plans to create an investment incentive fund, especially after the country’s parliament approved a global minimum corporate tax rate of 15% last year, which increases the tax burden on companies. This development has pushed companies to evaluate their investment decisions in Vietnam.
These recent developments highlight the importance of providing attractive investment incentives to attract and retain foreign investments in Vietnam’s growing economy. With countries like Indonesia and Poland offering more favorable terms, Vietnam must address its shortcomings in order to compete for multinational investments effectively.
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https://wibqam.com/2024/07/05/vietnam-misses-out-on-intel-lg-chem-investments-due-to-lack-of-incentives-ministry-document-shows/