Vietnam-bound investment last year more than doubled to US$2.8 billion, as Taiwanese firms sought to take advantage of the Southeast Asian nation’s fast-growing economy and meet the need for global supply chain realignment, Deloitte & Touche Taiwan (勤業眾信) said yesterday, citing data from the Ministry of Economic Affairs.
The volume made Taiwan the sixth-largest foreign investor in Vietnam, whose GDP growth is forecast by the IMF to approach 5.8 percent this year, as the global research body is positive about Vietnam’s economic recovery despite lingering uncertainty and geopolitical conflicts, the local branch of the international consultancy firm said.
Rising geopolitical tensions and awareness of the importance of sustainable operations on the part of enterprises have lent support to southward investment opportunities and Vietnam has emerged as a major beneficiary, Deloitte Taiwan managing partner Kenny Hong (洪國田) said.
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The Vietnamese government has unveiled a 10-year economic and social development initiative and has encouraged industrial sectors to transform and upgrade by focusing their attention on technology-intensive, low-pollution and high-value-added products and services, Hong said.
As a result, prices for industrial plots and personnel costs in the Southeast Asian country picked up significantly last year, but there are still abundant investment opportunities for companies making information technology and high- value-added products, he said.
The Vietnamese government is promoting foreign investment through favorable policy measures and expanding its consumer market, Deloitte Taiwan said.
Maggie Pan (潘家涓), another Deloitte Taiwan executive, said that Vietnam is also benefiting from the environment, social and governance (ESG) trend that has driven the country to support technology-intensive industrial sectors and woo foreign investment in electric vehicles, offshore wind power, semiconductors and high-end services.
Toward that aim, the Vietnamese government has made a priority of attracting investment projects that can help boost the nation’s technology development and it has provided tax incentives to boost investments, Deloitte Taiwan said.
Taiwanese firms intent on setting footprints there should pay attention to regulations, it said.
While Vietnam is courting foreign investment, it is pressing ahead with tax reforms, including export and import duties and a minimum-income tax resolution that drew heated discussions last year, Deloitte Taiwan said.
Taiwanese firms eyeing Vietnam should carefully study tax burdens and legal compliance requirements to reduce investment risks, it said.
The minimum tax takes effect this year and might generate NT$18.8 billion (US$597.96 million) annually, it said, adding that it remains to be seen if and how the new taxation would affect foreign investment interest.
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