‘Green lane’ policy increases opportunities for FDI attraction

Policy changes will create favorable conditions for Vietnam to attract FDI

Nguyen Thi Huong, Head of the General Statistics Office of Vietnam, said that on November 29, 2024, the National Assembly passed Law 57/2024/QH15, which amends and supplements some articles of the Law on Planning, the Law on Investment, the Law on Public-Private Partnership (PPP) Investment, and the Bidding Law. Law 57/2024/QH15 started to take effect from January 15, 2025, improving the legal framework for bidding, planning, investment, and PPP investment.

Law 57/2024/QH15 also adds two very important provisions to the Law on Investment. First, the Government establishes the Investment Support Fund from corporate income tax revenue supplemented by Global Anti-Base Erosion rules and other legal sources, in order to stabilize the investment environment, attract strategic investors, multinational corporations, and support domestic enterprises in certain sectors that require investment promotion.

Second, a special regulation on investment procedures is introduced, which can be called the ‘green lane’ policy, shifting from a pre-check mechanism to a post-check one to shorten the time for investment procedure implementation. An appropriate mechanism will be created to attract strategic investors, enhance national competitiveness in attracting investment in high-tech sectors and other areas where investment is encouraged, the semiconductor industry, design technology, the manufacturing of components, integrated electronic chips, flexible electronics circuits, and semiconductor materials. Priority will be given to investment in the manufacturing of high-tech products encouraged for development under the Prime Minister’s decision.

Nguyen Thi Huong said that these two important provisions of Law 57/2024/QH15 will help Vietnam overcome difficulties in attracting strategic investors. Specifically, while FDI has grown steadily over the years, the number of strategic investors who are intensifying research activities and seeking investment opportunities for large-scale projects in high-tech sectors remains limited.

The attraction of FDI in general and high-tech projects in particular is currently carried out through procedures related to investment, construction, bidding, environmental protection, land use, and fire prevention and control. Each procedure has its own specific requirements, with some involving multiple steps or sequential execution, where the result of one procedure serves as the input for another, creating a time-consuming process.

Therefore, the ‘green lane’ policy with special investment procedures will enhance Vietnam’s competitiveness in attracting strategic investors. Foreign investment registration in Vietnam is expected to grow robustly in 2025 and the following years.

Vietnam attracted over US$38.2 billion of FDI in 2024

In 2024, according to data from the Foreign Investment Agency, Vietnam attracted over US$38.2 billion of FDI through new projects, capital increases of ongoing projects, and stock purchases by foreign investors, equivalent to 97 percent of the amount attracted in 2023, a three-percent decrease.

Nguyen Thi Huong noted that despite this slight decrease, capital increases of ongoing projects were a bright spot of the 2024 FDI attraction picture. The number of projects with capital increases rose by 11.2 percent, while the total additional capital rose by 50.4 percent compared to 2023. The number of new projects also increased by 1.8 percent.

Notably, 2024 also witnessed the launch and expansion of numerous large-scale projects in sectors, such as semiconductors, energy, component manufacturing, electronics, and high value-added products.

“This reflects foreign investors’ trust in Vietnam’s investment environment and their willingness to invest in new projects and expand existing ones in the country,” Nguyen Thi Huong said.

In 2024, Vietnam recorded 1,539 FDI projects registering for capital increases, equivalent to 111.2 percent of the 2023 figure. The total registered capital of these projects reached US$13.96 billion, equivalent to 150.4 percent of that in 2023.