To really set free its tremendous potential for investment, trade, and tourism, Hanoi has been actively implementing different measures to promote itself domestically and abroad in a bid to become a safer and more stable destination.
|Hanoi’s famous Old Quarter is gradually getting back to normal, and itching to receive new international guests, Photo: Le Toan|
Covering over 3,300 square kilometres, Hanoi is a quickly developing city with a population of more than eight million and regional GDP of 7.46 per cent.
The city boasts Noi Bai International Airport and a convenient connection to the northern port city of Haiphong, and Hanoi’s industrial zones also include some focused on high technology. Over the years, with the aim of making itself an attractive destination for investors, Hanoi has been actively improving itself along with carrying out investing strategies with effective promotion programmes.
The clearest indicator showing the outstanding improvement of Hanoi is its upgraded position in Vietnam’s Provincial Competitiveness Index (PCI), in which the city moved from rank 13 in 2017 to rank 9 out of 63 cities and provinces in 2018 and 2019.
“The PCI is a useful indicator, showing the development of Hanoi. Improving this index has become one of the city’s top missions to facilitate a better business climate,” said Nguyen Doan Toan, Vice Chairman of Hanoi People’s Committee.
Along with that, the city’s export turnover increased gradually from $10.6 billion in 2016 to $17.5 billion in 2019. Similarly, the number of tourists to the city also increased from 24 million in 2017 to 29 million last year.
“These results are showing the efficiency of the city’s promotion activities, particularly those to attract foreign investment over the past five years,” Nguyen Gia Phuong, director of Hanoi Promotion Agency, (HPA) told VIR.
According to Phuong, the HPA has co-operated with the city’s relevant authorities to promote Hanoi to domestic and foreign investors via large political and economic events taking place across the country, such as APEC 2017 in the central city of Danang, the 2019 summit between the Republic of Korea and the United States, and a high level dialogue on ASEAN and Italian economic relations in Hanoi.
“Events since 2016, such as the annual Hanoi Investment and Development Cooperation event, have proven that Hanoi is a safe and stable destination for both tourism and trade and investment,” Phuong said. “This years’ edition, taking place on June 27 after the pandemic has been controlled in the country, is a strong message that Hanoi is a safe and stable destination for both domestic and foreign investors.”
With the participation of around 1,000 enterprises, embassies, trade counsellors, foreign investors, and other organisations, the conference promises to supply more information about Hanoi’s new policies, its socio-economic development orientation as well as its plans of attracting investment capital.
“We will further improve the investment environment in the city to reach the target of $5 billion of foreign investment. We will implement promotion activities aiming for new markets, particularly the ones joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA),” Phuong said.
Attracting new markets
According to Phuong, Vietnam’s partners within its free trade agreements, like the CPTPP and EVFTA, are markets with high potential for the development of trade, investment, and tourism of Hanoi.
“They are large, economically and technologically advanced markets,” he said.
So far, Hanoi has identified that improving the management efficiency and investment environment, together with reforming administration and removing barriers for enterprises, are key duties of Hanoi authorities.
Along with that, the city will continue to promote its investment environment, in association with promoting trade and tourism as well as foreign affairs and cultural activities.
Moreover, the city plans to identify key markets and work together with large corporations to introduce potentials and advantages of Hanoi and accelerate IT application in administration, thereby improving business registration, taxation, and land-related issues.
“We are working on the plan of attracting foreign investment for the 2021-2025 period with a vision towards 2030, ỉntroducing the list of projects calling for investment within the same period, and implementing both online and overseas tourism promotion programmes,” Phuong said.
Yagi Hiroshi - General director, Terumo Vietnam Medical Equipment Co., Ltd.
During the 10 years of our activities in the country, Terumo Vietnam has been well supported by the Vietnamese government, especially in Hanoi. With the help of the Japanese Chamber of Commerce and Industry in Vietnam, we have been able to express and discuss our ideas with Hanoi authorities.
Investment inflows will continue with the capital’s current development efforts and the many appropriate and long-term policies.
The online tax system is very convenient and helps enterprises reduce administrative works. However, there are still some issues that need to be improved so that Hanoi becomes a truly attractive environment for foreign investors like us.
The legal system should be improved while regulative restraints on foreign enterprises should be relieved.
However, we know that over the last few years, Hanoi has made improvements in its infrastructure. On the other hand, we see infrastructure of industrial zones like Quang Minh that need to be addressed to ensure the safety for workers. We hope to widen its manufacturing scope on the back of the government’s important groundwork for a sustainable macro-environment.
Jeffrey Wandly - First deputy general director, BIDV Tower
One of the key factors that helps Hanoi achieve the highest foreign direct investment among its peers is that Hanoi’s leaders are responsive, and active in approaching new investors and supporting existing ones while also listening to feedback and acting according to international best practices.
With recent investments from KKR and Temasek into Vinhomes, the spotlight has been put on how policies can be made clear and safe to spur growth in all sectors. With this experience of handling such large foreign investments, Hanoi’s leaders will be able to improve further on delivering more forward-looking policies to advance the economy. One particular area to keep an eye on would be the digital transformation and making Vietnam a hub for digital banking, with a view of providing tax and other benefits to financiers.
Further advantages of the city are its improved infrastructure combined with more transparent and attractive investment policies, more tax incentives to attract larger projects, improvements in human resources, and consideration of corporate and personal income tax incentives.
Nguyen Dinh Nam - CEO and founder, IPA Vietnam
In recent years, Hanoi has been one of the top cities and provinces luring in the largest foreign investment capital thanks to a stable political apparatus and attractive policies for key sectors. In addition, the People’s Committee has paid special attention to improving the investment and business environment as well as reforming promotion programmes. Moreover, foreign investors and international organisations highly appreciate the city’s move to increase the use of IT applications in dealing with administrative procedures.
Among the prioritised sectors that gained most of the attention from overseas investors are urban infrastructure, manufacturing, and high-value services.
Along with the advantages in political stability and being the country’s political and economic hub, the city is also home to a decent transport infrastructure with proximity to Noi Bai International Airport and several expressways connecting the capital to other cities and provinces as well as industrial infrastructure and skilled labour sources. VIR
Hanoi is going to present investment certificates for 229 projects with a total value of US$17.6 billion and sign 38 memoranda of understanding worth a combined US$28.6 billion, according to the Tuoi Tre Online website.
Amidst the global trend of investment shifts, Hanoi is betting on new orientations and solutions to increase its appeal, expecting to open opportunities for international investors to venture further afield.