Noteworthy impressions
Looking back over the whole journey of reaching out to the big sea since the government’s Resolution 22 on Vietnamese enterprises’ OFDI was promulgated, Phan Huu Thang, former director of the Foreign Investment Agency under the Ministry of Planning and Investment, said that the journey can be divided into four stages.
Specifically, the first stage was from 1999-2004, when Vietnam’s OFDI activity commenced. Resolution 22 created a legal framework for Vietnamese enterprises to carry out their OFDI projects. The second stage was from 2005-2010, a booming period following the issuance of the 2005 Law on Investment and Decree 78/2006/NĐ-CP on Vietnamese enterprises’ OFDI. During the period, there were 341 active projects with a total investment of nearly 10.1 billion USD, accounting for 46.5% of Vietnam’s total OFDI. In the third stage, from 2010-2016, OFDI continued to be maintained at a high level, with 521 active projects.
In the 4th phase (2017-2022), Vietnam's OFDI tends to decline. Although the number of OFDI projects increased compared to the previous period, the registered capital only reached 2.73 billion USD.
According to Dr. Phan Huu Thang, over the past 24 years, in addition to efforts to build and perfect the legal corridor and promote the attraction of foreign direct investment (FDI), Vietnam has allowed domestic businesses to invest abroad to expand commodity consumption markets, exploit strategic assets, absorb management experience and advanced technology from foreign countries, expand community relations, and people-to-people diplomacy, contributing to promoting the socio-economic development of the country and the development of Vietnamese businesses.
On this journey, many businesses have created and gradually affirmed Vietnamese brands internationally, helping Vietnam integrate more deeply and effectively into the world economy and join hands with international friends to build a peaceful and prosperous world.
One of the typical businesses mentioned when talking about Vietnam's OFDI is FPT Corporation, with a network of 290 headquarters, offices, and branches across four continents, 29 countries and territories. An important global partner of hundreds of large corporations in many fields and a high-level technology partner of Airbus, Siemens, Microsoft and Amazon Web Services.
FPT's revenue in 2022 reached VND 44,010 billion, with 41.2% of the figure being revenue from foreign markets.
In 2022, FPT opened four new offices in the US, Denmark, Japan, and Thailand; operated 31 projects with a scale of more than 5 million USD; and signed sales from foreign markets reaching 1 billion USD.
For TH Group, the OFDI journey officially had an important mark when TH invested in large-scale agriculture in Russia (May 2016). After more than seven years of implementation and with a total investment of 2.7 billion USD, TH Group’s High-Tech Dairy Farming and Milk Processing Complex has made important progress.
Labour Heroine Thai Huong, Founder and Chairwoman of the TH Group Strategy Council, shared that in Russia, TH has implemented the project tirelessly with feelings of gratitude to Russia. We hope that TH's products in Russia will be trusted and welcomed by consumers as national brand products of Russia produced by Vietnamese enterprises.
In Australia, TH is also firmly holding the position of the largest Vietnamese enterprise investing in this country.
Despite unfavourable things, TH Group has confidently stepped forward on the outward foreign direct investment (OFDI) journey, thanks to its experience, strengths in high-tech dairy farming and the possession of many products of international standards.
The picture of Vietnamese enterprises investing abroad has both light and dark colours. However, the common point is that business strategies are extensively researched by enterprises so that they can proactively and promptly respond to unpredictable and complex geopolitical situations.
“Dual mission” in global integration
Dr. Phan Huu Thang has many years of supporting Vietnamese businesses on the OFDI journey, understanding the challenges facing businesses, saying that OFDI is an extremely arduous and difficult journey.
Besides successful businesses that can firmly assert their brands, such as FPT, Viettel, Vinamilk and TH, there are many businesses encountering obstacles and even those who have to temporarily suspend operations or dissolve due to inability to adapt to the new environment and lack of knowledge about laws and market information of the host country.
Therefore, to reach the dual goals of attracting FDI into Vietnam and promoting Vietnam's OFDI, it is time to study more deeply about Vietnam's OFDI. This is the "dual task" that Vietnam needs to achieve when conducting international investment activities, especially in the context of that the current global economy is facing many uncertainties and complicated developments.
This is not the first time Thang mentioned this. Previously, at the launch of the book ‘Vietnam's direct investment abroad and in Myanmar’ held on May 31, 2023, Dr. Phan Huu Thang, who was also chairman of the book’s editorial council, had commented that the caution of a developing country that is striving to integrate deeply into the regional and world economy is inevitable.
However, Vietnamese businesses are still hesitant and self-conscious about the scale of their economy and level of economic development. Recently, the excessive caution in amending the legal system, policies, and limitations in state management of OFDI activities have discouraged the aspiration of Vietnamese businesses to reach out to the big sea and develop into a global enterprise, while also slowing the development process and reducing the effectiveness of OFDI.
Therefore, according to Phan Huu Thang, it is crucial to clarify the causes leading to the success and failure of Vietnam in OFDI through the current investment status and the production and business results of enterprises so that there can be in-depth research and appropriate solutions.
Specifically, the published data on OFDI lacks specific assessments of revenues, financial status, and budget remittances of businesses from OFDI, so it is difficult for the agencies with in-depth research on investment to fully and comprehensively assess the OFDI situation of Vietnamese enterprises up to this point.
In addition, it is necessary to analyse the legal framework on OFDI of Vietnam and other countries receiving investment to point out the advantages and disadvantages for businesses when implementing OFDI following the country’s socio-economic development strategies from now until 2030 and beyond.
