FDI Policy and measures

imposed by the host/home

country
Group 2
Group 2
LÊ TUẤN DŨNG PHẠM THỊ HỒNG MÂY

ĐỒNG THỊ THU HÀ NGUYỄN THỊ HOÀI PHƯƠNG

NGUYỄN KHUÊ
2
 1
Definition and characteristics of
FDI

2 Objectives of FDI policy

The role of FDI 3

4
Actual situation of applying FDI policies in
TABLE Vietnam

OF
CONTENTS
Solution for Vietnam 5
3
1
Definition and
characteristics
of FDI
1 Definition

“ Foreign direct investment (FDI) is an ownership stake

in a foreign company or project made by an investor,
company, or government from another country
 1 Characteristics
Types of Foreign Direct Investment

A horizontal FDI A vertical FDI

Exp: A U.S based cell phone Exp: A U.S. manufacturer might acquire
provider buying a chain of an interest in a foreign company that
phone stores in China is an supplies it with the raw materials it needs
example.

6
 2
Objectives
7
The main types of objectives Objectives

Market-seeking

Resource-seeking

Knowledge-seeking

Efficiency-seeking

Risk reduction-seeking
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The main types of objectives Objectives
Market-seeking FDI

Market-seeking FDI projects are undertaken in order

to serve local or regional demand.

The reason for market-seeking FDI projects may be

explained by the relative production and transaction costs
of servicing markets through export or local production.

9
 The main types of objectives Objectives
Resource-seeking FDIs

The objective of resource-seeking FDI projects is to exploit the

comparative advantages of individual countries.

3 main types of resource-seekers. 

Seeking physical resources of one kind or another 

Seeking supplies of cheap and well-motivated unskilled and

semi-skilled labour

Prompted by the need of firms to acquire technological

capability, management, organisational skills or marketing expertise. 

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The main types of objectives Objectives

Knowledge-seeking FDIs

Knowledge-seeking FDI projects are undertaken

to maintain or develop a better competitive
position in certain product or geographical
markets.

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The main types of objectives Objectives
Efficiency-seeking FDIs

The purpose of efficiency-seeking FDI projects is to

rationalize the structure of established production units in such a
way that a firm can benefit from the common governance of
economic activities in different locations

Efficiency seeking FDI projects tend to occur in capital or

technology intensive sectors

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The main types of objectives Objectives

Risk reduction-seeking FDIs

Reduce the corporate risk associated with unfavorable changes

in macroeconomic variables, changes in supply and demand
among national markets and the moves of competitors and of
national and regional governments.

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3 The role of FDI
FDI can entail drawbacks for host economies, the
benefits that it brings generally outweigh the costs by a
wide margin.

FDI is also a less volatile source of external finance than

loans and portfolio investment.

FDI also brings benefits in areas such as the environment

and employment conditions

Foreign investors may bring important additional benefits for the

host country's business environment. 14
4
Actual situation of
applying FDI policies
in Vietnam
4 Actual situation of applying FDI policies in Vietnam

The impact of the Covid-19 epidemic and the

slow recovery of economies led to new
investment decisions and the expansion of FDI
projects continued to be affected.

16
4 Actual situation of applying FDI policies in Vietnam

In 2020, Vietnam will also attract large-scale foreign

investment projects, creating a breakthrough for FDI
inflows in the coming time. Typically, the Bac Lieu
LNG Power project with a total investment of 50 billion
USD in 25 years

17
4 Actual situation of applying FDI policies in Vietnam

A number of large projects are also being promoted, such

as the investment project of building a power plant and a
liquefied gas terminal in Khanh Hoa by Millenium Oil
and Gas Group (USA) worth 15 billion USD

18
4 Actual situation of applying FDI policies in Vietnam

There were 15 Japanese enterprises registered to

invest in Vietnam, of which, most of them are equipment
manufacturing enterprises, medical equipment,
semiconductors, mobile phones and components, air
conditioners

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4 Actual situation of applying FDI policies in Vietnam

The attraction from stable politics, abundant human

resources, business-friendly investment policies and
industrial parks, especially the successes in
controlling the Covid-19 epidemic, has brought the
Vietnam has become one of the most successful
countries attracting FDI in the region and in the world

20
4 Actual situation of applying FDI policies in Vietnam

The Government also has a policy to attract FDI

capital for high-tech, low-carbon projects that do not
cause environmental pollution.  However, the number
of green FDI projects represented by the number of
projects on high technology, low emission green
cities... is still quite modest

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5
Solution for
Vietnam
22
 Firstly, accelerate environmental improvement business investment

5
and economic restructuring

Second, timely review and adjust policies, foreign investment to match and
keep up with fluctuations and uncertainties of the global economy

Third, the Government needs to specify the Sectors and fields that need to attract
foreign investment and sectors only domestic investors perform

Solution
for Fourth, continue to strengthen the solid macro foundation; have the right
strategy in translation processing Covid-19. 
Vietnam 23
 References
1. Arben Osmani, 2004, The objectives for foreign direct investments in interaction with the forms and types
of foreign direct investments
https://www.diva-portal.org/smash/get/diva2:229476/FULLTEXT01.pdfThirdly
2. GS.TSKH Nguyễn Mại, 2015, Quá trình hình thành và phát triển chính sách thu hút đầu tư nước ngoài của
Việt Nam 
https://mof.gov.vn/webcenter/portal/vclvcstc/pages_r/l/chi-tiet-tin?dDocName=BTC207081
3. https://mof.gov.vn/webcenter/portal/ttpltc/pages_r/l/chi-tiet-tin-ttpltc?dDocName=MOFUCM198685
Chính sách thu hút đầu tư trực tiếp nước ngoài năm 2021
4. https://www.investopedia.com/terms/f/fdi.asp
5. http://vibonline.com.vn/bao_cao/chinh-sach-va-thuc-trang-uu-dai-dau-tu-tai-viet-nam
6. https://tapchitaichinh.vn/giai-phap-thu-hut-fdi-xanh-tai-viet-nam.html Giải pháp thu hút FDI xanh tại Việt
Nam

24
Thank you
Group 2