Trends and Hot Topics in HCMC in 2024
Following our recent look-ahead to 2024 in Vietnam, the authorities in Ho Chi Minh City (“HCMC”) have now outlined some of their targets and trends for the next 12 months. In this article, we look at some of the developments in Vietnam’s commercial hub and their implications for international investors and foreign enterprise.
Over the last 12 months, Vietnam attracted almost 40,000 foreign direct investment (“FDI”) projects valued at USD 36.6 billion, according to figures from Ministry of Planning and Investment (“MPI”). This is a 32 per cent increase compared to FDI in 2022. HCMC topped the list of investment destinations in 2023, with Hanoi in second place and Binh Duong coming in third.
The authorities in HCMC hope to continue their positive record of investment and innovation, unveiling new policies for the southern metropolis in 2024. The HCMC Department of Industry and Trade (“DOIT”) has set a series of targets for the next 12 months to keep HCMC as the engine of economic growth in Vietnam.
In particular, the HCMC DOIT is targeting 6.5 per cent growth in its Industrial Production Index, 11 per cent growth in retail sales, and 10 per cent growth in export turnover. Building on a positive 2023 in which industrial production rose 4.3 per cent, retail sales increased 10.8 per cent, and the number of new business registrations grew 10 per cent, DOIT now plans to focus on supporting the development of hi-tech industries, industrial production, e-commerce, and green growth.
On the theme of green growth, the People’s Committee Chairman told a recent investment conference hosted with the World Bank that HCMC is one of the 10 cities most at risk of climate change. For this reason, HCMC has put green and sustainable growth at the top of its agenda for 2024, targeting a 10 per cent cut to the average annual 60 million tonnes of carbon emissions before the end of this decade.
In this spirit, HCMC is also piloting the conversion of five Industrial Zones (“IZs”) and Export Processing Zones (“EPZs”) into eco-industrial and hi-tech zones as part of a project to encourage greater FDI and attract more foreign enterprises.
These zones, all of which have land leases expiring in the next two decades, will see a phasing out of labour-intensive industries using old or outdated technologies for cleaner, greener, higher-tech companies. The five zones included in this pilot are Cat Lai, Tan Binh, Hiep Phuoc, Binh Chieu, and Tan Thuan.
The project, with a vision to 2045, also aims to tackle administrative barriers and bureaucratic bottlenecks through a “one-door” mechanism for procedures such as project examination, approval, and environmental licensing.
APFL Partners has an office in the heart of HCMC and our team is experienced in advising international clients on their investment projects in HCMC and the surrounding provinces, whether in infrastructure, energy, real estate, or retail. For more information about investing or doing business in HCMC, or Vietnam in general, please contact our team on: contact@apflpartners.com
Disclaimer: This article and its content are for information only and are not given as legal or professional advice. they do not necessarily reflect all relevant legal provisions with respect to the subject matter. Readers should seek legal or professional advice before taking or refraining to take any action.
