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Văn Bản 10

Vietnam's manufacturing and technology sectors are highly attractive for foreign direct investment (FDI) due to low-cost skilled labor, rapid urbanization, and strong government incentives. Major multinational enterprises like Samsung, Intel, and LG Display have successfully invested in these sectors, demonstrating their viability. Greenfield investments are recommended for full operational control, though they come with risks such as high initial costs and potential regulatory challenges.

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5 views1 page

Văn Bản 10

Vietnam's manufacturing and technology sectors are highly attractive for foreign direct investment (FDI) due to low-cost skilled labor, rapid urbanization, and strong government incentives. Major multinational enterprises like Samsung, Intel, and LG Display have successfully invested in these sectors, demonstrating their viability. Greenfield investments are recommended for full operational control, though they come with risks such as high initial costs and potential regulatory challenges.

Uploaded by

minhphu2545
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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To assess the attractiveness of a country for FDI, it is important not only to

evaluate broad economic factors but also to target specific industries that would
benefit most from foreign direct investment.

1. Industry Selection: Manufacturing and Technology in Vietnam

Vietnam’s manufacturing and technology sectors are particularly attractive for FDI.
The country offers a competitive advantage through:
• Low-cost but increasingly skilled labor
• Rapid urbanization and industrialization
• Strong government incentives, especially in high-tech manufacturing
(electronics, semiconductors)

2. Examples of Multinational Enterprises (MNEs)

Several global MNEs have already established significant operations in these


sectors:
• Samsung Electronics: Major investments in smartphone and component
manufacturing.
• Intel Corporation: Investment in semiconductor assembly and testing
plants.
• LG Display: Large-scale production facilities for screens and
electronic components.

These MNEs highlight the viability and profitability of foreign direct investment
in Vietnam’s manufacturing and tech sectors.

3. Type of FDI Investment: Greenfield Investment

The recommended form of FDI is a Greenfield investment, where a foreign company


builds new operational facilities from the ground up in the host country.
• This differs from other forms like mergers or acquisitions and is
purely a type of FDI, not licensing or exporting.

4. Benefits and Risks of Greenfield Investment

Benefits:
• Full control over operations, supply chains, and workforce.
• Ability to tailor facilities and technology specifically to strategic
needs.
• Strong local brand establishment and potential for long-term market
dominance.
• Eligible for investment incentives and tax breaks from the Vietnamese
government.

Risks:
• High initial capital outlay and longer time to reach profitability.
• Political and regulatory changes could affect business conditions.
• Challenges related to local bureaucracy, infrastructure limitations,
and legal system inefficiencies.

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