During his speech, Choi Joo Ho, CEO of Samsung Vietnam, shared the success story of Samsung in Vietnam, and offered suggestions for the sustainable growth of the country and its FIEs.
Samsung began investing in Vietnam in 2008 with the construction of a mobile phone factory in Bac Ninh province, and this has been followed by numerous more investments in Thai Nguyen, Hanoi, and Ho Chi Minh City. Currently, Samsung operates six factories, one sales legal entity, and one research and development centre. Its accumulated investment up to the end of 2022 stands at $20 billion.
“At present, more than half of all Samsung smartphones selling around the world are made in Vietnam. The nation has grown significantly to become a key player in the production of mobile phones globally,” said Ho.
“IT businesses around the world are seriously watching Vietnam, acknowledging it as a manufacturing hub for mobile phones,” he added
Additionally, Samsung constitutes about 20 per cent of Vietnam’s total export turnover every year, directly and indirectly creating high-quality jobs for about 300,000 employees and contributing to improving the lives of Vietnamese people.
Thanks in part to the presence of Samsung, the two provinces of Bac Ninh and Thai Nguyen, which were previously totally dependent on agriculture, have completely changed to become the main production hubs of IT equipment and the top localities in Vietnam in terms of GRDP.
Vietnam and Samsung have written a memorable win-win success story, leading some to state that Samsung’s success is Vietnam’s success.
“Samsung’s success is made possible by the comprehensive support of the Vietnamese government and the local authorities,” emphasised the CEO of Samsung Vietnam.
However, the global situation and the rapidly changing business environment are threatening the continuation of this success story, including the protracted war between Russia and Ukraine, the escalation of inflation, the volatile business environment, and the global minimum tax (GMT) mechanism raised by the Organisation for Economic Co-operation and Development.
Therefore, Vietnam’s competitiveness to attract foreign investment is also threatened. The CEO of Samsung Vietnam proposed some ideas to enhance the competitiveness and sustainable development of Vietnam and its FIEs.
The first is for the government to continuously improve the investment environment.
“The GMT regime is a prime example of the most significant external environmental changes. If Vietnam also applies these policies, it could eliminate the instability in the business activities of affected FIEs,” said Ho.
Many global consulting firms operating in Vietnam, such as Deloite, PwC, and other economic experts, are also recommending that Vietnam applies the mechanism of Qualifying Domestic Minimum Top-Up Tax. Ho emphasised the need for legislation this year.
“Samsung expects the Vietnamese government to continue creating a predictable business environment that is in line with global standards and the recent change in investment climate,” said the CEO.
The second idea is the implementation of commitments to build trust between the Vietnamese government and businesses.
The government has implemented the support policies promised after Samsung’s investment, and as a result, Samsung benefits from the best business environment.
“While investing in Vietnam, Samsung has also fully met its commitments such as creating jobs and developing co-prosperity with Vietnamese businesses,” said Ho.
Recently, Samsung has also realised its commitment to build a research and development centre that focusses on advanced technologies.
“The commitment between the Vietnamese government and Samsung is based on a profound relationship of mutual trust, and the two sides have formed a positive development relationship,” added the CEO.
He suggested that FIEs should continuously carry out social contribution activities in Vietnam.
“FIEs cannot only enjoy the benefits in Vietnam and then leave. They need to develop together with the Vietnamese people and build a spirit of harmonious interests and shared risks,” he concluded.