Five-month foreign investment highlights

Three bright points

The first bright point in the five-month FDI picture is the disbursement of US$7.71 billion, a year-on-year increase of 7.8 percent. The Foreign Investment Agency of the Ministry of Planning and Investment attributed this positive result to the continuous and effective support of the government and relevant state authorities, the business community’s efforts, and the recovery of the Vietnamese economy.

Binh Duong Province hands over investment certificates to businesses

Although the amount of FDI capital attracted in the first five months was 16.3 percent lower than that in the same period last year, the increased disbursement reflected Vietnam’s attractiveness to foreign investors.

The second bright point is the strong increase in the number of projects and the amount of registered capital. Specifically, 395 projects registered capital increases totaling more than US$5.61 billion, up 15.5 percent in the number of projects and 45.4 percent in capital amount. Major groups continued to increase their investments in Vietnam. Samsung, for example, poured an additional US$920 million in its electro-mechanics project based in Thai Nguyen Province. Goertek increased investment in its electronics, network equipment and multimedia audio products manufacturing facilities in Bac Ninh, Nghe An and Hai Phong respectively by nearly US$306 million, US$260 million and US$127 million. JNTC, another Korean investor in Vietnam, also invested an additional US$163 million in its electronic component manufacturing facility in Phu Tho Province.

The third positive development in the first five months are the stock purchases by foreign investors, which totaled more than US$1.98 billion, up 51.6 percent year-on-year.

Many foreign companies have increased investment in Vietnam

Limitations and new prospects

Apart from positive assessments, problems in the Vietnamese investment environment include inadequate transport and industrial zone infrastructure, high logistics costs and underdeveloped support industries. Trang Bui, General Manager of Cushman & Wakefield Vietnam, said Vietnam should accelerate the implementation of infrastructure investment projects.

Vietnam still lacks access to major investors and groups in the world, as well as products and financial solutions which can help it effectively attract foreign capital.

Nonetheless, Pao Jirakulpattana, Vice President at Warbung Pincus (Singapore), said among ASEAN countries, Vietnam interests foreign investors for its advantages in terms of geographical location, political stability, COVID-19 control ability and a high gross domestic product (GDP) growth rate.

According to Pao Jirakulpattana, Central Group and other major retailers of the Philippines are very interested in Vietnam, promising it opportunities to attract additional investment in this field.

Trang Bui affirmed that Vietnam not only attracts investors from Japan and the Republic of Korea but also interests European and American companies. She forecast this trend will continue in the time to come.

Nguyen Hoa