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As of August 20th, 2021, the total newly registered, adjusted, and paid-in capital for share purchase by foreign investors reachedUSD 19.12 billion,equal to 97.9%compared than the same period last year. The capital generated by FDI projects was estimated atUSD 11.58 billion,up by 2%over the same period last year.
Accumulated as of August 20th, 2021, the whole country had34,072valid projects with total registered capital ofUSD 400.6 billion. The accumulated realized capital of foreign direct investment projects was estimated atUSD 243.44 billion, equivalent to 60.8% of total valid registered investment capital.
Download here: 8-FDI_08.2021
Details are as follows:
I. FDI INFLOWS OF VIETNAM
- FDI attraction in the 8 months of 2021
1.1. FDI performance:
Realized capital:
As of August 20th, 2021, FDI projects were estimated to disburse USD 11.58 billion, a rise of 2% compared with the same period in 2020. The Covid-19 pandemic is still complicated in month, led to some factories’ postponement or capacity reduction; the realized capital in August decreased 12.2% compared to that in August 2020 and 14.3% over last month. However, the realized capital had a slight increase in the first 7 months.
Import and export performance:
Export:Export turnover of the foreign investment sector continued to increase in the first 8 months of 2021, but the rate was slightly decreased over to the first 7 months.Export (including crude oil) reached USD 156.9 billion, up by 25.5% compared with the same period last year, accounting for 73.8% of export turnover. Export (excluding crude oil) was USD 155.9 billion, a rise of 25.9% over the same period last year, accounting for 73.3% of the country’s export turnover.
Import:Imports of foreign investment sector attained USD 140.2 billion, up by 36.4% over the same period last year and accounting for 64.8% of the country’s import turnover.
In the first 8 months of 2021, the FDI sector saw a trade surplus of around USD 16.7 billion including crude oil and USD 15.6 billion excluding crude oil, while the domestic sector had a trade surplus about USD 20.4 billion.
1.2. Investment registration
As of August 20th, 2021, total newly registered, adjusted, and paid-in capital for share purchase by foreign investors reached about USD 19.1 billion,equalling 97.9% compared to the same period last year. With the newly registered capital continued to rise, the adjusted capital also slightly increased after decreasing for 7 months. Foreign investors’ paid-in capital continued to fall but the reduction was gradually improved.
Of which:
Newly registered capital:There were 1,135 new projects granted with investment registration certificates (a year-on-year decrease of 36.8%). Total registered capital reached about USD 11.33 billion (a year-on-year increase of 16.3%).
Adjusted capital:There were 639 projects registered for adjustment of investment capital (a year-on-year decrease of 11%). Total additional registered capital reached nearly USD 5 billion (a year-on-year increase of 2.3%).
Paid-in capital for share purchase:There were 2,720 paid-in capital for share purchase by foreign investors (a year-on-year decline of 43.4%). The total value of paid-in capital was worth USD 2.81 billion (a year-on-year decline of 43.4%).
(Detailed data in Appendix I attached).
By sector:
Foreign investors had invested in 18 sectors, of which the processing and manufacturing led with total investment capital of over USD 9.3 billion, accounting for 48.4% of total registered investment capital. Electricity production and distribution ranked the second with investment capital of about USD 5.5 billion, accounting for 28.7% of total registered investment capital. It was followed by the real estate business, wholesale and retail with the total registered capital of about USD 1.6 billion and USD 734 million, respectively. The rest were other sectors.
By counterpart:
There were 92 countries and territories investing in Vietnam in the first 8 months of 2021. Singapore led the list with total investment capital of over USD 6.2 billion, accounting for nearly 32.5% of total investment capital in Vietnam, decreased for 5% over the same period in 2020; Japan ranked the second with investment of USD 3.2 billion, accounting for 16.8% of total investment capital (in which, investment capital of Singapore and Japan was mainly in the form of new investment, accounting for 79.4% and 73.9% of total investment capital of each country subsequently). South Korea ranked the third with registered investment capital of over USD 2.4 billion, accounting for 12.7% of total investment capital, decreased 17.8% over the same period last year. Next were China, Hong Kong, Taiwan, and so on.
In the first 8 months of 2021, Singapore’s investment capital was 1.9 times higher than Japan’s and nearly 2.6 times higher than South Korea’s, because Singapore had a large project of USD 3.1 billion. This project accounts for 50% of Singapore’s total investment capital. Although South Korea only ranked the third in investment capital, it was the leading partner in the number of new investment projects as well as the number of capital adjustment projects. Thus, about the number of projects, South Korea was the partner with more investors interested and making new investment decisions as well as expanding investment projects in 8 months.
By location:
The foreign investors had invested in 58 provinces and cities nationwide in the first 8 of 2021. Long An led the list with total registered investment capital of USD 3.6 billion, accounting for 18.9% of total investment capital, including a large power project of over USD 3.1 billion (accounting for 85.8% of total investment capital of Long An). Ho Chi Minh City ranked the second with total registered capital of nearly USD 2.2 billion, accounting for 11.4% of total investment capital. Binh Duong ranked the third with USD 1.7 billion, or 8.7% of total investment capital. Next were Can Tho, Hai Phong, Ha Noi and so on.
Regarding the number of projects, foreign investors still focused on investing in big cities with convenient infrastructure such as Ho Chi Minh City, Hanoi and Bac Ninh. In which, Ho Chi Minh City led both in number of new projects (34%), number of adjusted projects (18.3%) and paid-in capital for share purchase (59.8%). Although Hanoi wasn’t in the top 5 cities attracting foreign investment in the first 8 months, it ranked the second in number of new projects (21.5%), number of adjusted projects (14.2%) and paid-in capital for share purchase (12.1%).
(Detailed data in Appendix II attached).
Some major projects in the 8 months of 2021:
(1) Long An I and II LNG Power Plant Project (invested by Singaporean investors) having total registered capital of more than USD 3.1 billion, with the goal of transmitting, distributing, and producing electricity in Long An (granted with a certificate of investment on March 19th, 2021).
(2) O Mon II Thermal Power Plant Factory (invested by Japanese investors) in Can Tho, with total investment capital of USD 1.31 billion, aimed to create a thermal power factory for electricity supply for the regional and national power system (granted with a certificate of investment on January 22nd, 2021)
(3) LG Display Project (invested by Korean investors) in Hai Phong with investment capital adjusted to increase by about USD 750 million (granted with an amended investment certificate on February 4th, 2021).
(4) Kraft Vina Paper Factory (invested by Japanese investor) in Vinh Phuc, with the capacity of 800,000 tons per yearand total investment capital of USD 611.4 million, aimed to produce kraft paper, lined paper and packaging paper (granted with a certificate of investment on May 13th, 2021).
(5) Polytex Far Eastern Vietnam Co., Ltd Factory Project (invested by Taiwanese investors) with investment capital adjusted to increase by 610 million USD (granted with an amended investment certificate on May 13th, 2021).
- Evaluation of the FDI performance in the first 6 months of 2021.
– The number of realized capital of foreign investment projects in the first 8 months increased 2% over the same period last year, down 1.8 percentage points compared to the first 7 months. The COVID-19 is still on-going complicated and has a significant impact on the production and business activities of many enterprises, especially those in the Southern area.
– Adjusted investment capital slightly rised in the first 7 months of 2021 (up by 2.3%). Newly registered investment capital continued to increase over the same period in 2020, and achieved a stronger increase compared to the first 7 months of 2021 (up 16.3%). Although the number of newly registered and adjusted projects still decreased over the same period (36.8% and 11% respectively), the reduction level was gradually improved. This decline in the number of projects was mainly in small-scale projects (under USD 5 million) while the number of large-scale projects (over USD50 million) maintained a strong increase in the 8 months of 2021 .
– Investment by purchasing paid-in capital by foreign investors in the first 8 months of 2021 continued to fall in both the number of purchasing paid-in capital and the total value of paid-in capital, but the reduction level was gradually improved.
– Import and export of the FDI sector continued to grow in the first 8 months of 2021. The FDI sector had a trade surplus of about USD 16.7 billion (including crude oil). But the trade surplus of the FDI sector was not enough to offset the trade deficit of USD 20.4 billion of domestic business sector, so the country had a trade deficit of USD 1.5 billion in the first 8 months of 2021. The trade deficit level of the country was gradually increased compared to previous months, further warning the negative impact and resilience of the domestic sector before the pandemic.
Some reasons in decreasing the number of newly registered, adjusted projects and paid-in capital for share purchase
* Objective:
– Global foreign investment flows sharply declined, affecting foreign investment flows into Vietnam.
– The competition in attracting foreign investment between countries is increases.
– Global M&A activity declined.
* Subjective:
-The selective investment attraction policies of Vietnam (reducing the quantity and increasing the quality) eliminate small-scale projects with small added value.
– The restriction on entry and the long-term quarantine policy have slowed the delegations of experts and project development teams into Vietnam to do survey and perform investment procedures. In addition, the blockade of factories and limit on workers’s movement in industrial zones have stagnated production, reduced capacity, quantity and disrupt the supply chain. These also contribute to affecting new investors’ mind planning to invest in Vietnam.
– Due to factory closures and labor shortage for production, many orders had to be moved to other areas in the supply chain. Although this was only a temporary solution, but if this situation was prolonged, investors would likely to shift production to other countries.
- Accumulated foreign investment as of July 20th, 2021
Accumulated as of August 20th, 2021, the whole country had 34,072 valid projects with total registered capital of nearly USD 400.6 billion. The accumulated realized capital of FDI projects was estimated at USD 243.44 billion, equaling 60.8% of total valid registered capital.
– By sector: Foreign investors have invested in 19/21 sectors in the national economic classification system, in which the processing and manufacturing sector accounted for the highest proportion with almost USD 235.7 billion, accounting for 58.5% of total investment capital. Followed is real estate business with USD 61.2 billion (or 15.3% of total investment capital); electricity production and distribution with USD 33.9 billion (or 8.5% of total investment capital).
– By counterpart: In August 2021, there were new projects from Albania, bringing the total number of countries and territories with valid investment projects in Vietnam to 141. In which, South Korea ranked first with a total registered capital of USD 72.3 billion (accounting for 18.1% of total investment capital). Japan ranked second with USD 63.8 billion (or 15.9% of total investment capital). Next were Singapore, Taiwan, and Hong Kong.
– By location: FDI has been present in all 63 provinces and cities nationwide, of which Ho Chi Minh City remains the leading province in attracting foreign investment with over USD 49.1 billion (accounting for 12.3% of total investment), followed by Binh Duong with USD 36.9 billion (or over 9.2% of total investment capital), Hanoi with nearly USD 36.7 billion (or 9.2% of total investment capital).
(Detailed data in Appendix III attached)
II. FDI OUTFLOWS OF VIETNAM
In the first 8 months of 2021, Vietnam’s total newly registered investment and additional investment outflows were USD 575 million (up by 74.1% over the same period last year). Of which, 40 projects were granted with newly registered certificate of investment, with total investment capital of USD 150.1 million (equaling to 68.7% compared to the same period last year), and 13 projects adjusted investment capital with a total additional capital of USD 424.9 million (a-year-on-year 3.8 times higher).
Vietnamese investors have invested in 13 sectors abroad. Of which, professional, scientific and technical activities led the list with 3 projects adjusted capital with total newly registered and additional capital of USD 270.8 million (or 47.1% of total investment capital). Wholesale and retail ranked the second with USD 150.9 million, accounting for 26.2%; followed by agriculture, forestry and fishery; administrative activities and support service and so forth.
There were 20 countries and territories receiving investment from Vietnam in the first 8 months of 2021. Leading is United State of America with 3 new investment projects and 2 adjusted capital projects worth 302.8 million USD, accounting for 52.7% of the total investment capital. Campuchia ranked the second with USD 89.4 million, accounting for 15.3% of total investment capital. Followed by Laos and Canada, with the investment capital of USD 47.8 million and USD 32.1 million correspondingly.
Accumulated as of August 20th, 2021, Vietnam had 1,428 valid aboard investment projects with total registered investment capital of nearly USD 21.8 billion. Vietnam’s investment aboard focuses mainly in: mining (36.3%); agriculture, forestry and fishery (15.3%). Areas receiving the most investment from Vietnam were Laos (23.8%); Campuchia (13.1%); Russia (12.9%)./.
(Detailed data in Appendix IV and V attached: 8-FDI_08.2021
Ministry of Planning and Investment