Foreign direct investment into Vietnam surges in July

RoK-invested ITM Semiconductor Vietnam in the Vietnam - Singapore Industrial Park, Bac Ninh province (Photo: VNA)

Hanoi - Vietnam attracted 3.15 billion USD in foreign direct investment (FDI) and capital for share purchases in July, representing a rise of 79.8 percent against the same period last year and 76.2 percent against June, reported the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

Of the figure, 1.02 billion USD was registered to be poured into 202 new projects, up 2.8 percent and 19.1 percent over June and the same period last year, respectively.

Ninety-three existing projects increased their registered capital by a total of 992 million USD, more than two times higher than the same month of 2019. Foreign investors spent nearly 1.13 billion USD to buy stakes at 334 projects, 2.8 times higher than July 2019.

In the first seven months of 2020, Vietnam attracted a total sum of 18.82 billion USD, equivalent to 93.1 percent of the same period last year.

A sum of 10.12 billion USD was disbursed in the seven-month period, equivalent to 95.9 percent of last year’s amount.

There were 1,620 new FDI projects in the period with a total registered capital of 9.46 billion USD, 4 billion USD of which was registered to flow into the Bac Lieu LNG power plan. Average registered capital per project was 5.8 million USD compared to 4.3 million USD in last year’s same period.

About 619 projects had their registered capital increased in the period by more than 4.7 billion USD altogether, up 37.7 percent.

However, capital for share purchases dropped by around 50 percent to 4.64 billion USD.

According to the Foreign Investment Agency, FDI flowed into 18 sectors in January-July, led by the manufacturing and processing industry with total registered capital of more than 8.96 billion USD. Power production and distribution ranked second with a total registered capital of 3.95 billion USD.

Vietnam saw the FDI inflow coming from 104 countries and territories from the beginning of this year. Singapore was the largest investor in the period which registered to pour 6.44 billion USD in Vietnam, followed by the Republic of Korea with 2.8 billion USD, and China with 1.7 billion USD. In terms of new projects, the Republic of Korea ranked first with 421 projects, China came second with 237 projects and Japan came third with 175 projects.

Foreign players invested in 59 out of the country’s 63 provinces and cities in the January-July period, with Bac Lieu province being the top destination thanks to the 4-billion-USD LNG power project. Hanoi ranked second with 2.82 billion USD registered FDI and HCM City third with 2.4 billion USD.

By the end of July, there were 32,391 valid FDI projects in Vietnam with total registered capital of 380.6 billion USD, 221.8 billion USD was disbursed.

The agency said that the COVID-19 pandemic was weighing on FDI attraction in the period but also created significant opportunities for Vietnam to capture the capital flow spurred by the global shift of value chains, given the country’s improved investment climate and infrastructure system.

The recent European Chamber of Commerce in Vietnam’s Business Climate Index survey found that European business leaders were positive about the country’s business and investment environment with around half predicting that Vietnam’s macro-economic climate would “stabilise and improve” in the next quarter.

According to Japan External Trade Organization (JETRO), fifteen out of 30 Japanese firms chose Vietnam as the destination for production expansion within the Japanese government’s programme to support Japanese firms to diversify their value chains in foreign countries.

Vietnam set the target of attracting 35-36 billion USD in FDI this year.

The country attracted 38.02 billion in FDI last year, up 7.2 percent against 2018 with 20.38 billion USD disbursed.