FDI disbursement up despite a decrease in registered inflow

• Southern FDI firms prepare investment for CPTPP
• Vietnam expects high-quality FDI inflows after CPTPP ratification
• More FDI to reach southern region

Updates from the Vietnam Foreign Investment Agency under the Ministry of Planning and Investment revealed that Vietnam attracted a total of US$30.8 billion worth of registered FDI from the beginning of this year to November 20. The FDI inflow saw a slight decree of 6.8% over last year.

Some 2,714 new FDI projects were granted investment licenses with total registered capital of US$15.78 billion in the period, while more than 1,050 existing projects adjusted their investment capital with a total additional sum of US$7.4 billion, equivalent to 79.7% and 92.6% of the total in same period last year, respectively.

Notably, foreign capital flow to buy stakes in Vietnam rose by 44.4% to total US$7.6 billion.

According to the National Financial Supervisory Committee, the foreign capital inflow through mergers and acquisitions (M&A) was becoming more common in Vietnam because the time taken to complete investment procedures is being cut.

Oliver Massmann, general director of Duane Morris Vietnam LLC, was quoted by enternews.vn as saying that many foreign investors were showing increasing interest in Vietnam, driven by the country’s rapid integration, stable macro-economy, hastened administrative reforms as well as improved investment climate, and wanted to enter the market through M&A.

“The trend will continue next year,” he said.

Foreign investors poured most into the manufacturing and processing sector out of 18 industries which saw foreign investment in the period, with a total sum of US$14.2 billion, or 46.2% of the registered capital, followed by real estate with US$6.5 billion then the wholesale and retail industry with US$3.1 billion.

Among 108 countries and territories investing in Vietnam, statistics showed that Japan was the largest foreign investor in the 11-month period, pouring in nearly US$8 billion, followed by Korea with US$6.8 billion and Singapore with US$4.1 billion.

Hanoi was the top destination for FDI flow which attracted US$6.3 billion in registered capital. HCM City ranked second with registered capital of US$5.6 billion, then Haiphong with US$2.49 billion registered capital.

So far, there were more than 27,000 existing FDI projects in Vietnam with a total registered capital of US$337.8 billion, more than US$188 billion of which was disbursed.

Korea was the largest investor in Vietnam with total registered capital of US$62.2 billion, so far and Japan came second with total registered capital of US$56.4 billion.

After about three decades of attracting FDI, Vietnam was now more selective, targeting to attract quality capital flow into technology-rich and environmentally-friendly industries and boost the development of local companies through setting up value chains.

Overseas investment

Statistics from the Vietnam Foreign Investment Agency also showed that Vietnam registered to invest US$303.5 million abroad in the first 11 months of this year, plus US$55 million worth of additional capital for existing overseas projects.

Vietnam’s overseas investments were mainly in the financial and banking sector, which made up 29.5% of total registered capital, followed by agro-forestry-fishery sector (19.1%) and manufacturing and processing industry (14.2%).

In January – November, Vietnam invested in 35 countries and territories, with Laos being the top destination with US$97.6 million registered capital, followed by Australia with US$52.7 million and Slovakia with US$35.9 million.