Foreigners keen on investing in Vietnam
A total of 1,285 deals were made by foreign investors to contribute capital to and buy shares of Vietnamese businesses with total capital of US$1.89 billion in the first quarter of this year, up 121.6% against the same period last year.
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The increase was attributed to the country’s more open investment environment as investors who want to contribute capital or buy shares do not have to register for investment licences like those conducting foreign direct investment (FDI) projects.
Therefore, “many investors choose this type of investment, since they do not waste time to carry out investment procedures and quickly gain access to the Vietnamese market,” said Nguyen Mai, head of the Vietnam Association of Foreign Invested Enterprises.
On the other hand, during the period, decreases were seen in newly-registered capital and additional capital poured into existing projects, at 27.3% and 54.6%, respectively.
In total, Vietnam attracted US$5.8 billion in foreign investment during January-March, down 25% year-on-year.
The Foreign Investment Agency under the Ministry of Planning and Investment (MoPI) reported that processing and manufacturing remained the most attractive sector to foreign investors, receiving US$3.44 billion and accounting for 59.4% of the total commitments.
The retail and wholesale sectors received the second largest chunk of FDI with US$531 million or 9.2%, followed by the real estate sector with US$486 million or 8.4%.
The Republic of Korea remained the biggest foreign investor among 76 countries and territories investing in Vietnam in the first quarter of 2018, with total registered capital of US$1.84 billion, 31.6% of the total capital.
Businesses from Hong Kong registered to pour 689 million into Vietnam, making up 11.9% of the country’s total FDI, while those from Singapore injected US$649 million, 11.2% of total FDI.
The southern economic hub of Ho Chi Minh City continued to be the largest recipient of FDI during the period with US$1.7 billion, while the northern port city of Hai Phong received US$925 million to take second place.
The third largest destination of FDI was the southern province of Binh Duong with investment worth US$565 million.
To fully capitalise on the FDI capital, the MoPI is drafting a FDI strategy for 2018-2023. With assistance from the World Bank, the FDI strategy underlines that Vietnam should focus on sectors having advantages and those that foreign firms could bring more benefits to rather than domestic firms.
The draft strategy stipulates Vietnam define priority sectors for attracting FDI, such as those that need increased value and competitiveness, including manufacturing, services, agriculture and travel.
