Home Business Half of foreign invested firms in Vietnam report losses in 2019

Half of foreign invested firms in Vietnam report losses in 2019

by Inside Out

Almost 55% of foreign-invested enterprises in Vietnam posted losses totaling US$5.7 billion in 2019, according to information released by the country’s Ministry of Finance.

The data is based on the 2019 financial statements of 22,600 companies set up by foreign investors in Vietnam, with a total of 12,500 companies posting losses, Vietnam Insider citing a report by the Ministry of Finance.

According to the ministry, the industries that have seen an increase in the number of FDI enterprises suffering losses before and after tax for two consecutive years are: steel and other metals; oil, gas and petrochemicals; and telecommunications and software.

Industries with high profit margins for FDI companies include automobile, motorcycle and other motor vehicle manufacturing and assembly with a 44.2% profit margin; processed food, wine, beer and beverages with a 29.1% profit margin; business support services with a 35.9% profit margin; and motor vehicle maintenance, medical, education and training, and science and technology with a 25.6% profit margin.

According to the ranking of countries and regions, FDI companies from Europe (Denmark, Netherlands, France and Luxembourg) have the highest total profit. Countries such as South Korea, Japan, Singapore, Taiwan and the British Virgin Islands have the highest registered capital in Vietnam.

As of December 2020, foreign investors had poured more than $28.5 billion into the Vietnamese market, equivalent to 75 percent of the amount in the same period last year.

The Ministry of Planning and Investment reported that over 19.9 billion USD of the capital had been disbursed, down only 2 percent compared to the same time last year despite impact of COVID-19 pandemic.

Many FDI firms have recovered, maintained and expanded their production, the ministry said.

Notably, 6.4 billion USD of FDI was injected into underway projects, up 10.6 percent compared to the same period of 2019.

In the year, foreign investors focused on 19 sectors, led by processing-manufacturing.

Electricity production and distribution drew 5.1 billion USD, while real estate attracted nearly 4.2 billion USD and retail and wholesale 1.6 billion USD.

In 2020, Vietnam saw the investment coming in from 112 countries and territories, according to Vietnam News.

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