Investing in Vietnam: Vietnam’s FDI equity flows in the first eight months reaches US$19.1 billion

Vietnam is considered to be one of the fastest and relatively stable-growing economies in Asia over the past years.

In 2021, Newly- and additionally-registered foreign direct investment capital increased in the first eight months, while capital contributions and share purchases dropped.

The total newly-registered and added capital, as well as capital contributions and share purchases in the first seven months of 2021, amounted to nearly $19.1 billion, down 2.1 per cent on-year.

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According to according to the Ministry of Planning and Investment, a total of 1,135 projects received new investment certificates, with a total of nearly $11.4 billion, up 16.3 per cent on-year.

Almost 640 projects asked to adjust capital by adding a total of $5 billion, up 2.3 per cent on-year.

Additionally, capital contributions and share purchases also decreased against the corresponding period last year, with 2,720 instances and a total investment of $2.81 billion.

In the first eight months, Singapore led the 92 countries and territories investing in Vietnam with a total investment sum of $6.2 billion, making up 32.5 per cent of the total investment. Japan ranked second with $3.2 billion (16.8 per cent) while South Korea ranked third with $2.4 billion (12.7 per cent).

Most capital arriving from Singapore and Japan went into newly-registered projects, making up 79.4 and 73.9 per cent of FDI inflows, respectively, the Foreign Investment Agency highlighted.

As of August 20, foreign-invested projects have disbursed $11.58 billion, a rise of 2 per cent on-year. The pandemic has halted or declined the capacity of numerous foreign-invested factories. The realized FDI capital in August was reduced by 12.2 per cent on-year, and by 14.3 per cent on-month.

The export turnover of foreign-invested enterprises increased during the period, reaching $156.9 billion, up 25.5 per cent on-year (including crude oil) and $155.9 billion (excluding crude oil), up 25.9 per cent on-year, equivalent to around 73.8 and 73.3 per cent, respectively, of the country’s total export turnover.

The import turnover of foreign-invested enterprises is estimated at $140.2 billion, up 36.4 per cent on-year, making up 64.8 per cent of the country’s total import turnover. In the first eight months, the trade surplus of the sector was estimated at $16.7 billion (including crude oil) and $15.6 billion (excluding crude oil). This has offset part of the $20.4 billion trade deficit of local businesses, according to Vietnam Insider.

“Recent years observed the effort of the Vietnamese Government in boosting international economic integration through the participation into many free trade agreements and communities such as the World Trade Organization (WTO), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU-Vietnam FTA, and UK-Vietnam FTA. This led to a significantly increasing FDI year on year”, said Sophie Dao, Partner of GBS, an investment consulting firm in Vietnam.