Over $2.1 Billion of Foreign Investment Poured into Vietnam in January

Up to 103 new foreign-invested projects were licensed with a total registered capital of nearly $388 million. Photo: VNA

The figures mark good signals for the country's investment attraction, according to the latest report from the Foreign Investment Agency (FIA), as cited by Nhan dan (People) newspaper.

Following the recovery from the end of 2021 after the impact of the Covid-19 pandemic, many foreign-invested enterprises have stabilised and expanded their production and business activities. Thus, disbursement of foreign direct investment (FDI) also saw a positive increase of 6.8% to surpass US$1.61 billion during the first month of this year, FIA said in its report.

According to the report, up to 103 new foreign-invested projects were licensed with a total registered capital of nearly $388 million, up 119.1 % year-on-year in terms of the number of projects but down 70.7% in value.

Although registered investment capital decreased compared to the same period last year due to a lack of large-scale projects, an increase in the number of new investment projects showed the confidence of foreign investors in the country's investment environment, FIA said.

Meanwhile, 71 operating projects were allowed to raise their capital by $1.27 billion, up 54.3% in project number and nearly triple the level of capital seen in the same month last year.

Capital contributions and share purchases by foreign investors stood at $443.5 million, up two times over the last year's corresponding month.

Following the recovery from the end of 2021 after the impact of the Covid-19 pandemic, many foreign-invested enterprises have stabilised and expanded their production and business activities. Photo: VNA

Among 15 sectors receiving FDI in the first month, processing and manufacturing took the lead with over $1.2 billion, accounting for 58.9% of the total FDI. Real estate came next with $472 million or equivalent to 22.5%. Administrative sectors and supporting services; wholesale and retail were the runners-up with over $221 million and $52.5 million, respectively.

As per the data, Singapore led 33 countries and territories investing in Vietnam with total investment capital of nearly $666 million, making up nearly 31.7% of the total FDI registered in the country.

The Republic of Korea ranked second with over $481 million, up five times year-on-year or equivalent to 30% of the total FDI. Mainland China came third with nearly $451 million, down 27% or 21.5%.

The capital city attracted the highest amount of FDI, with over $448 million, 29.9 times higher than last January, making up 21.3% of the total. The central province of Nghe An came second with $400 million or 19% thanks to two existing projects increasing their levels of capital. It was followed by Bac Ninh, Long An and Phu Tho.

Bright prospects for FDI attraction

Vietnam expects good results in FDI attraction in 2022 and following years, with good signals seen right from the beginning of this year, reported the Dau tu (Investment) newspaper.

The first FDI project receiving investment licence in Vietnam in this year is the Hai Lang liquefied natural gas (LNG) power plant project in the central province of Quang Tri with total investment of $2.3 billion.

This project alone has made the FDI in January higher than the figure of $2 billion recorded in January last year. Meanwhile, many other projects have received investment licences since the beginning of this year, including the addition of $400 million to Goertek project in Nghe An and a $136 million Coca-Cola project in Long An province.

Vietnam expects good results in FDI attraction in 2022 and following years. Photo: congthuong.vn

Right from the end of 2021, experts already showed optimism about FDI attraction prospects of Vietnam in 2022.

The Foreign Investment Agency under the Ministry of Planning and Investment mentioned the plans of many giant firms such as Apple, Samsung, Nike, Adidas and Foxconn to expand operations in Vietnam. Furthermore, the plans to invest $1 billion in LEGO factory in Vietnam and Intel’s plan to add $2.5 billion to is projects in Vietnam as well as Hanamicrom’s intention to invest in a semiconductor factory in the country have also been revealed.

The agency commented that 2022 and following years will be good years for Vietnam with many large-scale and high quality projects from world leading firms.

Meanwhile, 67% of European businesses said that they are optimistic about the business climate in Vietnam. At the same time, a survey by Japan External Trade Organization (JETRO) showed that 55.3% of Japanese said that they intend to expand business in Vietnam, and only 0.3% plan to withdraw from Vietnam. According to the survey, which was conducted from August to September 2021, 56.2% of the firms expect higher profits in 2022, and only 9.6% predicted lower profit.

According to Hirai Shinji, Chief Representative of JETRO in Vietnam, the Japanese firms intending to withdraw from Vietnam still hoped to return to the country when things become better.

In reality, many other firms have come back to Vietnam since the Government adopted the strategy of safely and flexibly adapting to the Covid-19 pandemic.

The business expansion of many other foreign firms in Vietnam, including Samsung from the Republic of Korea, JAPEX from Japan and Sri Avantika Contractor Ltd from India, is also expected to lead to many other opportunities for Vietnam in FDI attraction./.

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