FDI to Vietnam is mostly from Asia, with South Korea ranked first

The great advantages of Vietnam’s business environment and its membership in FTAs and the AEC have helped to attract many investors from Asia.

The Ministry of Planning & Investment (MPI) report said that in the first eight months of the year, foreign investors pledged to invest $23.36 billion in Vietnam, an increase of 45 percent compared with the same period last year.

At least 1,624 new projects have been licensed this year with total registered capital of $13.45 billion, up by 37.4 percent over the same period last year. In addition, 773 projects received approval for expansion with additional registered capital of $6.4 billion, up by 40.2 percent.

Foreign investors made 3,374 deals to contribute capital and acquire a stake in Vietnamese companies, totalling $3.5 billion, up by 101.3 percent.

Foreign investors have poured money into 18 production and business fields. Of these, the processing and manufacturing sector attracted $11.69 billion, or 50 percent of total investment capital.

The electricity generation and distribution ranks second with $5.36 billion worth of investment, accounting for 22.9 percent of total capital, followed by mining with $1.28 billion and 5.5 percent.

Of 98 countries and territories which have investment projects in Vietnam, South Korea has committed investment capital of $6.02 billion, or 25.7 percent of total investment capital, standing firmly in the first position on the list of top foreign investors.

The race for the No 1 position in the list is mostly among the ‘big four’ and all of them are from Asia – South Korea, Japan, China and Singapore. South Korea’s first position has fallen into the hands of the other three on three occasions this year.

Ideal destination

The statistics by FIA show that the leading countries in FDI and in the M&A market in Vietnam are all from Asia.

South Korean investors tend to prioritize deals in the food and finance & banking sectors. Japan targets aviation, petroleum and drug sectors and Singapore real estate projects. Thailand continues pouring money into retail and materials & chemicals.

Prof Tran Tho Dat and colleagues from Hanoi Economics University found that the committed and disbursed FDI capital in Vietnam has been at a high level for many years.

Vietnam remains an attractive destination for foreign investors thanks to the bright economic prospects, especially as Vietnam has made serious reforms to create a better business climate and has joined a number of FTAs.

A recent survey by UOB showed that among ASEAN countries Vietnam ranked second as the most attractive in terms of investment environment, just after Singapore.

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