As of December 2020, foreign direct investment capital inflows into Vietnam reached the $28.5 billion milestone, firmly establishing the country’s credentials as a safe and key investment destination in the midst of the COVID-19 pandemic.

FDI capital inflows into Vietnam cross $28 billion milestone in 2020. Photo: Unsplash

According to data from the Ministry of Planning and Investment, the total newly registered capital, adjusted capital, capital contribution, and share purchases by foreign investors reached $28.5 billion, down 25 per cent compared to the same period last year.

There were 2,523 new projects granted with investment certificates with total registered capital of $14.6 billion, down 35 and 12.5 per cent, respectively, against last year. Around 1,140 projects registered capital adjustment with the total additional capital reaching $6.4 billion, up 10.6 per cent.

In addition, there were 6,141 instances of capital contribution and share purchase by foreign investors worth $7.5 billion, a fall of 51.7 per cent on-year on-year. The total number of capital contributions and share purchases by foreign investors was 1,695 with the total value of $3.2 billion.

The COVID-19 pandemic has had a definite impact on FDI inflows. Production and trade was sluggish and many businesses fell into difficulties. The divested capital of foreign investment projects continued to decrease in 2020 over the same period last year. The disbursement of FDI capital saw a yearly increase of 6.7 per cent to $19.98 billion.

According to the MPI, many foreign-invested companies start to recover and expand their projects. Numerous foreign investors stayed interested and are looking to invest in Vietnam.

Around 300 companies are exploring investment opportunities or developing expansion plans in Vietnam. Around 50 groups and companies have achieved some initial results for upcoming investment in the country.

There are 19 key sectors attracting FDI inflows. Among them, the processing and manufacturing sector accounted for the highest proportion with $13.6 billion, accounting for 47.7 per cent of total investment capital. Electricity production and distribution ranked second with investment capital of over $5.1 billion, accounting for 18 per cent of the total registered investment capital. It is followed by real estate, wholesale and retail with the total registered capital of nearly $4.2 billion and $1.6 billion.

Several major projects in the period are a liquefied natural gas (LNG) plant project under Bac Lieu LNG Thermal Power Centre (Singapore) having a total registered investment capital of $4 billion; the South Vietnam Petrochemical Complex project (Thailand) in Ba Ria-Vung Tau with an increase of adjusted investment capital by $1.39 trillion; the West Lake Urban project (Hanoi) having additional capital of $774 million; Pegatron Vietnam (Taiwan) with an investment capital of $481 million in Haiphong, and Radian Jinyu Tire Manufacturing Factory (Vietnam) with an investment capital of $300 million in Tay Ninh.

Accumulated as of December 20, 2020, the whole country had 33,070 valid projects with the total registered capital of nearly $384 billion. The accumulated realised capital of FDI projects was estimated at $231.86 billion, equaling 60.4 per cent of the total valid registered capital.

South Korea ranked first with registered capital of nearly $70.6 billion (accounting for 18.4 per cent of the total investment). Japan ranked second with nearly $60.3 billion (capturing 15.7 per cent of the total investment capital), followed by Singapore, Taiwan, and Hong Kong.

By Thanh Van (VIR)