3 factors that help Vietnam continue to be a destination for FDI capital

In the context of the global supply chain being restructured, foreign direct investment (FDI) in Vietnam is still increasing in terms of new investment capital and adjusted capital, showing that foreign investors continue to consider Vietnam an important investment destination in the medium and long term.

Many foreign investment projects in Vietnam continue to expand in scale. Illustrative photo.

Comments on the attraction situation FDI capital In 2024, the Ministry of Planning and Investment said that according to the assessment of many domestic and foreign financial institutions, Vietnam's prospects for attracting FDI will maintain a positive pace thanks to three core factors.

That is: The important and increasingly strengthened role in the supply chain diversification strategy of multinational manufacturers; economic growth more positive recovery; stable macro economy.

Vietnam has great potential for investment in many cutting-edge industries. The technology sector is undergoing a lot of innovation and digitization; the renewable energy sector is gaining traction with an increasing focus on clean energy sources such as solar and wind power to sustainably enhance Vietnam’s electricity supply.

Investor confidence in Vietnam continues to be strengthened, existing investors believe in the Government's policies and the future development of Vietnam's economy, and many investors consider Vietnam an attractive destination with great potential and room for growth in the medium and long term.

Besides, Vietnam's position in the electricity and electronics supply chain is increasingly consolidated, so there is a tendency for many corporations producing electronic products to come to Vietnam.

The quality of investment projects has also improved significantly, many large projects in the fields of semiconductors, energy (production of batteries, photovoltaic cells, silicon bars), component manufacturing, electronic products, and products with high added value have received new investment and capital expansion in the first 6 months of the year.

FDI capital is concentrated in provinces and cities with many advantages in attracting foreign investment such as Bac Ninh, Ba Ria-Vung Tau, Quang Ninh, Hanoi, Hai Phong, Ho Chi Minh City, Dong Nai... and is invested mainly from Vietnam's traditional partners in Asia such as Singapore, Japan, Hong Kong (China), Korea, China...

As of June 20, 2024, the total newly registered capital, adjusted capital and contributed capital to buy shares of the foreign investment reached nearly 15.2 billion USD, up 13.1% over the same period. The realized capital of foreign investment projects is estimated at about 10.84 billion USD, up 8.2%.

The increase in both registered and implemented FDI inflows will further boost domestic activities. Notably, both new investment capital and adjusted capital of existing projects increased sharply over the same period, corresponding to increases of 46.9% and 35%.

This result shows that foreign investors continue to consider Vietnam an important investment destination in the medium and long term, in the context of the global supply chain undergoing restructuring.

However, Vietnam must actively overcome some current bottlenecks, specifically urgently preparing skilled human resources, especially in the field of semiconductor electronics; overcoming local power shortages in some localities with many electronics industry projects; reviewing procedures to simplify and shorten the processing time of licenses...

“The Government and the Prime Minister have issued timely instructions so that in the coming time, all levels and sectors will focus on drastic solutions to resolve these bottlenecks. Accordingly, there will be positive impacts on FDI attraction results in the last 6 months of 2024, continuing to maintain positive growth momentum, reaching the same level or higher than in 2023,” the Ministry of Planning and Investment informed.

Source