FDI capital into Vietnam increased

In the first 7 months of 2024, a notable point in the manufacturing sector is that there are many large projects in the fields of semiconductors, energy (production of batteries, photovoltaic cells, silicon bars, etc.); production of components, electronic products, products with high added value, etc. with new investments and expansion in scale.

Electronic circuit board production at the Nippon Mektron Factory of Mektec Manufacturing Vietnam Co., Ltd. (Photo: THANH HAI)

Foreign direct investment (FDI) attraction in Vietnam since the beginning of the year has not only increased sharply in quantity but also had positive changes in quality, focusing on high-tech industries such as semiconductors, electronics, energy, etc.

Choose your investments carefully

Along with the stronger growth of foreign capital flows into Vietnam, Minister of Planning and Investment Nguyen Chi Dung commented that the quality of FDI capital flows has increased sharply thanks to careful selection of investment attraction. In early July 2024, Foxconn Group - Apple's main manufacturing partner was granted an investment registration certificate for two major projects in Quang Ninh with a total registered capital of nearly 551 million USD.

These are the smart entertainment product manufacturing project, invested in Song Khoai Industrial Park (Amata) with an area of 21.5 hectares, investment capital of 263.7 million USD with a designed capacity of 4.18 million products/year and the smart system equipment manufacturing project in Bac Tien Phong Industrial Park (Deep C) with an area of 12.4 hectares, capital scale of 287.2 million USD, designed capacity of 8.78 million products/year.

In Quang Ninh alone, Foxconn has so far invested in five projects with a total registered capital of nearly $1 billion. In addition, the group also has large investment projects in Bac Giang, Bac Ninh and recently announced plans to establish a new factory in Nghe An. Foxconn’s expansion of investment in localities demonstrates the importance and new position of Vietnam in the global electronics manufacturing supply chain, while also affirming foreign investors’ confidence in Vietnam’s investment environment.

The year 2024 also marks an important milestone in opening a new, more substantial and broader page for Vietnam-India relations, including investment activities. During Prime Minister Pham Minh Chinh's state visit to India, many large Indian corporations identified Vietnam as a strategic investment destination and wished to become strategic investors in Vietnam.

Adani Group has reported to the Prime Minister about the investment proposal in Lien Chieu port project (total estimated capital of 2 billion USD); Vinh Tan 3 thermal power project (2.8 billion USD); proposal to participate in the construction of Long Thanh airport (phase 2) and Chu Lai airport,...

Following the Prime Minister's direction, immediately afterwards, Minister of Planning and Investment Nguyen Chi Dung and leaders of relevant ministries, branches and localities had a meeting with Adani Group to thoroughly handle related issues, agree on the method of implementation, implement procedures according to regulations, and soon deploy investment in Lien Chieu seaport project as well as other projects in accordance with Vietnamese law.

Localities accelerate

In many localities across the country, FDI capital has become an important driving force for economic growth and job creation. To improve the quality of foreign capital, many localities have been innovating investment promotion methods, preparing the best conditions, and being ready to welcome new projects to become the center of FDI attraction in the country.

In a recent meeting with the Korean Business Association (Kocham) in Vietnam, Chairman of the Vinh Phuc Provincial People's Committee Tran Duy Dong said that the province's orientation in attracting investment is to prioritize high-tech projects, mechanical engineering, electronics, supporting industries, especially projects in the semiconductor industry. The projects will be focused on construction in industrial parks to ensure the handling of environmental issues, providing telecommunications infrastructure, electricity, clean water, land, etc.

To date, Vinh Phuc has planned 27 industrial parks, of which 9 are in operation and 5 are completing infrastructure. The Provincial People's Committee has directed departments and branches to prepare necessary conditions and create clean land in industrial parks to be ready to allocate and lease land for projects in investment-oriented fields. Notably, Vinh Phuc has also developed a plan to ensure sufficient electricity supply for businesses in the area because this is a very important condition for high-tech projects such as the semiconductor industry.

On behalf of Korean enterprises, Mr. Hong Sun, Chairman of Kocham, said that Kocham had just organized a seminar on high-tech and semiconductor technology, attracting the attention of many member enterprises. Korean enterprises are very interested in investment opportunities in Vietnam in general and Vinh Phuc in particular. Kocham will continue to connect, exchange, and act as a bridge to promote investment cooperation in Vietnam in the coming time.

As of July 2024, many localities across the country have "reached the milestone" of attracting more than 1 billion USD in FDI capital. Among the top localities attracting FDI nationwide, Dong Nai province has exceeded the target of attracting FDI capital for the whole year in just the first four months of the year. Dong Nai's new projects mainly focus on the semiconductor industry, electrical and electronic components; mechanical engineering; textiles; production of prefabricated metal products, with no projects in the list of industries with factors causing environmental pollution, labor-intensive, etc.

As of July 20, total FDI capital in Vietnam reached more than 18 billion USD, up 10.9% over the same period, and realized capital reached more than 12.5%, up 8.4%. Thus, both registered and realized investment capital in the 7 months continued to increase over the same period. Notably, newly registered FDI capital reached nearly 10.8 billion USD, up 35.6%, and adjusted registered FDI capital reached nearly 5 billion USD, up 19.4%.

According to HSBC Bank, Vietnam has a competitive position in attracting FDI capital compared to other countries thanks to the 20% corporate income tax rate, the ability to participate deeply in the global value chain, and favorable factors from the implementation of signed free trade agreements. HSBC also believes that competitive costs and the Government's facilitation of the investment environment with policies supporting the foreign investment sector, including tax incentives, are advantages for Vietnam to compete in attracting FDI capital.

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