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FDI attraction situation in Vietnam and Vietnam's overseas investment in the first three months of 2023

Date 30/03/2023 - 15:19:00 | 1577 views
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I. FDI INFLOWS OF VIETNAM

As of March 20, 2023, the total newly registered capital, adjusted and contributed capital to buy shares and buy contributed capital of foreign investors reached nearly 5.45 billion USD, equalling 61.2% year-on-year. The capital generated by FDI projects was estimated at above 4.3 billion USD, a decrease of 2.2% over the same period in 2022.

Accumulated to March 20, 2023, the whole country has 36,881 valid projects with a total registered capital of approximately 444.1 billion USD. The accumulated realised capital of foreign investment projects reached 278.3 billion USD, equalling 62.7% of the total valid registered investment capital.

Details are as follows:

1. FDI attraction in the first three months of 2023

1.1. FDI performance:

Realised capital:

As of March 20, 2023, disbursement of FDI projects were estimated at 4.3 billion USD, down 2.2% year-on-year and up 2.7 percentage point compared to the first two months of this year.

Import and export performance:

Export: Export turnover of FDI sector slumped in the first three months of 2023. Export (including crude oil) was estimated at 59.91 billion USD, down 10% year-on-year, accounting for 75.7% of export turnover. Export (excluding crude oil) was 59.34 billion USD, a decrease of 10.2% year-on-year, accounting for 75% of the country’s export turnover.

Import: Imports of the foreign-invested sector attained nearly 50.47 billion USD, down 13% over the previous period and accounting for 66.6% of the country’s import turnover.

Despite decrease in export turnover, in the first three months of 2023 the FDI sector saw a trade surplus of over 9.4 billion USD including crude oil and nearly 8.9 billion USD excluding crude oil, while the domestic sector had a trade surplus of more than 6.1 billion USD.

1.2. Investment registration

As of March 20, 2023, the total newly registered capital, adjusted capital and capital contributions and share purchases of foreign investors stood at about 5.45 billion USD, equivalent to 61.2% year-on-year. The reason is that the first three months last year had a surge with a 1.32 billion USD Lego-project. Capital contributions and share purchases felt and and adjusted capital was not improved compared to the previous months. However, the number of newly-licensed projects and turns of projects had their capital adjusted still increased.

Of which:

Newly registered capital: There were 522 new foreign-invested projects, valued at over 3 billion USD, were granted licenses, up 62.1% in number and down 5.9% in value year-on-year.

Adjusted capital: There were 234 turn of projects registering for capital adjustment (up 2.6% on-year) with a total additional capital of about 1.21 billion USD (down 70.3% year-on year and up 14.8 percentage points compared to the previous months).

Capital contributions and share purchases: There were 703 capital contributions and share purchases by foreign investors (down 4.2% year-on-year) with a value of nearly 1.22 billion USD (down 25.5 % year-on-year).

(Detailed data in Appendix I attached)

By sector:

Foreign investors poured funds into 17 out of 21 sectors in the national economic classification system, of which the processing and manufacturing industry took the lead with about 4 billion USD, making up 73% of the total and decreasing 25% year-on-year. The real estate came next with a total investment of 766 million USD, accounting for 14.1% of the total and decreasing 71.6% compared to the same period last year. Meanwhile, wholesale and retail and logistics tend to increase with the total registered capital of 276 million USD (increase by 2 times), and 151 million USD (increase of 37%), respectively. The rest were other sectors.

It is also worth noting that processing and manufacturing was the sector with the largest number of newly-registered projects (28.7%) and capital-adjusted projects (65%).

By counterpart:

There were 67 countries and territories investing in Vietnam in the first three months of 2023. Singapore remained Vietnam’s leading source of foreign investment with nearly 1.69 billion USD, making up 31 % of the total FDI registered in the country (down 26.3% year-on-year). China came second with about 522 million USD, making up 10.1% of the total but representing a decrease of 38.3% year-on-year. Taiwan (China) came third with a total registered investment capital of over 477 million USD, accounting for 8.8% of the total and increasing 47.5% on-year. Next were Republic of Korea (RoK), Hong Kong (China), Netherlands and so on.

Regarding the number of projects, the RoK topped the list of investors when it comes to the number of newly-registered projects (accounting for 15.5%); turns of capital adjustment (26.9%) and capital contributions and share purchases (28.4%)

By location:

The foreign investors had invested in 44 provinces and cities nationwide in the first three months 2023. Bac Giang led the way with a total registered capital of more than 1.1 billion USD, making up 20.3% of the total and rising 5.2 times over the same period in 2021. Dong Nai ranked second with 18 new projects worth 607 million USD, making up 11.1% of the total and increasing 3 times compared to the same period last year. Next were Bac Ninh, Ho Chi Minh City, Hai Phong and so on.

Ho Chi Minh City remains leading city in number of new projects (41.4%), turns of adjusted-projects (15.8%) and capital contributions and share purchases (66.6%).

(Detailed data in Appendix II attached)

2. Evaluation of the FDI performance in the first three months of 2023

- The registered investment capital of FDI projects decreased 16.3% compared to the same period in 2022, but it was improved compared to the previous months (down 2.2% year on year and up 2.7 percentage points compared to the previous months).

- The capital structure of FDI by investment method has changed compared to the same period in 2022. In the first three months of 2023, the proportion of new investment capital in the total registered capital rose (accounting for over 55.5% compared to 36% in the same period last year), while the proportion of adjusted capital decreased (accounting for 22.2% compared to 45.6% in the same period). The proportion of foreign investors’ capital contribution and share purchases slightly plunged, from 18.3% in the three months of 2022 to 22.3% in the same period of 2023

- The newly registered capital did not maintain its vigorous growth as in the first two months of the year, however, the number of new projects continued to increase year-on-year and slump compared to the first two months of 2023. The reason is that: (i) small and medium-sized enterprises continued to pay attention to and had confidence in the investment climate of Vietnam to expand operation; (ii) large corporations were considering their business regarding the impact of Global Minimum Tax policy. The number of under-1-million USD projects accounted for nearly 70% of the total number of foreign-invested projects registered in Vietnam in the first three months of this year, but its value only making up 2.2% of the total.

- Newly-invested projects still focus on cities and provinces that have more advantages such as infrastructure, stable human resources, efforts to reform administrative procedures, and active investment promotion, like Bac Giang, Dong Nai, Bac Ninh, Ho Chi Minh City, and Hai Phong.

- Asian and traditional investors accounted the most proportion (Singaporean, Chinese, Taiwanese (China), South Korean, Hong Kong (China) and Japanese). Especially, China’s investment has increased and surpassed Taiwan (China) and the RoK to rank second out of 67 countries investing in Vietnam in the first three months, with a 140 million USD newly-invested projects in manufacturing batteries, accumulators and solar panels in Bac Giang.

- Adjusted capital still decreased compared to the same period last year due to few projects having their capital adjusted up, but the decline rate was improved month-on-month. The number of projects with capital boosts rise again (up 2.6%) instead of the decline by 6.3% in the first two months this year.

- In March 2023, newly-registered and adjusted capital tend to rise compared to the first months of the year. Newly-registered capital increased by 2.25 times compared to February, and 4.5% compared to January. Adjusted investment capital also rise by over 2.9 times compared to February, and nearly 2.2 times compared to January. Although capital contributions and share purchases slumped in February (about 3.6 times on-month), but it declined in March 2023.

- Although export of the FDI sector decreased, it posted a trade surplus and offset the trade deficit of the domestic business sector. With a trade surplus of more than 9.4 billion USD (including crude oil) and nearly 8.9 billion USD (excluding crude oil), the FDI sector offset the trade deficit of more than 6.1 billion USD of the domestic business sector, helping the country have a trade surplus of about 2.8 billion USD.

3. Accumulated foreign investment as of March 20, 2023

Accumulated as of March 20, 2023, the whole country has 36,881 valid FDI projects worth nearly 444.1 billion USD. The accumulated realised capital of FDI projects is estimated at over 278.3 billion USD, equalling 62.7% of the total valid registered investment capital.

- By sector: Foreign investors have invested in 19 out of 21 sectors in the national economic classification system, in which the processing and manufacturing accounted for the highest proportion with more than 264.2 billion USD, accounting for 59.5% of the total investment capital. It was followed by real estate sector with over 66.7 billion USD (representing 15%); electricity production and distribution with more than 38.3 billion USD (or 8.6%).

- By counterpart: With new foreign-invested project from Vanuatu, there are 143 countries having valid investment projects in. In which, the RoK ranked first with a total registered capital of over 81.5 billion USD (accounting for 18.4% of the total). Singapore ranked second with over 72.5 billion USD (representing for 16.3%). Next were Japan, Taiwan (China), Hong Kong (China) and so on

- By location: FDI has been present in all 63 provinces and cities nationwide, of which Ho Chi Minh City remains the leading province in attracting foreign investment with over 56.4 billion USD (accounting for 12.7% of the total investment capital), followed by Binh Duong with about 36.7 billion USD (or 8.9% of the total investment capital), Hanoi with more than 38.9 billion USD (representing 8.8% of the total investment capital).

(Detailed data in Appendix III attached)

II. FDI OUTFLOWS OF VIETNAM

In the first three months of 2023, Vietnam’s total newly-registered and additional investment were approximately 119.5 million USD (equalling 56.5% year on year). Of which, 21 projects were granted new investment registration certificates, with total registered capital of about 113.3 million USD (equalling 62.8% year on year); and 26 projects registered for capital adjustment of 6.2 million USD (or 19.9% year on year).

Vietnamese investors have invested in 11 sectors abroad. Of which, information and communication took the lead with 3 newly-registered projects and 1 times of capital adjustment, with total registered capital of over 105.4 million USD, accounting for 88.2% of the total. Next came service industry and 1 turn of capital adjustment worth 5 million USD, representing 4.2%; followed by wholesale and retail, healthcare, processing and manufacturing and so forth.

There were 15 countries and territories receiving investment from Vietnam in the first three months of 2023. Leading is Singapore with 1 newly-registered and 1 capital-adjusted projects wih the total registered capital of 105.5 million USD, accounting for 88.3% of the total. Followed by Israel, Cambodia, Australia, Thailand and Laos.

Accumulated as of March 20, 2022, Vietnam had 1,625 valid aboard investment projects with total registered investment capital of nearly 21.9 billion USD. In which, there are 141 projects of state-owned enterprises with a total investment of nearly 11.67 billion USD, accounting for 53.5% of the country’s total investment capital.

Vietnam’s investment aboard focuses mainly in: mining (31.8 %); agriculture, forestry and fishery (15.7%). The areas receiving the most investment from Vietnam were Laos (24.5%); Cambodia (13.5%); and Venezuela (8.3%)./.

(Detailed data in Appendix IV and V attached)


FDI_03.2023_E.xlsx Tải về

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