Additional FDI capital up 93% year-on-year

Both registered additional capital of FDI companies in Vietnam and foreign capital contributed to acquire stakes in the year to March 20 recorded a “strong rise” year-on-year.

Data from Foreign Investment Agency (FIA) shows that 228 FDI companies had their investment capital expanded by over $4.06 billion in total. The figures grew 41.6% and 93.3% respectively against the same period last year.

The capital contributed to acquire stakes doubled year-on-year to $1.63 billion via 734 transactions.

“Enterprises are gradually recovering and expanding production and business, thanks to their efforts to overcome the pandemic and adapt to the new situation, as well as the continuous and efficient support of the government and concerned agencies,” the FIA said in a release on Monday.

The agency called the above figures "strong rises" that "reflect foreign investors' trust in Vietnam’s business climate amid “new normalization”.

Many projects to manufacture electronic and high-tech products expanded on a large scale in the first three months, it added. Another positive note is disbursed capital reaching $4.42 billion, up 7.8 percent.

Corporate representatives at Vietnam Business Forum (VBF) in February praised Vietnam’s transition from the “zero-Covid policy” to safe and flexible adaption to Covid-19, with effective control of the disease to boost socio-economic recovery.

At the event, Chairman of EuroCham Alain Cany said business leaders have signaled a vote of confidence in Vietnam’s “new normal” trade and investment environment, with EuroCham’s Business Climate Index (BCI), its regular barometer of European business leaders, increasing by 42 points to 61 in January.

“The government’s ambitious and accelerated vaccine roll out, combined with the tireless and heroic work of our frontline healthcare professionals, have enabled a gradual re-opening of the country.”

Capital of newly-registered projects, however, declined sharply. There were 322 newly registered projects in the period, up 37.6%, with total capital of $3.21 billion, down 55.5%.

The $1.32 billion project of Danish-backed Lego Manufacturing Vietnam to make toys, import and trade (both wholesale and retail) in the southern province of Binh Duong is the only newly-registered, billion-dollar project in the first three months.

Meanwhile, in the same period last year, many projects with investment capital exceeding $100 million were registered, including some giants like the $3.1 billion liquified natural gas-fueled power plant 1 and 2 project in Long An province and the O Mon 2 thermal power plant in Can Tho city, both in southern Vietnam.

The investment agency said the country fully reopening its market to international tourists from March 15, the resumption of a pre-Covid, visa-free policy for many countries, and the shift of European investment capital due to the Russia-Ukraine conflict would positively impact FDI inflows to Vietnam.

In the first three months, manufacturing and processing was the largest recipient of registered FDI, with $5.3 billion or 59.5%. The real estate sector ranked the second, with $2.7 billion or 30.3%.

Singapore led the pack with $2.29 billion, making for 25.7% of the total in the period, down 50.1% year-on-year. South Korea came next with $1.61 billion or 18%, up 35.6%.

The $1.3 billion Lego project accounted for 14.8% of the country's total registered capital in the period.