Registered foreign direct investment capital in Vietnam declined 17.9% to $8.88 billion in the first four months of 2023, while disbursed capital dropped 1.2% to $5.85 billion.
Registered FDI capital included newly registered capital, additional capital of ongoing projects, and capital contributions for stake acquisitions.
Manufacturing and processing received the largest amount of registered FDI in the year to April 20 with $5.1 billion, accounting for 57.8% of Vietnam's total and down 17% year-on-year.
The banking-finance sector ranked second with $1.5 billion, or more than 17%, up 12 times year-on-year, followed by the real estate sector with nearly $972 million, down 65.5%. Wholesale-retail attracted $372 million, down 44.3%.
Of the 77 countries and territories investing in Vietnam in the period, Singapore led the pack with $2.2 billion, or over 24.7% of the total, down 29.5% year-on-year.
Japan ranked second with nearly $2 billion, accounting for 22.1% of the total, 2.63 times higher than the same period last year, followed by mainland China with $752 million (8.5%), down 30%; Taiwan; Hong Kong, and South Korea.
The number of newly-registered FDI projects reached 750 with total investment capital of $4.1 billion, up 65.2% and 11.1%, respectively.
Capital expansion of operational FDI projects dropped 68.6% year-on-year to just over $1.66 billion. A total of 386 projects received adjustments, up 19.5%.
Capital contributions for stake acquisitions rose 70.4% compared to the same period last year to over $3.1 billion, while the number of deals increased 1.8% to 1,044.
Both newly registered and disbursed FDI capital in April showed signs of improvement compared to the first three months of the year, according to the Foreign Investment Agency.
Small and medium-sized foreign investors continued to view Vietnam as an attractive investment destination with new investment decisions. In the four-month period, those worth below $1 million accounted for nearly 70% of new FDI projects, but their total investment capital made up only 2.2% of the country's total newly-registered capital.
But there are signs that large corporations are cautious given the upcoming enforcement of the global minimum tax (GMT), the agency added.
Many OECD countries stated that they will apply this new tax rule at the beginning of 2024, while the timeline for Vietnam might also be the same year.
The GMT under OECD Pillar Two is a once-in-a-lifetime global tax reform that will apply to multinational companies with revenue above 750 million euros.