Vietnam's FDI capital disbursement hits five-year high amid global decline

Disbursed foreign direct investment (FDI) capital in Vietnam hit $15.4 billion in Jan-August, up 8.8% year-on-year, despite declining global investment flows, the Foreign Investment Agency (FIA) reported.

"The continued increase in realized capital shows that Vietnam's capital absorption capacity and disbursement progress have improved, especially in the context of a global downward trend," said an FIA release on Saturday.

The figure was a record high for eight months in five years. The processing and manufacturing industry made up 81.6% of the total with $12.57 billion, followed by real estate with $1.24 billion, or 8%.

Registered FDI capital reached $26.14 billion in the period, up 27.3% year-on-year.

At the FIA's calculations, registered capital comprises capital for newly-registered projects, additional capital for existing projects, and capital for stake acquisitions.

In terms of registered capital, the processing and manufacturing industry led with nearly $15.3 billion, accounting for 58.5% of the total, up 7.7% year-on-year. Next was real estate with over $5.4 billion (20.75%, up 62.4%).

Singapore ranked number one with over $6 billion, making up 23%, down 11.6% year-on-year. South Korea held the second position with over $4 billion (15.5%, up 119.9%). Next were mainland China, Japan, and Hong Kong, with $3.1 billion, $2.3 billion, and $1.8 billion, respectively.

Bac Ninh province ranked first among localities in terms of registered capital with $4.7 billion, or 17.9% of the country's total, up 4.8% year-on-year.

Ho Chi Minh City ranked second with nearly $4.4 billion, or 16.8%. Hanoi placed third with over $3.8 billion (14.5%), followed by Dong Nai, Hai Phong, and Tay Ninh.

Of the total registered capital, over $11.03 billion (down 8.1% year-on-year) was capital for 2,534 newly-registered projects (up 12.6%).

As usual, the processing and manufacturing industry held the largest share of newly registered capital, at 59.2% or $6.53 billion, followed by real estate (at 21.5%, $2.37 billion).

Singapore continued to lead in newly-registered capital, with $3.06 billion. Next was mainland China with $2.65 billion, Sweden thanks to the $1 billion polyester fabric recycling complex project of Syre in Gia Lai province, and Japan with $878 million.

About $10.6 billion, a 85.9% increase year-on-year, was additional capital for existing projects.

Foreign investors made capital contributions/stake acquisitions to the tune of $4.5 billion, up 58.8%.

The processing and manufacturing industry led the pack in the number of newly-registered projects (accounting for 35.8%) and the number of projects having capital adjustments (58.7%). Meanwhile, the wholesale and retail sector ranked first in the number of capital contributions/share purchase transactions (40%).

It is noteworthy that newly registered capital decreased by 8.1%, while adjusted capital of existing projects surged 85.9% and the value of capital contribution/share acquisitions increased by nearly 59%.

“This shows that new investors are more cautious when starting projects in Vietnam, due to fluctuations in the global market. However, existing projects have significantly expanded their scale. This reflects the long-term confidence of active investors. It also indicates that attracting new projects has not really made a breakthrough,” the FIA added.

Among the largest manufacturing projects licensed in the period is the $1 billion polyester fabric recycling complex project of Sweden’s leading textile manufacturer Syre in Nhon Hoi Economic Zone, Binh Dinh province, now Gia Lai province after their recent merger.

The project, designed to have a capacity of up to 250,000 tons per year, is expected to become operational by the end of 2028.