Ministry of Planning and Investment
Thursday, 30/11/2023
FDI Keeps Flowing in
Wednesday, 18/06/2014 04:14
FDI Keeps Flowing in

Prime Minister Nguyen Tan Dung affirmed that Vietnam resolves and strives to create all possible conditions, especially security issues and business support, for investors and the international community so as to boost their trust in the business environment in Vietnam

Foreign direct investment (FDI) flows into Vietnam are still on the rise in the face of tensions and uncertainties in the East Sea, he said to investors at the recent Midterm Vietnam Business Forum 2014 (VBF).
On the rise
The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment said Vietnam drew over US$5.5 billion of foreign direct investment (FDI) in the year to May 24, down 34.3 percent over the same period in 2013. Specifically, the country licensed 500 fresh projects capitalised at nearly US$3.67 billion and allowed 167 existing projects to add US$1.84 billion. FIA added that foreign investors are actively deploying their projects. In the reporting period, they disbursed US$4.6 billion, up 0.4 percent year on year.
In addition, FDI firms also enjoyed remarkable export and import performances in the first five months. They earned US$39.45 billion, including crude oil, in the first five months of the year, accounting for 67 percent of the country’s total export turnover. In case crude was excluded, the value was US$36.39 billion, up 18.6 percent year on year. They spent US$32.55 billion in the period, up 11.4 percent year on year and equal 57 percent of the country’s total. This sector enjoyed a trade surplus of US$4.46 billion in five months.
According to FIA, manufacturing and processing industries are the top interests of foreign investors. Out of up 254 new projects with a combined registered capital of US$3.92 billion, this sector accounted for 71.2 percent of registered capital. The construction sector ranked second with 49 investment projects and more than US$463 million, both new and added capital, accounting for 8.4 percent, followed by the real estate sector with 9 new projects and nearly US$400 million, or 7.2 percent of the total capital registered. South Korea was the biggest investor in Vietnam with US$1.31 billion in the five-month period, accounting for 24 percent of the total, followed by Hong Kong with nearly US$630 million and Japan with US$588.6 million.
In a recent meeting between Planning and Investment Minister Bui Quang Vinh with Samsung (South Korea) and Coca-Cola (US), Coca-Cola Chairman Muhtar Kent revealed that Coca-Cola will invest US$300 million in Vietnam until the end of 2015. Meanwhile, Samsung will invest billions of US dollars in to various projects across the country in addition to existing projects worth US$5.8 billion. The South Korean firm expressed its interests in Long Son Oil Refinery, Nha Trang Shipyard, Vung Ang Thermal Power Plant 3. In a meeting with Deputy Minister of Planning and Investment Nguyen Van Trung, Madame Marjorie Yang, Chairwoman of Esquel Group (Hong Kong), said she worked with Chairman of Binh Duong Provincial People's Committee Le Thanh Cung and she would expand her project in Binh Duong province after more than 14 years of operations. Esquel Group is a garment and leading firm in the world. The group wants to scale up the capacity to grasp export opportunities when Vietnam signs the TPP Agreement. The first project of the company was built in VSIP Binh Duong 1 in 1996.
Real estate market awaits foreign funds
According to experts, much of capital has been trapped in the Vietnamese freezing real estate market. But, with many effective solution and measures adopted by the Government, the real estate market has shown signs of recovery. Neil MacGregor, Managing Director of property services firm Savills Vietnam, said Vietnam’s real estate market has bottomed out and is showing some encouraging signs of recovery. Currently, Vietnam is standing at the bottom point of a real estate cycle while other Asian markets remain at the other side and are likely to be on the decline in the next few years. Hence, the country is believed to serve as an important destination for investors in Southeast Asia while others are likely to cool down. He emphasised that foreign investors are eyeing office, hotel and housing projects in major cities like Hanoi and Ho Chi Minh City.
Office rents in Ho Chi Minh City, the largest economic hub in Vietnam, start to pick up from the bottom. So, investors will pour capital into office buildings in the near term. As domestic and international tourists are on the sharp rise in recent years, the demand for hotel rooms in big cities and beach resorts has climbed quickly. Some residential segments like houses with land are expected to draw new foreign capital because of stable demand. Indeed, Vietnam is the chosen destination of estate investors in Southeast Asia, Japan, Singapore and South Korea, said Neil MacGregor.
Marc Townsend, Managing Director of CBRE Vietnam, gave clearer evidences to increased cash flows for real estate projects in Vietnam. He cited US$200 million Apartment Block in Ward 22, Binh Thanh District, Ho Chi Minh City invested by Sun Wah Vietnam Real Estate Limited (Hong Kong); and a US$2.5 billion resort in Vung Ro, Phu Yen province invested by Rose Rock Group (owned by American billionaire Rockefeller) and Vung Ro Petroleum Co., Ltd. Besides, Igal Ahouvi (Israel) acquired Bai Rong Resort in Cam Ranh, Khanh Hoa province for US$300 million, which was renamed to Alma Resort. State Development - Moscow invested VND1,890 billion to build Cam Ranh Flowers Resort.
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