Foreign investment continues to spike

Increased FDI disbursement

Data from the Ministry of Planning and Investment (MPI) show that from the beginning of 2022 to October 20, Vietnam attracted more than US$22.46 billion of foreign investment through new projects, capital increases of ongoing projects and stock purchases and capital contributions by foreign investors.

Vietnam is a bright point among countries attracting foreign investment

FDI disbursement in the first 10 months increased 15.2 percent year-on-year, reaching US$17.45 billion – the highest in the past five years. The disbursed amount is forecast to reach US$21-22 billion by year's end, up 6.4-11.5 percent compared with 2021. The results of a quick survey by the MPI and the Vietnam Business Forum (VBF) show that the business efficiency and financial situation of more than 90 percent of FDI companies in Vietnam range from medium to high levels. Most of them expressed optimism and trust in Vietnam and willingness to expand investment and promote long-term business here. About 66 percent of FDI firms in Vietnam plan to increase investment as soon as 2023.

In the first 10 months, many large projects increased investment in Vietnam. For example, Samsung Electro-mechanics Vietnam, based in Thai Nguyen Province, increased investment twice, by US$920 million and US$267 million; Samsung Electronics HCMC CE Complex poured an additional US$841 million into its manufacturing facility; the plants manufacturing electronics, network equipment and multimedia audio products in Bac Ninh, Nghe An and Hai Phong increased investment respectively by US$306 million, US$260 million and US$127 million. In addition, Samsung's Research and Development (R&D) Center in Hanoi's Tay Ho Tay new urban area is expected to be completed later this year.

Apart from Samsung, other electronics giants such as LG, Foxconn, Panasonic, and HP also consider Vietnam an important link in their global supply chains, not only at manufacturing and assembly stages but also in R&D activities. During his recent visit to Vietnam, Secretary-General of the Organization for Economic Cooperation and Development (OECD) Mathias Cormann praised Vietnam's growth prospects and its attraction for foreign investors with improved infrastructure and a favorable investment environment. Therefore, in his opinion, Vietnam can expect further economic growth in the years to come. OECD companies tend to come to Vietnam to diversify their supply chains. Meanwhile, the chair of the European Chamber of Commerce in Vietnam (EuroCham), Alain Cany, said 42 percent of European companies plan increased investment in Vietnam in late 2022.

Investment for green growth

Economists are also pointing to improvement in the quality of FDI in Vietnam. The number of projects in the fields of high technology, electronics and renewable energy has increased. Multibillion-dollar projects by Intel, Samsung and other electronics giants have contributed to improving Vietnam's position in the global value chain, helping it promote green and sustainable development.

The LEGO Group (Denmark) recently broke ground to start construction of a carbon-neutral plant in Binh Duong Province – the first plant of its kind in Vietnam. Another Danish group, Pandora, has also pledged to invest US$100 million in building a jewelry production facility using renewable energy in Binh Duong Province. "From now to the end of the year, many EU firms will come to Vietnam to explore investment opportunities, especially in the field of green technology," said Nguyen Hai Minh, Deputy Chair of EuroCham.

EuroCham is implementing an investment promotion program to bring about 300 European companies to Vietnam to seek opportunities for green growth investment. It believes that with sustainable growth encouragement policies, Vietnam can move ahead of other regional countries to receive high-quality FDI flows.

Ha Duyen