FDI slides to four-year low How will Vietnam’s energy policies affect FDI attraction? Study: Vietnam’s FDI attraction unrelated to low energy price

The Ministry of Planning and Investment’s Foreign Investment Agency said on June 26 that the country attracted US$5.49 billion in FDI during the January-June period, or 80.2% of the figure in the first six months of last year and the lowest since 2012.

In the first half of the year, 750 new FDI projects were granted investment certificates, with total registered capital worth US$3.84 billion, or 79% of the number during the same period last year. Some 280 projects increased their registered capital by a total of US$1.65 billion, or 83% of last year’s figure in the first half.

According to the agency, the number of newly granted projects increased 15% in comparison with the corresponding period last year. However, there were no large-scale projects, which marked a reduction in registered capital from last year.

During the period, foreign investors entered 16 sectors. Most of the FDI went into the processing and manufacturing industries, with 338 new projects and 190 increasing capital worth US$4.16 billion, accounting for 76% of the total capital.

The property sector took the second position, with 11 new projects registered and 7 increasing capital with a total of US$465.5 million. It was followed by the wholesale, retail and repair sectors, with 119 new projects and 26 increasing capital, with total capital worth US$276.5 million.

The Republic of Korea overcame 48 countries and territories to become the top investing country in Vietnam, with total registered capital worth US$1.52 billion, followed by British Virgin Islands, with US$684,8 million.

Turkey and Hong Kong held the third and fourth positions, with a total investment of US$660.2 million and US$627.5 million, respectively.

Ho Chi Minh City received the highest FDI capital during the six-month period, with a total investment of US$1.12 billion, followed by Dong Nai Province and Haiphong City, with investments worth US$1.03 billion and US$433.7 million, respectively.

Some of the large projects that were granted licences during the period include Hyosung Dong Nai, which has US$660 million invested by Turkey to produce yarn in Dong Nai Industrial Zone; Worldon Vietnam Company, with US$300-million investment to produce high-end garment and textile products in Ho Chi Minh City; Lu Thai Vietnam, with US$160.8 million worth investment in Tay Ninh Province; and Tra Vinh 1 wind power project in Tra Vinh Province, with US$120-million investment.

The ministry expects the annual FDI to reach US$23 billion. As only 23.8% of the target could be met in the first six months, the country will need to attract new projects with larger investments over the remainder of the year to achieve the target.