The inflow of foreign investment into Viet Nam hit over US$2.1 billion in January, up 4.2 per cent year-on-year, marking good signals for the country's investment attraction, the latest report from the Foreign Investment Agency (FIA) showed.

Garment products are made by workers of South-Korean KH Vina Co in the central province of Thanh Hoa. — VNA/VNS Photo Vu Sinh

Following the recovery from the end of 2021 after the impact of the COVID-19 pandemic, many foreign-invested enterprises have stabilised and expanded their production and business activities. Thus, disbursement of foreign direct investment (FDI) also saw a positive increase of 6.8 per cent to surpass $1.61 billion during the first month of this year, FIA said in its report.

According to the report, up to 103 new foreign-invested projects were licensed with a total registered capital of nearly $388 million, 2.2 times higher than last January in terms of the number of projects but down 71 per cent year-on-year in value.

Although registered investment capital decreased compared to the same period last year due to a lack of large-scale projects, an increase in the number of new investment projects showed the confidence of foreign investors in the country's investment environment, FIA said.

Meanwhile, 71 operating projects were allowed to raise their capital by $1.27 billion, up 54.3 per cent in project number and nearly triple the level of capital seen in the same month last year.

Capital contributions and share purchases by foreign investors stood at $444 million, up two times over the last year's corresponding month. 

Among 15 sectors receiving FDI in the first month, processing and manufacturing took the lead with over $1.2 billion, accounting for 58.9 per cent of the total FDI. Real estate came next with $472 million or equivalent to 22.5 per cent. Administrative sectors and supporting services; wholesale and retail were the runners-up with over $221 million and $52.5 million, respectively.

As per the data, Singapore led 33 countries and territories investing in Viet Nam with total investment capital of nearly $666 million, making up nearly 31.7 per cent of the total FDI registered in the country. However, the total investment of Singaporean investors plunged 2.2 per cent year-on-year.

South Korea ranked second with over $481 million, up five times year-on-year or equivalent to 30 per cent of the total FDI. Mainland China came third with nearly $451 million, down 27 per cent or 21.5  per cent. Other leading sources of Viet Nam's FDI were from Japan, Hong Kong and Taiwan.

The capital city attracted the highest amount of FDI, with over $448 million, 29.9 times higher than last January, making up 21.3 per cent of the total. The central province of Nghe An came second with $400 million or 19 per cent thanks to two existing projects increasing their levels of capital. It was followed by Bac Ninh, Long An and Phu Tho.

According to FIA, foreign-invested businesses posted a trade surplus of above $1.6 billion in January.

As of January 20, the country was home to 34,642 valid foreign-invested projects worth nearly $415.6 billion. Of the sum, $253.2 billion or 61 per cent has been disbursed.

Earlier, the Dau Tu (Investment) newspaper reported that Viet Nam expected good results in FDI attraction in 2022 and following years, following optimism from many experts from the end of 2021.

FIA also commented that 2022 and the following years would be good for Viet Nam with many large-scale and high-quality projects from world-leading firms.

Meanwhile, 67 per cent of European businesses said that they are optimistic about the business climate in Việt Nam.

At the same time, a survey by the Japan External Trade Organisation (JETRO) showed that 55.3 per cent of Japanese said that they intend to expand business in Viet Nam, and only 0.3 per cent plan to withdraw from Viet Nam. According to the survey, which was conducted from August to September 2021, 56.2 per cent of the firms expect higher profits in 2022, and only 9.6 per cent predicted lower profit.

Viet Nam News Agency cited Hirai Shinji, Chief Representative of JETRO in Viet Nam, as saying that the Japanese firms intending to withdraw from Viet Nam still hoped to return to the country when things get better.

In reality, many other firms have come back to Viet Nam since the Government adopted the strategy of safely and flexibly adapting to the COVID-19 pandemic.

The business expansion of many other foreign firms in the Southeast Asian country, including Samsung from South Korea, JAPEX from Japan and Sri Avantika Contractor from India, was also expected to lead to many other opportunities for Viet Nam in FDI attraction.

Source: VNS