FDI Vietnam in May 2024: Recorded many positive changes

This report offers a comprehensive analysis of foreign direct investment (FDI) trends in Vietnam during May 2024. It delves into key indicators such as investment inflows, sectoral distribution, and major investor countries. With the aim to illuminate the investment climate and opportunities for doing business in Vietnam.

II. Report on foreign direct investment situation in May 2024 across the country

1. Overview

Foreign Direct Investment (FDI) in Vietnam in May 2024 recorded strong growth in both registered capital, disbursed capital, and the number of new projects. Exports also achieved positive results.

In May 2024, It is recorded many positive changes in the foreign direct investment (FDI) situation in Vietnam.

According to a report from the Ministry of Planning and Investment, total implemented capital, registered capital, number of projects and exports in May 2024 all increased compared to the same period in 2023, specifically:

Implemented capital: 1,970 million USD

Registered capital:

• New registration: 826.03 million USD
• Increased registration: 847.72 million USD
• Capital contribution, share purchase: 123.69 million USD

Project number:

• New level: 261 projects
• Capital increase: 95 projects
• Capital contribution and share purchase: 256 projects

Export:

• Exports (including crude oil): 22,866.21 million USD
• Exports (excluding crude oil): 22,762.76 million USD
• Import: 19,182.84 million USD

2. Detailed information on investment structure by industry

Regarding investment structure by industry, foreign investors have invested in 17 industries out of 21 national economic sectors. Outstanding industries in the first 5 months of 2024 can be mentioned as follows:

• Processing and manufacturing industry with a total investment capital of more than 7.43 billion USD, accounting for 67.1% of total registered investment capital, an increase of 11.9% over the same period in 2023;
• Real estate business with a total investment capital of nearly 1.98 billion USD, accounting for nearly 17.9% of total registered investment capital, an increase of 70.8% over the same period;
• Wholesale and retail and transportation and warehousing total registered capital reached more than 514.2 million USD and nearly 342.2 million USD, respectively.

The above data shows that the processing and manufacturing industry emerges as a focal point for foreign investment. In addition, daily essential consumer needs tend to increase. Simultaneously, the development of e-commerce and industrial parks is fueling the growth of traditional industries  such as wholesale, retail, and warehouse transportation. Meanwhile, the increasing demand for housing and other infrastructure is increasing rapidly. It opens up significant opportunities for businesses looking to invest in the real estate sector in Vietnam.

Foreign direct investment (FDI) into Vietnam is experiencing a robust growth. Manufacturing and processing industries, along with retail, transportation, and real estate services, are attracting significant FDI inflows.

3. Detailed information on investment structure by partner

Regarding investment structure by partner, data from the Ministry of Planning and Investment shows that Singapore, Hong Kong, and Japan are the three leading partners in terms of total investment capital in the first 5 months of 2024, of which:

Singapore is Vietnam’s largest investment partner in May 2024 with a total investment capital of nearly 3.25 billion USD. It accounts for 29.3% of total registered FDI capital, an increase of 28.2% over the same period of 2023.

Hong Kong ranked second with a total investment capital of 1.45 billion USD. It accounts for 13.1% of total registered FDI capital, more than 2.2 times higher than the same period of 2023.

Japan is the third largest investment partner with a total investment capital of 1.23 billion USD. It accounts for 11.1% of total registered FDI capital.

Vietnam continues to be a appealing destination for top global investors, with Singapore leading the way, recording a 28.2% growth.

In terms of number of projects alone, China is the leading partner in the number of new investment projects, accounting for 28.3%. In addition, Korea leads in the number of capital adjustments accounting for 24.1%.

It can be seen that Vietnam has maintained the trust of its traditional investors in the first five months of 2024. With Asia continues to be the primary source of foreign investment.

4. Detailed information on investment structure by locality

Foreign investors have invested in 47 provinces and cities across the country in the first 5 months of 2024.

The leading: Ba Ria – Vung Tau

• With a total registered investment capital of more than 1.52 billion USD.
• It accounts for 13.8 % of total investment capital in the country, more than 12 times higher than the same period.
• Infrastructure development has been a key factor in attracting foreign investors to the province. Favorable investment policies also played a significant role in creating an attractive investment environment. These combined factors have successfully drawn foreign direct investment to the province.

Top 2: Ha Noi

• Total registered investment capital: With nearly 1.14 billion USD.
• It accounts for 10.3% of total registered investment capital and down 39% over the same period in 2023.
• Vietnam’s capital remains attractive destination for foreign investors. Despite a recent slowdown in investment activities, the city continues to maintain its appeal due to a favorable investment environment. Additionally, the robust growth of the service and technology sectors has contributed to its ongoing success.

Top 3: Bac Ninh

• Total registered investment capital: With nearly 1.06 billion USD
• It accounts for nearly 9.6% of the total investment capital of the country.
• Bac Ninh is a developed industrial province. The province have many industrial parks and large investment projects. Particularly, it is known for the large-scale industrial projects in the field of processing and manufacturing.

Next is Ho Chi Minh City, Dong Nai, Quang Ninh,… In terms of number of projects, Ho Chi Minh City leads the country. The city accounted for 37.8% of new projects, 16.4% of capital adjustment projects, and a significant 71.1% of total foreign direct investment (FDI) capital.

It can be seen that investment capital is heavily concentrated in provinces and cities that have many advantages in attracting foreign investment (good infrastructure, stable human resources, efforts to reform administrative procedures and dynamic to attract foreign investment,…) such as Ba Ria – Vung Tau, Hanoi, Bac Ninh, Ho Chi Minh City, Dong Nai, Quang Ninh, Bac Giang, Hai Phong, Thai Nguyen, Hung Yen.

Foreign direct investment (FDI) was primarily concentrated in these 10 localities. These 10 localities alone account for 74.7% of new projects and 75.2% of the country’s investment capital in the first 5 months of 2024.

FDI accounts for 75% of total investment, concentrating in provinces with favorable policies.

5. Conclusion

Overall, the foreign direct investment situation in Vietnam in May 2024 reflects many positive signals and strong development prospects after being affected by the economic downturn from the COVID-19 pandemic. It forecasts that in the coming months, FDI inflows will continue to increase, contributing to promoting economic growth and creating more jobs for workers. Currently, Vietnam is still considered an ideal destination for business and investment for foreign investors.

For the most up-to-date information on foreign direct investment and business registration in Vietnam, please refer to our latest legal reports and articles. These reports provide valuable insights into the business environment and support policies.

References:

Business registration status in May 2024 – City Department of Planning and Investment. HCM 

Situation of foreign investment attraction in Vietnam and Vietnam’s investment abroad in the first 5 months of 2024