Investment in Q1: Drop in Both Quantity and Investment Capital

The increasingly complicated outbreak of Covid-19 has greatly affected the travel of investors, as well as new investment decisions and the expansion of the existing foreign investment projects in Vietnam, making FDI attraction in the first three months of 2020 decrease both in quantity and total registered investment capital.

As of March 20, 2020, the total newly registered, adjusted and contributed capital to purchase shares of foreign investors in Vietnam reached US$8.55 billion, equaling 79.1% of the same period in 2019. Disbursed capital of FDI projects is estimated at US$3.85 billion, equaling 93.4% compared to the same period in 2019. Despite a decrease compared to the same period of 2019, in terms of value, the registered capital in the first three months of 2020 still increased against the same period of 2016-2018 period (up 47% compared to 2018, up 11% compared to 2017 and up 97% compared to 2016).

Accordingly, accumulated until March 20, 2020, Vietnam has 31,665 valid foreign investment projects with a total registered capital of US$370 billion. The disbursed capital of FDI projects was estimated at US$215.63 billion, equaling 58.3% of the total valid registered investment capital.

Exports of FDI enterprises (including crude oil) in Quarter I/2020 reached US$40.4 billion, equaling 97.1% over the same period, accounting for 70.8% of export turnover. Exports excluding crude oil was nearly US$39.9 billion, equaling 97.1% as compared to the same period in 2019, a slight increase (0.2%) compared to the same period in 2018, accounting for 67.5% of nationwide export turnover in the first three months of 2020. Due to the impact of the Covid-19 pandemic, the export turnover of the FDI sector decreased from the same period after many years of continuous increase.

Import of the FDI sector also decreased, reaching US$33.18 billion, equaling 99.2% of the same period and accounting for 59% of import turnover of the whole country.

In the first three months of 2020, although import-export turnover decreased against the same period last year, the FDI sector still had a trade surplus of US$7.2 billion including crude oil and US$6.7 billion excluding crude oil. Meanwhile, the domestic economic sector had a trade deficit of US$4.4 billion.

Electricity sector attracts a large amount of capital

Foreign investors have invested in 18 sectors, of which electricity production and distribution takes the lead with a total capital of over US$4 billion, accounting for 47.5% of the total registered investment capital. Manufacturing and processing industry ranks second with a total investment capital of US$2.72 billion, accounting for 31.9% of total registered investment capital. However, considering the number of projects, the processing and manufacturing industry still accounts for the majority (accounting for 29.7%). Next are the wholesale and retail business, real estate business with total registered capital of US$682 million and US$264 million, respectively.

Singapore leads with US$4.54 billion of investment

There are 87 countries and territories investing in Vietnam. Singapore leads the way with a total investment of US$4.54 billion, accounting for 53.1% of total investment capital into Vietnam; Japan ranks second with total investment capital of US$846.7 million, accounting for 9.9% of total investment capital. China ranks third with a total registered investment capital of US$815.6 million (including a newly licensed project of US$300 million and a capital-adjusted project of US$138 million), accounting for 9.3% of total investment. Next come South Korea, Hong Kong (China), and Taiwan (China).

Considering the number of projects, South Korea ranks first (210 projects); China ranks second (113 projects); Japan ranks third (93 projects); Singapore ranks fourth (64 projects).

Bac Lieu takes the lead with a US$4 billion project

Foreign investors have invested in 55 provinces and cities across the country. Bac Lieu leads with a major project with investment of US$4 billion, accounting for 46.8% of total registered investment capital. Ho Chi Minh City ranks second with a total registered capital of over US$1 billion, accounting for 12.3% of total investment capital (of which investment by capital contribution, share purchase accounts for a large proportion of 78.8% of the total registered investment capital of the city and 53.2% of the total capital contribution, share purchase and accounting for 42.3% of the total value of contributed capital of the whole country). Tay Ninh ranks third with US$506.8 million, accounting for 6% of total investment capital. Next come Hanoi, Binh Duong, and Ba Ria - Vung Tau.

Considering the number of projects, Ho Chi Minh City leads the way with 290 projects; Hanoi ranks second with 169 projects; Bac Ninh ranks third with 53 projects).