By the end of 2017, Vietnam will see soaring foreign investment capital, reaching $28 billion with an expected record in disbursed FDI capital of $17 billion. 

Vietnam is looking at a potential new record in foreign investment inflows

Soaring foreign investment capital

In its report submitted to the 12th Communist Party of Vietnam Central Committee’s sixth plenary meeting organised on October 4, the Ministry of Planning and Investment reported that in the nine months of this year, the country attracted $25.48 billion of foreign investment capital, including foreign indirect and direct investment capital, which was considered a spotlight of the 2017 socioeconomic indicators.

Besides, the expected figure of $28 billion for the whole year was mentioned in MPI’s report, a surprisingly strong growth in recent years.

Along with the increase in registered capital, disbursed capital for the whole year will also reach strong growth. Notably, in 2017, the disbursed capital is expected to reach $20 billion, $3 billion of which come from foreign investors’ M&A deals or foreign indirect investment capital.

The remaining $17 billion come from FDI capital, signifying an increase of 7.5 per cent on-year and 9.6 per cent higher than expectations. If the expected $17 billion in disbursed capital comes through, it will create a record to date. In 2016, the figure was $15.8 billion.

In the nine months of this year alone, $12.5 billion was disbursed, up 13.4 per cent on-year.

According to Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, in recent years, one factor attracting FDI capital was that along with the strong growth in registered capital, the gap between registered and disbursed capital has been narrowed down.

In the list of billion-dollar projects registered in these nine months, the added $2.5 billion capital from Samsung has already been disbursed. As of late March, Samsung registered to invest $17.3 billion in Vietnam, $12.5 of which has been disbursed.

According to the Ministry of Industry and Trade (MoIT), in the first nine months of the year, the import turnover soared due to the increased disbursement of FDI capital, including Samsung Display and Formosa, to import machinery and equipment.

All of the above figures show that Vietnam is really an ideal investment destination for foreign investors looking to invest and expand their operations.

Golden opportunity for Vietnam

As numerous countries in Asia are experiencing political instability, Vietnam is becoming an attractive investment destination due to its long-standing stability and great potential for economic development as well as the continuously improving business environment.

Especially, Vietnam’s hosting of the Asia-Pacific Economic Co-operation (APEC) 2017 is considered a golden opportunity for Vietnam to promote co-operation with APEC economies, almost all of which are Vietnam’s leading partners, including Japan, South Korea, the US, China, Thailand, and Taiwan. 

After hosting APEC 2006, Vietnam became a magnet to FDI capital, peaking in 2007-2008. The country hopes to recreate the achievement with APEC 2017.

According to Philip Falcone, chairman of Harbinger Capital Partners from the US, which has poured a massive amount of money into Grand Ho Tram Strip (Ba Ria-Vung Tau province), the presence of US President Donald Trump at the APEC Economic Leaders’ Week will bring large-scale investment opportunities and help Vietnam and the US promote investment co-operation. Besides, US investors will also step up investments in Vietnam.

At the recent meeting between CEO of Samsung Group Shin Jong-kyun and Prime Minister Nguyen Xuan Phuc, Shin Jong-kyun affirmed that along with the $17 billion registered capital in existing projects, Samsung plans to pour capital in other sectors, including telecommunications, as well as power plant, airport, and shipbuilding development.

These movements show that FDI capital will continue to flow into Vietnam.

According to MPI’s expectations, in 2017, Vietnam will lure in $27.5-28.5 billion in registered foreign investment capital, with the total disbursed capital reaching $21 billion. $17.5 billion of the disbursed capital will come in the form of FDI, and the remaining $3.5 billion from M&A deals.

VIR