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Business Opportunities in Vietnam: FDI 2022

Business Opportunities in Vietnam: FDI 2022

For nearly four decades (1986 – 2022), business opportunities in Vietnam has been considered a successful model in attracting foreign direct investment (FDI) thanks to its attractive investment environment, stable political foundation, and potential for growth. economic growth is quite high. In 2022, foreign investors will continue to pour capital strongly into Vietnam, still viewing Vietnam as an attractive destination with geographical advantages, institutions, and an increasingly improved investment environment.

Status of FDI Attraction of Business Opportunities in Vietnam 2022

Status of FDI Attraction of Business Opportunities in Vietnam 2022

In 2022, the total registered FDI in Vietnam reached nearly 27.72 billion USD, the realized FDI capital reached a record 22.4 billion USD, up 13.5% over the same period in 2021. This is the amount of FDI capital. the highest performance in 5 years (2017 – 2022). Accumulated in the period 1986 – 2022, business opportunities in Vietnam has attracted nearly 438.7 billion USD of FDI; in which, 274 billion USD has been disbursed, accounting for 62.5% of the total valid registered investment capital.

Some new projects have been started with large capital such as Heineken Brewery inaugurated in September 2022 in Vung Tau. With total investment after the capital, the increase is 9,151 billion VND, a capacity of 1.1 billion liters/year, 36 times higher than before. As the largest brewery in Southeast Asia, Heineken has the fastest canning line among Heineken breweries worldwide. The Japanese LNG Quang Ninh Gas Power Plant Project has been granted a new investment registration certificate, with a total investment of nearly 2 billion USD, and will be started in October 2022.

Investment scale: In 2022, many projects with increased investment capital from the beginning of the year such as production and manufacturing projects of electronic and high-tech products will be increased capital on a large scale; Samsung Electro-mechanics Vietnam project (Thai Nguyen) increased capital twice: An increase of 920 million USD (1st time) and 267 million USD (2nd time); Samsung HCMC CE Complex Electronics Co., Ltd. project increased capital over 841 million USD; Projects of factories for manufacturing electronics, networking equipment, and multimedia audio products in Bac Ninh (increasing by USD 306 million), in Nghe An (increasing by USD 260 million) and in Hai Phong (up by USD 127 million) ).

Investment partners: In 2022, there are 108 countries and territories investing in Vietnam; in which, Singapore leads with a total investment of nearly 6.46 billion USD, South Korea ranks second with nearly 4.88 billion USD, Japan ranks third with total registered investment capital of more than 4.78 billion USD, followed by China ($2.52 billion), Hong Kong ($2.22 billion).

In 2022, Korea is still the investment partner making new investment decisions as well as expanding investment projects and contributing capital, and buying the most shares (accounting for 20.4% of new projects, 32.6) % of adjustments, and 34.1% of times of capital contribution and share purchase).
Status of FDI Attraction of Business Opportunities in Vietnam 2022

Investment fields: Foreign investors have invested in 19/21 economic sectors, in which: The processing and manufacturing industry leads the way with a total investment of more than 16.8 billion USD, accounting for 60 .6% of total registered investment capital in 2022; the real estate business ranked second with a total investment of more than 4.45 billion USD, accounting for 16.1% of total registered investment capital; followed by electricity production and distribution (with registered investment capital of 2.26 billion USD), professional science and technology activities with registered capital of nearly 1.29 billion USD; The rest are other industries.

In terms of the number of new projects, the wholesale and retail sectors, the processing and manufacturing industries, and professional science and technology activities attracted the most projects, accounting for 30%, and 25.1 respectively. % and 16.3% of total projects. Business opportunities in Vietnam is an attractive destination for foreign investors and is facing a golden opportunity to attract large amounts of investment capital into economic zones and industrial zones.

Investment allocation: Foreign investors have invested in 54 provinces and cities across the country in 2022. Ho Chi Minh City leads the way with a total registered investment capital of more than 3.94 billion USD, accounting for 14 .2% of total registered investment capital and an increase of 5.4% over the same period in 2021. Binh Duong ranked second with a total investment of more than 3.14 billion USD, accounting for 11.3% of total capital, up 47, 3% over the same period in 2021. Quang Ninh ranked third with a total registered investment capital of nearly 2.37 billion USD, accounting for 8.5% of total capital and more than doubled over the same period in 2021.

Regarding the number of new projects, foreign investors focus on investing in big cities with convenient infrastructure such as Ho Chi Minh City and Hanoi. Ho Chi Minh City leads in the number of new projects (43.9%), and the number of capital contributions to buy shares (67.6%), and is second in the number of projects with capital adjustment (17.3% behind). Hanoi (18.6%).
Status of FDI Attraction of Business Opportunities in Vietnam 2022

Investment form: In 2022, the total newly registered capital, additionally registered capital, and capital contribution and share purchase by foreign investors will reach nearly 27.72 billion USD; in which, newly registered capital decreased, but the number of new investment projects increased, adjusted investment capital also increased compared to the same period in 2021.

Although newly registered capital decreased (18.4%), disbursed foreign investment capital reached nearly 22.4 billion USD, up 13.5% over the same period in 2021 and the number of new investment projects increased. increased (up 17.1%, reaching 2,036 projects) compared to the same period in 2021. The high disbursement is a good sign that businesses are gradually recovering, maintaining, and expanding production activities, business after the Covid-19 pandemic. In addition, a number of large Korean corporations are researching, understanding, and planning to implement investment projects in the near future.

The amount of additionally registered capital increased by 12.2% and the number of adjustments increased by 12.4% with 1,107 adjustments in 2022 compared to the same period in 2021, confirming the confidence of foreign investors in the economy and environment. investment market of Vietnam. As a result, foreign investors have decided to invest in expanding many existing projects. The fact that foreign investors continuously increase their investment capital in Vietnam shows that foreign investors continue to put their faith in Vietnam’s economy and investment environment, so they have made decisions. plan to expand investment in existing projects.

Many big investors in the world such as Apple, Goertek, Foxconn, and Luxshare are planning to move production activities and increase investment capital into Vietnam. Apple has moved 11 factories of Taiwanese enterprises in its supply chain to Vietnam, confirming the “transformation” step for Vietnam to become a new production center of the world. The moves of foreign investors further prove that Vietnam is really becoming a new production center of the world, especially in the fields of electronics and high technology. According to JP Morgan, Vietnam will contribute 20% of the total output of iPads and Apple Watches, about 5% of MacBooks, and 65% of AirPods by 2025. Vietnam is emerging as a center for components manufacturing and power generation services. for small-volume products (Apple Watch, Mac, iPad) and is becoming the main AirPods production center.

Some problems still exist in attracting Business Opportunities in Vietnam FDI 2022

Some problems still exist in attracting Business Opportunities in Vietnam FDI 2022

Total investment capital newly registered, adjusted, and contributed capital to buy shares of foreign investors in Vietnam reached 27.72 billion USD, down 11% compared to the same period in 2021. The decline clearly shows the difficulty. common short-term difficulties of the world economy as well as of Vietnam in the face of many risks and fluctuations in 2022. The trend of outward investment in developed countries shows signs of slowing down despite the Covid-19 pandemic. 19 has been controlled in the world and in Vietnam. The decline in foreign investment in Vietnam is due to the influence of a number of fundamental factors such as investor uncertainty and the risk situation due to the influence of political conflicts in some countries around the world. gender; Russia-Ukraine conflict, high price pressure, and inflation; global commodity demand tends to decrease; global financial conditions tend to tighten; supply chain disruption has not been completely overcome. These factors put significant downward pressure on the global FDI inflows in 2022, negatively affecting the outward investment flows of major economies, especially investment partners of Vietnam. impact on attracting foreign investment to Vietnam.

In 2022, although FDI enterprises have positive assessments of the business environment in Vietnam, such as a decrease in inspection activities, relatively positive changes in administrative procedure reform in many areas. Informal costs continue to be eliminated, and labor quality and infrastructure quality have relatively clear improvements. However, there are still some shortcomings that need to continue to be overcome such as: Focusing on reforming administrative procedures, but some enterprises still have troubles with tax, fire prevention, import and export, investment registration, and insurance. social insurance. Business opportunities in Vietnam needs to create more favorable conditions for businesses in carrying out procedures for implementing investment projects with construction works such as building permits, fire prevention and control appraisal, and environmental impact assessment. The fight against corruption and negativity needs to continue to be promoted, especially in a number of areas such as import and export, inspection, court proceedings, and administrative procedures for land.

The reduction of newly registered capital affects not only the disbursed capital but also the economic development in the coming time. The decrease in attracting new investment shows that the preparation steps in terms of land and human resources are not good. The main reason for the decrease in newly registered capital is due to:

Firstly, policies to control the Covid-19 epidemic have made it difficult for foreign investors to move to Vietnam to explore investment opportunities as well as carry out investment project registration procedures. in the last months of 2021, thereby affecting the number of newly granted investment projects in the first months of 2022.
Some problems still exist in attracting Business Opportunities in Vietnam FDI 2022

Second, the global market is facing many fluctuations due to the influence of the geo-political conflict in Europe, high inflation pressure, and supply chain disruptions, which are negatively affecting the outflow of investment capital. foreign investors of major economies, especially investment partners of Vietnam.

Third, the decrease in newly registered capital is due to many projects with a capital of over 100 million USD being granted investment registration certificates in 2021 (accounting for 62.8% of the total newly registered capital in 2021). While in 2022, there are only a few new investment projects with a capital scale of over 100 million USD (accounting for 37.2% of total investment capital).

In addition to the above main reasons, there are also a number of other limitations that cause the newly registered capital in 2022 to decrease, such as Administrative procedures, approval documents, and survey permit issuance are slow to make operations and public project development is slow to start; lack of human resources, especially human resources in the field of information technology, artificial intelligence – the core factors determining the competitiveness of Vietnam in the future. Some problems in tax issues, investment incentives, less open visa policy, and the ongoing “brain drain” phenomenon also negatively affect Vietnam’s investment attraction and expansion.

The comprehensive decentralization of local authorities to license and manage FDI projects in the area has promoted the creativity of many localities in attracting FDI. However, due to mass decentralization, spreading, and not fully taking into account local characteristics, it has led to a situation where localities compete to attract FDI at all costs, calling for investment by issuing many opportunities. Regulations and investment incentive policies are not in accordance with authority, exceed regulations, and many projects disrupt the planning, even licensed, and then cannot be implemented and have to revoke the license. Therefore, it is necessary to develop a screening toolkit to gradually overcome the limitations of the current appraisal of FDI projects, and at the same time receive capital flows in line with the orientation of FDI attraction in the new period of Vietnam. , focusing on quality, instead of running after quantity.

In short, there are many problems related to the investment environment, if Business opportunities in Vietnam do not improve soon, it will be difficult to accelerate in the race to attract foreign investment in the near future.

You can read the previous article here: Business Visa to Vietnam: Application and Renewal

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Q: What is the currency in Vietnam?

The currency in Vietnam is the Vietnamese dong (VND). The exchange rate as of February 2023 is around 23,000 VND to 1 USD.

Q: What are the main industries driving Vietnam’s economy?

Vietnam’s economy is driven by several key industries, including manufacturing, agriculture, and services.

Q: What is the current state of the economy in Vietnam?

Vietnam’s economy has been experiencing rapid growth in recent years, with a 7.11% growth rate in 2019 before being impacted by the COVID-19 pandemic in 2020.

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huyho

Professional Content Writter about the office space for lease, coworking, serviced office, retailed space.

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