According to the Vietnam General Statistics Office (GSO), from the beginning of the year to 20 November 2015, Vietnam attracted 1855 FDI newly licensed projects with the registered capital of US$13.55 billion, an increase of 30% in the number of projects and 1.1% in the capital from the similar period in 2014. In the same period, 692 times of license-granted projects from the previous years registered to raise the capital with additional capital of US$6.67billion.
The total registered capital of both newly and additionally financed projects reached US$20.22 billion, grew by 16.7% against the last year’s same period. Realized FDI capital in eleven months of this year was estimated to gain US$13.20 billion, rose 17.9% from 2014’s similar period.
Source: Vietnam GSO
In eleven months, the manufacturing industry attracted the largest number of FDI projects with the registered capital of US$12.93 billion, accounting for 64% of the total registered capital; the electricity, gas, warm water, steam and air conditioning generation and supply reached US$2.78 billion, accounting for 13.7%; the real estate business attracted US$2.33 billion, accounting for 11.5%; other industries received US$2.18 billion, representing 10.8%.
The country had 47 provinces and cities directly under the central management which received newly licensed FDI projects from 56 nations and territories in eleven months.
Regarding investing countries,
South Korea is the biggest foreign investor. Vietnam is now in the second
position, after Singapore, in South Korean outward investors’ list of the
fastest growing markets. On a hand, FDI from South Korea is pushed up by the
FTA reached between Vietnam and Korea.
On other hand, South Korean investor moves from China to Vietnam due to
higher production and business cost in China. In fact, China raised its minimum
wage by 17 percent last year and plans to raise the wage by 13 percent a year
in the context of the global economic recovery, the drop in oil prices and
unpredictable exchange rates.
Source: Vietnam GSO Domestic law has expanded market access in some sectors beyond those of Vietnam’s FTA commitments. Since July 2015, a number of new laws and regulations governing foreign investment, enterprises, real estate and foreign ownership limits have come into effect. For example, the new Law on Investment and the new Law on Enterprises have remarkable improvement as follows:
• Clarify definitions of foreign - invested enterprises;
• Facilitate M&A activities;
• Reduce the number of prohibited and conditional business sectors;
• Reduce statutory business licensing time
• Provide more flexibility with regard to corporate governance (such as multiple legal representatives and lower voting thresholds); and
• Create more favorable conditions for shareholder lawsuits.
In addition, new laws and regulations affecting foreign ownership of real estate have come into effect. Foreigners can now own apartments and for the first time buy houses, sublease and inherit real estate.
With the coming into effect of several international trade agreements and more particularly, investors are looking forward to the positive changes that will be implemented and that will further business incentives as well as contribute to Vietnam’s growth.
In the coming time, to improve business environment - a condition to attract more FDI, Vietnam will push up the issuance of guiding regulations for many new laws and regain confidence from investors who were experiencing delays in the processing of applications.
