REVIEW
of
FINANCE -
November, 2018
41
total registered capital of USD 42,433.9 million.
Aeon Group has built 3 Aeon Malls in Ha Noi,
Da Nang and Ho Chi Minh City, 3 biggest
cities of Vietnam. Coming in the next place
was Singapore with subtantially increasing FDI
inflows to Vietnam which mainly focused on
processing and real-estate industries.
Taiwan was the forth biggest partner with
2,516 projects and the total registered capital of
USD 31,885.5 million invested in 21 economic
sectors, mainly processing and manufacturing
(90% of the total capital) and waste processing
(7% of the total capital)...
FDI inflows to Vietnam by economic sectors
As of December 31
st
2016, industry and
construction were the most attracted FDI sectors
with 13,312 projects and registered capital of
USD 199,781.8 million, accounting for 68.2%
of total FDI capital. This source of capital has
contributed to forming some key industries of the
economy such as telecommunications, oil and gas
exploitation, processing, electronics, information
technology... contributing significantly to the
shift of the Vietnamese economic structure,
diversification of products, improvement of
the value of export goods, absorbing advanced
technologies, and helped improve infrastructure
in localities.
The service sector has attracted 8,760 projects
with a total registered capital of $ 90,344.8
million, accounting for 30.76% of total FDI. FDI
in this sector has contributed to the creation of
new high-quality services such as hotels, offices,
banks, insurance, etc. These services have
contributed to the creation of new methods in the
distribution of goods, consumption, stimulated
domestic trade activities and helped increase the
export turnover.
In addition, the agriculture, forestry and
aquaculture sector has attracted 522 projects with
a total capital of US $ 3,576.8 million (accounting
for 1.22% of total registered FDI). The investment
projects were various and equalized, focusing on
all fields such as cultivation, animal husbandry,
forestry and forest product processing,
forestation and production of paper materials,
sugarcane production. This has contributed to
creating new jobs, improving income for local
people, improving the socio-economic life of
many agricultural and rural areas, improving
infrastructure, and thus contributing to poverty
reduction.
It can be seen that since the opening of the
economy, especially since the promulgation
of the Law on Foreign Investment in Vietnam,
FDI inflows into Vietnam have been increasing.
It is expected that in the near future, with
Vietnam’s bilateral and multilateral Free Trade
Agreements signed and implemented, Vietnam
will increasingly attract FDI. However, the
business environment of Vietnam still has many
barriers to foreign investors. Challenges of
the Vietnamese business environment include
the lack of consistency in the legal framework
and business conditions, lack of transparency
and accountability, high operating costs and,
in particular, poor performance. The coming
time will be an important and drastic time for
the Government of Vietnam to continue to cut
costs for businesses and improve the investment
and business environment in order to create
competitive advantage to attract FDI.
References:
1. Nguyen Thi Mai Huong, “FDI attraction to Vietnam’s agriculture: the
current situation and solutions, Forestry Science and Technology
Magazine, Volume 3, Pages 148 – 157, 2017;
2. Chu Tien Quang, “FDI in economic restructuring process associated
with the transformation of growth pattern towards enhancing
quality, effectiveness and competitiveness in the period of 2013 –
2020”
);
3. Top 10 countries with the largest FDI to Vietnam, (
;
4. General Statistics Office (gso.gov.vn).
FIGURE2:REGISTEREDFDIINTOVIETNAM(1988-2016)BYMAJOR
INVESTMENTPARTNER(cumulativeprojectsvalidtoDecember31
st
2016)
Source: GSO
