Vietnam's Foreign Direct Investment (FDI) Soars in 2023

Vietnam’s Foreign Direct Investment (FDI) Soars in 2023

In the face of global economic uncertainties, the Vietnamese economy still maintains stability, attracting a remarkable $36.6 billion in foreign direct investment (FDI) in the year 2023.

Despite the challenges posed by the global economic downturn, FDI experienced a robust 32.1% increase compared to the previous year, demonstrating the resilience of Vietnam’s economy.

According to the Foreign Investment Department (Ministry of Planning and Investment), the recovery of foreign investment capital flows into Vietnam in the last months of the year has caused this capital flow in 2023 to increase sharply compared to 2022.

As of December 20, 2023, the total registered FDI in Vietnam reached nearly $36.61 billion, marking a substantial 32.1% increase from the same period the previous year. Additionally, the realized capital of foreign-invested projects reached approximately $23.18 billion, a 3.5% increase compared to 2022 and setting a record-high disbursement level.

Breaking down the FDI figures, within the total registered investment of $36.6 billion, newly registered capital reached almost $20.19 billion, reflecting a remarkable 62.2% increase. The number of newly registered projects also reached 3,188 projects, an increase of 56.6%.

Apart from newly registered capital, 2023 also saw 1,262 projects registering adjustments to their investment capital, a 14% increase from the previous year. Although the total investment capital in these adjusted projects increased by over $7.88 billion, it marked a 22.1% decrease compared to the corresponding period of 2022.

In terms of investment channels, FDI through capital contribution and share purchase reached over $8.5 billion, representing a substantial 65.7% increase from the previous year. Despite a slight decrease in the number of transactions (3,451 transactions, down by 3.2% compared to the same period of 2022), the increased capital contribution highlights the growing confidence of investors.

The Foreign Investment Agency, in its assessment of the FDI landscape in Vietnam in 2023, emphasized the role of the government, the Prime Minister, and the close coordination with various ministries and localities in actively addressing and removing legal obstacles hindering investment and business operations. This proactive approach has proven effective in stabilizing businesses, improving production and business activities, and fostering continued investment.

The substantial increase in newly registered capital further indicates that Vietnam remains a secure and attractive destination for investors. Despite a reduction in adjusted investment capital, the improved rate of decrease suggests sustained investor confidence in the long-term business prospects in Vietnam.

Examining the sectors of investment, foreign investors in 2023 participated in 18 out of the total 21 national economic sectors. The processing and manufacturing industry led the way, attracting over $23.5 billion in investment, accounting for 64.2% of the total registered capital and a 39.9% increase from the previous year. The real estate business sector followed with nearly $4.67 billion in total investment, representing over 12.7% of the total registered capital and a 4.8% increase.

Other sectors such as electricity production and distribution and finance and banking secured the third and fourth positions, registering total registered capital of over $2.37 billion (a 4.9% increase) and nearly $1.56 billion (an almost 27-fold increase), respectively.

In terms of investing countries, 111 countries and territories invested in Vietnam in 2023. Singapore led the way with over $6.8 billion in total investment, comprising 18.6% of the total investment in Vietnam and a 5.4% increase from 2022. Japan came in second with nearly $6.57 billion, representing over 17.9% of the total investment and a remarkable 37.3% increase from the previous year.

Following closely, Hong Kong claimed the third spot with registered capital exceeding $4.68 billion, accounting for almost 12.8% of the total investment and doubling compared to the same period. China, South Korea, Taiwan, and other countries occupied subsequent positions.

Analyzing the number of projects, China took the lead in new project registrations, accounting for 22.2% of the total. South Korea led in the number of projects adjusting investment capital (25.9%) and capital contribution through share purchase (27.8%).

Vietnam’s impressive FDI performance in 2023 not only demonstrates its resilience in the face of global economic challenges but also underscores its attractiveness as an investment destination. As the government continues to actively support and facilitate foreign investment, Vietnam is ready to maintain its momentum and emerge as a key player in the global economic landscape.

ASL LAW is the top-tier Vietnam law firm for in-depth legal advice in Vietnam and internationally. If you need any advice, please contact us for further information or collaboration.


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