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FDI: Be cautious with capital contribution and share purchase

Monday 30, 12 2019
As of December 20, 2019, the total foreign direct investment (FDI) in Vietnam reached US$ 38 billion, an increase of 7.2% compared to 2018.
FDI: Be cautious with capital contribution and share purchase

Accordingly, in 2019, there were more than 3,880 newly licensed projects with a total registered capital of US$ 16.7 billion, up 27.5% in the number of projects and down 6.8% in the total registered capital compared to the previous year. Licensed projects from previous years registered to adjust investment capital with the additional capital of US$ 5.8 billion, down 23.6%. There were more than 9,840 times of capital contribution and share purchase by foreign investors with a total value of capital contribution of US$ 15.5 billion, up 56.4%.

Realized FDI capital in 2019 was estimated at US$ 20.4 billion, up 6.7% over the previous year. In 2019, the processing industry received the largest FDI capital, accounting for 72.2% of the total newly registered capital while real estate business accounted for 10.8%.

Among 81 countries and territories that have newly licensed FDI projects in Vietnam in 2019, South Korea is the largest investor with more than US$ 3,668 million, accounting for 21.9% of the total newly registered capital; followed by Hong Kong, accounting for 16.8% and China accounting for 14.2%; Singapore accounts for 12.5% ...

Commenting on the situation of FDI attraction in Vietnam, Mr. Nguyen Viet Phong, Director of the Department of Construction Statistics and Investment Capital (General Statistics Office), said that FDI attraction is the highlight of economic growth in 2019 when it continues to set new peaks compared to previous years.

The reason behind this is because the business environment has been better, especially when the 2014 Investment Law came into effect and helped diversify investment forms, gradually shifting to capital contribution and share purchase. Specifically, in 2019, it reached more than US$ 15 billion, accounting for 40% of total investment capital, while in 2018, it was only nearly US$ 10 billion, accounting for 28%.

FDI: Be cautious with capital contribution and share purchase

Although this is a positive trend, according to Mr. Phong, in the coming years, in addition to being steadfast in attracting FDI, management agencies need to closely monitor capital contribution and share purchase to avoid being capitalized by foreign capital, leading to the dominance of economic sectors. Moreover, it is necessary to take measures to direct capital sources into new technology sectors and fields, with high added value and low environmental pollution.

Australia is the favorite destination of Vietnamese investors

Also, according to the report by GSO, Vietnam's total offshore investment capital (newly and additionally granted capital) in 2019 reached over US$ 508 million, of which wholesale and retail, repair of automobiles, motors, motorbikes and other motor vehicles accounting for 23.9%; agriculture, forestry and fishery reached US$ 86.1 million, accounting for 16.9% ...

Among 32 countries and territories receiving investment from Vietnam, Australia was the leading country, accounting for 30.4%, while the United States ranked 2nd with 18.4%, followed by Cambodia with 14.5%.

​Read more: Vietnam’s FDI inflow reaching USD 32 billion

Categories:
Economy News

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