Deputy Minister of Planning and Investment Tran Quoc Phuong last week said that Vietnam remains a magnet for foreign investors, who are planning to cultivate numerous projects in Vietnam in the near future.

“Macroeconomic stability is an important factor to reinforce investors in the investment environment in Vietnam,” Phuong said. “The Ministry of Planning and Investment (MPI) finds that foreign investors remain positive about Vietnam’s economic rise, showing their desire to continue investment here. Thereby, we can expect that the foreign direct investment (FDI) inflow in 2024 will reach as much as $39-40 billion.”

He elaborated that the ongoing expansion of many global-scale groups in the country still reinforces Vietnam’s position in the electric and electronic supply chain. These high-quality capital inflows also focus on localities that have advantages in investment attraction such as Bac Ninh, Quang Ninh and Ba Ria-Vung Tau provinces.

“The growth in FDI of these localities in the first six months is a positive sign for our expectations of $39-40 billion in 2024,” Phuong explained.

Expansion of global-scale groups reinforces Vietnam’s position, Phôt Le Toan

This figure, if realised, is higher than that recorded in 2023, when in the face of global economic uncertainties, the Vietnamese economy still fetched $36.6 billion in FDI, up 32.1 per cent on-year.

Economic recovery, an increasingly improved business and investment climate, and the government’s strong determination have helped Vietnam woo more FDI. MPI statistics showed that cumulatively as of June 20, Vietnam attracted nearly $15.19 billion, up 13.1 per cent over the corresponding period last year.

Notably, related disbursement in the first six months of the year reached $10.84 billion, representing an on-year ascension of 8.2 per cent. This is a record for the first half of a year in the last five years.

The top five localities in FDI attraction (Bac Ninh, Ba Ria-Vung Tau, Quang Ninh, Hanoi, and Haiphong) reported approximately $7.7 billion, accounting for nearly half of the capital influx of the whole country.

Between January and June, the amount of capital in Bac Ninh, Ba Ria-Vung Tau, and Quang Ninh reported increases of around 310 per cent, 1,230 per cent, and 308 per cent on-year, respectively.

Representatives of Phu My 3 Industrial Park in Ba Ria-Vung Tau said that in the first half of the year, the park attracted six foreign investors, with a total figure of more than $500 million. Two investors have been licensed, and the other four are completing licensing procedures.

The southern province will also continue to implement solutions to maintain the growth momentum. Le Anh Tu, deputy director of Ba Ria-Vung Tau Department of Natural Resources and Environment, said that the land clearance is one of the most important pieces of work during the process to implement the projects.

“Thus, in order to provide the best support for investors, the department will continue to coordinate with localities to guide in compensation and site clearance, creating clean available land to hand over to IP infrastructure developers as well as their tenants,” Tu said.

According to him, in dealing with investment procedures related to land and environment, the department also strives to provide timely consultancy for each project.

“For example, when tenants sign land renting contracts and implement projects, the department will urgently direct the Land Registration Office to carry out procedures for granting land ownership certificates in the fastest time, even faster than the regulations, so that businesses can immediately deploy and put the venture into operation on schedule,” Tu said.

In addition, since announcing its provincial planning towards 2030 with a vision to 2050 last December, Ba Ria-Vung Tau has established a list of public and off-budget ventures and introduced investment locations in industry, seaports, logistics, urban areas, and tourism services.

According to the MPI, the FDI growth since early this year will lay firm groundwork for a continued rise in this kind of funding until the year’s end backed by growing confidence of investors. In addition, an FDI climb will contribute to economic growth, which is expected to 6.5-7 per cent this year.

However, Vietnam must still resolve several problems to unlock the FDI inflows in the second half of the year.

The MPI noted in its report on the situation that the country must urgently prepare skilled human resources, especially in semiconductor electronics. The second urgent mission is to overcome electricity shortages in some localities, concentrating on many electronic industry projects.

Another important task is to review procedures to simplify and shorten processing times, especially procedures after granting investment registration certificates such as construction or fire prevention permits.