According to the Foreign Investment Agency under the Ministry of Planning and Investment, the total amount of FDI capital registered in Vietnam in July exceeded US$2.8 billion, up 8.9 percent compared with June, 41.9 percent compared with May, and 85.7 percent year-on-year.

An automobile assembly line at Toyota Vietnam - photo: Can Dung

In the first seven months, a total of more than US$16 billion of FDI was registered in Vietnam, including US$7.84 billion of capital of new projects, up 38.6 percent year-on-year; US$4.16 billion of capital increases of ongoing projects; and US$4.14 billion of capital contributions and stock purchases, up 60.7 percent.

Notably, the amount of disbursed FDI continued growing and reached about US$11.58 billion in the first seven months, up 0.8 percent year-on-year.

Do Nhat Hoang, Director of the Foreign Investment Agency, said these results reflect foreign investors’ interest and confidence in Vietnam’s investment environment, as well as their willingness to make new investment decisions.

Given positive changes in July, Vietnam is optimistic about FDI attraction in the time to come.

The positive FDI attraction results also show that FDI decreases in the recent period were not due to Vietnam’s worsening competitive advantages but to the common trend of global investment flows.

New FDI projects in Vietnam are concentrated in localities with adequate infrastructure and stable human resources, which have made great efforts to reform administrative procedures and been dynamic in investment promotion, such as Hanoi, Ho Chi Minh City, Bac Ninh, Bac Giang, Binh Duong, Hai Phong, and Dong Nai.

Assembling electronic components

To attract more FDI, in the opinion of experts, Vietnam should continue institutional improvements and further slash business conditions which currently hinder production and trade. At the same time, Vietnam needs to accelerate administrative reform and effectively operate the one-stop administration system to create a favorable business environment that facilitates the establishment and development of new companies. Preferential policies and mechanisms which Vietnam applies to attract foreign investors should be checked and adjusted in the context of the global minimum tax scheduled to take effect from January 1, 2024. Along with improving the quality of human resources, Vietnam should upgrade the transport infrastructure to enhance the connection between provinces and economic zones to facilitate FDI attraction.

The State should eliminate all unofficial costs, increase policy dialogue and take timely measures to resolve difficulties facing FDI companies, especially problems related to administrative procedures and land rent, and those related to investment in industrial parks.

Localities nationwide and those having industrial parks in particular should launch investment promotion campaigns to affirm that Vietnam is a safe and reliable investment destination.

Nguyen Huong Giang, the Chair of the People’s Committee of Bac Ninh Province - a locality that has successfully attracted FDI, said that one of the factors making Bac Ninh attractive to foreign investors is its willingness to accompany businesses through difficulties. Bac Ninh also attaches great importance to the planning work which is crucial for the province to attract large-scale projects, she added.