Vietnam's Total Foreign Investment has reached US$9.27 billion in the span of four months (GSO)

The General Statistics Office reported that foreign investment disbursed in Vietnam reached US$6.28 billion in the first four months, the highest in five years. Additionally, over 51,000 new enterprises were established during this period.

Vietnam continues to attract foreign enterprises seeking investment opportunities and strategic partnerships. With a thriving economy, strategic geographical location, and favorable policies, Vietnam offers abundant opportunities for foreign direct investment (FDI) across various sectors.

FDI in Vietnam for four first months of 2024

Foreign investment in Vietnam increased to US$9.27 billion, a 4.5 percent rise from the previous year, according to the General Statistics Office (GSO). The country attracted an estimated US$6.28 billion in FDI from January to April of this year, the highest level in the past five years.

New projects worth US$7.11 billion were approved, reflecting a significant increase of 28.8 percent in project numbers and 73.2 percent in capital.

The processing and manufacturing industry led the FDI influx with nearly US$4.93 billion, making up 78.5 percent of the total, followed by real estate with US$607.6 million. Other top FDI beneficiaries were wholesale & retail, and scientific and technological activities.

Investment into Vietnam came from 50 countries and territories during this period, with Singapore leading the pack at US$2.59 billion, followed by Hong Kong, Japan, China, Turkey, and Taiwan.

An additional US$1.23 billion was invested in 345 existing projects, while US$929.6 million was allocated for stake purchases and capital contributions, marking a 25.6 percent decrease and a 70.1 percent decrease, respectively, compared to the previous year.

In Q1, Hanoi and Bac Ninh province were the top recipients of FDI.

Over 51,000 new businesses were established during the January to April period

In the first four months of this year, 51,550 new enterprises were founded, according to GSO data released on April 29th.

In April alone, authorities approved 15,300 newly established enterprises. However, the month also saw a 13.6 percent decrease in the number of firms entering or rejoining the market, with a total of 8,300.

Nationwide, a total of 29,700 companies entered or re-entered the market, reflecting a 2.4 percent increase compared to the previous year.

The overall tally for new enterprises or those returning to operation in the year's first four months reached 81,300, a notable 3 percent rise from the same period in 2023.

Of these, 50,700 firms were registered in the agriculture, forestry, and fisheries sector, up by 1.2 percent year on year, followed by the service sector with 38,500 firms (up 3.2 percent), and the industrial and construction sector with 12,500 firms (up 4 percent).

Conversely, the January to April period also saw 60,900 enterprises withdrawing from the market, marking a significant 21.9 percent increase compared to the previous year.

Spotlight on the sector: E-commerce and the digital economy

The E-commerce and digital economy sector in Vietnam is experiencing rapid growth, particularly in the shoppertainment industry. TikTok Vietnam has seen a significant increase in both merchants and sales, solidifying its position as the country's second-largest online marketplace. With 67 million users in early 2024, compared to 50 million the previous year, TikTok Vietnam is quickly gaining ground and competing with established platforms like Facebook and YouTube.

The revenue from online B2C retail nearly doubled from 2018 to 2023 and is expected to reach US$26.31 billion by 2024. Deliveries through major e-commerce platforms also experienced a substantial increase of over 50 percent in 2023.

Vietnam has also been highlighted in the e-Conomy SEA 2022 report, with B2C revenue projected to grow by 35 percent annually, reaching 310 trillion VND in 2024.

Vietnam's healthcare and education startups are attracting the highest amount of investment

In 2023, Vietnam maintained its third position in both the number of investment deals and total investment in startups across Southeast Asia. According to the 2024 Technology and Innovation Investment Report unveiled at the Vietnam Innovation Forum, Vietnamese startups attracted a total investment of US$529 million. While Singapore led in both deal count and total investment, Indonesia followed closely behind.

Vietnamese startups' total investment of US$529 million in 2023 experienced a 17 percent decrease compared to the previous year. Despite this decline, the number of startup deals in Vietnam dipped by only 9 percent, totaling 122 deals. The trend indicates that global economic shifts have influenced Vietnam's technology investment landscape.

However, Vietnam's decline in investment was more moderate compared to the global venture capital investment drop of 35 percent to US$345 billion.

In 2023, nearly 100 funds were invested in Vietnamese startups, with Singaporean investors being the most active, followed by domestic investors. The healthcare sector witnessed the highest investment, soaring by 391 percent from the previous year, while the education sector also experienced a substantial increase of 107 percent.

Conclusion

Based on the information presented, it is evident that Vietnam's economy continues to attract significant foreign investment, especially in sectors such as processing and manufacturing, real estate, wholesale & retail, and scientific and technological activities. The surge in foreign direct investment (FDI) in Vietnam, particularly in the first four months of 2024, highlights the country's appeal to investors from various countries and territories, with Singapore leading in investment figures.

Additionally, establishing over 51,000 new enterprises in the same period reflects a dynamic business environment in Vietnam. The growth of sectors like e-commerce and digital economy, as well as the noteworthy investments in healthcare and education startups, further demonstrate the diverse opportunities present in the Vietnamese market.

Looking ahead, with favorable policies, strategic location, and a thriving economy, Vietnam is poised to continue its trajectory as a promising destination for foreign investment and business growth across multiple sectors.