The production line for smart, environmentally friendly sensor products at Hyundai Kefico Vietnam Co., Ltd., a South Korean-invested company, located in Dai An II Industrial Park, Hai Duong province. (Photo by Dang Anh)

Regarding the flow of FDI into Vietnam in the fourth quarter of 2024, Professor, Doctor of Science Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises (VAFIE), predicted that 2024 could be a successful year in attracting FDI to Vietnam, with the goal of attracting approximately 39-40 billion USD and achieving a record disbursement level of 25 billion USD.

A bright spot in the economic picture.

As expected, for the first time, foreign investment disbursement reached the milestone of US$25 billion by the end of 2024. Thus, one of the component objectives of Resolution No. 50-NQ/TW dated August 20, 2019, of the Politburo on the orientation for perfecting institutions and policies, and improving the quality and effectiveness of foreign investment cooperation by 2030, has been achieved one year ahead of schedule.

According to data from the Foreign Investment Agency, total FDI into Vietnam in 2024 decreased by 3% compared to 2023. However, the disbursed capital and additional capital of projects showed impressive growth. Specifically, 1,539 projects licensed in previous years registered capital increases totaling US$13.96 billion, a 50.4% increase compared to 2023, mainly in the processing and manufacturing industries.

Meanwhile, the disbursed capital of FDI projects is estimated at approximately US$25.35 billion, an increase of 9.4% compared to 2023. These figures demonstrate strong investor confidence in Vietnam's business environment and affirm the genuine commitment of foreign investors to Vietnam.

Notably, 2024 marked significant advancements in the quality of Vietnam's foreign investment cooperation, with several important events occurring in quick succession towards the end of the year. These included the official signing of a cooperation agreement between billionaire Jensen Huang, founder and CEO of NVIDIA (USA), and the Vietnamese government to establish a VRDC (Vietnam Artificial Intelligence Research and Development Center) and an AI Data Center in Vietnam.

These centers will not only play a key role in supporting research and development initiatives in artificial intelligence (AI), promoting innovation and entrepreneurship, but also create job opportunities for talented individuals in Vietnam. Thus, after two visits and direct working sessions, "technology wizard" Jensen Huang has decided to "make Vietnam NVIDIA's second home."

This is also the result of the Government's focused and targeted investment promotion efforts over the past two years to achieve the goal of "building a nest to welcome technology eagles," as announced to international investors. "This is a historic turning point for Vietnam, making our country a leading AI research and development center in Asia," affirmed Minister of Planning and Investment Nguyen Chi Dung.

The first billion-dollar project in 2024 also belongs to the semiconductor industry sector, with the Bac Ninh Provincial People's Committee granting an investment adjustment certificate to Amkor Technology Co., Ltd. to increase its capital by $1.07 billion to expand its semiconductor materials, assembly, and testing plant project at Yen Phong II-C Industrial Park.

Speaking at the conference summarizing the work of 2024 and outlining tasks for 2025 of the planning and investment sector, Chairman of the People's Committee of Bac Ninh province, Vuong Quoc Tuan, said that Bac Ninh is the first locality in the country to issue a resolution of the Provincial People's Council on supporting training in the semiconductor industry.

One of the impressive results of local investment cooperation is the attraction of multi-billion dollar projects in the electronics and semiconductor industries, thereby forming a high-tech supply chain and promoting growth.

A boost for attracting investment.

After years of waiting, on December 31, 2024, the Government issued Resolution No. 259/NQ-CP on the action plan to implement the Politburo's Notice No. 47-TB/TW on building regional and international financial centers in Vietnam. According to the plan, financial centers in Ho Chi Minh City and Da Nang will be established and operational in 2025.

This is a "boost" and a new impetus for development not only for Ho Chi Minh City and Da Nang but for the whole country, contributing to the successful implementation of the Resolution of the 13th National Congress of the Party. Along with building financial centers, the Government is committed to strengthening economic dialogue, attracting large-scale foreign investment projects with spillover effects, leading new economic sectors and value chains domestically, and participating more deeply in global value chains. At the same time, it will build strong policies to connect businesses and foster cooperation for mutual development between domestic and foreign-invested enterprises.

Also on December 31, 2024, the Government issued Decree No. 182/2024/ND-CP regulating the establishment, management, and use of the investment support fund. Eligible beneficiaries include high-tech enterprises; enterprises with investment projects for the production of high-tech products; enterprises with projects applying high technology; and enterprises with investment projects for research and development centers.

The fund also provides support for the costs of investment projects in the production of high-tech products; training and human resource development costs; research and development costs; investment costs for creating fixed assets; and production costs of high-tech products, etc.

Economic experts believe that the establishment of the fund is necessary to ensure the competitiveness and attractiveness of Vietnam's investment environment, help stabilize the investment environment, encourage and attract strategic investors and multinational corporations, and support domestic businesses in certain sectors that need investment encouragement in the context of applying the global minimum tax rate from the beginning of 2024.

According to Mr. Mai, Vietnam is considered a successful model in attracting FDI thanks to its increasingly完善 institutional and investment environment, stable political foundation, and relatively high economic growth potential.

However, the slight decrease in newly registered capital in 2024 also indicates adjustments in the investment strategies of foreign businesses in Vietnam, and this trend needs to be closely monitored and analyzed in order to promptly implement appropriate policies to attract FDI in the new situation.

In particular, the general trend of global FDI flows is projected to continue declining, and competition to attract investment among countries is becoming increasingly fierce. Therefore, Vietnam needs to continue to improve its investment environment, reduce administrative procedures, and boost infrastructure development to remain an attractive destination for global FDI, especially high-quality capital.

Total registered foreign direct investment (FDI) in Vietnam in 2024 reached US$38.23 billion, a decrease of 3% compared to the same period last year. Of this, newly registered capital reached US$19.73 billion, a decrease of 7.6%; adjusted registered capital reached US$13.96 billion, an increase of 50.4%; and the value of capital contributions from foreign investors reached US$4.54 billion, a decrease of 48.1%. Of the total FDI implemented in Vietnam in 2024, the manufacturing sector accounted for US$20.62 billion, representing 81.4% of total FDI; real estate business activities reached US$1.84 billion, accounting for 7.2%; and electricity, gas, hot water, steam and air conditioning production and distribution reached US$1.07 billion, accounting for 4.2%.

According to nhandan.vn