Workers of Scavi Hue Garment Company, a French wholly invested company, sew the products for export. — VNA/VNS Photo Danh Lam

HA NOI (Biz Hub) — Foreign direct investment (FDI) from the European Union (EU) to Viet Nam is recovering this year after a downtrend since 2011, according to a report from the Ministry of Planning and Investment's Foreign Investment Agency (FIA).

A report released this week pointed out that the EU's total investment in Viet Nam in the first half of this year reached US$600 million, nearly the same as in the entire 2013 and even higher than in the whole 2014. The FDI from the EU has had recovery after reduction from 2011 to 2014 due to recession in the global economy.

The total FDI was expected to be higher by the end of this year, the agency forecast.

Now, 23 EU nations have invested in Viet Nam with the number of existing projects at 1,688 and total investment capital at $21 billion. Average investment is $12.6 million per project.

The biggest investors include the Netherlands, the United Kingdom (UK), France, Luxembourg and Germany, who account for 82 per cent of the total FDI, according to the agency.

The EU's investment is mainly concentrated in large cities such as Ha Noi and HCM City as well as provinces and cities with oil and gas resources or large industrial zones including Binh Duong, Dong Nai, Ba Ria-Vung Tau, and Da Nang, in addition to Hai Phong, Khanh Hoa and Hai Duong. Large amounts of FDI were invested in Ha Noi and HCM City.

Regarding the investment sectors, the EU investors mainly put their money into the processing and manufacturing sector, with 573 projects and a total investment of $6.29 billion. Their other major investment sectors have included the power production and real estate sectors.

The agency said that from 1988 to 1994, the EU's investment in Viet Nam was limited, but the investment increased quickly from $15 million in 1988 to $707 million in 1995. The Netherlands and France were the two largest EU investors to Viet Nam during that period. They focused on the processing and manufacturing sector.

From 1997 to 1999, the EU's investment took a plunge.

Meanwhile, 2000 and 2001 saw a huge increase in the EU's investment to Viet Nam and the important role of FDI from the Netherlands. The investment from the Netherlands surged by 20 per cent while capital from the UK continued to rise. The EU became one of Viet Nam's important foreign investors, accounting for 38 per cent of the national registered FDI.

However, from 2002 to 2004, the percentage dropped to 16.8 per cent due to the EU's low demand in investing abroad, the agency said.

The EU's investment in Viet Nam recovered to reach $1.7 billion in 2005 and continuously rose to $2.3 billion in 2008 but then fell to about $450 million in 2009.

The FDI has gained a record high of $2.6 billion in 2010, the agency said. — VNS