Despite the prolonged pandemic, foreign investors registered to pump US$31.15 billion into Viet Nam in 2021, up 9.2 per cent year-on-year, the Foreign Investment Agency (FIA) has said.

Foreign investors had 1,738 new projects licensed, with total registered capital of over US$15.2 billion, down 31.1 per cent in the number of projects but up 4.1 per cent in the level of capital.

The firms also added more than US$9 billion of capital to 985 operating projects, up 40.5 per cent in value and down 13.6 per cent in volume.

A remainder of nearly US$6.9 billion was used by foreign businesses for capital contribution and share purchases in a total of 3,797 transactions, marking yearly decreases of 7.7 per cent in value and 38.2 per cent in volume.

Meanwhile, disbursement of foreign direct investment (FDI) also saw a slight decline of 1.2 per cent, to an estimated US$19.74 billion.

In its latest report, the FIA attributed the decreases in the numbers of new, expanded projects and paid-in capital for share purchases, to Viet Nam's selective investment attraction policies that prioritise quality over quantity of projects, while eliminating small-scale projects with low added value.

Travel restrictions and long quarantine policies made it hard for foreign investors to survey planned projects, the agency said.

It added that lockdowns and travel restrictions also affected operations of foreign-invested firms, resulting in production capacity reductions and supply chain disruptions. This also affected plans to invest in the country.

The manufacturing and processing sector attracted the lion's share of FDI with over US$18.1 billion, or 58.2 per cent. Electricity production and distribution came next with over US$5.7 billion, or 18.3 per cent. It was followed by the real estate, wholesale and retail sectors.

Among 106 countries and territories investing in Viet Nam, Singapore ranked first with over US$10.7 billion, equivalent to 34.4 per cent of the total, ahead of South Korea with around US$5 billion or 25.4 per cent, and Japan with nearly US$3.9 billion or 12.5 per cent.

The country's other major sources of FDI were mainland China, Hong Kong and Taiwan.

With over US$5.26 billion investment, the northern port city of Hai Phong surpassed the southern province of Long An in terms of FDI in 2021, making up 16.9 per cent of total registered capital, nearly triple that of the same period last year.

Long An came second with more than US$3.84 billion or 12.3 per cent, and HCM City third with roughly US$3.74 billion, 12 per cent. Binh Duong, Bac Ninh and Ha Noi were the next highest.

According to the FIA, foreign-invested businesses posted a trade surplus of nearly US$28.5 billion in 2021 as they gained US$246.7 billion from exports, a yearly hike of 21 per cent while their imports hit US$218.3 billion, up 29.2 per cent.

As of December 20, the country was home to 34,527 valid foreign-invested projects, worth nearly US$408.1 billion. Of the sum, US$251.6 billion, or 61.7 per cent, has been disbursed.

Experts forecast that a recovery in the global investment flow will open up a bright future for Viet Nam’s investment attraction next year.

Nguyen Anh Duong, director of the general research department at the Central Institute for Economic Management, said that the fact that Viet Nam was among countries with a positive economic outlook in 2022 and there was recovery momentum in Asian production, would both make an important contribution to accelerating foreign investment.— VNS