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Prospect of attracting foreign direct investment in 2021 The prospect of attracting foreign direct investment (FDI) in Vietnam in 2021 is bright given the investment diversion of investors from developed countries to the country.
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ccording to Foreign Investment Agency (FIA) under Vietnam Ministry of Planning and Investment, disbursement of foreign direct investment (FDI) to Vietnam rose by 6.7 compared to 2020 to USD7.15 billion in the first five months of this year. New investment capital registered by foreign businesses in the country also saw a modest yearly rise of 0.8 percent to nearly USD14 billion in the same period. Of which USD8.83 billion went to 613 newly-licensed projects, up 18.6 percent year-on-year, while USD3.86 billion was added to 342 existing
projects, up 11.7 percent. Capital contributions and share purchases by foreign investors fell 56.3 percent to USD1.31 billion. Investors poured money into 18 sectors in the first five months, in which processing and manufacturing took the lead with USD6.14 billion, accounting for 44 percent of the total. Power generation and distribution came next with USD5.43 billion, accounting for 39 percent, followed by real estate with USD1.05 billion and wholesale and retail sales with USD522 million. In the first five months of the year, Singapore was Vietnam's largest source of FDI with USD5.26 billion, making up nearly 38 percent of the total FDI registered in the country. It was followed by Japan with more than USD2.59 billion and South Korea with USD1.83 billion.
At present, Vietnam is considered as a good destination for highquality FDI inflows. Since the outbreak of Covid-19, many large international corporations and enterprises have been looking for investment opportunities in Vietnam in order to diversify their supply chain and avoid overdependence on the Chinese market. Vietnam has become one of the brightest spots to welcome these diverted inflows thanks to its success in fighting and containing the pandemic. The government has also exerted
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