Foreign investment in Vietnamese projects surges

14:11 | 02/10/2018 Investment

(VEN) - Foreign investment in the form of capital contribution and share purchase in Vietnam has increased in recent years. According to experts, it will sharply increase in the coming time as the investment environment is gradually improving.

foreign investment in vietnamese projects surges

According to the Foreign Investment Agency under the Ministry of Planning and Investment, foreign direct investment (FDI) commitments in the first eight months of the year totaled US$24.35 billion, up 4.2 percent year-on-year. Notably, overseas players spent US$5.28 billion on acquiring shares in Vietnamese companies in the first eight months, shooting up 50.9 percent year-on-year.

The amount of capital contribution and share purchase in some provinces and cities have exceeded those in newly registered and additional capital. For example, in the first half of the year, there were 915 enterprises and economic entities that enjoyed foreign capital through the purchase of US$1.4 billion in shares in Ho Chi Minh City, while direct investment reached US$375 million for 340 projects.

Nguyen Noi, deputy director of the Foreign Investment Agency, said the amount of capital contribution and share purchase is actually much higher than the figure announced.

The advantage of foreign investment in the form of capital contribution and share purchase is that investors do not have to wait for licenses. In addition, they can start working immediately without having to spend time for learning and researching the market. Another advantage is quick disbursement, contributing to limiting investment projects on paper.

Foreign investors have paid their attention to capital contribution and share purchase in Vietnam as the Vietnamese investment environment is improving. In addition, Governmental Decree 60/2015/ND-CP allows an increase of foreign ownership in listed companies and public businesses from 49 percent to 100 percent (except for some companies in conditional business lines). Particularly, the equitization of state-owned enterprises (SoEs) has also opened up great opportunities for Vietnam to attract foreign investment.

The real estate, banking, and retail sectors have caught the attention of foreign investors.

To attract more foreign investment in the form of capital contribution and share purchase, Ho Chi Minh City has also allowed foreign investors to register online. This is one of the important solutions, helping investors to be more favorable in entering the Vietnamese market.

Chu Huynh