Foreign investors contribute more capital to businesses

As the state’s divestment plan continues, more foreign companies are pouring capital into Vietnamese businesses.

The latest report of the Foreign Investment Agency (FIA) showed that from the beginning of the year to February 20, Vietnam granted investment certificates to 313 foreign invested projects with total registered capital of $2 billion, an increase of 6.5 percent over the same period last year.

These included 137 projects which plan to expand the additional registered capital of $759.5 million.

Foreign investors made 654 deals in contributing capital to businesses and buying shares of Vietnam businesses with total value of $619 million, a four time increase compared with the same period in 2016.

As such, the total foreign investment capital flowing to Vietnam from the beginning of the year to February 20 was $3.4 billion, an increase of 21.5 percent against the same period.

Though registered capital increased sharply, the disbursed capital was 1.55 billion only, a slight increase of 3.3 percent over the same period last year.

Foreign investors usually register projects in the first months of year, thus increasing registered capital, while disbursement is now in the low season (just before and after Tet).

As usual, processing and manufacturing continue attracting attention from foreign investors with registered capital of $2.5 billion, accounting for 73.4 percent of total registered capital.

Real estate is the second most attractive sector with $345.5 million worth of capital registered, followed by retail & wholesale with $222.6 million.

Singapore is the biggest foreign investor registering $881.6 million in investment capital (25.8 percent), followed by China ($721.7 million) and South Korea ($637.1 million).

FIA for the first time released figures about the foreign investment via capital contribution and share purchase in August 2016 (in the past, it only released statistics about foreign direct investment FDI).

Analysts have commented that since the 2014 Investment Law took effect on July 1, 2015, foreign investors have poured more money into capital contribution and share purchase deals.

This is because under Vietnamese laws, they don’t have to make investment registration when contributing capital or buying shares of Vietnam businesses, which they have to do with FDI.

Therefore, they choose this investment mode to avoid wasting time and quickly access the Vietnamese market.

From July 1, 2015 to July 20, 2016, more than 3,000 foreign invested institutions spent $2.9 billion to contribute capital and buy shares in Vietnamese businesses.


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