Vietnam FDI Data for Jan-April 2024: GSO Report

2 May 2024

Vietnam Briefing

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Vietnam FDI Data for JanApril 2024 GSO Report

Vietnam received an estimated US$6.28 billion in FDI during Jan-April of this year, marking the highest level in the past five years.

The disbursed foreign investment in Vietnam reached US$6.28 billion in the first four months, the highest in five years, according to the General Statistics Office. Vietnam also recorded over 51,000 newly established enterprises during this period.

Vietnam continues to be a magnet for foreign enterprises seeking investment opportunities and strategic partnerships. With a thriving economy, strategic geographical location, and favorable policies, Vietnam presents abundant opportunities for foreign direct investment (FDI) across various sectors.

READ: Unlocking Investment Opportunities: Vietnam’s Q1 Business Activity Rebound

FDI in Vietnam – January to April 20, 2024

Foreign investment in Vietnam surged to US$9.27 billion, marking a 4.5 percent increase over the previous year, according to the General Statistics Office (GSO). The country received an estimated US$6.28 billion in FDI during Jan-April of this year, marking the highest level in the past five years.

New projects totaling US$7.11 billion were approved, a significant rise of 28.8 percent in project numbers and 73.2 percent in capital.

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The processing and manufacturing industry led the FDI influx with nearly US$4.93 billion, constituting 78.5 percent of the total, followed by real estate with US$607.6 million. Other top FDI beneficiaries were wholesale & retail, and scientific and technological activities.

Investment into Vietnam came from 50 countries and territories during this period, with Singapore leading the pack at US$2.59 billion, followed by Hong Kong, Japan, China, Turkey, and Taiwan.

An additional US$1.23 billion was invested in 345 existing projects, while US$929.6 million was allocated for stake purchases and capital contributions, marking a 25.6 percent decrease and a 70.1 percent decrease, respectively, compared to the previous year.

In Q1, Hanoi and Bac Ninh province were top drawers of FDI.

READ: FDI into Vietnam in Q1 2024

Over 51,000 new enterprises established in Jan-April period

In the first four months of this year, 51,550 new enterprises were founded, according to the GSO data released on April 29.

April alone witnessed the approval of 15,300 newly established enterprises by authorities. However, the month also saw a 13.6 percent decrease in the number of firms entering or rejoining the market, with a total of 8,300.

Nationwide, a total of 29,700 companies entered or re-entered the market, reflecting a 2.4 percent increase compared to the previous year.

FIND BUSINESS SUPPORT

The overall tally for new enterprises or those returning to operation in the first four months of the year reached 81,300, a notable 3 percent rise from the same period in 2023.

Of these, 50,700 firms were registered in the agriculture, forestry, and fisheries sector, up by 1.2 percent year on year, followed by the service sector with 38,500 firms (up 3.2 percent), and the industrial and construction sector with 12,500 firms (up 4 percent).

Conversely, the January to April period also saw 60,900 enterprises withdrawing from the market, marking a significant 21.9 percent increase compared to the previous year.

Company spotlight: Alibaba touted to set up data center in Vietnam

Alibaba is set to construct a data hub in Vietnam to comply with local regulations mandating the storage of data within the country, as reported by Nikkei Asia. The Chinese tech giant currently leases space for its servers from two major Vietnamese telecom groups: Viettel (operated by the military) and VNPT (Vietnam Posts and Telecommunications Group).

This move follows a government decree effective since October 1, 2022, which stipulates that foreign companies must store user data within Vietnamese territory.

Dang Minh Tam, solution architect lead at Alibaba Cloud, explained that the company utilizes colocation, renting space from data center operators, while also backing up data at its server farms across the region, spanning from Taiwan to Singapore.

Tam spoke of Alibaba’s intention to construct a data hub in Vietnam to meet the rising demand in one of Asia’s fastest-growing economies. Although specifics regarding cost and timeline remain undisclosed, Tam mentioned that the project’s expenses could exceed US$1 billion.

In addition to cost considerations, companies like Alibaba may opt to build their servers to ensure enhanced security and control over their information, as per insights provided by Nikkei Asia.

Viettel IDC, the owner of five major data centers in Vietnam, forecasts a 15 percent annual expansion in the Vietnamese data center market, with potential for higher growth if major cloud companies like Alibaba decide to invest.

Sector spotlight: E-commerce and digital economy

Vietnam’s shoppertainment scene is booming, poised to become a major player in Southeast Asia’s e-commerce landscape. TikTok Vietnam saw a remarkable surge in merchants and sales, cementing its position as the country’s second-largest online marketplace in the past year. With 67 million users in early 2024 compared to 50 million one year ago, TikTok Vietnam is gaining ground rapidly, rivalling Facebook and YouTube.

Revenue from online B2C (business-to-consumer) retail nearly doubled from 2018 to 2023, and is projected to reach US$26.31 billion by 2024. Deliveries through major e-commerce platforms surged by over 50 percent in 2023.

Vietnam also stood out in the e-Conomy SEA 2022 report, with B2C revenue projected to soar by 35 percent annually, hitting 310 trillion VND in 2024.

Vietnam’s healthcare and education startups attract most investment

In 2023, Vietnam retained its third position in both the number of investment deals and total investment in startups across Southeast Asia. According to the 2024 Technology and Innovation Investment Report unveiled at the Vietnam Innovation Forum, Vietnamese startups attracted a total investment of US$529 million. While Singapore topped the charts in both deal count and total investment, Indonesia followed closely behind.

Vietnamese startups’ total investment of US$529 million in 2023 experienced a 17 percent decrease compared to the previous year. Despite this decline, the number of startup deals in Vietnam dipped by only 9 percent, totaling 122 deals. The trend indicates that Vietnam’s technology investment landscape has been influenced by global economic shifts.

However, Vietnam’s decline in investment was more moderate compared to the global venture capital investment drop of 35 percent to US$345 billion.

In 2023, nearly 100 funds invested in Vietnamese startups, with Singaporean investors being the most active, followed by domestic investors. The healthcare sector witnessed the highest investment, soaring by 391 percent from the previous year, while the education sector also experienced a substantial increase of 107 percent.

For personalized business advisory services in Vietnam, please contact our experts at vietnam@dezshira.com.

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