Foreign direct investment flows in Vietnam increased amid COVID-19 pandemic

The Vietnam Association of Foreign-Invested Enterprises (VAFIE) released its annual report on foreign investment in Vietnam last year at a meeting in Hanoi on May 10.

The report is made in cooperation with KPMG Vietnam with the support of the Foreign Investment Department under the Ministry of Planning and Investment and a number of experts, the Vietnam News Agency reported.

Foreign investment is the highlight in Vietnam’s economic picture amid the negative impacts of the COVID-19 pandemic on the national and global economy.

Related: Here’s how to setup a foreign invested company in Vietnam

However, the remaining problems in the process of attracting and using FDI capital such as the small number of high-tech projects from the US and Europe. In addition, the contribution to the State budget of many FDI enterprises is not commensurate with the investment scale and incentives they enjoy. The structure of FDI by region and province is still not balanced and too few enterprises have established research and development (R&D) centers.

In 2019, the Vietnamese Politburo issued Resolution No. 50-NQ/TW on orientations to strengthening institutions and policies to improve the quality and efficiency of foreign investment by 2030, VAFIE recognized the need to have a report on FDI into the country, that’s why the report published.

Since the National Assembly approved the Law on Foreign Investment in Vietnam in 1987, the FDI sector has continuously developed, making an important contribution to the country’s economic growth and innovation, growth model in the direction of industrialization, modernization, and promoting international economic integration of Vietnam enhance the country position in the world.

The FDI sector currently accounts for about 25% of total social investment, 55% of the total value of industrial production in Vietnam and more than 70% of the country’s export turnover.

It has directly created jobs for 4.6 million people or more than 7% of the country’s workforce and indirectly created jobs for millions, according to a report by Vietnam Insider.