After falling slightly in the first quarter of the year, foreign investment attraction has begun to improve according to the Foreign Investment Agency (FIA) at the Ministry of Planning and Investment.

FIA data shows that as of April 20, total newly-registered capital, additional capital, and capital contributed to buy shares or buy capital contributed by foreign investors reached $8.88 billion.

There were 750 new FDI projects granted investment licenses in the first four months of the year with total capital of over $4.1 billion, a year-on-year increase of 65.2 per cent in number and 11.1 per cent in value.

Nearly $1.66 billion was added to 386 existing FDI projects.

The increase in new investment capital was attributed to small and medium-sized foreign investors’ continued interest and trust in Vietnam’s investment environment. Giant investors, meanwhile, have become more cautious about investing in Vietnam in the context of the possible impact of the global minimum tax.

As a result, the number of FDI projects with capital of less than $1 million accounted for nearly 70 per cent of all new projects.

The number of projects adding investment capital rising strongly also demonstrates foreign investors’ trust in Vietnam’s investment environment, which prompted them to continue expanding their projects.

The FIA said foreign investors invested in 18 out of the 21 economic sectors in Vietnam. The manufacturing and processing sector topped attraction, with total investment of over $5.1 billion, accounting for 57.8 per cent of the country’s total registered capital.

It was followed by the banking and finance sector with more than $1.5 billion, or over 17 per cent.

Seventy-seven countries and territories are now investing in Vietnam, including investors from Asia such as Singapore, Japan, China, Taiwan (China), Hong Kong (China), and South Korea, whose investment capital accounted for 75.1 per cent of the country’s total in the first four months of the year.

These investors still concentrate on cities and provinces with advantages in FDI attraction such as good infrastructure, stable human resources, improvements in administrative reform, and dynamic investment promotion activities, including Hanoi, Bac Giang, Ho Chi Minh City, Binh Duong, Dong Nai, Bac Ninh, and Hai Phong.

In particular, Hanoi posted impressive growth in FDI attraction in the first four months of 2023. It topped localities with more than $1.1 billion, accounting for nearly 19.2 per cent of the total.