Production line of smart, environmentally friendly sensor products of Hyundai Kefico Vietnam Co., Ltd., invested by South Korea, in Dai An II Industrial Park, Hai Duong province. (Photo: DANG ANH)

From the FDI capital flow into Vietnam, in the fourth quarter of 2024, Professor, Doctor of Science Nguyen Mai, Chairman of the Association of Foreign Investment Enterprises (VAFIE), commented that 2024 could be a successful year in attracting FDI capital into Vietnam with the goal of attracting about 39-40 billion USD and achieving a record disbursement of 25 billion USD.

Bright spot in the economic picture

And as expected, for the first time, foreign investment disbursement reached the 25 billion USD mark by the end of 2024. Thus, one of the component goals of Resolution No. 50-NQ/TW dated August 20, 2019 of the Politburo on orientations for perfecting institutions and policies, improving the quality and effectiveness of foreign investment cooperation by 2030 has reached the target one year ahead of schedule.

According to the Foreign Investment Agency, total FDI capital in Vietnam in 2024 decreased by 3% compared to 2023. However, the implemented capital and additional capital of projects had impressive growth. Specifically, 1,539 licensed projects from previous years registered to increase capital by 13.96 billion USD, an increase of 50.4% compared to 2023, mainly projects in the processing and manufacturing industry.

Meanwhile, the realized capital of FDI projects is estimated at about 25.35 billion USD, an increase of 9.4% compared to 2023. These figures show investors' strong confidence in Vietnam's business environment, and at the same time affirm that foreign investors' commitment to Vietnam is substantial.

Notably, 2024 marks important steps forward in the quality of Vietnam's foreign investment cooperation with many important events taking place at the end of the year. That is the event when billionaire Jensen Huang, founder and CEO of NVIDIA Corporation (USA) officially signed a cooperation agreement with the Vietnamese Government on the establishment of the Artificial Intelligence Research and Development Center (VRDC) and the Artificial Intelligence Data Center in Vietnam.

These centers will not only play a key role in supporting research initiatives, developing artificial intelligence (AI) applications, promoting innovation and startups, but also creating job opportunities for talented people in Vietnam. Thus, after two direct visits and work, "technology wizard" Jensen Huang decided to "turn Vietnam into NVIDIA's second home".

This is also the result of the Government’s focused and key investment promotion process over the past two years to realize the goal of “building a nest to welcome technological eagles” as announced to international investors. “This is a historic turning point for Vietnam, making our country a leading AI research and development center in Asia,” Minister of Planning and Investment Nguyen Chi Dung affirmed.

The first billion-dollar project in 2024 also belongs to the semiconductor industry, with the event that the People's Committee of Bac Ninh province granted an investment adjustment certificate to Amkor Technology Co., Ltd. to increase capital by 1.07 billion USD to expand the project of a factory manufacturing, assembling and testing semiconductor materials and equipment in Yen Phong II-C Industrial Park.

Sharing at the conference to summarize the work in 2024 and deploy tasks in 2025 of the planning and investment sector, Chairman of the People's Committee of Bac Ninh province Vuong Quoc Tuan said that Bac Ninh is the first locality in the country to issue a resolution of the Provincial People's Council on supporting training for the semiconductor industry.

One of the impressive results in local investment cooperation is attracting billion-dollar projects in the electronics and semiconductor industry, thereby forming a high-tech supply chain and promoting growth.

“Nudge” for investment attraction

After many years of waiting, on December 31, 2024, the Government issued Resolution No. 259/NQ-CP on the action plan to implement Notice No. 47-TB/TW of the Politburo on building a regional and international financial center in Vietnam. According to the plan, the financial center in Ho Chi Minh City and Da Nang will be established and operated in 2025.

This is a “push” and new driving force to promote development not only for Ho Chi Minh City and Da Nang but also for the whole country, contributing to the successful implementation of the Resolution of the 13th National Party Congress. Along with the construction of financial centers, the Government is committed to strengthening economic dialogue, attracting large foreign investment projects with spillover effects, leading new economic sectors and fields, domestic value chains and deeper participation in the global value chain. At the same time, building strong enough policies to connect businesses, cooperate and develop together between domestic enterprises and foreign-invested enterprises.

Also on December 31, 2024, the Government issued Decree No. 182/2024/ND-CP regulating the establishment, management and use of investment support funds. Beneficiaries of support are high-tech enterprises; enterprises with investment projects in the production of high-tech products; enterprises with high-tech application projects; enterprises with investment projects in research and development centers.

The Fund also supports investment project costs for high-tech product production; training and human resource development costs; research and development costs; investment costs for creating fixed assets; production costs for high-tech products, etc.

Economic experts say the establishment of the fund is necessary to ensure the competitiveness and attractiveness of Vietnam's investment environment, help stabilize the investment environment, encourage and attract strategic investors, multinational corporations and support domestic enterprises in a number of areas that need investment incentives in the context of applying global minimum tax from the beginning of 2024.

According to Mr. Mai, Vietnam is considered a successful model in attracting FDI thanks to its increasingly improved investment institutions and environment, stable political foundation and high economic growth potential.

However, the slight decrease in newly registered capital in 2024 also shows that there are adjustments in the investment strategies of foreign enterprises in Vietnam and this trend needs to be closely monitored and analyzed to promptly have appropriate policies to attract FDI capital in the new situation.

In particular, the general trend of global FDI capital flows is forecast to continue to decline and competition to attract investment among countries is increasingly fierce. Therefore, Vietnam needs to continue to improve the investment environment, cut administrative procedures, and promote investment in infrastructure development to continue to maintain its status as an attractive destination for global FDI capital flows, especially high-quality capital.