Vietnam continues to be a region of interest and a significant absorber of foreign direct investment (FDI). According to a report by the Ministry of Construction, as of June 20, 2024, foreign investment registered in Vietnam for the first six months of the year totaled nearly $15.19 billion, a 13.1% increase compared to the same period last year. This includes new registered capital, adjusted registered capital, and the value of capital contributions and share purchases by foreign investors.
Foreign investment in Vietnam has seen a significant increase in the first half of 2024.
The estimated FDI disbursement reached $10.84 billion, representing an 8.2% year-on-year increase. This is the highest FDI disbursement for the first six months of the year in the past five years. In terms of new registered capital, there were 1,538 newly licensed projects with a registered capital of $9.54 billion, marking an 18.9% increase in the number of projects and a 46.9% surge in registered capital compared to the same period last year.
Notably, real estate business activities accounted for $1.89 billion, or 19.9% of the total new registered capital. When taking into account both new and adjusted registered capital of previously licensed projects, FDI registered in the real estate business sector reached $1.99 billion, making up 14.8% of the total. In the first half of 2024, FDI realization in Vietnam’s real estate business activities amounted to $1 billion, constituting 9.3% of the total.
According to economic experts, the attractiveness of investing in Vietnam persists, with profitability remaining a key draw. Foreign investors are particularly optimistic about the potential stability that new laws, such as the Land Law, Housing Law, and Real Estate Business Law, will bring to the real estate market in the coming years.
The report also highlights an improvement in the performance of real estate businesses in the first half of 2024, with both the number of newly established enterprises and those resuming operations increasing compared to the same period in 2023. Specifically, there were 2,210 newly established businesses (a 1.4% increase), and 1,577 businesses resumed operations, reflecting an 11.4% year-on-year increase (according to the Business Registration Management Agency under the Ministry of Planning and Investment).
In the context of a slow recovery in the real estate market, many real estate businesses are currently planning to expand their land funds for project development. As a result, legal compliance, liquidity, and land use fees have become the top criteria for enterprises when making investment decisions.
Recently, there have been indications that businesses in the real estate sector are strategizing to expand their land banks in anticipation of the industry’s recovery. These enterprises are taking a more serious and calculated approach, carefully studying the market to ensure that their projects have complete legal documentation and that land use fees are fully paid, enabling them to be exploited in the coming years.
Additionally, businesses operating in the office rental and resort sectors are also looking to acquire land suitable for their respective fields in the upcoming period.
Dragon Capital Chairman: “Long-term vision is needed, accepting necessary adjustments for a safer, more efficient, and higher quality market”
According to Mr. Dominic Scriven, Chairman of Dragon Capital, the role of the finance industry in the stock market will be significant in 2023 and possibly in 2024. The roles of other industries, such as real estate or consumer goods, will depend on their respective challenges.
Vietnam’s economy predicted to have a rapid boost in the early months, as various indicators skyrocket.
These statistics indicate that Vietnam’s economic prospects in 2024 are quite positive.
