Foreign investors have invested in 19 economic sectors, including processing and manufacturing with US $ 24.56 billion,accounting for 664.6%; real estate business with 3.88 billion USD, accountingfor 10.2% of registered capital; followed by retail wholesale, science andtechnology.
The distribution of FDI capital into economic sectorscontinued to hold the same proportion as previous years, including a number ofpositive shifts in real estate business, due to the expanding market, domesticenterprises have stronger potential, so some foreign investors enter into jointventures, cooperation in transferring new technologies and new business methodsto domestic enterprises.
M&A activities have become active in recent years,accounting for an increasing proportion of the total registered capital: in2017 accounted for 17.02%, in 2018 accounted for 27.78%, in 2019 accounted for56.4%. That is a good sign for two main reasons: the size of domesticenterprises has grown, creating abundant supply for M&A and the policy ofopening to the stock market under the policy of loosening room for foreigninvestors.
M&A has advantages compared to new investments,because investors come to businesses that can bring profits to them on thebasis of monitoring and researching financial statements of enterprises sellingshares; Project execution time is much faster because of simpler procedures.
However, the quality and effectiveness of FDI in 2019did not meet the country's requirements in the process of shifting towardsinnovation, creativity, science, technology and high quality human resources,building the foundation, digital economy, joining the industrial revolution4.0.
The average size of each FDI project is too small,3,833 projects are granted investment certificates with a total registeredcapital of 16.75 billion USD, on average each project has only about 4.3million USD of registered capital. Some localities also attract projects of 1-2million USD, even less than 1 million USD. Of course, depending on theindustry, the field to discuss the scale of the project for some servicesectors, it does not require large scale, but for production and processing, itis necessary to pay attention to the project scale, when domestic and small andmedium-sized enterprises are capable governmental level to facilitate theimplementation of such projects.
There is a shortage of large-scale projects. If in2018, there were some large-scale projects such as Smart City in Dong Anh(Hanoi), a joint venture with Japan of US $ 4.14 billion, Polypropylene factoryand Korean liquefied petroleum storage depot, invested 1.2 billion USD in BaRia - Vung Tau; then in 2019, the largest project will be 420 million USD.
In the manufacturing and processing industry, it has not attracted the future technology projects such as AI, blockchain, fintech,R&D center, especially in the two major economic centers of Hanoi and HoChi Minh City with scientific potential and great technology, abundant in highquality labor.
The capital increaseadjustment is mainly from small projects, without large-scale projects like2018 (Laguna - Singapore Co., Ltd. adjusted to increase the capital by US $1.12 billion).