Japan top investor in Vietnam again

A smart city megaproject in Hanoi has catapulted Japan back to the top of the list of foreign investors in Vietnam.

The project pushed Japan’s investments in the first half of 2018 to $6.47 billion, 31.8 percent of the total FDI reported for the period.

In second place is South Korea with an FDI of $5.06 billion, 24.9 percent of the total, followed by Singapore with 11.8 percent at $2.39 billion.

The significant spurt in Japanese FDI owes a lot to a $4.138-billion smart city megaproject in Hanoi. Japan had been Vietnam’s top foreign investor in 2017, but lost that spot in the first quarter of this year, before regaining it this month.

Total FDI in the first six months of the year jumped 5.7 percent year-on-year to $20.33 billion, according to the Foreign Investment Agency on June 27.

The manufacturing sector has led the field in attracting FDI, accounting for 38.9 percent of the first half total at $7.91 billion. Retailing stayed far behind at $1.5 billion, for 7.4 percent.

Despite many incentives in terms of tax and land, FDI investors have lagged behind their domestic counterparts in tax contributions, with the two sectors accounting for 25.28 and 43.82 percent of the total, respectively, said Dau Anh Tuan, Director of Legal and Compliance Department under the Vietnam Chamber of Commerce and Industry (VCCI).

So far this year, $8.37 billion in FDI has been disbursed, up 8.4 percent over the same period last year.