Vietnam Tops Global Greenfield FDI Project Rankings

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Brick_Factory,_Mekong_Delta,_VietnamVietnam has come first in a ranking of countries for greenfield foreign direct investment in a study carried out by Financial Times data division fDi Intelligence.

The ASEAN country achieved a score of 8.14, more than second place Romania and third place Hungary combined, topping the ranking of 71 economies receiving at least 25 greenfield projects in 2014.

Vietnam attracted over 2,000 greenfield foreign direct investment projects between 2003 and 2014, being new ventures started in Vietnam in which a company constructs operations from the ground up.

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A score of 1 in the index means that a country’s global share of inward greenfield FDI matches its share of global gross domestic product. This index shows that Vietnam’s share of inward greenfield FDI projects is more than eight times its share of global GDP. This index is all the more impressive when considering that the Asian Development Bank has forecast Vietnam’s GDP to grow by 6.1 percent in 2015.

The index ranked Vietnam far above neighboring economic giant China, which scored only 0.56 on the index. China’s performance on the index has declined almost every year since 2003, as its pace of GDP growth outperformed growth of inward greenfield FDI projects. This should not be seen as a disastrous score, as it matches that of the world’s largest national economy the U.S., and fits with China’s strategy of stimulating domestic spending to fuel its growth while reducing reliance on FDI.

Of the world’s top five national economies by GDP, only the UK at 1.96 had a score greater than 1, outperforming South Asian economic powerhouse India. India’s situation resembles that of China, with GDP growth higher than inward greenfield FDI growth.

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The methodology of the index is a variant of that devised by Unctad for overall FDI, and excludes retail investments.

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Further Support from Dezan Shira & Associates

Dezan Shira & Associates can service companies which are looking to further develop their operations in Vietnam. The firm can help companies establish a direct office in the country and can guide them through the affiliated tax, legal and HR issues that come with doing so. To arrange a free consultation, please contact us at: vietnam@dezshira.com


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