Vietnam attracted US$1.31 billion of foreign direct investment (FDI) in the first two months of this year, while the total disbursed FDI capital in the country was estimated at US$452 million, according to the Ministry of Planning and Investment.

The country licensed 113 new projects with total registered capital of US$1.18 billion in the period, up 16 per cent in volume and up 15 per cent in value against the same period last year.

It also allowed 38 existing projects to raise capital by US$135 million in total, up 41 per cent in terms of the number of projects.

South Korea was the biggest foreign investor in Vietnam in the first two months with 38 projects capitalized at US$388.7 million, followed by Japan with 35 projects valued at US$279.7 million, the US with eight projects worth US$10.4 million, Hong Kong with five projects worth US$625 million, China with four projects valued at US$600,000, Australia with four projects worth US$495,000, Taiwan with three projects capitalized at US$1 million, and Singapore with three projects worth US$881,000.

Foreign investors focused on industrial and service projects in Vietnam in the period. The local heavy industry welcomed 58 FDI projects in Jan-Feb with total registered capital of over US$901 million, while the light industry attracted 25 projects capitalized at US$73.5 million and the service sector reported 12 projects worth US$4.78 million.

Foreign investment also entered into Vietnam’s culture, healthcare and education with 6 projects worth US$8.17 million, the foodstuff processing industry with 4 projects valued at US$700,000, construction sector with 2 projects worth US$5.4 million, agricultural and forestry sector with 2 projects worth US$1.91 million, and into new urban zone building, hotel and tourism, transport and posts, and banking and finance with one project for each.

Ho Chi Minh City became the most attractive place for FDI in the first two months with 40 projects capitalized at over US$645 million, followed by southern Binh Duong province with 25 projects worth US$39.8 million, southern Dong Nai province with 21 projects valued at US$98.8 million, and Hanoi with nine projects worth US$415 million.

According to the ministry, FDI firms in Vietnam earned US$3.19 billion from export in the first two months, up 32.6 per cent on-year, and spent US$2.04 billion on import, up 18.9 per cent.

In 2006, Vietnam hopes to draw about US$6 billion and disburse US$3.5 billion in foreign direct investment. In 2005, the country attracted US$5.8 billion of FDI and the total disbursed capital was US$3.4 billion.