The Vietnamese government's recent publication of criteria to assess the effectiveness of foreign investment in Vietnam will contribute to accurately evaluating the contributions of this sector to the economy, thereby "improving the quality" of foreign capital flows.
"Improving the Quality" of Foreign Direct Investment Flows to Vietnam
The government's recent publication of a set of criteria to evaluate the effectiveness of foreign investment in Vietnam will contribute to accurately assessing the contributions of this sector to the economy, "thereby improving the quality" of foreign capital flows.
The Ministry of Finance's report was based on financial reporting data from 28,918 FDI enterprises. Photo: Duc Thanh
Foreign-Invested Enterprises Suffer Huge Losses
Deputy Prime Minister Nguyen Chi Dung has just requested relevant agencies to coordinate in reviewing and evaluating the deficit business situation of foreign direct investment (FDI) enterprises.
This request was made after many press agencies published this content based on a recent report from the Ministry of Finance. Specifically, according to the reporter's information, at the end of December 2024, the Ministry of Finance sent a report to the Government on the results of the synthesis and analysis of the 2023 financial statements of FDI enterprises. This is a report that the Ministry of Finance continues to compile annually for submission to the Government.
According to the report, the business results of this group of enterprises in 2023 decreased compared to 2022. Specifically, revenue reached VND 9,416,102 billion, down 4.3%; profit after tax was VND 337,027 billion, down 15.7%. Consequently, the amount paid to the state budget also decreased slightly, from VND 197,087 billion in 2022 to VND 193,238 billion in 2023.
A notable point in this report is that as of December 31, 2023, the number of loss-reporting enterprises was 16,292, an increase of 21.2%; the number of enterprises with accumulated losses is 18,140 enterprises, an increase of 15%; the number of enterprises with equity losses was 5,091, an increase of 15.2%.
Also according to the Ministry of Finance's report, the loss in 2023 is VND 217,464 billion, an increase of 32%; the value of accumulated losses is VND 908,211 billion, an increase of 20%; the negative equity value was VND 241,560 billion, an increase of 29%.
"Thus, the number of enterprises reporting losses, accumulated losses, and equity losses has been increasing for many years," the Ministry of Finance indicated, adding that there are enterprises that report losses but continue to expand investment.
However, the Ministry of Finance's report also shows that although the profits of FDI enterprises in 2023 decreased and the number of loss-making enterprises was also large, some industries had high profit growth rates. For example, the accommodation and food service industry increased by 417.1% (VND 1,825 billion); the mining industry increased by 302.8% (VND 89 billion); scientific and technological professional activities increased by 43.1% (VND 3,641 billion)...
These are the areas that the Ministry of Finance considers to have "turned the tide" and achieved impressive business results, in the context of many unfavorable factors within the country and the world, causing difficulties for many businesses and many business sectors.
Those unfavorable factors are the reason why many companies lose money. However, it must be noted that the figures presented above do not necessarily reflect the complete situation. Because, according to statistics, at the end of February 2025, there were 42,477 valid foreign investment projects, with a total registered capital of $507.3 billion. Meanwhile, the Ministry of Finance's report was based on data from 28,918 companies.
According to the Ministry of Finance, the failure of some localities to implement the required reporting regime has also caused a significant shortage of data information, significantly affecting the process of synthesizing and analyzing the financial situation of FDI enterprises.
Building Criteria to Properly Assess Investment Efficiency
In the report submitted to the Government, the Ministry of Finance recommended that it is necessary to create a database in the information system and connect the data and information on enterprises in general and FDI enterprises in particular between the relevant state management agencies, satisfying the requirements of data exploitation and analysis.
In addition, it is necessary to develop investment efficiency indicators as a basis for evaluating the impact of projects and FDI enterprises in operation on socio-economics and the environment in order to manage and prevent possible risks in a timely manner.
Regarding this issue, the Foreign Investment Agency (Ministry of Finance) has made efforts to develop a set of criteria to evaluate the effectiveness of foreign investment and submit it to the Government for approval. And recently, the Government has officially issued a set of criteria to evaluate the effectiveness of foreign investment in Vietnam.
This set of criteria includes 42 indicators, including 29 economic indicators, 8 social indicators, and 5 environmental indicators. This will be the basis for evaluating the performance of the sector with foreign investment at the national, local, and sectoral levels.
In the economic indicators, there are groups of criteria on scale and contribution to socio-economic development of the foreign investment sector; performance criteria group, including indicators on profit and export rate; State budget payment criteria group; criteria group on contagion effects; on technology; on the contribution of foreign investment to strengthening Vietnam's innovation capacity...
In addition, there are 8 social indicators, such as job creation and income for workers, gender equality, and criteria on compliance with the law; 5 environmental indicators, such as the rate of application of energy-saving measures, the rate of establishments that comply with environmental protection laws, the proportion of greenhouse gas emissions of economic organizations with foreign investment in the total number of establishments required to carry out greenhouse gas inventories, etc.
Thus, the criteria of profits, losses, and contributions to the state budget are only some of the many criteria to comprehensively evaluate the performance of the FDI sector. This is something long awaited, not only by state agencies and localities, but also by experts and investors.
Since the Foreign Investment Agency developed this set of criteria, experts have strongly agreed and said that there must be a set of criteria to evaluate foreign investment, to see how it contributes to the economy, the pros and cons at a scientific level that is quantitative, not qualitative, to serve the policy-making process of state agencies, as well as the learning and decision-making process of investors.
And now that set of criteria has been issued. It will be a useful support tool, contributing to improving the quality and effectiveness of foreign investment cooperation in the localities, in the spirit of Resolution 50-NQ/TW of August 20, 2019 of the Politburo.
Last year, the International Investment Research Institute (ISC) proactively researched and published two sets of criteria for the evaluation and monitoring of FDI projects. According to Mr. Phan Huu Thang, president of ISC, this aims to help localities make decisions more easily and quickly, thereby promoting the investment and business environment and increasing foreign investment flows. In addition, these two sets of criteria will help eliminate "bad projects," "thereby improving the quality" of foreign investment flows.
However, at that time, Mr. Phan Huu Thang himself emphasized that the criteria established by the ISC were only for reference and that a set of criteria with a "legislative" nature was still needed to be applied throughout the country.
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