VIETNAM

Foreign Direct Investment in Vietnam

A remarkable economic transformation

Vietnam’s economic journey over the past three decades, since the U.S. lifted its embargo in 1994, is a truly remarkable story. From an economy recovering from war, Vietnam has risen to become a leading global manufacturing hub. Foreign Direct Investment (FDI) has been the core driver of this development, supported by competitive labor costs, strategic trade agreements, and the realignment of global supply chains. As of September 2025, Vietnam’s FDI landscape continues to demonstrate robust growth and deep integration with East Asia, solidifying its position as a resilient beacon amid international uncertainties.

Strong FDI inflows

Vietnam’s FDI ecosystem is thriving. As of December 31, 2024, the country hosted 42,002 active FDI projects with a total registered capital of USD 502.8 billion, of which USD 322.5 billion (64.1%) has been realized. In 2024, Vietnam attracted $38.23 billion in registered FDI, with disbursements reaching a record $25.35 billion, a 9.4% year-on-year increase.

This momentum carried into 2025. In the first half of the year, FDI pledges soared to $21.51 billion, a 32.6% rise and the highest mid-year figure since 2009. By August 2025, registered inflows reached $26.1 billion (up 27.3%), with disbursements hitting $15.4 billion (up 8.8%), marking the strongest eight-month performance in five years. Analysts project 2025 inflows could reach $35–40 billion, potentially driving 7–8% GDP growth as disbursements accelerate.

Pivoting toward high-value industries

Vietnam’s FDI is increasingly concentrated in high-value, innovation-driven sectors. Manufacturing and processing dominate, accounting for over 60% of inflows, with a growing focus on high-tech industries such as semiconductors, electronics, and renewable energy, which now represent 15-20% of commitments. Emerging sectors like industrial real estate, digital services, and green energy are also gaining traction, reflecting Vietnam’s strategic shift toward sustainable growth.

Global integration

East Asian investors, particularly from Singapore, China, South Korea, Japan, and Taiwan, account for approximately 70% of Vietnam’s FDI. Singapore leads with a 27% share, followed closely by other regional giants. Global corporations are deeply embedded in Vietnam’s economy. For instance, Samsung’s $23.2 billion investment has made Vietnam a key production hub for its smartphones, contributing $54.4 billion to Vietnam’s exports in 2024. Similarly, Apple suppliers like Foxconn have expanded operations, producing significant shares of iPads and AirPods, reinforcing Vietnam’s critical role in global value chains.

Vietnam’s integration with East Asia, encompassing 70% of its FDI, trade, and economic exchanges, provides a strong foundation for resilience. Despite U.S. tariffs peaking at 46% in early 2025 before easing to 20%, inflows from Japan, Korea, and China remain robust. Landmark projects, such as the $8 billion Lao Cai-Hanoi-Haiphong railway and the $200 million Vinh Phuc superport, highlight this commitment.

The Regional Comprehensive Economic Partnership (RCEP) further amplifies Vietnam’s advantages, offering tariff-free access to markets representing 30% of the global population. In 2024, Vietnam’s exports to China reached $61.2 billion, underscoring deepening regional ties. Local firms, such as Viettel with its $130 million border logistics investment, are also strengthening these supply chains, cementing Vietnam’s position as a central hub in East Asia’s economic ecosystem.

Challenges to sustained growth

Despite its success, Vietnam faces challenges that could impact its FDI trajectory. Trade frictions, such as evolving U.S. policies, pose risks. Infrastructure bottlenecks, including port congestion and power shortages, require urgent attention. Additionally, with a population exceeding 100 million, skills gaps must be addressed to meet the demands of emerging industries like AI and robotics. Upskilling the workforce and improving bureaucratic agility will be critical to sustaining momentum.

A path to prosperity

Vietnam’s FDI-driven growth positions it to achieve upper-middle-income status by 2030. By prioritizing incentives for green technology, workforce development, and digital infrastructure, policymakers can unlock even greater potential. For investors, Vietnam is more than a “China+1” alternative, it is a strategic pivot in East Asia, offering enduring returns in a dynamic global landscape.

Vietnam’s vision

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