Exploring Vietnam’s FDI Landscape

Foreign Direct Investment (FDI) underpins Vietnam's economic prosperity. In 2024, Vietnam’s FDI landscape is set for expansion in technology, renewable energy, healthcare, banking, and real estate. Favorable policies for investors, along with tax incentives and the emergence of new industrial sectors beyond Ho Chi Minh City and Hanoi - make Vietnam a compelling choice for foreign investors seeking stable long-term growth opportunities.

As of February 2024, Vietnam boasted more than 39,000 approved projects with a combined registered capital exceeding US$473.1 billion. This statistics reconfirms its status as an attractive destination for foreign investment.

Current Vietnam's FDI Landscape 

Vietnam's Foreign Trade Agency reported a notable rise in Foreign Direct Investment (FDI) during the first two months of 2024, with an inflow exceeding US$4.29 billion. It is a substantial 38.6 percent increase from the previous year. 

In this timeframe, Vietnam issued investment certificates for 405 new projects, totaling US$3.6 billion in registered capital. This represents a 55.5 percent increase in the number of projects, twice the amount compared to last year.

 In addition, 159 projects underwent capital modifications. In January and February of 2024, the FDI disbursement totaled US$2.8 billion, showing a 9.8 percent whooping increase compared to 2023.  

Hanoi, Thai Nguyen, Quang Ninh, Ba Ria–Vung Tau, Bac Ninh, Dong Nai, Bac Giang, Ho Chi Minh City, Hai Phong, and Hung Yen were the top 10 destinations for foreign direct investment (FDI) in Vietnam from January to February, accumulating 81.7 percent of the total FDI inflow during this period. 

Among them, Hanoi took the lead by receiving nearly US$914.4 million, marking a significant increase of 24.4 times compared to the same period in 2023.

In the initial two months of 2024, Vietnam received significant Foreign Direct Investment (FDI) from several major economies like Singapore, Japan, Hong Kong, and Mainland China among 48 countries and regions for investment. A similar pattern was observed in 2023.

Key Sectors and Industries for FDI 

Between January and February 2024, foreign investors displayed a diverse investment pattern, with the processing and manufacturing industry taking the lead. This trend is consistent with the previous year's data, where the processing and manufacturing industry attracted the lion's share of investments totaling over US$23.5 billion, constituting 64.2% of the total and registering a significant 39.9% year-on-year growth. 

The real estate industry ranked second, drawing in more than $4.67 billion USD, making up 12.7% of the overall amount, and showing a 4.8% growth from the year before.

In 2024, Vietnam will offer promising investment opportunities across various emerging sectors. The technology industry is undergoing significant advancement and digital transformation. The renewable energy sector is gaining momentum with a growing emphasis on harnessing clean energy sources like solar and wind power to sustainably enhance Vietnam's power supply. 

Additionally, there is excitement around the potential demand-driven growth of the med-tech sector and other healthcare-related industries.

Final Thoughts

Vietnam presents abundant opportunities for FDI. Looking ahead to 2024. There are promising opportunities on the horizon, especially in advanced technology fields, that offer great potential for both new and experienced investors. Favorable investment conditions are being supported by government regulations and incentive schemes that focus on regional administrative improvements, promoting public-private partnerships, and offering tax benefits to businesses in targeted sectors and underdeveloped areas.