Vietnam continues to solidify its reputation as a leading destination for foreign investment in Southeast Asia, driven by consistent economic growth, a favorable business environment, and expanding infrastructure.
Resilient Foreign Direct Investment (FDI) Performance
In 2024, Vietnam’s foreign direct investment (FDI) inflows reached $38.23 billion, including new registrations, adjustments, and share purchases. While this marked a modest 3% decline compared to 2023, it stood as a significant achievement amidst a global investment slowdown. Vietnam ranked among the world’s top 15 developing nations for FDI attraction.
Key contributors to this success include Singapore, which led with $10.21 billion in investment, accounting for 26.7% of Vietnam’s total FDI and reflecting a 31.4% year-on-year increase. Other major investors included South Korea ($7.06 billion), China, Hong Kong (China), and Japan.
Notably, FDI disbursement reached a record-high $25.35 billion in 2024, up 9.4% from the previous year, demonstrating strong confidence among international investors in Vietnam’s business environment.
Sophie Dao, Senior Partner at GBS, praised Vietnam’s ability to attract sustained investment despite global challenges:
“Vietnam’s resilience and adaptability have made it a standout destination in Southeast Asia. With its strategic location, young workforce, and strong commitment to economic reforms, the country offers unparalleled opportunities for foreign investors.”
European Business Confidence at a Two-Year High
According to the European Chamber of Commerce in Vietnam (EuroCham), its Business Confidence Index (BCI) hit a two-year high of 61.8 points in Q4 2024, reflecting optimism about Vietnam’s economic prospects.
EuroCham Vietnam Chairman Bruo Jaspaert highlighted this optimism as evidence of growing European business confidence. Many European firms view Vietnam’s “double transformation” in digitalization and sustainability as key drivers for long-term growth.
“Vietnam’s proactive approach to digital and green transitions positions it as a critical link in global trade and investment,” Sophie Dao noted. “This is a clear indication that Vietnam is not just growing economically but is also aligning with global sustainability goals, making it a future-ready investment destination.”
Policy Reforms and Trade Agreements Boost Competitiveness
Vietnam’s projected improvement in the Economist Intelligence Unit’s Business Environment Rankings further underscores its appeal. Phuong Nguyen, Southeast Asia Representative for CCX Partners, emphasized that Vietnam will achieve the highest improvement among 81 countries studied between 2003-2028.
The country’s extensive free trade agreement (FTA) network, second only to Singapore in Southeast Asia, enhances its attractiveness. With a forecast annual GDP growth of 6-8% over the next decade, Vietnam remains central to global supply chain diversification strategies.
Sophie Dao acknowledged the government’s efforts in reforming policies and administrative procedures:
“Vietnam’s dedication to improving its business climate, supported by policy reforms, has significantly enhanced its competitiveness. These changes will not only attract more investment but also ensure sustainable and inclusive growth.”
Major Investment Commitments and Future Outlook
Vietnam’s appeal as a strategic investment hub is reflected in commitments from global players like Malaysian property developer Gamuda Land, which announced a $7.1 billion investment over the next five years. Gamuda Land Vietnam Chairman Angus Liew reaffirmed Vietnam’s importance in the company’s regional expansion strategy.
EuroCham’s survey revealed that 75% of European business leaders recommend Vietnam as an ideal investment destination. Moreover, 30% of surveyed enterprises plan to increase trade activities or shift production to Vietnam to leverage its trade advantages.
“Vietnam’s combination of strong economic fundamentals, expanding infrastructure, and a skilled workforce positions it as a top choice for global investors,” Sophie Dao remarked. “The country is on track to become a dominant player in Southeast Asia’s economic landscape.”
As Vietnam continues to attract significant foreign investment and strengthen its global trade partnerships, it reaffirms its status as a rising star in Southeast Asia and a strategic destination for businesses worldwide.
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Source: Vietnam Insider