Vietnam industrial sector has seen a significant increase in foreign direct investment (FDI) in the early months of 2024, reaching a five-year high. This growth highlights the country’s strong appeal to international investors, driven by its dynamic investment climate and strategic economic sectors. The rise in FDI is a testament to Vietnam’s robust economic policies and its ability to attract substantial foreign capital.
The inflows are marked by contributions from major global players, underscoring the confidence that foreign investors have in Vietnam’s market potential. This trend not only boosts the local economy but also reinforces Vietnam’s position as a key destination for global investment.
Interested in Investing in Vietnam? Check out InCorp Vietnam’s Incorporation Services
Vietnam’s FDI Disbursement in 2024
FDI disbursement in Vietnam reached a five-year high of US$6.28 billion from January to April 2024, marking a 7.4% increase year-on-year. The processing-manufacturing sector led with US$4.93 billion, followed by real estate at US$607.6 million, and electricity, gas, hot water, steam, and air conditioning at US$259.8 million.
Overall FDI inflows totaled nearly US$9.27 billion, with new projects and capital contributions rising significantly. Singapore was the top investor with US$2.59 billion, followed by Hong Kong (US$898.6 million) and Japan (US$814.1 million). This underscores Vietnam’s growing appeal to foreign investors and its dynamic investment climate.
Read More: Vietnam’s FDI: Analysis of Industries, Source Countries, and Geographical Regions
Record Public Investment in Vietnam
Accelerated public investment in Vietnam has reached a record high, with over 30% of the state budget investment plan disbursed in the first half of 2023, compared to just under 28% in the same period last year. The Ministry of Planning and Investment (MPI) emphasizes the importance of this investment for socio-economic recovery and development.
Authorities are urged to focus on medium and long-term projects for 2021-2025. Public investment, considered crucial for economic growth, will continue to be a primary driver in 2024, with plans already being made for the 2026-2030.
Vietnam’s Textile Sector Attracts US$37B
Vietnam’s textile sector has attracted over US$37 billion in FDI, with around 3,500 foreign-invested projects significantly boosting production capacity. Major investors include South Korea, Taiwan, Hong Kong, and China, with South Korea leading the pack.
In the first four months of 2024, the sector experienced a 6.3% increase in export turnover, reaching US$10.3 billion. Key export markets include the US, EU, South Korea, China, and Japan, demonstrating the sector’s robust growth and international reach.
Read More: Vietnam Clothing Manufacturers: Why Vietnam is a Premier Destination for Apparel Production
Vietnam’s Opportunities Amid Chinese Investment
Vietnam is capitalizing on a wave of Chinese investments, making China the sixth-largest investor with over US$27.6 billion in registered capital in Q1 2024. Key projects include BOE’s US$277.5 million smart terminal factory in Ba Ria-Vung Tau and Yadea’s US$100 million electric motorcycle plant in Bac Giang.
The Vietnamese government fosters a favorable investment climate, focusing on green and digital economies. These significant projects highlight the strategic partnership between Vietnam and Chinese firms, boosting the country’s manufacturing and technology sectors.
Read Related: China +1 Strategy in Vietnam: An Overview for Chinese Investors
Japanese Interest in Vietnamese Startups
Japanese investment in Vietnam’s startups is growing, as seen in the Inno Vietnam-Japan Meetup with over 600 participants. Notable investments include Mynavi Corporation’s involvement in local IT, education, and HR startups, and Cresco’s investment in Capichi, a food delivery service with 2,000 affiliated stores and over 160,000 users.
Despite economic challenges, the Vietnamese startup ecosystem shows promise. Med247, a medical service provider, and Capichi are among the local startups attracting Japanese interest. In 2023, Japanese investment in Vietnam reached US$6.56 billion, highlighting robust bilateral collaboration and potential for future growth.
Read Related: Understand the Fundamentals of Japan & Vietnam’s Trade Under the VJEPA
Ho Chi Minh City Lures US$900M FDI
Ho Chi Minh City attracted US$900 million in FDI in the first four months of 2024, showcasing a robust investment climate. This investment represents a significant portion of Vietnam’s overall FDI inflows, with notable contributions from major sectors.
The city’s strong FDI performance underscores its strategic importance and potential for future growth. Key investors include Singapore, Japan, and South Korea, highlighting international confidence in Ho Chi Minh City’s economic prospects.
Read More: 9 Reasons to Choose Ho Chi Minh City in Vietnam to Launch Your Business
Dong Nai Attracts US$800M FDI in 2024
Dong Nai has received US$832 million in FDI in the first five months of 2024, surpassing its annual target by 119%. This investment includes 40 new foreign-invested projects and 39 existing projects expanding their capital. Major sectors attracting FDI are semiconductors, electronic components, and mechanical engineering.
Singapore led with investments worth US$231.7 million across nine projects, accounting for nearly 45% of the FDI total. This influx of investment highlights Dong Nai’s growing appeal as a hub for high-tech and Vietnam industrial projects.
Read Related: Vietnam’s Industrial Zones: A Key Player in Global Manufacturing
Pandora’s US$150M Factory in Binh Duong
Pandora is set to break ground on a US$150 million factory in Binh Duong, Vietnam. This significant investment underscores the country’s appeal to global manufacturing giants. The factory will focus on crafting high-quality jewelry, supporting Pandora’s global supply chain.
This new facility is expected to generate around 6,000 jobs, contributing to local economic growth and enhancing Vietnam’s manufacturing sector. The groundbreaking ceremony highlights Vietnam’s strategic position in attracting substantial foreign investments.
Read Related: Choosing the Ideal Business Location in Vietnam: The First Step of Success
We made the most detailed step-by-step guide for Company Incorporation in Vietnam for investors, now available as an interactive checklist:
About Us
InCorp Vietnam is a leading market entry and corporate services firm in Vietnam. We are part of InCorp Group, a regional leader in corporate solutions that encompasses 9 countries in Asia-Pacific, headquartered in Singapore. With over 1,500 legal experts serving over 20,000 Corporate Clients across the region, our expertise speaks for itself. We provide transparent legal consulting, setup, and advice based on local requirements to make your business fit into the market perfectly with healthy growth.
Don’t take our word for it. Read some reviews from some of our clients.
