Innovation in October 2024 is driving Vietnam’s rise as a leading emerging market, marked by resilience through strong foreign investment, technological advancements, and sustainable initiatives. Experts predict Vietnam could become one of the world’s fastest-growing markets by 2035, fueled by a youthful workforce, digitalization, and strategic infrastructure projects.
This month’s updates emphasize Vietnam’s commitment to global competitiveness, attracting investors, boosting industrial productivity, and fostering green growth, aligning with its long-term economic goals for sustained prosperity.
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Vietnam’s Q3 2024 FDI Surge Driven by High-Tech Growth
Vietnam’s FDI surged 11.6% in the first nine months of 2024, reaching over US$24.78 billion, surpassing expectations. This growth includes 2,492 new projects totaling US$13.55 billion in registered capital, with ongoing projects’ adjusted capital rising by 48.1% to US$7.64 billion. The manufacturing sector led, attracting US$15.64 billion, with Singapore as the top investor at US$7.35 billion, up 69% year-on-year, followed by China at nearly US$3.2 billion.
Bac Ninh topped provincial FDI with US$4.5 billion, tripling last year’s figures. September alone contributed US$4.26 billion, with high-tech investments driving growth, including Amkor’s US$1.07 billion expansion in semiconductors. Vietnam anticipates FDI to reach US$40 billion by year-end, especially in high-tech sectors.
Read More: Vietnam FDI: Analysis of Industries, Source Countries, and Geographical Regions
Vietnam’s Innovation Ambitions for Global Leadership
Vietnam aims to become an innovation powerhouse, with recent policies supporting high-tech growth. Currently ranked 44th on the Global Innovation Index, Vietnam hosts 4,000 startups, 208 investment funds, and 84 incubators, highlighting its progress in innovation ecosystems.
Prime Minister Pham Minh Chinh emphasizes the critical role of technology and innovation in driving Vietnam’s sustainable development. To strengthen this, the government is introducing measures to improve governance, infrastructure, and international cooperation in tech sectors like AI, semiconductors, and cloud computing.
China’s Automotive Investments and Stimulus Impact Vietnam’s Key Sectors
China’s stimulus package, aimed at enhancing domestic demand, is set to benefit Vietnam’s key exports. With 2023 bilateral trade reaching over US$170 billion, Vietnam’s seafood exports to China rose 17% year-on-year, surpassing US$1 billion by August 2024. Other industries, like rubber and steel, are also expected to gain.
Read More: Top Industries for Chinese Investors to Start a Business in Vietnam
Additionally, China seeks favorable conditions for expanding its automotive investments in Vietnam, including recent joint ventures like Geely’s US$168 million factory in Thai Binh. Aligning with Vietnam’s 2030 automotive strategy focused on electric vehicles, this cooperation supports growth in both nations’ green markets.
Read Related: Moving to Vietnam for Chinese Businesses: What are the Benefits?
European Businesses Maintain Optimism for Vietnam
European companies are increasingly optimistic about Vietnam’s business outlook, with EuroCham’s latest Business Confidence Index rising from 45.1 in Q3 2023 to 52 in Q3 2024. Nearly half of European respondents expect business conditions to improve in the coming quarter, and 69.3% foresee a favorable five-year outlook.
Vietnam’s appeal as a long-term investment destination is underscored by 67% of European businesses recommending it, with significant opportunities in renewable energy and digitalization. These sectors are viewed as essential for sustainable growth, enhancing Vietnam’s strategic value for European investors.
Bac Ninh Leads in Vietnam’s 2024 FDI Inflow
In the first nine months of 2024, Bac Ninh attracted over US$4.2 billion in FDI, maintaining its top position in Vietnam. This includes US$1.56 billion in 339 new projects, reflecting year-on-year growth of 82.2%. Additionally, US$2.68 billion was added to 147 existing projects.
Major investors, including Samsung and Canon, contributed significantly, while new licenses in September totaled US$57.8 million. Bac Ninh’s strong investment climate and infrastructure support its growing appeal to foreign firms.
Read More: Bac Ninh Province: Strategic Cooperation with Bac Ninh Industrial Park
Danang’s Digital Transformation Drives Growth
Danang is accelerating digital transformation, with 95% of public services now online—well above Vietnam’s national average of 55%. Recognized for digital excellence, Danang has won the Vietnam Digital Awards four years running. The city has set ambitious targets for e-governance, planning a full rollout of digital public services by early 2025.
Danang has attracted significant projects in semiconductor and AI fields, supporting its smart city aspirations. The Vietnam Digital Government Summit and investments in digital infrastructure are positioning Danang as a national leader in digital transformation.
Read More: Doing Business in Danang: Reasons to Invest in Vietnam’s Industrial Parks
Vingroup Launches US$150 Million Tech Fund
Vingroup has launched VinVentures, a US$150 million venture capital fund to support Vietnamese tech startups. With US$100 million from Vingroup’s portfolio and an additional US$50 million to be invested over the next 3-5 years, VinVentures will focus on AI, semiconductors, and cloud computing. Targeting seed to Series A rounds, VinVentures aims to boost early-stage Vietnamese startups, helping them scale and integrate into the digital economy.
VinVentures also plans to provide startups with access to Vingroup’s extensive network, which spans real estate, healthcare, and electric vehicles, offering startups a significant advantage in product development and expansion. This strategic fund underlines Vingroup’s commitment to advancing Vietnam’s digital landscape and fostering innovation.
Read More: Venture Capital for Small and Medium Enterprises in Vietnam: Business Size of Companies
Conclusion
Vietnam’s business landscape in October 2024 reflects a robust trajectory toward economic leadership. Significant FDI growth, especially in high-tech sectors, and strategic partnerships with countries like China and the EU are positioning Vietnam as a key player in global markets. With initiatives in green energy, digital transformation, and industry innovation, Vietnam is steadily enhancing its infrastructure and workforce, aligning with its long-term development goals.
Vietnam’s appeal as an investment destination is bolstered by government-backed policies supporting innovation and sustainability, fostering confidence among foreign investors. These developments not only highlight Vietnam’s resilience but also underscore its ambition to become one of the world’s fastest-growing economies by 2035.
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