The Rise of Foreign Investment in Vietnam: A Comprehensive Overview

Foreign investment in Vietnam has entered an exciting phase, showing robust growth despite a recent dip in newly registered funds. In the first 11 months of 2025, Vietnam attracted nearly $33.7 billion in foreign direct investment (FDI)—an impressive increase of 7.4% compared to the previous year. This article explores the driving factors behind this upward trend, examines the sectors attracting the most capital, and highlights the countries leading the charge in FDI.

Strong Performance Amidst Challenges

Vietnam’s foreign investment journey is characterized by a nuanced landscape. Although newly registered capital saw a slight decline, the overall increase in FDI was primarily fueled by substantial adjustments in previously committed funds and surging capital contributions. Specifically, more than 3,695 new projects were licensed, amounting to over $15.9 billion. Interestingly, while the number of projects increased by 21.7%, the total pledged capital decreased by 8.2%, indicating a preference for adjusting existing investments rather than initiating new ones.

An Influx of Adjusted Capital

A notable feature of this period is the increased adjusted capital for ongoing projects, which reached approximately $11.6 billion—a remarkable 17% rise year-on-year. This indicates that foreign investors are either expanding their existing operations or increasing their financial commitment to ongoing projects, signaling confidence in Vietnam’s economic potential.

In addition, there were 3,225 cases of capital contributions and share purchases worth over $6.1 billion, marking a staggering 50.7% rise compared to the previous year. Investors have shown an appetite for acquiring stakes in local companies, which adds another layer of depth to the investment landscape in the country.

Disbursement Trends

Disbursement of FDI has also seen a positive trajectory. In the first 11 months, $23.6 billion of FDI inflows were disbursed, up 8.9% year-on-year. This reflects not only a favorable investment climate but also the effectiveness of governmental measures aimed at accelerating the implementation of projects.

Sector-Wise Breakdown of Investments

FDI in Vietnam is by no means homogeneous; it spans various sectors, showcasing the country’s diverse economic potential. In the first 11 months, investment flowed into 18 out of 21 sectors. The processing and manufacturing industry remained the star performer, attracting just over $18.5 billion, which accounts for nearly 55% of total FDI. This sector’s appeal is largely due to Vietnam’s competitive labor costs and improving infrastructure.

Real estate also saw significant attention, garnering around $6.5 billion—19.3% of total investments and a 24.2% increase from the previous year. This surge reflects growing confidence in the Vietnamese housing market. Other notable sectors include wholesale and retail, along with professional and scientific activities, which received $1.9 billion and $1.7 billion respectively.

Leading Investor Nations

Among the 110 countries and territories investing in Vietnam, Singapore emerged as the top investor, contributing nearly $8.5 billion—approximately 25.2% of the total FDI, marking a 9% increase year-on-year. Following closely was China, with almost $4.3 billion (12.7%), up 18.1% compared to last year. South Korea, Japan, and Hong Kong also made significant contributions, showcasing the multi-faceted appeal of Vietnam as an investment destination.

Regional Distribution of FDI

Vietnam’s geographical distribution of foreign investment is equally diverse, with 31 cities and provinces receiving FDI. Ho Chi Minh City ranked as the top destination, attracting $6.5 billion (19.4% of total FDI), while Hanoi followed closely with $4.3 billion (12.7%). Bac Ninh, Dong Nai, Tay Ninh, and Haiphong also emerged as attractive locations for foreign investors, further underlining the regional disparities in investment distribution.

Future Prospects

Looking ahead, the landscape of foreign investment in Vietnam is expected to evolve further. Companies like Luxshare-ICT Group are planning significant expansions, particularly in the technology and innovation sectors, indicating a shift towards more high-value investments. This aligns with the government’s push for high-quality FDI, focusing on industries that can drive economic growth and sustainable development.

Conclusion

Vietnam’s foreign investment scene offers a dynamic blend of opportunities and challenges. An upward trajectory in adjusted capital and share purchases reflects the resilience of foreign investors in navigating potential hurdles. As the country continues to refine its investment policies and infrastructure, the potential for foreign direct investment remains promising.