Strong Manufacturing Inflows and Rising Capital Absorption Propel Vietnam’s Foreign Investment Performance to New Heights in 2025

Vietnam’s foreign direct investment (FDI) landscape is witnessing a remarkable transformation, driven by strong manufacturing inflows and an impressive capacity for capital absorption. In 2025, disbursed FDI surged by an estimated 9% year-on-year, reaching a noteworthy US$27.6 billion. This significant milestone marks a five-year high, asserting Vietnam’s position as a resilient and attractive destination for global investors, particularly in an era of global economic uncertainty.

Manufacturing: The Backbone of Investment

The manufacturing and processing sectors led the charge in attracting foreign investment, bringing in a staggering $22.9 billion. This figure represents nearly 83% of the total implemented capital, underscoring the sector’s pivotal role in Vietnam’s FDI narrative. Investors are increasingly recognizing Vietnam as a strategic hub for manufacturing, with companies looking to diversify their supply chains and capitalize on the country’s competitive labor costs and burgeoning industrial zones.

In particular, electronics production has seen a remarkable uptick. Facilities like Rhythm Precision Vietnam in Hanoi’s Noi Bai Industrial Park exemplify the active manufacturing environment that is drawing international interest. The thriving electronics sector not only meets the needs of local markets but also caters to global supply chains, further solidifying Vietnam’s status as a manufacturing powerhouse.

Real Estate and Energy Contributions

While manufacturing took center stage, other sectors also contributed to the robust investment figures. The real estate segment accounted for $1.9 billion, comprising about 7% of the total. This reflects ongoing confidence in Vietnam’s urban development and real estate market, which has been attracting significant interest from foreign investors looking to capitalize on the growth of residential and commercial properties.

In addition, the electricity and gas production and distribution sectors contributed nearly $915 million, representing 3.3% of total FDI. This indicates a growing recognition of the importance of infrastructure development and energy production in supporting Vietnam’s economic expansion.

A Resilient Investment Climate

The data provided by the General Statistics Office highlights strong foreign investor confidence in Vietnam’s investment climate. The total registered foreign investment experienced a slight uptick of 0.5%, reaching $38.4 billion in 2025. This modest growth, in the face of global economic challenges, speaks volumes about the resilience and attractiveness of the Vietnamese market.

With more than 4,000 new projects launched nationwide, the landscape is evolving rapidly. Although the total registered capital for these projects declined by 12%, the increase of 20% in the number of new projects indicates a dynamic shift in how investors are approaching Vietnam’s market.

Leading Sectors for New Investments

Among the newly registered projects, manufacturing and processing sectors continued to lead, capturing $9.8 billion—a compelling 56.5% of the total. The real estate sector followed, attracting $3.7 billion, or 21%. Other industries, collectively, drew in an additional $3.8 billion, showcasing the diverse interests of foreign investors.

In terms of investment partners, the landscape is equally dynamic. Singapore topped the charts with $4.8 billion in registered capital, accounting for 28% of the overall foreign investment. China came in a close second with $3.6 billion, while countries like Hong Kong, Japan, and Sweden also made significant contributions, illustrating a broad spectrum of international engagement.

Adjustments and Mergers: A Comprehensive Approach

Beyond new project registrations, the overall investment scene remains lively. Adjusted capital from existing projects reached $14.1 billion, marking a 0.8% increase from the previous year. This reflects ongoing commitment from foreign investors to enhance and expand their existing operations in Vietnam.

When combining newly registered capital and adjustments, the manufacturing and processing sectors attracted a substantial $18.6 billion, or 59% of the total. Real estate investments followed with $6.3 billion, showcasing a strong interest across these crucial sectors.

Foreign interest in mergers and acquisitions is also on the rise, as seen in the remarkable 55% increase year-on-year to $7 billion across nearly 3,600 transactions. This trend highlights the growing desire for strategic partnerships within Vietnam’s evolving economic landscape, further emphasizing the country’s appeal to foreign investors.

A Bright Future Ahead

As Vietnam navigates a complex global economic landscape, its ability to attract significant foreign investment, especially in manufacturing and processing, is a clear indicator of its resilience and potential. The combination of strong inflows, investor confidence, and a diverse economic base positions Vietnam as a key player in regional and global markets, promising exciting developments in the years to come.