Foreign direct investments have been a major driving force of Vietnam’s economic development. The country has become an appealing destination for foreign investors with its strong business climate, friendly policies, diverse investment opportunities, and socio-political stability.
From global conglomerates Samsung and Adidas’s production facilities to the much-talked-about billion-dollar Lego factory that will soon rise at the Vietnam Singapore Industrial Park, investors have been pouring huge capital into major industries since the launch of Doi Moi in 1986.
Latest data from the Vietnam Government Portal show the country had total registered capital of USD15.4 billion from January 1 to July 20. The processing and manufacturing sector attracted USD10 billion or 64.3% of the total.
As many as 927 investment projects capitalized more than USD5.72 billion were licensed, while foreign investors committed to adding 7.24 billion USD to 579 projects currently underway, up 3.2%and 59.3%, respectively. Overseas investors also spent almost USD2.58 billion in over 2,072 share purchase deals, an increase of 25.7% over the same period last year.
Singapore ranked first with USD4.3 billion, overtaking first-half top investor Denmark. South Korea came second.
With an updated national strategy to enhance FDI inflow approved just in June, Vietnam expects to develop a healthy investment ecosystem and position itself in front of international economic integration.
Here are the localities receiving the largest FDI, per Vietnam Government Portal data. Unsurprisingly, commercial capital Ho Chi Minh City and neighbor Binh Duong are on top of the list.
1. Ho Chi Minh City
Ho Chi Minh City, where large-scale businesses and towering skyscrapers have emerged over the past decade, leads in foreign investments. As the most important financial and trading hub, the city is home to dynamic human resources and competitive service, industrial and construction sectors.
There are more than 150,000 enterprises and 19 industrial zones, including three export processing zones, 14 industrial parks, and two hi-tech parks. The industrial zones attract investment capital in all fields, especially manufacturing and processing. And as host to the largest airport and well-developed infrastructure, the city supports industrial production and international trading.
Until 2019, Ho Chi Minh City licensed 9,173 FDI projects valued at USD47.3 billion. South Korea, Japan, and Singapore were the top three investors. Leading foreign projects include Intel (US), Samsung (South Korea), Toshiba, Isuzu, and Nidec (Japan), a Vietnam Briefing article detailed. In the first seven months of 2022, the city received USD2.40 billion in foreign investment.
FDI: USD55.19 billion
Top industries: Finance, logistics, electronics, food processing
2. Binh Duong
Binh Duong, considered the gateway to Ho Chi Minh City, has evolved from an agricultural province to an economic cultural center of Vietnam. Bình Duong is an emerging hub for technology, trade, and services, and even surpassing HCMC and Hanoi to top the country’s per capita income in 2021.
So far, Binh Duong has recorded more than 4,033 valid foreign investment projects from more than 60 countries worth more than USD38 billion. It houses 29 concentrated IPs spanning nearly 13,000ha in total, with an average occupancy rate exceeding 83.4%. In the first six months of 2022, the industrial parks have attracted more than USD2.3 billion, an increase of 85% compared to the same period in 2021.
FDI: USD39.58 billion
Top industries: Automobile mechanics, electronic technology
Hanoi, Vietnam’s capital city, has always been a bright spot for FDI, even leading nationwide during the 2018-2019 period of largest foreign investment. It’s the largest economy in the Northern Key Economic Region, with a high percentage of highly-skilled and trained workforce.
During the 2016-2020 period, the city attracted 3,113 foreign-funded projects worth USD26.5 billion, 4.2 times higher than in the previous five-year period. In the first quarter of 2022, the capital city lured 62 new projects with a combined investment of USD24.9 million, while 28 operational projects registered to increase their capital by USD122.8 million. Hanoi is now home to 10 industrial parks, covering a total area of over 1,347 hectares, nine sitting on a site of more than 1,270h and having an occupancy rate of nearly 100%.
Hanoi aims to lead Vietnam’s digital transformation, targeting to raise its contribution to the digital economy. But in the coming years, the capital will continue to prioritize transport construction projects and increase investment promotion in manufacturing and processing, logistics services, healthcare, and clean energy.
FDI: USD37.73 billion
Top industries: Metal industry, electronic industry, food processing, clean energy
4. Dong Nai
With its efficient logistic networks and connectivity to Ho Chi Minh City, Dong Nai’s investment attractiveness has grown tremendously over the years. Multinational firms from South Korea, Japan, China, and Singapore invested majorly in electronic component manufacturing, textile and garment, and tech-intensive industrial goods.
Even when the pandemic affected supply chains and movements across Vietnam, the province recorded USD1.17 billion worth of investments targeted at industrial zones in 2021. Its investment incentive schemes (including an initial four-year tax exemption followed by a 50 percent reduction in taxes over the next nine years.) and industrial zone expansion strategy helped the province give a better business climate for existing investors and lure in new ones. It currently has 10,200ha of industrial zones, and a planned 7,573ha will be added in the coming years.
The Long Thanh International Airport, which is scheduled to operate starting in 2025, is foreseen to drive more investments to the province. The expected capacity of the airport is 25 million passengers and 1.2 million tonnes of cargo per annum.
FDI: USD34.03 billion
Top industries: Electronic manufacturing, textile and garments, agriculture
5. Ba Ria-Vung Tau
Part of the Southern Key Economic Region, Ba Ria-Vung Tau has slowly but surely built its name as a major foreign investment destination. Improving systems of deep-water ports, technical infrastructure, and transport structures helped the coastal province’s economic growth, attracting rising revenues over the years. It’s best known for its oil and gas industry and its strong metalworking and machinery industry linked to shipping and oil.
However, a recent downturn in the oil industry forced Ba Ria-Vung Tau to shift its focus to seaports and logistics services. It is an international transshipment gateway in the Southern area and can accommodate vessels up to 200,000 deadweight tonnage. There are 28 operating ports in the area with a total capacity of 98 million tons annually. Products from Cai Mep-Thi Vai port — the only deep-water port in southern Vietnam — can be shipped directly to Northern America and Europe.
Ba Ria-Vung Tau received at least 429 FDI projects with total registered capital of more than USD31 billion in 2019, with the US as the biggest investor country. Mitsubishi and Lotte are some of the biggest corporations that operate in Ba Ria-Vung Tau.
FDI: USD33.13 billion
Top industries: Industrial production, seaport logistics
Here’s a complete list of Vietnam's ten largest FDI recipients as of June 2022.