Continuing to be a safe and attractive destination for international businesses, partners and investors, Vietnam is among the 15 developing countries attracting the largest foreign direct investment (FDI) in the world.
In the context of declining global investment, Vietnam is "going against the flow" in attracting foreign direct investment (FDI).
Continuing to be a safe and attractive destination for international businesses, partners and investors, Vietnam is among the 15 developing countries attracting the largest foreign investment capital in the world.
These results continue the outstanding achievements of the nearly 40-year journey of attracting FDI following the Party's innovation policy. FDI capital is considered a driving force for economic growth.
Outstanding achievements
Implementing the renovation policy, the Party and State of Vietnam have issued many policies and laws to attract and manage foreign investment, create a favorable investment and business environment, and gradually approach international practices.
Faced with the new situation with new requirements and demands; especially for the quality of foreign investment flows, the Politburo issued Resolution No. 50-NQ/TW dated August 20, 2019 on the orientation to perfect institutions and policies, and improve the quality and effectiveness of foreign investment cooperation by 2030.
The foreign-invested economic sector has developed rapidly and effectively, becoming an important part of the economy, actively contributing to the country's socio-economic development.
Foreign investment activities are increasingly vibrant, many multinational corporations, large enterprises with modern technology invest in our country; the scale of capital and quality of projects increase, contributing to creating jobs and income for workers; improving qualifications and production capacity; increasing state budget revenue, stabilizing the macro economy; promoting economic restructuring, renewing the growth model; enhancing Vietnam's position and prestige in the international arena.
Currently, the foreign direct investment (FDI) economic sector is not only an important pillar for economic development but also a driving force for reform, innovation and enhancing Vietnam's competitiveness in the context of globalization.
In particular, the foreign-invested economic sector not only contributes to creating jobs, increasing income for workers, diversifying production structures, but also spreading technology and modern management experience, contributing to bringing Vietnam to participate in many stages of the global value-added chain.
The leader of the Foreign Investment Agency (Ministry of Planning and Investment) commented that foreign investment continues to affirm its important role in Vietnam's economic growth. Accordingly, in 2024, FDI attraction will reach nearly 38.23 billion USD, ranking among the 15 developing countries attracting the largest FDI in the world; with realized FDI capital of about 25.35 billion USD, an increase of 9.4%, the highest ever.
Although total registered capital decreased slightly by 3%, the significant increase in adjusted capital (up 50.4%) and the number of new projects (up 1.8%) in 2024 showed strong confidence of foreign investors when Vietnam's political and socio-economic situation was stable. Large projects in the fields of semiconductors, energy and high technology were implemented, contributing to promoting economic restructuring.
The foreign investment sector contributes positively to the state budget with about 20.49 billion USD and continues to be an important support for Vietnam's exports in 2024. This sector also has a trade surplus of nearly 49.2 billion USD including crude oil and 47.5 billion USD excluding crude oil, helping to offset the trade deficit of more than 25.4 billion USD of the domestic enterprise sector, bringing the whole country to a trade surplus of 23.8 billion USD.
“The contributions of the FDI sector have also created foundations to promote the process of economic restructuring, promote foreign economic relations, and enhance Vietnam's national competitiveness in recent years,” said Professor-Doctor of Science Nguyen Mai, Chairman of the Association of Foreign Investment Enterprises (VAFIE).
Economist, Dr. Nguyen Bich Lam, former General Director of the General Statistics Office, said that an important step forward in Vietnam's FDI attraction strategy is that instead of focusing only on quantity, Vietnam is aiming to attract high-quality FDI flows, originating from multinational companies in the top 500 and developed economies.
“This shows a change in strategic thinking, in line with the spirit of Resolution No. 50, where sustainable and stable development is a top priority. This is a testament to Vietnam’s commitment to screening and selecting investors with capacity, advanced technology, and the ability to contribute to long-term growth and environmental protection,” Dr. Nguyen Bich Lam emphasized.
Although the FDI sector has made many contributions to the Vietnamese economy, economic experts still emphasize the limitations in attracting FDI.
According to Professor-Doctor Nguyen Mai, in terms of benefits - an important criterion in FDI investment activities, Vietnam is still at a disadvantage because foreign investors transfer "huge profits" back to their countries.
In terms of technology and management, Vietnam has not really acquired many management skills and has almost not received technology transfer impacts from FDI projects.
Currently, about 68.5% of FDI enterprises consider Vietnam to be more favorable in terms of investment location compared to other countries that they consider investing in, such as issues of labor costs and quality, taxes, and the Vietnamese Government's ability to respond to emergencies, which are considered more positive than other countries.
“Foreign investment in the new situation still has many issues that need to be resolved; in particular, the connection between the FDI sector and domestic enterprises is still weak, lacking cohesion, failing to promote technology transfer and improve our country’s position in global value chains…,” Minister of Planning and Investment Nguyen Chi Dung emphasized.
Seize the opportunity and timing
The strength of Vietnam's economy has been demonstrated through controlled macroeconomic indicators and Vietnam is increasingly affirming and consolidating its important role in the supply chain diversification strategy of multinational corporations. 2025 will be the time for foreign investors to seize opportunities and implement high-tech foreign direct investment (FDI) projects in Vietnam.
Mr. Nguyen Van Toan, Vice President of the Vietnam Association of Foreign Investment Enterprises (VAFIE), said that Vietnam has been attracting quality FDI flows. Implementing the FDI attraction strategy in the new period, Vietnam aims to not only attract quantity but also quality FDI from multinational companies in the top 500, from developed countries.
Economic experts also noted that, to anticipate new-generation FDI projects, industrial parks need to focus on developing a green environment, paying attention to ESG (measuring sustainability and corporate responsibility for the environment, society and governance), reducing carbon emissions, etc. In that context, the requirement is to develop green industrial parks and green infrastructure not only to meet environmental standards but also to become a competitive advantage.
Investors clearly see that Vietnam has made very specific moves in preparing and being ready to attract projects from investors. Basic conditions such as land, energy, and human resources have undergone many changes in 2024, especially human resources with the training of 50,000 engineers and high-quality workers in the fields of technology and semiconductor chips.
“When participating in supply chains and production chains, it is clear that Vietnam has improved its position in the international arena in foreign affairs, which will be a basic premise for participating in chains in the economy and production and business,” said Deputy Minister of Planning and Investment Tran Quoc Phuong.
However, to boost FDI attraction, Vietnam needs a clearer strategy in attracting FDI; in particular, it needs to screen FDI projects. For example, requiring FDI enterprises to invest in developing domestic supply chains, creating opportunities for Vietnamese companies to participate in the production and service provision process. Along with that, localities require foreign enterprises to build factories, recruit local workers and participate in domestic supply chains. Only when enterprises comply with these conditions will they enjoy incentives.
According to forecasts, attracting global FDI in 2025 will face many challenges; especially policies to retain investors of major countries. This also requires Vietnam to improve the investment environment, remove barriers in administrative procedures and develop infrastructure to attract this potential capital flow, contributing to economic growth.../.
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