Despite the challenges posed by the COVID-19 pandemic, Vietnam has remained a magnet for foreign direct investment (FDI), playing a crucial role in transforming the country into a prominent global production hub.
“Over the past five years, Vietnam has witnessed a consistent increase in FDI inflows since revising its foreign investment attraction policies.”, Sophie Dao, Senior Partner at Global Business Services LLC (GBS), an investment consulting firm in Vietnam told reporter.
According to data from the Ministry of Planning and Investment (MPI), between January 2018 and April 20, 2023, Vietnam recorded a staggering $180 billion in registered FDI, accounting for 40.3% of the total accumulated investment capital over the past 35 years. As of April 2023, the country had attracted 37,065 foreign-invested projects, with a total registered capital of $445.87 billion, of which $279.8 billion had been disbursed.
Vietnam, along with other ASEAN nations, has been a focal point for foreign investment, as highlighted in a report by HSBC on attracting foreign investment in ASEAN. The report emphasized Vietnam’s significant inflow of foreign investment capital. Notably, Vietnam’s FDI disbursement in the last five years reached $107.47 billion, equivalent to 38.4% of the total disbursement over the past 35 years. An average of $19-20 billion in FDI has been disbursed annually during this period, with a record disbursement of $22.4 billion in 2022, Vietnam News Agency reported.
The quality of foreign investment in Vietnam has also witnessed remarkable improvements. Minister of Planning and Investment Nguyen Chi Dung noted that numerous multinational corporations and major investors continue to invest in the country. These foreign-invested projects, characterized by high technology and modern services, have contributed significantly to the added value of industrial products. Additionally, the establishment of research and development (R&D) centers, innovation hubs, and technology incubators has facilitated connections between domestic firms, especially small and medium-sized enterprises, and foreign businesses.
Vietnam’s success story in attracting foreign investment is exemplified by its prominent role in global supply chains, particularly in sectors such as textiles, footwear, and consumer electronics. HSBC highlighted the large-scale investments made by companies like Samsung, Pegatron, Foxconn, Luxshare, and Goertek, affirming Vietnam’s transformation into the world’s technology factory.
Recent investments by Quanta Computer, a MacBook manufacturing partner of Apple, and Foxconn, another key Apple partner, further reinforce Vietnam’s position as an attractive destination for production. Samsung and LG, with their substantial investments totaling $20 billion and $7.5 billion, respectively, exemplify the scale of foreign investment in Vietnam. Moreover, Foxconn, Pegatron, Winston, Goertek, and Amkor have all demonstrated their commitment by continually increasing their investment capital in the country.
According to Christopher J Marriott, CEO of Savills Southeast Asia, Vietnam’s high-value industries and production capacity align well with the expectations of international investors and technology corporations. This sentiment is echoed by Lego Group of Denmark, which recently commenced construction on a $1.3 billion project in Vietnam, signaling the start of green investment in the country as Vietnam strives to achieve net-zero emissions by 2050.
Vietnam’s ability to attract sustained foreign investment highlights its growing importance as a global production hub. With a favorable investment climate, increasing FDI inflows, and a focus on sustainable practices, Vietnam is poised to further strengthen its position in the global manufacturing landscape.