Processing and Manufacturing Sector Catalyzes Foreign Investment in Vietnam
Vietnam’s allure as a foreign investment destination is underscored by its recent influx of foreign direct investment (FDI). According to a report by the Foreign Investment Agency under the Ministry of Finance, FDI in Vietnam reached a notable 6.9 billion USD in the first two months of 2025, signifying a substantial 35.5% year-on-year increase. This includes new registered capital of over 2.19 billion USD, additional capital of over 4.18 billion USD, and capital from contributions and share purchases totaling 529.8 million USD.
The manufacturing and processing sector emerged as the foremost recipient of FDI during this period, attracting nearly 4.72 billion USD, which accounts for 68.3% of the total registered FDI. This sector’s prominence in Vietnam’s economic landscape is further emphasized by the country’s ambitious goals for the 2026-2030 period, aiming to attract 40-50 billion USD in FDI annually.
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Vietnam’s aspirations for FDI during the 2026-2030 period |
Nguyen Văn Toan, Vice Chairman of the Vietnam Association of Foreign-invested Enterprises (VAFIE), underscored the allure of the processing and manufacturing sector, dubbing it a ‘magnet’ for foreign capital. Notably, this sector not only dominated in registered FDI capital but also in implemented FDI, with 2.42 billion USD invested in the first two months, constituting 82.1% of total FDI capital implementation in Vietnam. Toan emphasized the significance of this capital influx, highlighting the sector’s attractiveness to foreign investors.
The report reveals that foreign investors have ventured into 19 out of 21 industries within Vietnam’s national economic sectors. The processing and manufacturing sector leads the way with nearly 311.6 billion USD in FDI, accounting for 61.4% of total FDI in Vietnam. This is followed by real estate, electricity production, and distribution, with investments of over 74.4 billion USD and 41.9 billion USD, respectively.
Toan attributed the sector’s appeal to foreign investors to Vietnam’s “golden population” demographic, characterized by a large and highly skilled workforce. He commended Vietnamese workers for their eagerness to learn and adapt to new circumstances. Additionally, Vietnam’s investment environment has attracted leading industrial corporations such as Samsung Group, LG, Canon, Honda, and Toyota. These corporations have and will continue to attract satellite enterprises in the processing and manufacturing industry to invest in Vietnam. Vietnam’s open foreign investment policies in recent years have also been instrumental in creating favorable conditions for foreign investors, contributing to the country’s success in attracting FDI projects in this sector.
Vietnam’s Opportunities and Aspirations
The influx of FDI projects in the processing and manufacturing sector signifies a significant milestone in Vietnam’s development journey. As affirmed by Toan, this success provides Vietnam with a strategic opportunity to achieve its vision of becoming a developing country with a modern industry and high middle-income status by 2030. By 2045, Vietnam aspires to be a developed, high-income country, as outlined in the Resolution of the 13th National Party Congress.
While FDI in Vietnam, particularly in the processing and manufacturing sector, exhibits positive trends, the Politburo’s Resolution 50-NQ/TW sets ambitious targets. It aims for registered FDI capital of around 200-300 billion USD during the 2026-2030 period, with a disbursement of approximately 150-200 billion USD. To realize these goals, Prof., Dr. Nguyen Mai, Chairman of the VAFIE, emphasized the need to address the challenges posed by the shrinking global FDI landscape and the policies of exporting countries that encourage domestic investment.
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FDI concentration in the processing and manufacturing sector |
Despite Vietnam’s efforts to enhance its investment and business environment, some foreign investors remain discontent with the investment climate. Prof. Dr. Nguyen Mai highlighted the need to address cumbersome administrative procedures that hinder business investment activities. He emphasized the importance of a supportive mechanism to expedite processes for large foreign corporations operating in Vietnam.
To attain its FDI aspirations, Vietnam must not only focus on completing transportation and energy infrastructure but also on streamlining administrative procedures. By creating a simplified, clear, and accessible investment environment, Vietnam can better support investors in implementing their projects and achieving mutual success.
| Vietnam’s FDI aspirations for the 2026-2030 period, with a focus on disbursement |
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