Foreign Direct Investment (FDI) in Vietnam witnesses a boost due to increased reinvestments and acquisitions of local shares

Foreign Direct Investment (FDI) in Vietnam witnesses a boost due to increased reinvestments and acquisitions of local shares

Vietnam has witnessed a significant increase in Foreign Direct Investment (FDI) in the first seven months of 2025, attracting nearly $24.1 billion. This marks a 27% year-on-year growth, the highest level for the period in the past five years [1][2][3].

Sources of FDI

Singapore leads as the largest investor, contributing nearly $2.8 billion, or about 30% of the newly registered capital. China follows closely with approximately $2.3 billion, accounting for 23% of the total FDI [1][2][4]. Sweden has emerged prominently from the Nordic region, investing about $1 billion, or 10.8% of the total FDI. Other notable investors include Japan (9%), Taiwan and Hong Kong (7% each), and the Virgin Islands [1][2][4].

Reasons for the Increase in FDI

Vietnam’s political stability and favourable investment environment make it attractive over the medium and long term [3]. The country’s targeted FDI strategy and strong positioning in Southeast Asia encourage investment [3]. Despite external challenges like US tariff measures, which impose a 20% tariff on Vietnamese exports, Vietnam maintains strong investor confidence due to its comparative advantages [3]. Investors show confidence in reinvestment and expansion of existing projects, contributing to capital adjustments and share purchases [1][2].

Impact on Various Sectors

The processing and manufacturing industry remains the largest recipient, attracting over $5.6 billion, which is about 56% of the newly registered capital [1][2][4]. Real estate follows as a major sector with around $2.4 billion (about 24%) [1][2]. Other sectors including electricity and gas production, transport and warehousing, and wholesale and retail also benefit, with shares of approximately 21%, 20.6%, and 14.8% respectively among sectors detailed in reports [2].

The growth in these sectors supports industrial expansion, infrastructure development, and boosts the overall economy. The professional activities and science and technology sectors received about $827 million, accounting for 20% of the total FDI [1][2].

In Hung Yen, industrial upgrades, policy reforms, and growing investor confidence in the province's development prospects have driven over $840 million in investment in seven months [1].

In summary, Vietnam’s FDI growth in 2025 is fueled by reinvestment and broad international interest, especially from Asia and Northern Europe, with manufacturing and real estate sectors leading the capital absorption, reinforcing Vietnam’s role as a major investment hub in Southeast Asia [1][2][3][4].

[1] Vietnam Briefing. (2025). Vietnam's FDI disbursement hits $13.6 billion in seven months. Retrieved from https://www.vietnam-briefing.com/news/vietnam-fdi-disbursement-hits-13-6-billion-in-seven-months.html

[2] VnExpress International. (2025). FDI disbursement hits $13.6 billion in seven months. Retrieved from https://e.vnexpress.net/news/business/fdi-disbursement-hits-13-6-billion-in-seven-months-3972129.html

[3] Nikkei Asia. (2025). Vietnam's FDI hits record high in first seven months. Retrieved from https://asia.nikkei.com/Business/Vietnam-s-FDI-hits-record-high-in-first-seven-months

[4] Vietnam Investment Review. (2025). Singapore leads FDI inflow in seven months. Retrieved from https://vietnamlawmagazine.vn/singapore-leads-fdi-inflow-in-seven-months/

1. The growth in Vietnam's FDI in 2025 is largely attributed to reinvestment and broad international interest, particularly from Asian countrieslike Singapore and China, and Northern European nations such as Sweden, in sectors like manufacturing, real estate, and technology.
2. Vietnamese sectors like professional activities and science and technology, driven by growing investor confidence, have also experienced significant growth, accounting for around 20% of the total FDI, indicating a strong emphasis on technological advancement.

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