Foreign investment into Vietnam in 2025 has gotten off to a strong start, with inflows reaching nearly $6.9 billion in the first two months, for an impressive 35.5 per cent year-on-year increase. The latest report from the National Statistics Office (NSO) under the Ministry of Finance underscores Vietnam’s growing attraction as a prime destination for global investors.

Promising inflows

While newly-registered FDI fell 48.4 per cent in value to $2.19 billion in the period, the number of new projects rose 10 per cent to 516. This signals that despite a more cautious approach to project scale due to global economic uncertainties, investors are still eager to establish operations in Vietnam.

One standout trend was the six-fold increase in additional registered capital, which soared to $4.18 billion. This remarkable growth highlights the trust and long-term commitment of existing investors who are actively expanding their presence in the country.

Meanwhile, foreign capital contributions and share purchases skyrocketed by 88.8 per cent to $529.8 million, underscoring the strong interest of international investors in tapping into Vietnam’s dynamic business landscape.

Beyond the numbers, recent discussions between foreign business associations, investors, and the Vietnamese Government reinforce Vietnam’s position as an increasingly attractive investment destination.

At a meeting with Prime Minister Pham Minh Chinh in early March, Mr. Ko Tae Yeon, Chairman of the Korean Chamber of Commerce in Vietnam (KoCham), emphasized the strong confidence of South Korean businesses in Vietnam’s market potential. He also praised the government’s proactive efforts in navigating the external challenges, facilitating business operations, and driving economic growth.

Some 10,000 South Korean enterprises are now operating in Vietnam, spanning key economic sectors such as high-tech industry, semiconductors, and energy. This strong presence highlights Vietnam’s crucial role in the global supply chain and reflects the deepening Vietnam-South Korea economic partnership.

Looking ahead, Mr. Yeon noted that South Korean businesses remain eager to explore new investment opportunities in high-tech fields, including semiconductors, green energy, LNG, electric vehicle (EV) batteries, biotechnology, and advanced materials. This signals the likelihood of major South Korean investments in Vietnam in the near future.

Similarly, the latest survey of Japanese enterprises on emerging markets identified Vietnam as the most promising destination. With ambitious plans for energy development and road and rail infrastructure, Vietnam is regarded by Japanese businesses as one of the most dynamic economies in the region. Notably, around 56 per cent of Japanese companies plan to expand operations in Vietnam within the next one to two years; the highest rate in ASEAN. “Businesses are optimistic about Vietnam’s economic growth, especially as the country enters the era of the nation’s rise and undertakes a revolution in organizational streamlining,” Japanese Ambassador to Vietnam, H.E. Ito Naoki, emphasized.

Notable shifts in FDI

As highlighted by investors, the manufacturing and processing sector remains the largest recipient of FDI in Vietnam.

According to the GSO, FDI inflows into the sector reached $4.51 billion in the first two months of 2025, accounting for 70.8 per cent of total newly-registered and additional capital. This reaffirms Vietnam’s position as a key manufacturing hub in the region.

Beyond manufacturing, FDI in service sectors such as financial services and logistics has also seen growth, signaling a shift in investment patterns as more foreign investors explore diverse industries.

Vietnam’s FDI disbursement also showed positive momentum, reaching an estimated $2.95 billion in the first two months, for a 5.4 per cent increase year-on-year. This is also the highest two-month disbursement level in recent years. The steady rise in disbursed capital reflects the effective implementation of FDI projects, further driving Vietnam’s economic growth.

One of the standout trends in early 2025 is that Asian investors continue to play a pivotal role in Vietnam’s FDI landscape. South Korea leads with total investment of $1.47 billion, followed by Singapore with $1.4 billion and China with $850 million.

However, when it comes to new project registrations, Chinese investors have taken the lead, contributing $679.8 million, which accounts for 31 per cent of total newly-registered capital. This reflects the growing interest of Chinese businesses in expanding their presence in Vietnam.

Challenges remain

While FDI disbursement reached its highest level in the period for the past five years, its growth rate nonetheless remains modest compared to the increase in registered capital and is lower than in the same period of 2023, which saw a 4.9 per cent decline. This presents a challenge for achieving first-quarter economic growth targets, as the FDI sector has long been one of Vietnam’s key growth drivers. To address this, authorities must implement measures to accelerate disbursement and create favorable conditions for FDI project execution.

Additionally, Vietnam should focus on attracting FDI into high-tech, environmentally-friendly sectors that generate higher added value for the economy. FDI attraction should also be closely linked to technology transfer and sustainable development.

To sustain and build on this momentum, Vietnam must continue improving workforce quality, developing modern infrastructure, and enhancing the competitiveness of domestic enterprises. Strengthening these areas will enable local businesses to integrate more deeply and sustainably into the global value chains of foreign investors.

With ongoing efforts to improve the investment climate, Ambassador Naoki expressed confidence that Vietnam will continue attracting FDI in 2025, further driving economic growth and strengthening its position on the global stage.