Vietnam and Thailand officially elevated their bilateral ties to a Comprehensive Strategic Partnership last May, during the official visit to Vietnam by Thai Prime Minister Paetongtarn Shinawatra. This landmark step not only marked a significant diplomatic milestone but also paved the way for a stronger wave of Thai FDI coming to Vietnam in the near future.

As the two countries look ahead to the 50th anniversary of diplomatic relations, in 2026, Thai businesses have been ramping up their investment activities in Vietnam, adding renewed energy and depth to the evolving landscape of Vietnamese-Thai investment cooperation.

Signaling stronger ties

In the first half of this year, Thailand’s investment activities in Vietnam posted impressive growth, emerging as a standout in the country’s FDI landscape. According to the Foreign Investment Agency at the Ministry of Finance, Thai businesses launched 19 new projects in Vietnam during the first half of the year, with total registered capital exceeding $869.65 million; an increase of more than eleven-fold against the same period last year. This not only represents a breakthrough but also marks Thailand’s highest first-half investment figure in the 2021-2025 period.

As of the end of June, Thailand had invested in 771 projects in Vietnam, with total registered capital of over $14.92 billion, ranking it ninth among all countries and territories investing in the country. Within ASEAN, it trails only Singapore, with $86.45 billion in investment, reinforcing its role as one of Vietnam’s key strategic partners and prominent investors in the region.

Thai investors are currently most active in sectors such as manufacturing and processing, retail, real estate, and energy. Several major Thai corporations have made notable moves in recent months, further enriching Thailand’s investment footprint.

In manufacturing, the SCG Group, one of Thailand’s long-standing players in Vietnam, announced plans to resume operations at its $5.4 billion Long Son Petrochemicals Complex in southern Ba Ria-Vung Tau province (now part of Ho Chi Minh City) in August, following a temporary suspension. It also revealed a $500 million expansion plan for the complex, underscoring its long-term commitment and aggressive growth strategy in the country.

Another notable player is the WHA Group, Thailand’s leading multi-sector investor. In mid-May, it officially received an investment license for the WHA Smart Technology Industrial Zone 2 project in north-central Thanh Hoa province, with total capital of over VND1.45 trillion ($55 million).

In retail, meanwhile, Central Retail recently opened its GO! Hung Yen shopping center in northern Hung Yen province, with total investment of VND429 billion ($16 million). This marks the 43rd center in the group’s growing portfolio around Vietnam, reinforcing its presence in the country’s dynamic retail sector.

Beyond traditional sectors, Thai investment is also gradually shifting towards long-term growth areas such as energy, logistics, and high technology. Logistics cooperation between the two countries holds particular promise, especially as global supply chains face increasing pressure from geopolitical and economic uncertainties.

Commenting on Thailand’s investment in Vietnam, Ambassador of Thailand to Vietnam, H.E. Urawadee Sriphiromya, noted that Thai businesses were among the pioneering foreign investors in the country, with several operating in Vietnam for more than three decades in a wide range of sectors.

Vietnam, she went on, is advancing rapidly in technology, with policies aimed at promoting innovation in areas such as AI, semiconductors, and automation. These developments provide a strong foundation for deepening bilateral cooperation in the digital economy.

As Vietnam and Thailand move towards the 50th anniversary of diplomatic relations next year, Thai investment in Vietnam is proving to be a solid pillar that strengthens the comprehensive and effective partnership between the two countries. “Thai businesses have strong confidence in Vietnam’s development potential and in the investor-friendly policies the country continues to pursue,” the Ambassador emphasized.

Growing confidence

Beyond expansion plans, many Thai companies are also placing strong confidence in Vietnam’s development prospects, both in the short and long terms. According to the “Thai Business Sight in Vietnam 2025” survey and report released by the Thai Chamber of Commerce and Industry in Vietnam (ThaiCham), Vietnam continues to be viewed as one of the most attractive investment destinations in the ASEAN region. Specifically, 62 per cent of Thai businesses currently operating in Vietnam expressed optimism about its macro-economic outlook for 2025.

Moreover, 69 per cent believe that Vietnam will maintain its growth momentum and gradually realize its economic development goals over the next decade. Regarding medium and long-term investment strategies, 36 per cent of Thai companies indicated they plan not only to sustain their existing operations but also to expand in Vietnam this year and in subsequent years.

Many Thai businesses cited Vietnam’s consistent and proactive government support as a key factor in attracting sustained foreign investment. Notably, ongoing efforts to update the legal framework, streamline administrative procedures, and foster a transparent investment environment are helping to build strong investor confidence, including among Thai enterprises.

In addition, Vietnam is gaining recognition for its significant efforts in education and workforce development, particularly in preparing human resources for the rapidly-evolving digital economy. Its alignment with ESG (environmental, social, and governance) principles and the promotion of a circular economy also serve as major advantages, as they align with the sustainable growth strategies of many Thai corporations investing abroad.

Commenting further on why Vietnam continues to appeal to Thai investors, Mr. Sanan Angubolkul, Chairman of ThaiCham and President of the Thailand-Vietnam Friendship Association, highlighted several fundamental strengths. These include Vietnam’s large and youthful population, an expanding middle class, and the government’s clearly-defined long-term economic development strategy, which is being effectively implemented.

Notably, Vietnam’s ambitious growth targets - of 8 per cent in 2025 and an annual average of 10 per cent between 2026 and 2030 - have further strengthened Thai business confidence in Vietnam’s stable and promising investment environment.

However, alongside these positive developments, Thai businesses still encounter several challenges when operating in Vietnam. Major obstacles include weak domestic demand, an unclear and frequently changing legal framework, and slow policy implementation.

Other factors, such as global supply chain disruptions, geopolitical instability, labor shortages, and intensifying market competition, are also impacting Thai enterprises’ operations in Vietnam. As a result, Thai companies have called on the Vietnamese Government to further improve the investment climate and enhance transparency, stability, and the ease of doing business, to enable more sustainable business growth. Such efforts, in turn, will help reinforce the ongoing wave of Thai investment into Vietnam.