WNAM REORT: Vietnam has cemented its position as an attractive destination for foreign businesses looking to expand their operations in Southeast Asia, driven by robust growth and expanding infrastructure.
The country’s foreign direct investment (FDI) situation showed remarkable resilience in 2024, with total capital reaching 38.23 billion USD, including new registrations, adjustments, and share purchases. While this represents a modest 3% decline from the previous year, Vietnam’s performance stands out amid global investment slowdown, securing a place among the world’s top 15 developing nations in terms of FDI attraction.
Among 114 countries and territories pouring investment in Vietnam last year, Singapore was the leading investor, channelling 10.21 billion USD into the country, accounting for 26.7% of the total foreign capital and marking a 31.4% increase from 2023. It was followed by the Republic of Korea with nearly 7.06 billion USD, then China, Hong Kong (China) and Japan.
A particularly noteworthy achievement was Vietnam’s record-high FDI disbursement of 25.35 billion USD in 2024, up 9.4% from 2023, reflecting international investors’ strong confidence in the country’s business environment.
The latest survey conducted by the European Chamber of Commerce in Vietnam (EuroCham Vietnam) showed that the European Business Confidence Index (BCI) reached a two-year high of 61.8 points in Q4 2024, reflecting a positive sentiment in both current and future outlooks.
The uptick in business sentiment can be attributed to several factors, most notably Vietnam’s ongoing economic reforms and its centrality in the global shift toward sustainability. Particularly, many respondents referenced the “double transformation” of digital and green transitions as key drivers of optimism.
EuroCham Vietnam Chairman Bruo Jaspaert said this clearly signals growing European business confidence in Vietnam’s economic prospects while reflecting widespread recognition of the country’s economic achievements. Vietnam’s continued GDP growth reinforces its position as a crucial link in Southeast Asian trade and investment.
Phuong Nguyen, Southeast Asia Representative for CCX Partners, highlighted Vietnam’s projected improvement in the Economist Intelligence Unit’s Business Environment Rankings, where the country is said to gain an additional 1.7 points on a 10-point scale between 2003-2028, the highest improvement among 81 countries studied.
Vietnam has the second highest number of free trade agreements, just behind Singapore in Southeast Asia, together with its forecast annual GDP growth of 6-8% based on the growth foundation over the past four decades, makes it a key market for international businesses’ growth and investment diversification strategies.
According to Phuong, the country’s business climate will become more attractive and competitive on the back of fundamental changes in administrative procedures and policies of various sectors.
The country’s appeal is evidenced by major investment commitments, including Malaysian property developer Gamuda Land’s planned 7.1 billion USD investment over the next five years, The Star Online said on January 10. Chairman of Gamuda Land Vietnam Angus Liew stressed that Vietnam continues playing an important role in the property developer’s expansion strategy.
According to EuroCham’s survey, 75% of participating business leaders would recommend Vietnam as an ideal investment destination. This data underscores the growing recognition of Vietnam’s strategic importance as an investment hub in Southeast Asia. With its strong growth rates and expanding infrastructure, Vietnam has positioned itself as an attractive destination for European businesses looking to expand in the region.
Some one-fourth of the surveyed firms consider partnerships with Vietnamese manufacturers or service providers. Meanwhile, 30% of the surveyed enterprises are looking to increase their trade activities or shift production to Vietnam to leverage its trade advantages. The move aligns with global trade shifts, particularly in light of recent disruptions in the global supply chains.
