A new stage in attracting FDI

Ha Noi leads the way

According to the Foreign Investment Agency, under the Ministry of Finance, Viet Nam attracted over 21.5 billion USD in FDI in the first half of this year, the highest level since 2010. This total includes newly registered capital, capital increases, and share purchases and capital contributions by foreign investors.

Notably, Ha Noi topped the national rankings with 3.677 billion USD, 2.8 times higher than the same period last year, reaffirming its appeal on the FDI map. In June alone, the capital drew nearly 800 million USD, with 41 new projects licensed, worth USD 27.8 million, 21 projects seeing capital increases totalling nearly 730 million USD, and 33 share purchases worth around 41.7 million USD.

Bac Ninh came second with nearly 3.15 billion USD, up 7.1% year-on-year, while Ho Chi Minh City exceeded 2.7 billion USD, more than double last year’s figure. In total, 54 provinces and cities received FDI in the first half of the year, with the top six localities accounting for nearly 65% of new projects and over 62% of total capital.

These leading localities have made the most of advantages such as infrastructure, stable human resources, administrative reform and proactive investment promotion, helping both to retain existing investors and attract new ones.

The Foreign Investment Agency observed that the record-breaking FDI inflows in the first half of 2025 reflect continued strong investor confidence in Viet Nam’s business environment. The capital influx not only creates jobs and boosts exports, but also facilitates technology transfer and enhances domestic production capacity.

Asia maintains dominance as green FDI takes centre stage

In terms of partners, Asian investors continued to dominate. The top five countries, Singapore, the Republic of Korea, China, Japan and Malaysia, accounted for nearly 63% of new projects and about 65% of total registered capital. These long-standing partners have forged strong economic ties with Viet Nam and made substantial contributions to key industries.

Jeong Jihoon, Vice President of the Korea Trade-Investment Promotion Agency (KOTRA) in Viet Nam, noted: “Korean businesses regard Viet Nam as a highly attractive destination thanks to substantial improvements in infrastructure, investment policies, and geographic advantages. We consider Viet Nam a top priority in our overseas expansion plans.”

Nitin Kapoor, Vice President of the Viet Nam Business Forum (VBF) Alliance, added that today’s investment trends prioritise not only cost but also sustainability. “Investors are increasingly interested in green, clean, and high-tech projects. Viet Nam is becoming an ideal destination for high-quality FDI,” he said.

To attract sustainable FDI, the Ministry of Finance has introduced a range of special incentives. For instance, innovation centres and research and development (R&D) hubs with investments of 3 trillion VND or more may benefit from preferential tax rates as low as 5% for up to 37 years, full tax exemption for up to six years, and a 50% reduction for the following 13 years.

Viet Nam is also actively improving its business environment by cutting costs and administrative procedures and promoting public-private partnerships with experienced investment funds and corporations to develop strategic infrastructure, artificial intelligence, semiconductors, renewable energy, science and technology, and digital transformation.

From quantity to quality: Moving up value chain

Another significant shift is Viet Nam’s transition from mass-market FDI attraction to a more selective approach, giving priority to high-quality, advanced technology and environmentally friendly projects. Preferred sectors include high technology, semiconductors, supporting industries, electric vehicles, renewable energy and logistics.

The government is also focusing on streamlining procedures, upgrading infrastructure, developing human resources, and ensuring policy transparency. At the same time, Viet Nam is capitalising on the trend of global supply chains shifting away from China, positioning itself to receive investment relocations from major corporations such as Samsung, LG, Foxconn, Apple and Goertek.

While the outlook remains positive, experts warn that geopolitical and international policy risks persist.

Phi Thi Huong Nga, Head of the Industry and Construction Statistics Department at the General Statistics Office, noted: “New US tax regulations could lead to increased costs and reduced import-export contracts, affecting FDI flows into Viet Nam and globally.”

She emphasised that Viet Nam must enhance its competitiveness in areas where it enjoys tariff advantages or benefits under existing free trade agreements (FTAs).

“The country’s investment environment is continually improving, with increasingly attractive policies, a large labour pool and supply chain advantages, these will continue to attract FDI in the future,” she said.

From an optimistic perspective, economist Nguyen Thuong Lang believes that FDI will continue to thrive thanks to new incentives under Decree 19/2025, which guides procedures for strategic projects, streamlines investment procedures under the amended Investment Law, and removes requirements for pre-licensing assessments in fire prevention, environment and construction for certain projects.

Most notably, he highlighted four key resolutions recently issued as major reform initiatives to unlock FDI potential. These include Resolution 57-NQ/TW (2024) by the Politburo on promoting science, technology and innovation; Resolution 59-NQ/TW (24 January 2025) on proactive and comprehensive international integration; Resolution 66-NQ/TW (30 April 2025) on comprehensive reform in law-making and implementation; and Resolution 68 on vigorous development of the private sector.

“Each resolution targets a critical area to streamline and enhance transparency in procedures, create favourable conditions for investors, and improve the competitiveness of domestic enterprises,” economist Nguyen Thuong Lang said. He believes these are timely boosts for FDI attraction in the coming months and years. If Viet Nam can fully seize this opportunity, it will not only remain an appealing FDI destination but could also evolve into a regional manufacturing and innovation hub.

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