Vietnam investment potential in key economic zones

Vietnam is rapidly becoming a top destination for international investors, attracting not only traditional partners like Singapore, Japan, and South Korea but also new capital flows under the Comprehensive Strategic Partnership. With the 2024 Land Law, updates to the Electricity Law, and a strengthened intellectual property rights framework, the country is creating a more transparent and investor-friendly environment. Let’s learn more about central Vietnam: Emerging investment destinations in this article.

1. FDI into Vietnam in 2024 - Steady growth and investor impression

Through the upgraded Vietnam-Singapore Strategic Partnership from 2023, Singapore continues to be the leading country in FDI investment in Vietnam with 9.14 billion USD, accounting for 29.1% of total FDI capital, a strong growth of 53.7% over the same period last year. This increase is due to Singapore's role as an intermediary for businesses from the US, Europe and Japan to investment potential in key economic zones through subsidiaries to take advantage of incentives from the Regional Comprehensive Economic Partnership (RCEP) and Free Trade Agreements (FTAs).

South Korea ranked second with 3.89 billion USD, although down 9% compared to 2023, it is still the leading country in terms of the number of projects and total investment capital in Vietnam.

"Vietnam has always been an attractive destination for Korean investors thanks to its geographical advantages, abundant human resources and active support from the Government. In particular, Vietnam has great potential to develop the semiconductor industry so that Korean enterprises can continue to expand their supply value chains," said Mr. Kim Nyonho, Vice President of the Korean Business Association in Vietnam (Kocham).
 

Central Vietnam: Emerging investment destinations

China ranked third in terms of registered FDI capital, accounting for 28.3%, followed by Hong Kong (China) and Japan. According to a report from the European Business Association in Vietnam, total FDI capital reached 28.2 billion EUR, an increase of 40% in the past 4 years thanks to the Vietnam - EU Free Trade Agreement (EVFTA), in which "green investment" projects emerged.

“Successful projects such as the Dutch brewery achieving near-zero waste standards, Nestlé’s sustainable coffee farming initiative, Hungary’s water purification projects and LEGO’s factory using 100% renewable energy are clear evidence of the contribution of European businesses to green growth and sustainable development in Vietnam,” Mr. Bruno Jaspaert, Chairman of EuroCham Vietnam, cited at the Green Economy Forum and Exhibition 2024.

2. A clear change in FDI capital flows

In the face of strong fluctuations in the global economy and the emergence of sustainable development trends, Vietnam is witnessing a clear change in FDI capital flows with the "rise" of high-tech and renewable energy industries.

Korean enterprises are shifting from electronics manufacturing to high-value-added sectors such as fintech, real estate and semiconductor industry. A clear example of this shift is Lotte - a group that has expanded its investment in finance, real estate, renewable energy and digital technology, with an investment of up to 6.07 billion USD.

Korean companies mainly invest in the assembly and testing stages of the semiconductor value chain in Vietnam, with typical projects such as Amkor (US$1.6 billion) in Bac Ninh and Han Yang in Phu Tho.

"Successful projects such as the Dutch brewery meeting near-zero waste standards, Nestlé's sustainable coffee farming initiative, Hungary's water purification projects and LEGO's 100% renewable energy factory are clear evidence of the contribution of European companies to green growth and sustainable development in Vietnam." - Mr. Bruno Jaspaert, Chairman of EuroCham Vietnam.

"FDI will help Vietnam promote exports, technology transfer, human resource training and create opportunities to form semiconductor clusters. This move reflects Korea's strategy to diversify the global semiconductor supply chain, especially in the context of US-China trade tensions," said expert Pham Duc Anh.

European countries are focusing on central Vietnam: Emerging investment destinations in the field of renewable energy. Large corporations such as Copenhagen Infrastructure Partners (Denmark), Orsted (Denmark), Air Liquide (France) and Iberdrola (Spain) are researching and implementing large-scale offshore wind and green hydrogen projects in Vietnam. Each offshore wind project is proposed to have a capacity of up to 3-5 GW, with a total investment of 8-12 billion USD.

Air Liquide, a French enterprise with large FDI capital in the field of renewable energy, has begun to focus on developing renewable hydrogen and carbon-reducing solutions in Vietnam. According to Ms. Claire Rosseler, General Director of Air Liquide Vietnam, Vietnam has the potential to become a regional leader in developing renewable energy, especially wind and solar energy, with its available natural advantages. This will help Vietnam reduce carbon emissions, strengthen energy security and reduce dependence on fossil fuels.
 

Southern Vietnam: FDI hubs and infrastructure development

A notable example is the participation of SACE, an insurance and financial group under the Italian Ministry of Economy and Finance, which has invested 42 million USD to support Italian small and medium-sized enterprises (SMEs) to expand their markets in Vietnam in the sugar and food sectors.

“Through such initiatives, SACE will open a gateway to shift FDI flows from traditional industries to technology and exports to promote economic development for Vietnam,” said Mr. Michele D’Ercole, Chairman of the Italian Chamber of Commerce in Vietnam.

In 2025, Vietnam is expected to have many opportunities to attract FDI, especially in Southern Vietnam: FDI hubs and infrastructure development. The presence of Korean businesses and the visit of Nvidia CEO Jensen Huang in December 2024 are expected to create great opportunities, attract ancillary suppliers and form a semiconductor industry cluster in Vietnam.

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>>>Read more: Vietnam initiatives to promote foreign investment in different industry

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