Vietnam Tops Foreign Direct Investment Inflows In Southeast Asia
Jan 30, 2020

Booming Vietnam has become Southeast Asia’s top receiver of foreign direct investment (FDI), with ten consecutive years of increase in FDI to a record of more than $38 billion in 2019, up from the previous record figure of $35.4 billion on 2018.

Ministry of Planning and Investment officials in Hanoi on January 27 said that the compound annual growth rate of FDI was 7.2 per cent and does not only rank the country as Southeast Asia’s top FDI receiver, but also eighth in the world when calculated over the decade’s period.

This ranking comes from a recent US News and World Report list that rated Vietnam in eighth place among the 29 nations that receive the most FDI and the first in Southeast Asia, ahead of Malaysia (13th place globally), Singapore (14th) and Indonesia (18th).

Out of the total, last year $16.7 billion were assigned to more than 3.800 new projects and about $6 billion to over 1,300 projects that were already underway. This figure was completed with purchases of shares and capital contributions.

Manufacturing and real estate top FDI sectors

The processing and manufacturing sector attracted the highest amount of investment by receiving over $24.5 billion, 45.8 per cent of the total. It was followed by real estate sector, wholesale and retail, as well as technology.

Among the more than 100 nations and territories investing in Vietnam, South Korea came first by investing $7.9 billion in 2019, more than a fifth, followed closely by Hong Kong with $7.8 billion.

Geographically, Vietnam’s main receivers were Hanoi and Ho Chi Minh City, with $8.45 billion and $8.3 billion, respectively.

The economic boom is seen primarily to be the result of the successful Doi Moi (Renovation) policy starting in 1986, when the government shifted away from a communist commando system and freed up markets. That way, Vietnam’s economy was gradually becoming one of the world´s fastest growing.

Analysts braodly agree that Vietnam has developed into a very reliable destination for investments due to its sold investment policies, political and social stability, the dynamism of its economy and the skilled workforce.