Vietnam Sees Record FDI Inflows Amid Growing Investor Confidence

Vietnam has recorded a significant surge in foreign direct investment (FDI), with total registered capital reaching $34.65 billion in the first half of 2023, a 61% increase compared to the same period last year, according to the General Statistics Office. This figure is nearly equivalent to the total FDI attracted for the entire year of 2025, which was $38.42 billion.

Key drivers of this growth include a notable 89.5% increase in foreign investors' capital contributions and share purchases, indicating a revitalization in the mergers and acquisitions (M&A) market. The manufacturing and processing sector continues to lead FDI attraction, securing $10.76 billion, which constitutes nearly 62% of the total new registered capital. Additionally, actual disbursed FDI reached over $13 billion, marking an 11.2% increase and the highest disbursement level in five years.

According to Ozasa Haruhiko, the Chief Representative of the Japan External Trade Organization (JETRO) in Vietnam, nearly 57% of Japanese companies operating in Vietnam plan to expand their production and business activities within the next one to two years. Furthermore, 67.5% of these firms anticipate profitability by 2025. Haruhiko attributes this optimism to Vietnam's stable socio-political environment, improving investment climate, and the country's growing market potential.

“The fact that corporations from Japan, South Korea, Singapore, and China are continuing to expand their operations underscores Vietnam's vital role in their global supply chain diversification strategies.”GS-TS Võ Xuân Vinh, Director, Institute of Business Research

Experts like GS-TS Võ Xuân Vinh from the University of Economics in Ho Chi Minh City emphasize that the increase in FDI reflects a shift in investor focus towards quality rather than merely quantity. He noted that the high disbursement rates indicate that many projects are being implemented quickly after receiving approval, contributing to production capacity expansion and job creation. "The fact that corporations from Japan, South Korea, Singapore, and China are continuing to expand their operations underscores Vietnam's vital role in their global supply chain diversification strategies," Vinh stated.

Võ Trí Thành, Director of the Institute for Brand Strategy and Competition Research, also highlighted that Vietnam's competitive advantages remain highly regarded by international investors. The country maintains a stable political environment, robust macroeconomic conditions, and a comprehensive network of free trade agreements, positioning itself as a key destination in the global supply chain restructuring process.

“The current goal must be to attract high-quality capital that enhances competitiveness and adds value to the economy.”Võ Trí Thành, Director, Institute for Brand Strategy and Competition Research

Despite these positive trends, Thành cautioned that the focus should not solely be on attracting large volumes of investment but rather on the quality of FDI. This perspective aligns with the government's Resolution 10, which aims to attract a new generation of FDI prioritizing high-tech projects, innovation, R&D centers, semiconductors, AI, and green economy initiatives. However, he noted that current FDI statistics do not adequately reflect these priorities.

To enhance the quality of FDI, experts recommend that statistical agencies incorporate data on R&D activities, technology transfer, and collaboration levels between foreign-invested enterprises and domestic businesses. Vinh echoed this sentiment, stating that the quality of investment will be more critical than its quantity in the coming years. High-tech projects in electronics, AI, and digital infrastructure not only expand production capabilities but also create significant added value, facilitate technology transfer, and improve labor quality.

In light of the economy's need for additional resources to sustain growth, FDI remains crucial. However, experts warn against reverting to previous practices of attracting FDI at any cost. Investment policies should adhere to principles of fair competition, transparency, and strict adherence to international commitments. If the pressure for growth leads to lowered project selection standards or a focus on the volume of registered capital, Vietnam risks falling back into outdated practices. The current goal must be to attract high-quality capital that enhances competitiveness and adds value to the economy.