Vietnam has been a hub for foreign direct investment in recent years as geopolitical tensions between the United States and China have seen multinationals looking south of the border to diversify their supply chains.
A number of locations have proven popular to these new market entrants. Here are 6 of the most attractive destinations for foreign direct investment in 2023 in Vietnam
1. Ho Chi Minh City
Taking the lion’s share of FDI in 2023 with a whopping US$5.85 billion in newly registered capital is Vietnam’s biggest city, Ho Chi Minh City. Vietnam’s financial hub, this booming economic center in the south has become a regional manufacturing and business magnet.
HCMC’s port is the biggest in Vietnam both in area and volume of goods that pass through it. It also has Vietnam’s busiest international airport and is located right in the center of Southeast Asia.
HCMC also has a population of around nine million of which around five million are of working age. It also boasts a number of international universities and training institutions producing a regionally, relatively high-caliber of skilled workers.
Not only that, but HCMC has a history of successful FDI ventures as well as policies favorable to foreign direct investors. It’s for these reasons, though not these reasons alone, that HCMC is Vietnam’s top FDI destination.
2. Hai Phong
The port city of Hai Phong comes in second with just over US$3.26 billion in FDI in 2023. Around 120 kilometers east of Hanoi, Hai Phong is the biggest coastal city in northern Vietnam. In 2021, it also had the seventh-biggest population in the country.
Founded by the French this city has become an industrial powerhouse in Southeast Asia. Its port on the Cam River is one of the biggest in Vietnam and its ability to move large volumes of goods by sea makes this province one of the most attractive to foreign firms.
3. Quang Ninh
Quang Ninh, in Vietnam’s northeast, is more than just the home of the World Heritage-listed Ha Long Bay. With its close proximity to the Port of Hai Phong, it has been a magnet for FDI in recent years, coming in third, with US$3.11 billion.
In Vietnam’s 2022 Vietnam’s Provincial Competitiveness Index (PCI) Quang Ninh came in first.
With its geographical location; access to highways and seaports; close proximity to China, as well as Vietnam’s capital Hanoi; and the provincial government’s push to attract greater FDI, Quang Ninh has quickly climbed the ranks.
Quang Ninh is a smart choice for foreign firms looking for a low-cost, well-prepared location in Southeast Asia from which to expand their footprint in the sub-continent.
4. Bac Giang
Hanoi’s provincial neighbor to the north, Bac Giang, comes in at number four in the most attractive destinations for FDI in Vietnam in 2023 with US$3.02 billion.
Bac Giang ranked third in Vietnam’s PCI for 2022. Feeding off its proximity to Hanoi, factories have been built and continue to be built all over the province.
Home to at least 36 industrial clusters spread over 682 hectares. Back Giang has become a major hub for foreign-invested enterprises with a strong focus on electronics manufacturing.
5. Thai Binh
With nearly US$2.8 billion of new registered capital in Thai Binh in 2023, this province roughly 100 kilometers south-east of Hanoi, comes in at number five on the list.
Back in 2021, Vietnam Briefing noted the potential for this relatively small province to attract vast sums of FDI. At the time, Vietnam Briefing noted that its geographical location, natural resources, labor supply, and infrastructure were all driving investment in the province.
That investment has continued over the past three years to make Thai Binh a leading destination for FDI in Vietnam.
6. Hanoi
Vietnam’s capital comes in at number six in 2023, receiving a little over US$2.73 billion in FDI.
With just shy of 9 million people calling the city home–a number that continues to climb–in terms of labor, Hanoi has it in abundance. Not only that, but it is connected to the world via road, rail, air, and sea (via the Red River).
It’s also just a short drive from the coast, particularly the key port city of Hai Phong. This makes getting goods made in Hanoi out of the city and to the wider world much easier.
Summary
Overall, 2023 was an excellent year for foreign direct investment in Vietnam. Its role as a key alternative to China is becoming increasingly clear and its business environment is becoming more and more favorable for foreign investment.
Source: Vietnam Briefing
