Vietnam remains a prime choice for foreign investors in 2024
As of January 20 Vietnam had attracted more than 2.36 billion USD in foreign direct investment, up 40% from the same period last year, according to the Foreign Investment Agency of the Ministry of Planning and Investment. This positive sign indicates that Vietnam will continue to be a top choice for FDI in 2024.
With investment flows slowing globally, Vietnam is still a magnet for foreign investors, especially in semiconductors and high-tech industries. A recent report by HSBC said that Vietnam continues to lead Southeast Asia in attracting FDI.
Vietnam – a destination for foreign investors in 2024
“Made in Vietnam” LEGO products will be exported for the first time by the end of this year, thanks to an investment of 1.3 billion USD since 2022 by Denmark’s LEGO Group. This is one of the largest investments Vietnam has received from a Danish company.
“We were looking at different countries in Southeast Asia. We selected Vietnam for a number of good reasons: political stability, a very strong labor force, and a skilled labor force. These are a number of parameters that we looked at actually – over 10 different parameters – and out of it came the selection of Vietnam. We’re super happy that we chose Vietnam, and we’re still very happy that we’re here in Vietnam,” said Preben Elnef, Vice President and General Director of LEGO Manufacturing Vietnam.
So far, 111 countries and territories have invested in Vietnam. Reasons Vietnam has emerged as a popular country for foreign investors include geographical position, workforce, material supply, infrastructure, legal framework, and tax incentives.
“70% of Vietnam’s population is under the age of 35. They’re highly literate – they’re highly digital literate – and that just really makes for a high tech-forward digital literate population. There’s a strong start-up culture. There are international investors, some of which have been there since the mid-90s. IBM has been there for a long time. The Vietnamese government has put forward tax incentives that makes it easier for foreign investors to go in,” said Erin Murphy, a senior fellow with the Asia Program at the Center for Strategic and International Studies in the US.
In a complicated geopolitical context, Vietnam continues to attract many big foreign investors in the technology sector. The Samsung Group invested 19 billion USD in 6 factories and 1 research and development center in Vietnam. Apple, Google, Dell, and Amazon are also setting up facilities in the country.
Vietnam’s status as an investment hotspot has been taken up a notch. An impressive 62% of members of the European Chamber of Commerce in Vietnam rank the country among their top ten global investment destinations. 17% place it at the very top.
Government committed to creating best conditions for foreign investors
The Vietnamese Government considers foreign investment an important driver of growth, jobs, and a better standard of living, so it has a policy of attracting qualified investment with a focus on efficiency, technology, and environmental protection.
Viewing investors’ success as Vietnam’s success, the Government always creates favorable conditions for investors in a win-win spirit.
At last October’s conference with foreign businesses invested in Vietnam, Prime Minister Pham Minh Chinh mentioned three commitments to investors.
“First, Vietnam always protects the legitimate rights and interests of investors. Second, we always help businesses overcome difficulties and challenges and take advantage of opportunities to ensure their long-term stability and sustainability, based on a sharing of benefits and risks. Our third commitment is not to criminalize economic relations or civil relations, but to punish those who break the law.”
“We protect those who follow the law and create an equitable, healthy, and sustainable production and business environment. We listen attentively to the opinions and suggestions of foreign investors in the interests of improvement, sharing, understanding, and partnership,” said Mr. Chinh.
FDI capital flows into Vietnam are forecast to increase in 2024 and beyond, now that Vietnam has signed 16 Free Trade Agreements with 60 countries and established partnerships with several of the G20 economies.
