Vietnam’s FDI Hits 5-Year High as Singapore and China Lead Investment Wave

Summary:

Vietnam’s foreign direct investment surged to $31.52 billion in the first 10 months of 2025 the highest in five years with Singapore and China contributing nearly 50% of new registered capital...

FDI Rebounds Sharply Amid Global Supply Chain Shifts

Vietnam has recorded a remarkable resurgence in foreign direct investment (FDI) inflows, with registered capital reaching $31.52 billion and disbursed capital hitting $21.3 billion by the end of October 2025. This marks a 15.6% year-on-year increase in registered FDI and an 8.8% rise in disbursed FDI the strongest performance for the January–October period in five years.

This uptrend reflects growing investor confidence in Vietnam’s economic resilience, favorable investment climate, and improving post-pandemic recovery. The shift also aligns with ongoing regional supply chain relocations driven by cost optimization, geopolitical tensions, and Vietnam’s continued openness to international capital.

Singapore and China Dominate New Investment Registrations

Among the 87 countries and territories with newly licensed investment projects in Vietnam this year, Singapore led the charge with $3.76 billion in newly registered capital, accounting for 26.7% of the total. China followed closely with $3.21 billion, or 22.8%, underscoring the strategic repositioning of Chinese investors amid trade disruptions and domestic capacity constraints.

Other notable contributors include Hong Kong ($1.38 billion, 9.8%) and Japan ($1.17 billion, 8.3%). The dominance of Asian capital sources highlights a strong intra-regional investment cycle, reflecting both market proximity and policy complementarities.

This concentration of funding from Asia also reveals a causal relationship between trade redirection (particularly away from China) and Vietnam’s increasing role as a manufacturing substitute or partner.

Manufacturing Sector Remains Core FDI Magnet

The manufacturing and processing sector retained its title as the top FDI magnet, accounting for $17.68 billion, or 83% of total realized FDI. In terms of registered and adjusted capital, the sector attracted $16.37 billion (62.5%).

Real estate followed with $5.32 billion (20.3%), while energy-related sectors such as electricity and gas production received $671.9 million (3.2%). These figures reaffirm Vietnam’s comparative advantage in labor-intensive manufacturing and its rising appeal in industrial real estate and clean energy.

Mergers, acquisitions, and equity participation also surged, with 2,918 transactions valued at $5.34 billion a 45.1% increase from 2024. Notably, $1.86 billion went into manufacturing, while professional services and tech absorbed $1.11 billion. The remaining $2.37 billion flowed into trade, finance, and service industries.

Geographic Highlights: Industrial Hubs Lead the Race

In terms of provinces, Bắc Ninh emerged as the top destination for newly registered FDI with over $1.7 billion, followed by Ho Chi Minh City ($1.6 billion) and Hải Phòng ($1.4 billion). These industrial hubs benefit from established infrastructure, logistics networks, and government incentives that enhance their competitiveness in electronics, logistics, and industrial real estate.

Their strategic locations also correlate with multinational firms’ site-selection strategies, where access to ports, labor, and high-tech ecosystems are key decision drivers.

Vietnamese Capital Goes Abroad: Outbound Investment Accelerates

Parallel to inward investment, Vietnamese firms have also ramped up overseas investments. In the first 10 months, outbound registered capital hit $1.1 billion more than double the same period last year.

This included 148 new projects worth $742.8 million and 28 capital expansion projects totaling $358.2 million. Primary destinations included Laos, which attracted $590.3 million (53.6% of total outflow), primarily into energy and manufacturing sectors.

This diversification trend aligns with Vietnam’s ambition to build regional investment footprints while securing energy resources and market access.

Toward a New Growth Cycle in 2026–2030

Vietnam’s dual surge in both registered and realized FDI signals renewed investor confidence and lays the foundation for a new phase of industrial and export-led growth. If momentum continues through Q4, total FDI for 2025 could exceed $35 billion a new record.

Such inflows will be critical in boosting Vietnam’s manufacturing capabilities, labor market, and technology transfer as it positions itself as a Southeast Asian industrial powerhouse in the 2026–2030 period.

The dominance of Singapore and China also signals potential shifts in regional capital flow dynamics, as Vietnam becomes increasingly central to both supply chain diversification strategies and geopolitical recalibration across Asia.

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