Vietnam's Department of Foreign Investment calculated 2017 FDI at USD 35.9 billion, a 42.3% increase year-to-year. Traditionally directed towards light industry, FDI inflows quickly turn towards heavy industry, real estate and tourism. Inflows are expected to continue, confirming the country's position as one of the most attractive country in terms of FDI in Asia. The main investor countries were Japan, South Korea and Singapore, with the manufacturing and processing sectors attracting the most FDI followed by real estate and professional activities/science/technology (Trading Economics). Total FDI stock reached USD 129.4 billion (60% of GDP) in 2017.
Vietnam maintained 69th place in the 2019 Doing Business Report. The greatest progress has been made in protecting minority shareholders and cross-border trade. Vietnam expects disbursed foreign direct investment to continue to rise as the government steps up efforts to attract factories into the country. The Ministry of Planning and Investment aims to draw more FDI into areas including export-oriented, energy and high-technology by building a more business-friendly environment. FDI now allows Vietnam to produce high value-added products such as smart phones and tablets. The country is willing to create a more favourable environment for foreign investors. More information can be found at the Investment and Trade Promotion Centre of Ho Chi Minh City (ITPC).
|Vietnam||East Asia & Pacific||United States||Germany|
|Index of Transaction Transparency*||7.0||5.0||7.0||5.0|
|Index of Manager’s Responsibility**||4.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||7.0||6.0||4.0||8.0|
|Index of Investor Protection****||5.3||5.2||6.5||6.0|
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2015||2016||2017|
|FDI Inward Flow (million USD)||11,800||12,600||14,100|
|FDI Stock (million USD)||102,791||115,391||129,491|
|Number of Greenfield Investments***||232||277||247|
|FDI Inwards (in % of GFCF****)||25.5||27.5||n/a|
|FDI Stock (in % of GDP)||53.7||57.3||n/a|
Source: UNCTAD - Latest available data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
The main strengths of the country's economy are:
The main obstacles to the development of the country are:
The promotion of foreign investments is part of Vietnam's development strategy. To that end, the government is improving its judicial system, creating more incentives and taxation policies for foreign investors and trying to respect its commitments with regard to the international community. "Business Forums", opportunities for foreign investors to establish fruitful dialogue and to assert their interests, are frequently organised between the Vietnamese government and the private sector. Additionally, Vietnamese efforts to maintain socio-political stability and set up and professionalise investment promotion activities also play a crucial role in increasing the FDI flow. Recent moves to diversify the economy and shift to high value-added industries also demonstrate the country's desire to attract new types of FDI.
Find out more about Investment Service Providers in Vietnam on GlobalTrade.net, the Directory for International Trade Service Providers.