VIETNAM ATTRACTS HIGHER-QUALITY FDI WITH RISING US, EUROPEAN CAPITAL FLOWS

Vietnam continues to draw strong interest from foreign investors, with capital inflows from the US and Europe emerging as a significant driver of growth.

An increasing number of major corporations, particularly from Europe and the US, are investing in Vietnam

Strong momentum in investment activity

A highlight in recent days was ExxonMobil’s survey in South Van Phong in south central Khanh Hoa province. The US energy giant is considering a 10-billion-USD investment in a modern refinery project, which, if implemented, will be among its first near-zero emission facilities. The company plans to complete surveys by 2027, begin construction and investment procedures in 2031, and launch operations in 2035.

This development has added momentum to FDI flows into Vietnam, which remain robust despite global uncertainties over tariffs and geopolitical tensions.

In mid-August, Bac Ninh province licensed nine new FDI projects worth 322.5 million USD and approved capital increases of 762 million USD for nine existing projects, bringing total new FDI commitments in the province to over 1 billion USD within just one month. Following its mergence with Bac Giang, Bac Ninh has strengthened its role as a northern “investment hub,” particularly in high-tech and semiconductor industries. The province now ranks second nationwide in FDI attraction, after Ho Chi Minh City, both for the first seven months of 2025 and on a cumulative basis.

On August 19, among 250 projects inaugurated or launched nationwide, five were FDI projects with a combined value of 54 trillion VND (around 2.2 billion USD), notably including the 4.2-billion-USD North Hanoi Smart City developed by the BRG–Sumitomo joint venture.

Upgrading FDI quality through European and US investment

This information aligns with assessments by the Foreign Investment Agency under the Ministry of Finance, which reported that registered FDI in Vietnam reached 24.1 billion USD in the first seven months of 2025, up 27.3% year-on-year.

According to Savills Vietnam, FDI inflows remain stable, supported by Vietnam’s recent administrative boundary adjustments and adoption of a two-tier local administration model, expected to streamline governance and improve investment efficiency. Resolution No. 68-NQ/TW, aimed at boosting private sector development, is also seen as a key foundation for attracting high-quality capital, particularly from investors prioritising transparency and legal stability.

Among the standout transactions, CapitaLand acquired a project from Becamex IDC for 553 million USD in former Binh Duong province. Meanwhile, a consortium of Sumitomo Forestry, Kumagai Gumi, and NTT Urban Development teamed up with Kim Oanh Group to develop the One World project, and Nishi Nippon Railroad purchased a 25% stake in Nam Long’s Paragon Dai Phuoc project.

These deals underscore growing interest from Japanese, Korean, and Singaporean investors, alongside an increasing flow of capital from the US and Europe - the markets known for long-term strategies and high investment standards.

Minister of Finance Nguyen Van Thang has repeatedly underscored the increasing participation of major US and European corporations such as Qualcomm, LEGO, and SYRE, which are advancing billion-dollar projects and R&D activities in Vietnam.

At the 2025 Global Business Forum, Alexander Ziehe, Chairman of the German Business Association (GBA) and Vice President of Hettich Southeast Asia, reported that 80% of German enterprises in Vietnam view business conditions as good or satisfactory, while 38% plan to expand within the next 24 months.

He emphasised Vietnam’s role as both a manufacturing hub and a strategic gateway to regional and global markets, with opportunities in advanced manufacturing, automation, renewable energy, green technologies, premium consumer goods, and vocational training.

Although US and European investment inflows into Vietnam are not large, rising interest suggests strong potential for these inflows of high-quality capital in the coming years.

Source: VCCI