Strong attraction and disbursement of foreign direct investment (FDI) in 2025 underscore Vietnam’s status as a safe and attractive investment destination, with prospects for inflows in 2026 also expected to remain highly positive.

Production activities at a centrifugal concrete pillar manufacturing plant.

Strong growth in disbursement reflects a positive restructuring of investment

In 2025, amid a global decline in FDI, Vietnam remained a stable and sustainable destination for international investment, with total registered capital, including new and adjusted capital, and investment through capital contributions and share purchases, surpassing 38.4 billion USD, up 0.5% from 2024.

Foreign invested-projects have disbursed a total of 27.6 billion USD, up 9% year-on-year, the highest level in the past five years.

Regarding investment flows and structure, the Foreign Investment Agency under the Ministry of Finance reported that while newly registered FDI fell 12.2% compared to 2024, adjusted capital rose 0.8% and equity contributions and share purchases surged by 54.8%.

New investors have been more cautious in launching projects in Vietnam amid global market volatility, yet existing projects significantly expanded through capital increases, equity contributions, and mergers and acquisitions (M&A).

Commenting on Vietnam’s FDI performance in 2025, Dr. Nguyen Quoc Viet, a public policy expert at the University of Economics under the Vietnam National University, Hanoi, said that the strong growth in disbursed capital, particularly additional funding for ongoing projects, reflects sustained confidence among international investors.

He added that the results also highlight the benefits of Vietnam’s deeper integration into global production and value chains, as investors expand operations to capitalise on supply chain shifts and the recovery in global demand.

Viet said this is a positive signal, reflecting a qualitative shift in both production and the broader economy.

Notably, new FDI in 2025 was concentrated mainly in processing and manufacturing, particularly hi-tech sectors such as semiconductors, electronics, and electrical equipment, which accounted for over 80% of the total.

These industries also have the largest export shares and drive growth, with around 78% of Vietnam’s export turnover coming from foreign-invested enterprises.

Increased FDI in high value-added and key export sectors is expected to provide a foundation for sustainable growth, closely linked to expanded trade and exports in the coming years.

Macroeconomic indicators further reflect strong investor confidence. Industrial production sustained robust growth, with a notable surge of 9.9% in the last quarter of 2025, while the processing and manufacturing sector expanded nearly 11%.

The Purchasing Managers' Index (PMI) rebounded markedly in final months of the year, signaling that investors’ optimism has largely overcome concerns about global trade risks and reciprocal tariffs.

In addition, Vietnam has maintained a stable macroeconomic foundation, with controlled exchange rates, average inflation around 3.3%, below the target set by the National Assembly, and trade turnover exceeding 930 billion USD.

These factors reinforce Vietnam’s position as a safe and reliable investment destination.

Determination to achieve two breakthroughs in infrastructure and institutional reform in 2025, through accelerating public investment disbursement and streamlining administrative procedures, has been a key factor driving new FDI registrations and additional capital injections to expand production in Vietnam, Viet stressed.

Investor confidence sets stage for FDI inflows in 2026

Rgarding FDI outlook, Viet said prospects for 2026 are very positive, particularly as key laws and resolutions passed in 2025 begin to take effect.

He noted that Vietnam’s central role in shifting global supply chains, combined with macroeconomic stability, a secure political and social environment, and an open and partnership-focused foreign policy, makes it an increasingly attractive destination for global trade and investment.

According to Viet, Vietnam retains advantages in its workforce, with improved quality, reasonable costs, and strong capacity to meet the requiremets of shifting production and supply chains.

Institutional reforms and improvements to the investment and business environment are also highly valued by investors, helping to create a more transparent and favourable business climate.

These factors will be key in allowing Vietnam to leverage its comparative advantages, capitalise on integration opportunities, and drive breakthrough growth in the years ahead, he stated.

This assessment is further reinforced by the Business Confidence Index (BCI)’s report released on January 13 by the European Chamber of Commerce (EuroCham) in Vietnam, which shows the index climbing to 80 points, the highest level recorded in the past seven years.

EuroCham Chairman Bruno Jaspaert said “After years of hovering around the mid-line, reaching 80 tells us that confidence is now grounded in delivery – in factories running, orders returning, and investments being executed.

We are seeing a structural shift where Vietnam is quickly transforming itself into a powerful growth engine, on track to rank among the top three economies in ASEAN.”

Vietnam’s appeal is further reinforced by strong support from the European business community, with 87% of respondents said they would recommend Vietnam as an investment destination to other foreign businesses, with the highest confidence levels reported among large-scale companies.

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