Foreign Direct Investment in Vietnam Surges in 1st Half 2024: Global Investments Powering Economic Growth

Vietnam’s FDI Resilience Amid Global Uncertainty

In recent years, global foreign direct investment (FDI) has been on a decline, with capital outflows occurring in several Asian countries due to geopolitical instability, making business operations increasingly challenging. However, foreign direct investment in Vietnam seems to reverse this trend and continues to attract substantial FDI, showcasing its resilience and strategic importance in the global economy. In the following, more details of foreign direct investment in Vietnam are shown through the commitment of global brands in investment figures.

Foreign Direct Investment in Vietnam Surges in 1st Half 2024: Global Investments Powering Economic Growth

Robust FDI Growth in 2024

The status as a prime destination for foreign direct investment in Vietnam remains strong. In the first half of 2024, registered FDI in Vietnam reached nearly $15.2 billion, marking a 13.1% increase compared to the same period in 2023. This significant growth highlights Vietnam’s appeal to international investors, even as other markets struggle.

Strategic Location and Political Stability

Vietnam’s strategic position in the global supply chain and its open economic and political environment have made it an attractive alternative for manufacturers exiting China. The country continues to maintain a high disbursement rate of FDI, averaging around $1.8 billion per month. This sustained investment level is the highest Vietnam has seen in the past five years, underscoring its stability and potential for future growth.

Global Brands Foreign Direct Investment in Vietnam

Prominent global brands from various sectors have established or expanded their presence in Vietnam, solidifying its role as a critical market. For instance, TCL has laid the foundation for its operations in Vietnam by constructing a manufacturing plant in Binh Duong in 2019. This facility spans 72,900 square meters with a total investment exceeding $53.56 million.

Schneider Electric’s Commitment of Foreign Direct Investment in Vietnam

Schneider Electric has chosen Vietnam as a pivotal country to pioneer social progress and sustainable impact, shaping the future of homes, buildings, data centers, infrastructure, and industries. The company emphasizes its role in developing electric vehicle (EV) charging infrastructure, a new potential growing field. By allowing EV users to charge at home or in high-rise buildings, costs can be reduced by 20-25%, and users can take advantage of renewable energy technologies.

Boeing’s Strategic Expansion in Vietnam

The aerospace giant Boeing has recently opened an office in Hanoi, recognizing Vietnam’s significant demand for aircraft. Over the next 30 years, Southeast Asia is projected to need 4,000 aircraft, with Vietnam leading this demand. Boeing aims to become a strategic supplier to Vietnam, tapping into this substantial market.

SMS Pharmaceuticals’ Ambitious Plans in Vietnam

SMS Pharmaceuticals has expressed its desire for Vietnam to allocate 500 hectares for the development of a pharmaceutical manufacturing hub. This park will attract secondary investors, and commercial production is expected to commence within 6-8 months of groundbreaking.

Merck’s Focus on Vietnam

Merck has identified Vietnam as a priority market for its development and incentive policies. As a leading global science and technology company, Merck provides pioneering solutions for infertility and reproductive health. The company is targeting the niche market of infertility in Vietnam, offering cutting-edge treatments.

Retail and Luxury Sectors Flourish

Vietnam’s appeal extends to the retail, luxury jewelry, and cosmetic sectors, catering to the rising demand and sophistication of its population. Since the beginning of the year, numerous high-end brands have been competing to open stores in Vietnam, highlighting the country’s growing consumer market.

Foreign Direct Investment in Vietnam Future Looking

Vietnam’s ability to attract and sustain foreign direct investment amidst global challenges is a testament to its strategic advantages and robust economic policies. The ongoing investments from leading global brands underscore Vietnam’s position as a vital player in the global market, promising continued economic growth and development.

By strategically leveraging its strengths, Vietnam is poised to remain a top destination for foreign direct investment, driving its economic prosperity forward.

About ANT Consulting and Market Entry Services in Vietnam

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Granting Investment Registration Certificate | ANT Lawyers

As Vietnam integrates further into the global supply chain, foreigners are more and more encouraged to invest in Vietnam in many areas for pursuing profit. The foreign direct investment of the foreigners is required to be registered at Vietnam state authority to protect the rights of the investor.

According to the Law on Investment 2014, investment projects of foreign investors; projects of setting up a economic organization in which foreign investors holding 51% of charter capital or more or the majority of the general partners are foreigners in a partnership; projects of BCC contract between domestic investors and foreign investors or between domestic investors and economic organization which foreign investors holding 51% of charter capital or more or the majority of the general partners are foreigners shall need to conduct the procedure of applying investment registration certificate as regulations of law.

Preparation of dossier

A written request for permission for execution of the investment project;

A copy of the ID card or passport (if the investor is an individual); a copy of the Certificate of establishment or an equivalent paper that certifies the legal status of the investor (if the investor is an organization).

An investment proposal that specifies: investor(s) in the project, investment objectives, investment scale, investment capital, method of capital rising, location and duration of investment, labor demand, requests for investment incentives, assessment of socio-economic effects of the project;

Copies of any of the following documents: financial statements of the last two years of the investor; commitment of the parent company to provide financial support; commitment of a financial institutions to provide financial support; guarantee for investor’s financial capacity; description of investor’s financial capacity;

Demand for land use; if the project does not use land allocated, leased out by the State, or is not permitted by the State to change land purposes, then a copy of the lease agreement or other documents certifying that the investor has the right to use the premises to execute the project shall be submitted;

Explanation for application of technologies to the project which specifies: names of technologies, origins, technology process diagram, primary specifications, conditions of machinery, equipment and primary technological line;

The business cooperation contract (BCC) (if the project is executed under a BCC).

Order and Procedure

Investors submit the dossier at Department of Planning and Investment (or management of economic zones, high-tech zones);

Within 15 working days from the date of receipt of a complete and valid dossier, the competent authority shall grant the investment registration certificate for investors.

In practice, the time duration would be lengthened due to the time for preparation of documents from investor, getting them notarized, legalized and authenticated before being accepted in Vietnam. The documents in foreign languages shall need to be translated into Vietnamese. The actual time for processing paper at the State authority would also last longer in practice when the State authority evaluate the project plan of the investor to ensure that its investment purpose is achievable economically and in accordance to the regulations of Vietnam. It is advised that the client engage professional law firm in Vietnam to assist with advisory and investment registration process.

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