Based on the FDI capital flow into Vietnam in the fourth quarter of 2024, Professor, Doctor of Science Nguyen Mai, Chairman of the Vietnam's Association of Foreign Investment Enterprises (VAFIE), commented that 2024 may have been a successful year in attracting FDI capital into Vietnam, with the goal of attracting about 39-40 billion USD and reaching a record disbursement of 25 billion USD.
Bright Spot in the Economic Panorama
As expected, for the first time, foreign investment disbursement reached the 25 billion USD mark by the end of 2024. Thus, one of the component goals of the Politburo’s Resolution No. 50-NQ/TW (dated August 20, 2019) on orientations for perfecting institutions and policies, improving the quality and efficiency of foreign investment cooperation by 2030 has reached the target one year ahead of schedule.
Data from the Foreign Investment Agency shows that total FDI capital in Vietnam in 2024 decreased by 3% compared to 2023. However, the implemented capital and additional capital of projects have had very impressive growth. Specifically, 1,539 licensed projects from previous years registered a combined increase in capital of 13.96 billion USD, an increase of 50.4% compared to 2023. These were mainly projects in the processing and manufacturing industry.
Meanwhile, the realised capital of FDI projects is estimated at about 25.35 billion USD, an increase of 9.4% compared to 2023. These figures show investors' strong confidence in Vietnam's business environment, while affirming the real commitment of foreign investors to Vietnam.
Notably, 2024 marks important steps forward in the quality of Vietnam's foreign investment cooperation with many important events taking place at the end of the year. That was the event where billionaire Jensen Huang, President and CEO of NVIDIA (the US), officially signed a cooperation agreement with the Vietnamese Government on the establishment of the Vietnam Research and Development Centre (VRDC) and the AI Data Centre in Vietnam.
These centres will not only play a key role in supporting research initiatives, developing AI applications, promoting innovation and startups, but also creating job opportunities for talented people in Vietnam.
Thus, after two direct visits and working sessions, "technology wizard" Jensen Huang decided to "turn Vietnam into NVIDIA's second home".
This is also the result of the government's investment promotion process over the past two years to realise the goal of "building a nest to welcome eagles" in technology, as announced to international investors. "This is a historic turning point for Vietnam, making our country a leading AI research and development centre in Asia," Minister of Planning and Investment Nguyen Chi Dung affirmed.
The first billion-dollar project in 2024 also belongs to the semiconductor industry, with the event that the People's Committee of Bac Ninh Province granted an investment adjustment certificate to Amkor Technology Co., Ltd. to increase its capital by 1.07 billion USD to expand a factory manufacturing, assembling, and testing semiconductor materials and equipment in Yen Phong II-C Industrial Park.
Sharing at the conference to review the work in 2024 and deploy tasks in 2025 of the planning and investment sector, Vuong Quoc Tuan, Chairman of the People's Committee of Bac Ninh Province, said that Bac Ninh is the first locality in the country to issue a resolution of the Provincial People's Council on supporting training for the semiconductor industry.
One of the impressive results in local investment cooperation is attracting billion-dollar projects in the electronics and semiconductor industry sectors, thereby forming a high-tech supply chain and promoting growth.
"Nudge" for investment attraction
After many years of waiting, on December 31, 2024, the government issued Resolution No. 259/NQ-CP on the action plan to implement the Politburo’s Notice No. 47-TB/TW on building a regional and international financial centre in Vietnam. According to the plan, financial centres in Ho Chi Minh City and Da Nang will be established and put into operation in 2025.
This is a “push” and new driving force to promote development not only for Ho Chi Minh City and Da Nang but also for the whole country, contributing to the successful implementation of the Resolution of the 13th National Congress of the Communist Party of Vietnam.
Along with the construction of financial centres, the government is committed to strengthening economic dialogue, attracting large foreign investment projects with spillover effects, leading new economic sectors and fields, domestic value chains and participating more deeply in the global value chain, and at the same time building adequately strong policies to connect businesses and cooperate towards mutual development among domestic enterprises and foreign-invested enterprises.
Also on December 31, 2024, the government issued Decree No. 182/2024/ND-CP regulating the establishment, management, and use of investment support funds. Beneficiaries of support are high-tech enterprises, enterprises with investment projects in manufacturing high-tech products, enterprises with high-tech application projects, and enterprises with investment projects in research and development centres.
The fund also supports investment project costs for high-tech product production, training costs and human resource development, research and development costs, fixed asset investment costs, and high-tech product production costs.
Economic experts say that the establishment of the fund is necessary to ensure the competitiveness and attractiveness of Vietnam's investment environment, help stabilise the investment environment, encourage and attract strategic investors, multinational corporations and support domestic enterprises in a number of areas that need investment incentives in the context of applying global minimum tax from the beginning of 2024.
According to Mr. Mai, Vietnam is considered to have a successful model in attracting FDI thanks to its increasingly improved investment institutions and environment, stable political foundation, and high economic growth potential.
However, the slight decrease in newly registered capital in 2024 also shows that there are adjustments in the investment strategies of foreign enterprises in Vietnam and this trend needs to be closely monitored and analysed to promptly have appropriate policies to attract FDI capital in the new situation.
Specifically, the general trend of global FDI capital flows is forecast to continue to decline while competition to attract investment among countries is becoming increasingly fierce. Therefore, Vietnam needs to continue to improve the investment environment, cut administrative procedures, and promote investment in infrastructure development to continue to maintain itself as an attractive destination for global FDI capital flows, especially high-quality capital.
