Vietnam is emerging as an attractive destination for foreign investors. In 2025, a massive wave of foreign direct investment (FDI) is expected to pour into Vietnam’s industrial parks. The following article will explore the reasons behind this anticipated FDI boom and its impact on the economy.
1. Overview: Vietnam’s position in the FDI attraction race
In 2024, Vietnam continues to affirm its position as one of the most attractive destinations for foreign direct investment (FDI) in Southeast Asia. The total registered FDI, including new investments, adjustments, capital contributions, share purchases, and additional capital, reached nearly 38.23 billion USD, marking a significant increase compared to the previous year. This has placed Vietnam among the top 15 FDI-attracting countries worldwide.
In terms of disbursement, the realized FDI in 2024 reached 25.35 billion USD, up 9.4% from 2023, setting a record high. This serves as strong evidence of investors’ confidence in Vietnam’s business environment, despite global economic fluctuations.
Amid the regional competition for FDI attraction, Vietnam has maintained a superior growth rate compared to its neighboring countries. Indonesia and Thailand remain strong competitors, with total FDI inflows reaching 36 billion USD and 31.5 billion USD, respectively, in 2024. However, Vietnam holds an advantage thanks to its attractive investment incentives, competitive labor costs, and political stability.
Compared to Malaysia and the Philippines, Vietnam stands out due to an increase in large-scale investment projects in high-tech industries, electronic component manufacturing, and supporting industries. Major corporations such as Samsung, Intel, Foxconn, LG, and Lego continue to expand their investments, solidifying Vietnam’s position in the global supply chain.
Regarding investment by country, Singapore continues to lead with 10.21 billion USD, accounting for 26.7% of the total investment in Vietnam. South Korea ranks second with 7.06 billion USD, followed by Japan with 5.9 billion USD. This indicates that Vietnam remains an attractive destination and is regarded as a strategic production and export hub for Asian countries.
In terms of investment locations, Bac Ninh has risen to the top with nearly 5.12 billion USD, driven by the expansion of electronic component manufacturing plants. Hai Phong and Ho Chi Minh City rank second and third, with total investments of 4.94 billion USD and 3.04 billion USD, respectively, reflecting the shift of high-tech industries and logistics sectors.
Vietnam is not only maintaining its FDI growth momentum but is also enhancing its regional position. With favorable investment policies, improving infrastructure, and a young workforce, Vietnam is expected to continue attracting strong investment waves in the coming years, particularly in high technology, renewable energy, and smart manufacturing.
2. Trends in FDI inflows into Vietnam’s industrial parks in 2025
In 2025, Vietnam continues to affirm its position as an attractive destination for foreign direct investment (FDI), particularly in the industrial real estate sector. According to the latest data, as of January 31, 2025, total registered FDI into Vietnam reached $4.33 billion, marking a 48.6% increase compared to the same period last year.
2.1. Investment Trends in Industrial Parks
In 2025, the trend of investing in industrial parks (IPs) in Vietnam is expected to maintain strong growth, especially in FDI inflows. Experts believe that thanks to the “China +1” strategy, infrastructure improvements, and administrative reforms, Vietnam is becoming an increasingly attractive destination for international investors.
Northern Region: A Bright Spot for FDI Attraction
The Northern region, especially provinces such as Bac Ninh, Hai Phong, and Thai Nguyen, is forecasted to remain a key FDI hotspot:
- Bac Ninh: In 2024, Bac Ninh led the country in FDI attraction, with total registered investment reaching nearly $5.12 billion, accounting for 13.4% of total registered capital.
- Hai Phong: Ranked second with total registered capital of $4.94 billion, accounting for 12.9% of total FDI inflows.
- Thai Nguyen: While not in the top ranking, Thai Nguyen remains a potential second-tier investment hub in the near future.
Southern Region: Recovery and Increasing FDI Inflows
The Southern region is also witnessing a recovery in FDI inflows, thanks to infrastructure development and government support policies:
- Binh Duong: The “industrial capital” attracted over $1.82 billion in investment over 11 months in 2024, a 19.3% increase compared to the same period in 2023.
- Ho Chi Minh City: Ranked third nationwide in FDI attraction, with total capital exceeding $1.76 billion in the first 8 months of 2024.
Outlook for 2025
Vietnam continues to have a promising start in attracting foreign investment in 2025:
- In January 2025, total FDI registered reached $4.33 billion, an increase of 48.6% compared to the same period in 2024.
- The government aims to attract over $40 billion in annual registered FDI over the next five years, focusing on high-tech investments.
With these figures and forecasts, Vietnam is well-positioned to become an attractive destination for industrial real estate investment. The synchronized infrastructure development and government support policies will continue to drive this trend in 2025 and beyond.
2.2. Impact of the “China +1” Trend
The “China +1” trend continues to drive businesses to seek new manufacturing locations outside of China, and Vietnam has emerged as a top choice. Improvements in infrastructure, administrative reforms, and the government’s efforts to strengthen cooperation have created favorable conditions for attracting FDI into industrial parks.
“China +1” brings many positive impacts to Vietnam. This trend stimulates foreign direct investment, particularly from businesses looking for new production sites outside of China. As of November 2023, China had invested in 4,161 projects in Vietnam, with a total capital exceeding $27 billion, ranking third in the number of projects and sixth in total investment capital among 143 countries and territories investing in Vietnam.
Industrial Park Development: The shift in production has driven the expansion and upgrading of industrial parks in Vietnam. New industrial parks with modern infrastructure, combined with government incentive policies, have created favorable conditions for foreign investors.
Export Growth: The establishment of manufacturing facilities by FDI enterprises in Vietnam has contributed to increased export volumes, especially in electronics, textiles, and footwear. This not only improves the trade balance but also enhances Vietnam’s position in the global supply chain.
However, the “China +1” trend also presents significant challenges for Vietnam.
Infrastructure Pressure: The increase in investment requires Vietnam to upgrade and expand transportation, energy, and telecommunications infrastructure to meet the needs of businesses. Delays in infrastructure development could affect the efficiency of industrial parks.
Human Resources: Although Vietnam has a young and abundant workforce, the lack of highly skilled labor could be a barrier for high-tech industries. Therefore, investment in education and vocational training is essential to meet the labor market’s demands.
Regional Competition: Other countries such as Indonesia, Thailand, and Malaysia are also striving to attract FDI by improving their investment environment and offering attractive incentives. Vietnam must continuously improve its policies and infrastructure to maintain its competitive edge.
2.3. Focus on Industrial Manufacturing
It is projected that around 80% of FDI into Vietnam in 2025 will be directed toward industrial manufacturing, including factories, power plants, and logistics infrastructure. This reflects the growing interest of investors in developing industrial parks and related infrastructure to support production and exports.
With positive trends and strong government support, Vietnam is in a favorable position to attract FDI into industrial parks in 2025. Infrastructure improvements, combined with the “China +1” strategy, will solidify Vietnam’s role as a top destination for international investors in industrial manufacturing.
3. Opportunities for FDI Investors in Vietnam’s Industrial Parks
In 2025, Vietnam continues to attract strong interest from foreign investors thanks to attractive incentive policies and the synchronized development of the industrial park ecosystem.
3.1. Investment Support Policies & Incentives
New Incentive Policies of the Vietnamese Government in 2025
The Vietnamese government has implemented various incentive policies to create favorable conditions for FDI investors. These measures include corporate income tax exemptions and reductions, import tax incentives, and support for workforce training costs. The goal is to position Vietnam’s investment environment among the top three in ASEAN within the next 2–3 years.
Comparison of Incentive Policies: Vietnam – Thailand – Indonesia
In the competition to attract FDI, Thailand has introduced a 50% corporate income tax reduction for five years for companies with an actual investment capital of at least 1 billion baht (approximately $32.61 million). Meanwhile, Indonesia offers tax incentives and subsidies to encourage investment in renewable energy infrastructure. Compared to these countries, Vietnam is actively improving its investment environment through tax incentives and business support policies to enhance its competitiveness within the region.
Regulatory Challenges and Opportunities for Improvement
Despite offering many incentives, Vietnam still faces certain regulatory challenges, such as complex administrative procedures and inconsistent infrastructure development. To address these issues, the government needs to further simplify procedures, improve infrastructure quality, and enhance workforce training to create a more transparent and investor-friendly environment for FDI investors.
3.2. A More Synchronized Development of the Industrial Park Ecosystem
The Boom of Next-Generation Industrial Parks (Smart IPs, Eco-IPs, Integrated Urban IPs)
Vietnam is witnessing the rise of next-generation industrial parks, including smart industrial parks (Smart IPs), eco-industrial parks (Eco-IPs), and integrated urban industrial parks. These parks not only focus on manufacturing but also emphasize sustainability and quality of life for workers. According to a report by JLL, Vietnam is leading in green certification within the industrial real estate sector, attracting strong interest from international investors.
Expansion Projects of Key Industrial Parks in Bắc Ninh, Bình Dương, Hải Phòng, and Long An
Provinces such as Bắc Ninh, Bình Dương, Hải Phòng, and Long An are implementing major industrial park expansion projects to meet the growing demand from investors. This development not only increases industrial land supply but also enhances infrastructure quality and support services, contributing to a more synchronized and sustainable industrial park ecosystem.
With attractive incentive policies and the rapid development of the industrial park ecosystem, Vietnam is creating numerous opportunities for FDI investors, solidifying its position as a prime investment destination in the region.
4. Challenges of Investing in Vietnam’s Industrial Parks
4.1. Infrastructure Falling Behind Demand
Although Vietnam has made significant investments in infrastructure, its development pace has not kept up with the rapidly growing demand of industrial parks. Issues such as traffic congestion and high logistics costs remain major concerns. Additionally, the lack of a stable electricity supply for industrial production raises concerns among investors.
4.2. Rising Labor Costs
Vietnam was once considered a low-cost labor destination, but wages have been rising steadily. This raises concerns about Vietnam’s competitiveness compared to neighboring countries in attracting FDI. Furthermore, competition for high-quality labor between Vietnam and other nations is also a significant challenge.
4.3. Institutional & Legal Risks
Despite the Vietnamese government’s efforts to improve the investment environment, FDI investors still face institutional and legal barriers. Further administrative reforms and enhancing Vietnam’s competitiveness are essential to creating a more favorable environment for foreign investors.
5. Forecast & Strategic Recommendations for Investors
FDI Forecast for the Next 5 Years
Between 2025 and 2030, Vietnam is expected to maintain strong FDI growth, with annual disbursement potentially exceeding $30 billion. This growth is driven by the global supply chain shift, as multinational corporations seek alternative investment destinations to mitigate risks from over-concentration. The “China +1” strategy continues to gain momentum, positioning Vietnam as an ideal investment hub thanks to its strategic location, competitive labor costs, and stable political environment.
Vietnam’s free trade agreements (FTAs), particularly CPTPP and EVFTA, facilitate international market access. Many leading corporations in electronics, textiles, and footwear are expanding their manufacturing operations in Vietnam.
The Vietnamese government is also promoting investment in high-tech industries, such as electronics, semiconductors, and renewable energy. The rising demand for clean energy creates opportunities for wind power, solar energy, and other renewable sources. Vietnam possesses significant renewable energy potential, particularly in solar and wind power. Many large-scale renewable energy projects are underway, and major tech firms are investing in research and development (R&D) centers in Vietnam.
A favorable investment climate is another key factor. Vietnam maintains a stable political environment, fostering investor confidence. The government is streamlining administrative procedures to facilitate investment, while infrastructure for transportation, power, and telecommunications is steadily improving. Vietnam’s business environment rankings continue to rise, with numerous investment incentives offered, especially for priority industries.
Finally, the development of industrial parks plays a crucial role in attracting FDI. These parks are becoming more structured and professionally managed, with modernized infrastructure. The rise of green and eco-industrial parks aligns with the global shift toward sustainable investment.
Optimized Strategies for FDI Enterprises
- Selecting the Right Industrial Park by Industry: Businesses should choose an industrial park with suitable infrastructure and support services tailored to their sector to maximize operational efficiency.
- Leveraging Tax Incentives & Investment Policies: Companies should stay updated on government incentives to reduce costs and increase profitability.
- Risk Management in Vietnam’s Business Environment: Developing effective risk management plans, including regulatory compliance and market adaptability, is crucial for long-term success.
Conclusion
Despite challenges in attracting FDI to industrial parks, strategic planning and government support can help investors capitalize on opportunities for success in 2025 and beyond.