What is your assessment about the investment situation of the top five countries and territories investing in Vietnam?

Singapore has maintained its leading position among countries with foreign direct investment in Vietnam for the past four years. However, a highlight is the increase in the capital amount. In 2024, Singaporean financiers poured $10.2 billion into the country, higher than the figure of $6.8 billion in 2023. South Korea, Japan, and the business community from China and Hong Kong round out the top five.

Pham Duc Toan, consulting manager at Vietnam Investment Consulting

While Singapore, the Chinese bloc, and South Korea continue to increase their strong presence and capital volume, Japan is showing signs of a decline in proportion. In 2023, Japan was the second-largest foreign investor in the country, with a total registered capital amount of $6.56 billion. However, in 2024, Japan dropped to the fifth position with a capital volume of $3.5 billion.

Singapore is still in the top position with a soaring increase in capital thanks to the close economic and trade relationship. The island state aims to become a capital and large business transit centre in Southeast Asia. Preferential policies and the foundation of economic and bilateral trade cooperation helped Vietnam become more and more attractive to foreign-backed enterprises from Singapore.

Meanwhile, South Korea became the second-largest investor with an increase in capital to $7.05 billion compared to the previous figure of $4.4 billion. This sudden growth comes from the increase of both newly registered and added capital influx from large names such as Samsung, LG, and Amkor.

Regarding Japan, the drop in capital inflow is due to the impact of the economic and political fluctuations and the devaluation of the Japanese yen. Japan is showing new moves on the investment chessboard when it focuses on prioritising resources on the domestic market and projects.

How have the trends of these investors changed compared to the previous year?

Southeast and Northeast Asian markets such as Singapore, China, and South Korea are still increasing their investment abroad. Meanwhile, Japan shows new directions when there are clear adjustments to strategies due to the influence of domestic economic and political factors.

One of the reasons leading to the change in trends of enterprises is due to the restructuring of the supply chain. Many foreign-invested enterprises from Singapore and South Korea are shifting to long-term funding in high-tech fields, industrial real estate and renewable energy, to ensure sustainable development. The trend of Chinese enterprises in 2024 also saw adjustments. Along with traditional manufacturing sectors such as processing, manufacturing, garments, household appliances, and conventional packaging, investors are gradually shifting to high-tech industries, green energy, and modern services, and even industrial real estate.

Meanwhile, Japan has been gradually withdrawing from traditional manufacturing sectors and focusing on less risky projects in the domestic market.

It is predicted that in 2025, the trend will focus on high-tech industries: for example, semiconductor chips, AI, renewable energy, and logistics, instead of focusing only on traditional industries such as textiles or component manufacturing.

What are your predictions for investment from these economies in 2025?

The fluctuating global economic context has caused countries to change their production shift strategies, which will bring about changes in the foreign investment structure.

Given the economic and trade relationship between Vietnam and Singapore, the latter is likely to continue to maintain its leading position in foreign backing in Vietnam, especially in finance, real estate, renewable energy, and high technology.

South Korea, China, and Hong Kong may still hold the position in the top five markets in Vietnam, with money put into manufacturing, processing, and supporting industries

But for Japan, the growth rate may continue to slow. In the face of economic fluctuations, this nation is continuing to adjust its international strategy.