Top 7 FDI Destinations in Vietnam in 2022 and Why

December 30, 2022 Posted by Vietnam Briefing Written by Mark Barnes Reading Time: 4 minutes

Vietnam has been a hub for foreign direct investment in recent years as geopolitical tensions between the United States and China have seen multinationals looking south of the border to diversify their supply chains.

A number of locations have proven popular to these new market entrants. Here are seven of the most attractive destinations for foreign direct investment in 2022 in Vietnam

This article was compiled with data from Vietnam Briefing’s FDI Tracker.

1. Ho Chi Minh City

Taking the lion’s share of FDI in 2022 is Vietnam’s biggest city, Ho Chi Minh City. Vietnam’s financial hub, this booming economic center in the south has become a regional manufacturing and business magnet.

HCMC’s port is the biggest in Vietnam both in area and volume of goods that pass through it. It also has Vietnam’s busiest international airport and is located right in the center of Southeast Asia.

HCMC also has a population of around nine million of which around five million are of working age. It also boasts a number of international universities and training institutions producing a regionally, relatively high-caliber of skilled workers.

Not only that, but HCMC has a history of successful FDI ventures as well as policy favorable to foreign direct investors. It’s for these reasons, though not these reasons alone, that HCMC is Vietnam’s top FDI destination.

2. Binh Duong

HCMC’s provincial neighbor to the north, Binh Duong, comes in at number two in the most attractive destinations for FDI in Vietnam in 2022.

Binh Duong ranked sixth in Vietnam’s Provincial Competitiveness Index (PCI) in 2021. Feeding off its proximity to HCMC, factories have been built and continue to be built all over the province. It also came in first for infrastructure in the aforementioned PCI.

Those factories are spread over 30 industrial parks with a total area surface of over 12,670 hectares and an occupancy rate of 87.4 percent. The province also has another 12 industrial clusters with a total surface area of 790 hectares and an occupancy rate of 67.4 percent making it a manufacturing powerhouse and very attractive to international investors.

3. Quang Ninh

Quang Ninh, in Vietnam’s north east, is more than just the home of the World Heritage listed Ha Long Bay. With its close proximity to the Port of Hai Phong, it has been a magnet for FDI in recent years, coming in third on the list for 2022.

In Vietnam’s 2021 PCI Quang Ninh came in first.

With its geographical location; access to highways and seaports; close proximity to China, as well as Vietnam’s capital Hanoi; and the provincial government’s push to attract greater FDI, Quang Ninh has quickly climbed the ranks.

Quang Ninh is a smart choice for foreign firms looking for a low cost, well prepared location in Southeast Asia from which to expand their footprint in the sub-continent.

4. Bac Ninh

With over US$2 billion of new registered capital in Bac Ninh in 2022, this province roughly 40 kilometers to the north of Hanoi, comes in at number four on the list.

Back in 2017, Vietnam Briefing noted the potential for this relatively small province to attract vast sums of FDI. Vietnam Briefing’s then editor, Koushan Das, noted that its roads, rail, waterways, and industrial zones were all driving investment in the area.

That investment has continued over the past five years to make Binh Duong a leading destination for FDI in Vietnam.

5. Hai Phong

The port city of Hai Phong rounds out the top five with almost US$2 billion in FDI in 2022. Around 120 kilometers east of Hanoi, Hai Phong is the biggest coastal city in northern Vietnam. In 2021, it also had the seventh biggest population in the country.

Founded by the French this city has become an industrial powerhouse in Southeast Asia. Its port on the Cam River is one of the biggest in Vietnam. In 2021 it had a throughput of 5.69 million Twenty-Foot-Equivalent-Units (TEUs) representing an increase of just over 10 percent over 2020 and double its throughput in 2012.

A second seaport in the city, Tan Vu, also facilitated the import-export of 1 million TEUs in 2021, according to the General Office of Statistics.

The ability to move large volumes of goods by sea is one of Hai Phong’s most attractive features for foreign direct investors.

6. Hanoi

Vietnam’s capital comes in at number seven in 2022, receiving a little over US$1.7 billion in FDI.

With just shy of 9 million people calling the city home, a number that continues to climb, in terms of labor, Hanoi has it in abundance. Not only that, but it is connected to the world via road, rail, air, and sea (via the Red River).

It’s also just a short drive from the coast, particularly the key port city of Hai Phong. This makes getting goods made in Hanoi out of the city and to the wider world much easier.

7. Thai Nguyen

Thai Nguyen in Northern Vietnam is lucky number seven in the top FDI destinations in Vietnam in 2022. Thai Nguyen is the home of Samsung’s biggest operation in Vietnam and has been the recipient of billions of dollars in investment from the South Korean firm.

This close working relationship with one of the world’s most profitable technology firms has propelled Thai Nguyen toward creating one of the most favorable business environments in the country.

In the UNDP’s Public Administration Reform (PAR) Index Thai Nguyen rose 40 places in the three years. In 2020 it was one of the top 15 provinces. This rapid rise through the ranks has made it a very attractive destination for foreign firms to which 2022’s FDI data will attest.

Summary

Overall, 2022 was an excellent year for foreign direct investment in Vietnam. Its role as a key alternative to China is becoming increasingly clear and its business environment is becoming more and more favorable for foreign investment.

All up, Vietnam has 63 provinces of which these are just the five most popular in 2022. There are also a number of up and coming locations where foreign investors can find greater opportunities with less competition.

These locations are easy to find with the right team and support.

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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at vietnam@dezshira.com or visit us at www.dezshira.com