Two converging trends continue to drive FDI into Vietnam

Asian partners continue to dominate foreign direct investment (FDI) into Vietnam in the first five months of 2026, as both the wave of production diversification away from China and the ongoing restructuring of capital flows within ASEAN jointly generate additional momentum for investment inflows.

Total newly registered FDI into Vietnam during the five-month period reached more than $24.8 billion, up 34.9% year-on-year. Disbursed capital amounted to $9.7 billion, an increase of 9.6%.

“This result shows that Vietnam remains an attractive destination for foreign investors amid ongoing shifts, restructuring, and diversification of global supply chains,” the Foreign Investment Agency (FIA) under the Ministry of Finance noted in its periodic report.

The most notable aspect is not only the increase in capital, but also the structure of investor origins. Singapore and South Korea continued to lead, while mainland China, Hong Kong, and Indonesia ranked among the top five investors.

Together, these five economies accounted for more than 85% of total registered FDI during the period, underscoring the continued dominance of Asian capital flows.

According to the FIA, this structure reflects Vietnam simultaneously benefiting from two major trends: the relocation and diversification of supply chains away from China, and the restructuring of investment within ASEAN.

Two capital flows converge

After five months, Singapore led in investment in Vietnam with more than $8.5 billion, followed by South Korea with over $6.7 billion. Combined, these two partners accounted for more than 60% of total registered FDI into Vietnam over the period.

Singapore’s position reflects its role as a regional financial and investment hub. A portion of multinational projects in Vietnam is registered through Singapore-based entities.

Meanwhile, South Korean capital continues to focus on industrial manufacturing, electronics, semiconductors, and expansion projects by companies already operating in Vietnam.

Mainland China ranked third in total registered capital, while also leading in the number of newly registered projects. This reflects a trend of Chinese firms expanding production capacity into Vietnam to diversify operations, access ASEAN markets, and benefit from free trade agreements.

However, this is not simply a case of production relocating out of China. In many industries, Vietnam is becoming an additional node in regional production networks, while its manufacturing sector remains heavily dependent on machinery, raw materials, and intermediate inputs imported from China.

At the same time, the presence of Singapore and Indonesia among the leading investors highlights the growing importance of intra-ASEAN capital flows.

Indonesia recorded about $1.74 billion in registered capital, almost entirely from a single equity contribution and share acquisition transaction in Ho Chi Minh City. This illustrates that ASEAN capital flows are not limited to greenfield projects, but also include mergers, acquisitions, and equity investments in existing firms.

Major projects shaping the FDI landscape

Several large-scale projects have significantly influenced FDI figures since the beginning of the year.

Notable examples include the Can Gio International Transshipment Port with total investment of $4.9 billion; the GS Nha Be Metrocity project, which increased capital by $2.2 billion; a smart complex project in the Thu Thiem New Urban Area with a capital increase of around $1.2 billion; and a $2.1 billion AI data center in Tan Phu Trung Industrial Park, all in Ho Chi Minh City. In Nghe An province, the South Korean-invesed Quynh Lap LNG thermal power plant boasts more than $2.2 billion in investment.

In Thai Nguyen province, Samsung Electro-Mechanics Vietnam No. 2 has registered $1.2 billion capital, focusing on high-end FCBGA circuit boards used in robotics, autonomous vehicles, and advanced technology devices.

Together with another multi-billion-dollar technology project, this has helped Thai Nguyen emerge as Vietnam’s leading locality for FDI attraction in the Jan-May period, while also reflecting South Korea’s shift toward higher-value, more technology-intensive investments.

Posco Future M has also invested in a project producing artificial graphite anode materials for lithium-ion batteries in Thai Nguyen, with more than $282 million in capital, linked to the electric vehicle, battery, and new energy supply chains.

In addition to manufacturing projects, an Indonesian investor’s transaction of more than $1.7 billion in contributing capital to VLD Investment and Finance JSC has also significantly affected the capital structure by partner country. However, this is registered capital via equity contribution and share acquisition, not a new investment project.

FDI concentrated in manufacturing and emerging industrial hubs

The processing and manufacturing sector remained the main driver of investment, accounting for more than 60% of total registered capital in the first five months.

Projects in electronics, semiconductors, battery materials, and data centers indicate that new capital flows are increasingly directed toward higher-value technology sectors, while manufacturing continues to be the core attraction for FDI.

Foreign investors invested across 29 provinces and cities. Thai Nguyen led with more than $7.6 billion, followed by Ho Chi Minh City and Nghe An. Tay Ninh, Bac Ninh, and Hanoi also ranked among the major destinations.

Thai Nguyen stood out for electronics, semiconductor, and high-tech material projects, while Nghe An attracted large-scale energy investments.

The rise of these localities suggests the early formation of new industrial hubs supported by land availability, industrial park infrastructure, and capacity to absorb large-scale projects. However, this concentration also makes provincial FDI performance more volatile, depending on the timing of a few major projects.

Disbursed FDI over the five-month period reached its highest level in five years for the same period, indicating that licensed projects continue to be implemented at a steady pace.

However, the growth rate of disbursed capital remained significantly lower than that of registered capital. According to the FIA, this highlights the need to closely monitor capital absorption capacity, implementation progress, and the conversion of registered capital into actual disbursements.

The agency also pointed to persistent bottlenecks in energy infrastructure, logistics, high-quality human resources, supporting industries, and project implementation procedures.

Amid intensifying global competition for high-tech investment, the FIA emphasized that Vietnam must improve energy and logistics infrastructure, enhance industrial park quality, develop a skilled technical workforce, and streamline procedures related to land, construction, environmental approvals, and fire safety.