In recent years, the global landscape has undergone significant changes. The Covid-19 crisis and supply chain issues have been the main causes leading to countries worldwide implementing “trade isolation” policies. However, despite this context, Vietnam remains an attractive destination for FDI for several reasons.
- Vietnam is a country with many competitive advantages in attracting FDI investments.
Currently, developed countries are continuously relocating their production factories from China. Vietnam will be a beneficiary of this shift. The labor costs and production expenses in Vietnam are always reasonable compared to other countries. This has enabled Vietnam to establish attractive trade policies in the region. Vietnam has also been striving to promote FDI inflows for a long time, creating a competitive advantage that is superior to many other countries in the ASEAN bloc.
- Convenient geographical location for companies to move from China into
After the Covid-19 pandemic, countries have realized that relying too much on the supply chain of other countries will make them vulnerable to global changes. During the chaotic period, China temporarily closed its trade doors for a long time. Many companies have realized the need to diversify their supply chains to avoid being entirely dependent on China. Meanwhile, Vietnam has a favorable position for companies to relocate from China.
- Vietnam has the ability to attract FDI related to high technology.
In recent years, Vietnam has received a lot of FDI investment in the high-tech sector. This has helped Vietnam enhance its position and become a destination for high-quality investment. Many FDI investors are interested in the renewable energy sector and have poured capital into Vietnam. The flow of green and clean technology funds is expected to continue to pour into Vietnam, which has helped boost FDI investment in the country.
- The Vietnamese government continues to be open and attract FDI.
The current legal framework has been simplified, creating favorable conditions for foreign capital flows. The Vietnamese government recognizes the importance of foreign investment and will continue to implement flexible and open policies to preserve the benefits of FDI.
- Strong commitments from global corporations.
In late March 2023, a delegation of more than 50 major US companies came to Vietnam to explore investment opportunities. This is the largest business delegation from the US to Vietnam in recent years, with the participation of many large corporations such as Boeing, SpaceX, and Netflix. This demonstrates the strong interest and commitment of global corporations to invest in Vietnam in the future.
(Reference: Investment Magazine – 35 years of foreign investment in Vietnam)
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