Top 6 FDI Locations in Vietnam in 2023 and Why

Vietnam has emerged as a prime destination for foreign direct investment (FDI) in recent years, as geopolitical tensions between the United States and China have prompted multinationals to look southward to diversify their supply chains.

Several locations in Vietnam have proven particularly attractive to these new market entrants. Here are six of the most appealing destinations for FDI in 2023.

1. Ho Chi Minh City

Leading the pack in 2023 with a remarkable US$5.85 billion in newly registered capital is Vietnam’s largest city, Ho Chi Minh City. As Vietnam’s financial hub, this booming economic center in the south has become a magnet for regional manufacturing and business.

Ho Chi Minh City boasts Vietnam’s largest port by area and volume of goods, the busiest international airport in the country, and a strategic location in the heart of Southeast Asia. With a population of around nine million, including about five million of working age, and numerous international universities and training institutions, the city produces a high caliber of skilled workers.

Moreover, Ho Chi Minh City has a history of successful FDI ventures and policies favorable to foreign investors, making it Vietnam’s top FDI destination.

2. Hai Phong

The port city of Hai Phong ranks second with just over US$3.26 billion in FDI in 2023. Located about 120 kilometers east of Hanoi, Hai Phong is the largest coastal city in northern Vietnam and had the seventh-largest population in the country in 2021.

Founded by the French, Hai Phong has grown into an industrial powerhouse in Southeast Asia. Its port on the Cam River is one of the biggest in Vietnam, and its capability to handle large volumes of goods by sea makes this province highly attractive to foreign firms.

3. Quang Ninh

Quang Ninh, located in Vietnam’s northeast and home to the World Heritage-listed Ha Long Bay, has become a significant FDI magnet, securing US$3.11 billion in 2023. In Vietnam’s 2022 Provincial Competitiveness Index (PCI), Quang Ninh ranked first.

Its strategic geographical location, access to highways and seaports, proximity to China and Hanoi, and the provincial government’s efforts to attract FDI have all contributed to Quang Ninh’s rising prominence as an investment destination.

4. Bac Giang

Neighboring Hanoi to the north, Bac Giang comes in fourth among the most attractive FDI destinations in Vietnam in 2023, with US$3.02 billion. Bac Giang ranked third in Vietnam’s PCI for 2022, and its proximity to Hanoi has spurred significant industrial development.

The province hosts at least 36 industrial clusters spread over 682 hectares, becoming a major hub for foreign-invested enterprises with a strong focus on electronics manufacturing.

5. Thai Binh

With nearly US$2.8 billion in new registered capital in 2023, Thai Binh, located roughly 100 kilometers southeast of Hanoi, ranks fifth.

In 2021, Vietnam Briefing highlighted the potential of this relatively small province to attract substantial FDI, citing its geographical location, natural resources, labor supply, and infrastructure. Investment has continued over the past three years, making Thai Binh a leading FDI destination.

6. Hanoi

Vietnam’s capital city, Hanoi, received a little over US$2.73 billion in FDI in 2023, placing it sixth on the list.

With nearly nine million residents, Hanoi has an abundant labor supply. The city is well-connected via road, rail, air, and sea (through the Red River) and is just a short drive from the key port city of Hai Phong, facilitating the movement of goods to the global market.

Summary

Overall, 2023 was an excellent year for foreign direct investment in Vietnam. The country’s role as a key alternative to China is becoming increasingly clear, and its business environment continues to become more favorable for foreign investors.