Vietnam is attracting foreign investors, leading to a significant surge in FDI

Published at 14 Nov 2023

Foreign direct investment (FDI) in Vietnam is experiencing a surge as the country becomes increasingly attractive to foreign investors. According to M&A experts, investors from Europe, Japan, the U.K., and the U.S. are eager to enter the Vietnamese market.

Vietnam's political stability, growing consumer spending, and competitive wages are among the factors drawing the attention of European and American investors.

According to the agency, the major investment destinations in the country this year include Ho Chi Minh City, Hai Phong, Quang Ninh, Bac Giang, Hanoi, Bac Ninh, Binh Duong, and Dong Nai.

In the first 10 months of 2023, FDI reached $25.7 billion, a 14.7% increase compared to the previous year. Key sectors of interest for international investors include food, consumer goods manufacturing, retail, education, non-bank financial technology, and logistics.

This year, significant M&A deals have taken place with the participation of investors from Japan and the U.S. One notable transaction involved Sumitomo Mitsui Banking Corporation acquiring a 15% stake in VPBank through a private placement, valued at US$1.5 billion. Additionally, KKR Global Impact invested US$120 million in EQuest.

To further attract FDI, policymakers are advised to simplify the divestment process and improve regulations. The average duration of M&A transactions in Vietnam is nine months, and companies planning to sell are recommended to engage consultants at least a year in advance to identify potential buyers and negotiate prices.

"When putting money in, investors consider how they can withdraw it [later]. Company registration and acquisition are already convenient in Vietnam, but the divestment process needs to be improved and made simpler to attract investors."

Source: tradingeconomics.com