Identifying Key Provinces Attracting High FDI in Vietnam

Vietnam continues to be a compelling destination for foreign direct investment (FDI). With an increasingly favorable investment environment, many provinces have emerged as magnets for attracting FDI capital. This article identifies key provinces in Vietnam that are attracting high levels of FDI and compares their advantages and disadvantages, drawing on reputable domestic and international news sources.

Ho Chi Minh City

• Advantages:
  • The largest economic, financial, and commercial center in the country: Ho Chi Minh City is the economic engine of Vietnam, contributing significantly to the national GDP. It is home to the headquarters of many multinational corporations, banks, and financial institutions, creating a vibrant business environment and numerous opportunities for cooperation.
  • Developed infrastructure, convenient transportation: Ho Chi Minh City has a diverse transportation system, including roads, railways, waterways, and airways. Tan Son Nhat International Airport is one of the busiest airports in the region, connecting Ho Chi Minh City with many major cities around the world.
  • Abundant and high-quality human resources: Ho Chi Minh City is home to many universities, colleges, and high-quality training centers, providing a rich source of human resources for businesses.
  • Large consumer market: With a population of over 10 million people, Ho Chi Minh City is the largest domestic consumer market in the country, creating favorable conditions for businesses to operate and develop products.
  • Dynamic and open business environment: Ho Chi Minh City always encourages investment and business, creating favorable conditions for domestic and foreign enterprises. (Source: Ho Chi Minh City Portal)
• Disadvantages:
  • High land and rental costs: Land prices in Ho Chi Minh City are among the highest in the country, putting great pressure on businesses, especially small and medium enterprises.
  • High competitive pressure: As a major economic center, Ho Chi Minh City attracts a large number of domestic and foreign enterprises, creating a fiercely competitive environment.
  • Traffic congestion and environmental pollution: Traffic congestion and environmental pollution are pressing issues in Ho Chi Minh City, affecting the quality of life and business operations. (Source: The Economist Intelligence Unit)

Hanoi

• Advantages:
  • The capital, political and cultural center of the country: Hanoi is the administrative center, home to government agencies, embassies, and international organizations.
  • Synchronous and modern infrastructure: Hanoi has a modern transportation system, including roads, railways, and airways. The city is promoting the development of urban railway lines, contributing to reducing traffic congestion.
  • Many large industrial parks and export processing zones: Hanoi has many concentrated industrial parks and export processing zones, attracting many large-scale FDI projects.
  • Attractive investment attraction policies: Hanoi has many preferential policies to support businesses in investment and business. (Source: Hanoi Portal)
• Disadvantages:
  • High cost of living: The cost of living in Hanoi is relatively high compared to other provinces.
  • Administrative procedures are still complicated: Although there have been many improvements, administrative procedures in Hanoi are still complicated, causing difficulties for businesses.
  • Lack of clean land for large projects: Clean land in Hanoi is increasingly scarce, making it difficult to implement large-scale investment projects. (Source: Vietnam Briefing)

Binh Duong

• Advantages:
  • Favorable geographical location, close to Ho Chi Minh City and international seaports: Binh Duong is adjacent to Ho Chi Minh City, facilitating the transportation of goods and trade with other provinces and internationally.
  • Many large-scale and modern industrial parks and export processing zones: Binh Duong has many industrial parks and export processing zones with synchronous infrastructure, attracting many FDI enterprises.
  • Reasonable investment costs: Land rental and labor costs in Binh Duong are lower than in Ho Chi Minh City, helping businesses save costs.
  • Local authorities actively support businesses: Binh Duong provincial authorities always create favorable conditions and support businesses in investment and business. (Source: Binh Duong Portal)
• Disadvantages:
  • Lack of high-quality human resources: Although the workforce is abundant, there is a shortage of highly skilled and specialized labor.
  • Environmental pressure: Rapid industrial development puts great pressure on the environment in Binh Duong.

Dong Nai

• Advantages:
  • Strategic location, near Long Thanh International Airport: Dong Nai is located near Long Thanh International Airport, creating favorable conditions for international trade.
  • Well-connected transportation infrastructure: Dong Nai has a developed road and waterway transportation system, connecting with neighboring provinces and international seaports.
  • Developed industrial economy: Dong Nai is one of the provinces with a strong industrial economy, attracting many FDI projects in the manufacturing sector.
  • Abundant industrial land fund: Dong Nai has a large industrial land fund, meeting the needs of large-scale investment projects. (Source: Dong Nai Portal)
• Disadvantages:
  • Increasing labor costs: Along with economic development, labor costs in Dong Nai are on an upward trend.
  • Intense competition with neighboring provinces: Dong Nai has to compete with neighboring provinces such as Binh Duong and Ho Chi Minh City in attracting FDI.

Bac Ninh

• Advantages:
  • Close to Hanoi, convenient for trade: Bac Ninh is located near Hanoi, facilitating the transportation of goods and trade with the capital and northern provinces.
  • Attracting many high-tech FDI projects: Bac Ninh is a favorite destination for high-tech FDI projects, especially in the electronics sector.
  • Attractive investment incentives: Bac Ninh has many preferential policies to support business investment, especially high-tech projects.
  • Young and dynamic workforce: Bac Ninh has a young, well-trained, dynamic, and creative workforce. (Source: Bac Ninh Portal)
• Disadvantages:
  • Small economic scale: Compared to big cities like Ho Chi Minh City and Hanoi, Bac Ninh’s economy is still small.
  • Asynchronous development of social infrastructure: Social infrastructure such as healthcare, education, and culture in Bac Ninh has not developed synchronously to meet the needs of people and foreign experts.

Hai Phong

• Advantages:
  • Large seaport, important international gateway: Hai Phong has the Lach Huyen deep-water port, which is an important international gateway for northern Vietnam.
  • Developed logistics infrastructure: Hai Phong has a developed logistics system, including seaports, roads, and railways, facilitating the transportation of goods.
  • Dinh Vu – Cat Hai Economic Zone attracts many large FDI projects: Dinh Vu – Cat Hai Economic Zone is one of the key economic zones of the country, attracting many large-scale FDI projects. (Source: Hai Phong Portal)
• Disadvantages:
  • Harsh weather conditions: Hai Phong has a tropical monsoon climate with cold winters, hot and humid summers, and heavy rainfall.
  • Competition with other seaports in the region: Hai Phong has to compete with other seaports in the region such as Cai Mep – Thi Vai (Vietnam), Singapore, and Hong Kong.

Quang Ninh

• Advantages:
  • Great tourism potential, attracting investment in tourism and services: Quang Ninh is famous for Ha Long Bay – a world natural heritage site, attracting a large number of domestic and foreign tourists.
  • Van Don Economic Zone is being strongly developed: Van Don Economic Zone is planned to become a special economic zone, attracting investment in many fields such as tourism, services, and industry.
  • Improved investment environment and administrative procedures: Quang Ninh has made many efforts to improve the investment environment and simplify administrative procedures, creating favorable conditions for businesses. (Source: Quang Ninh Portal)
• Disadvantages:
  • Highly dependent on the tourism industry: Quang Ninh’s economy is heavily dependent on the tourism industry, making it vulnerable to external factors such as epidemics and natural disasters.
  • Undiversified economic structure: Apart from tourism, other economic sectors in Quang Ninh have not developed strongly, creating an imbalance in the economic structure.

Comparison

Each province has its own advantages and disadvantages in attracting FDI. Investors need to carefully consider these factors to choose an investment location suitable for their business strategy.

• January 19, 2025
• Latest News
• Anne Phuong