In the first half of 2025, Vietnam recorded numerous positive developments in attracting foreign direct investment (FDI), with the capital city of Hanoi leading the nation, demonstrating a robust and sustainable recovery in its investment environment.
Hanoi attracted approximately $3.68 billion in registered FDI capital, a 2.2-fold increase compared to the same period in 2024, accounting for about 18% of the country's total FDI capital. Specifically, there were 89 projects with capital adjustments, contributing over $3.1 billion in additional capital, which represents nearly 85% of Hanoi's newly registered FDI capital. This reflects strong confidence from investors in Hanoi’s long-term prospects, particularly following the implementation of the amended Capital Law earlier this year.
This breakthrough is attributed to Hanoi’s strategic geographic location, well-developed infrastructure, and a highly skilled workforce, which provide a significant competitive advantage, especially in technology and engineering sectors. Additionally, a large consumer market of over 8 million people with rising per capita income, combined with significant potential for urban and service sector development, has created a solid foundation for Hanoi to not only attract but also retain investors.
The Capital Law of 2024 introduces flexible incentive mechanisms, such as a 10-year land rent exemption for high-tech and research and development (R&D) projects, support for up to 50% of R&D costs (capped at 2 billion VND per year), and a reduction in tax refund processing time to three working days. The city aims to attract at least five strategic projects annually, with total investment exceeding $1 billion per year.
Despite challenges related to limited land availability, with only about 200 hectares readily available for large-scale projects, Hanoi has accelerated the disbursement and implementation of FDI projects. In the first six months of 2025, the realized capital from FDI projects reached approximately $1.46 billion. This figure highlights the city’s effectiveness in converting registered capital into tangible investments for production and business activities.
Following the restructuring of local governance into a two-tier system, Hanoi is poised to gain additional momentum to drive investment growth. With its inherent advantages, innovative policies, and clear development strategies, Hanoi is on track for a breakthrough, continuing to solidify its position as one of Vietnam’s leading economic and investment hubs.