Nearly US$867 million worth of foreign direct investment (FDI) was injected into Hanoi in January 2024, according to the city's Department of Planning and Investment.

Consumers shop at Japan-invested Aeon Mall in Hanoi. Photo: Cong Hung/The Hanoi Times

The city topped all 63 provinces and cities in the first month of the year, followed by Ba Ria-Vung Tau, Bac Giang, Bac Ninh, and Dong Nai provinces.

Of the total, city authorities issued new licenses for 10 projects in which foreign investors registered to pour nearly $860 million, the department said.

Foreign investors increased their capital in six existing projects by $5.1 million and bought local shares worth $2.3 million.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, foreign capital into Hanoi increased in January as the capital launched a $662 million project to build a new urban area.

After 15 years of administrative boundary expansion, Hanoi has always been one of the most attractive destinations for foreign investors, the agency said.

As the capital of Vietnam, Hanoi has absolute advantages over other places in attracting foreign capital, said economist Nguyen Minh Phong.

The capital has strong attributes for sustainable socio-economic development, such as a highly skilled workforce and a large market with a variety of services, he said.

Foreign investors always appreciate Hanoi authorities' efforts to improve local infrastructure and their willingness to help businesses solve problems, he added.

The city authorities have taken measures to improve business and investment conditions and organized investment promotion events to attract foreign capital to the city, Minh Phong said.

"The strong increase of FDI capital in Hanoi is a fact that proves how much foreign investors are confident in the city's potential," he said.

In 2023, Hanoi was one of the five provinces and cities to receive the highest FDI capital, pulling in a total of $2.9 billion from foreign investors, up 70.5% year-on-year.

In 2024, Hanoi is expected to see about $3.15 billion worth of FDI capital, including about $2.15 billion for land lease projects and another $1 billion for trade and service projects.

The capital is also expected to draw $2.7 billion worth of FDI in 2025, including $1.5 billion for land lease projects and $1.2 billion for commercial and service use.

High-tech industries at the forefront

Hanoi expects to welcome more foreign investors in hi-tech industries, as the city sees technological advancement as key to boosting its socio-economic performance.

Electronics production at Rhythm Precision Vietnam Ltd Co in Hanoi's Noi Bai Industrial Park. Photo: Pham Hung/The Hanoi Times

There are now 10 operational industrial parks in the capital with more than 700 investment projects, including 302 FDI projects with a total registered capital of $6.7 billion.

Foreign investors in Hanoi come mainly from Japan, South Korea, Singapore, Europe and the US. Their investments focus on machinery, electronics, manufacturing and processing, real estate, health and education, and commercial services.

In June 2023, Vietnam's N&G Corp and Korea's SEIN I&D Group agreed to join forces and build the Vietnam-Korea Techno Park Complex in the Hanoi Southern Supporting Industrial Park (HANSSIP).

The park will cover an area of 200 hectares and is designed to facilitate world-class R&D activities.

Nguyen Hoang, chairman of N&G Corp, said the new industrial park will bring high-tech projects to Hanoi, especially in the semiconductor sector.

Nguyen Ngoc Tu, deputy director of Hanoi's Department of Planning and Investment, said the capital will ensure that FDI projects are environmentally friendly and produce high-quality results.

"Priority will be given to projects based on advanced, green and value-added technologies," he said.

The city expects hi-tech FDI projects to have a huge impact on its socio-economic growth and help improve the quality of the city's workforce, the deputy director added.

Tu hopes that hi-tech FDI projects will help the city move towards sustainability through infrastructure construction, smart city development and the use of eco-friendly technologies.

"The capital will also reach out to hi-tech developers to improve the quality and efficiency of project management, especially in the manufacturing industry," Tú said.

According to Nguyen Anh Duong, director of the Hanoi Promotion Agency, the agency and local authorities will work to promote the city's brand to international businesses to attract more FDI capital in 2024.

Meetings will be held between foreign investors and the city government to discuss solutions and improve business conditions. The city aims to create a transparent, favorable and fair environment so investors will accompany Hanoi in its sustainable development.

According to Nguyen Manh Quyen, Deputy Chairman of the Hanoi People's Committee, FDI capital is one of the most important drivers of Hanoi's growth.

"The city will focus on improving transport and telecommunications infrastructure to attract more foreign capital. Priorities will be urban development, manufacturing, science and technology," he said.

"Hanoi is committed to standing by investors, providing them with a safe and stable environment, ensuring sufficient supply of utilities, and continuing to reform the regulatory framework," the deputy chairman said.