With an open investment environment, modern infrastructure and abundant skilled labour resources, Hanoi is gradually establishing itself as an ideal destination for foreign investors.
As global trade continues to restructure and global investment capital generally declines, Vietnam, especially Hanoi, continues to attract investors from all over the world.
Growth Potential
As Vietnam’s largest financial center, Hanoi is home to the country’s second-largest business community and is the headquarters of most scientific research institutions, universities, hospitals and banks. These factors give Hanoi a unique advantage in international cooperation based on innovation and technological progress.
Hanoi’s population accounts for 8.1% of the country’s total population, of which 51.7% are young people. In 2023, the city’s trained workforce ratio will exceed 73%.
Abundant capital is one of the main driving forces for Hanoi’s development. From 2011 to 2023, the national fiscal budget revenue increased by an average of 10.65% per year, and the total social development investment increased by 9.47% per year.
The structure of social development investment has changed significantly, with investment from the state decreasing from 51% in 2010 to about 34.3% in 2023, while investment from the non-state sector has rapidly increased from 35.3% to about 59%.
As of 2023, Hanoi has attracted 4,500 foreign direct investment projects with a total registered investment capital of more than US$33 billion, an increase of 70.5% over 2022, ranking among the top five cities in the country in terms of foreign direct investment.
In the first nine months of this year, Hanoi attracted US$1.5 billion in foreign direct investment. Many companies from the United States, South Korea, Japan, Singapore and Europe actively invested in Hanoi, which not only introduced new technologies, trained local labor, but also contributed to the global value chain every year; at the same time, foreign direct investment companies contributed 10% of Hanoi’s city fiscal revenue, 11% of its labor force and 11% of its social development capital every year.
In a meeting with Prime Minister Pham Minh Chinh on August 17, Hanoi People’s Committee Chairman Tran Thi Thanh said Hanoi’s foreign direct investment target this year is US$3.13 billion.
“International investors’ confidence in Hanoi’s investment environment demonstrates the city’s significant reforms in management, improving the business environment and investment promotion,” he noted.
“Hanoi is not only an ideal destination for foreign investment, but also an important economic and financial center for the region and the country.”
Following the Prime Minister’s decision, Hanoi City has now taken over the Hoa Le Hi-Tech Park, which was previously managed by the Ministry of Science and Technology.
The park is located in Tham and Quoc Vai districts outside Hanoi and covers an area of 1,600 hectares. By the end of 2023, the park had attracted 106 investment projects with a total registered capital of US$3.46 billion.
This means that the Hanoi People’s Committee is responsible for coordinating 111 investment projects in the park, of which 96 are domestic projects and 15 are foreign-funded projects, with a total registered capital of approximately VND116 trillion (approximately US$4.57 billion).
“The foreign direct investment sector has advantages in terms of capital, technology and management capabilities, and has made significant contributions to the socio-economic development of the city,” said Nguyen Ngoc Du, deputy director of the Hanoi Department of Planning and Investment, at the same conference.
He added that the sector boosted economic growth from both the supply and demand sides, increased the total amount of social development investment, and boosted the Gross Regional Product (GRDP).
The presence of FDI enterprises also creates competitive pressure in various industries, prompting local enterprises to improve technology, update designs, improve product quality and enhance competitiveness.
“This has had a profound impact on the restructuring and development of various industries,” Du said.
A solid legal foundation protects investment
Hanoi offers a series of preferential policies to attract high-tech investment and drive economic development.
Nguyen Duc Kiem, former head of the prime minister’s economic advisory group, said Hanoi’s advantages in attracting foreign direct investment lie in its geographical location, human resources and administrative reforms.
Economist Nguyen Minh Phong pointed out: “The key to attracting domestic and foreign investment is a good investment environment.”
“Hanoi benefits from a transparent and favourable legal basis for attracting investment, thanks to important regulatory documents such as Resolution No. 15 issued by the Politburo on May 5, 2022, which guides the city’s development until 2045.”
“The Capital City Law approved by the National Assembly in 2024 also introduces many mechanisms and policies to support urban growth.”
Hanoi has long viewed its business community (both local and foreign-invested) as a key driver of its development and globalization. The investment projects attracted by Hanoi focus on sustainable development, technology transfer, and Vietnam’s integration into global production and supply chains.
“The city always pays attention and provides the most favorable conditions to attract investment,” said Nguyen Anh Duong, director of the Hanoi Investment, Trade and Tourism Promotion Center.
In addition to the existing general preferential policies, the Capital Law of 2024 also establishes a number of special mechanisms and policies for strategic investors, including exemptions and reductions of land and water surface lease fees, tariff and tax preferences for imported and exported goods related to strategic investment projects, etc.
“It is worth noting that the 2024 Capital Law has made some outstanding provisions in terms of decentralization of management power and public asset management, which will help the Hele High-Tech Park to develop plans to attract new technology and high value-added projects,” Yang said.
Regarding plans to attract more foreign direct investment, Hanoi Chairman Tran Thi Thanh said that Hanoi will focus on implementing Resolution No. 50 issued by the Political Bureau on August 20, 2019, which clearly proposed to improve the institutional framework and policies by 2030 to enhance the quality and efficiency of foreign investment cooperation.
He added: “As a result, cities will focus on attracting foreign investment in terms of quality rather than quantity, and in line with the sustainable development goals.”
Priority will be given to high-quality, high value-added and competitive projects, with key areas including urban infrastructure development, supporting industries for modern environmental protection technologies, as well as projects in information technology, research and development, tourism, financial and banking services, human resources training, high-tech agriculture and safe food production.
Strategically, Hanoi also hopes to attract investments from companies and businesses in the high-tech sector.
“We will continue to innovate investment promotion methods by integrating them with trade and tourism promotion, external relations and cultural activities,” he said.
“We will focus on key markets and countries such as the G7, G8 and OECD to showcase the city’s potential and strengths.”
Hanoi has made significant progress in attracting foreign investment, which has not only promoted its own economic development, but also contributed to the economic development of Vietnam. I hope that with these efforts, more foreign enterprises and companies will come to Hanoi and work hand in hand with the people of Hanoi to build a sustainable and prosperous economic environment, injecting new vitality into the future development of Vietnam and Hanoi.
