For our series on investment attraction, we examined how five Southeast Asian economies make their case to international investors: Indonesia, Malaysia, Singapore, Thailand and Vietnam. We looked at their investment strategies, the messages they use to attract capital and the evidence behind their claims.
The picture that emerges is one of considerable similarity in the sectors and ambitions they promote, but also of differences in what they expect from investors and how openly they report on the results.
What each country puts forward
Indonesia’s proposition draws heavily on its natural resources and the opportunity to process more of them domestically. The government has made downstream investment a central part of its strategy, seeking to attract investors who can turn minerals, agricultural products and other resources into higher-value goods rather than simply extracting and exporting raw materials. Alongside this, Indonesia promotes opportunities across its regions and the scale of its domestic market. The country’s investment promotion agency, BKPM, describes downstreaming as a growing driver of investment, extending beyond minerals to plantations and forestry, oil and gas, and marine and fisheries resources.
Malaysia presents a broader proposition built around an established manufacturing base, industrial capabilities and access to regional markets. Its investment promotion increasingly emphasises higher-value activities, technology, skilled employment and stronger links between foreign investors and domestic suppliers. The message is not simply that Malaysia is a competitive place to manufacture, but that investors can contribute to the next stage of its industrial development. This direction is reflected in the government’s ambition to make Malaysia a preferred investment destination and a competitive industrial and trading nation.
Singapore makes a more focused case. It positions itself as a base for advanced manufacturing, innovation and regional business operations, offering international connectivity, skilled talent and an established business environment. Companies are encouraged to use the city-state not only as a market in its own right, but as a place from which to manage regional activities, develop new products and coordinate investment across Southeast Asia. The Economic Development Board’s presentation of Singapore as a trusted hub for advanced manufacturing puts connectivity, talent, infrastructure and innovation at the centre of that proposition.
Thailand combines its long-established manufacturing base with an ambition to move into higher-value industries. Its investment promotion agency, the Board of Investment (BOI), presents the country as a regional business and investment hub, while highlighting innovation, competitiveness and more inclusive economic development. The automotive and electronics industries remain important parts of the proposition, alongside efforts to attract investment in electric vehicles, semiconductors and advanced electronics. The BOI’s investment promotion priorities set out this broader ambition to restructure the economy and strengthen industrial capabilities.
Vietnam’s established role in international manufacturing and supply chains remains central to its appeal. But the government is now making a more explicit case for investment in higher-value production, research and development, technology transfer and innovation. The aim is to move beyond attracting manufacturing capacity towards building stronger domestic capabilities and deeper links between foreign investors and Vietnamese businesses. This shift is set out in the government’s June 2026 resolution on the future direction of foreign investment.
What governments now expect from investors
Across the five economies, investment promotion is becoming less about attracting capital at any cost and more about what that capital is expected to contribute. The difference lies in how explicitly governments set out those expectations and connect them to incentives and industrial priorities.
Malaysia’s New Incentive Framework, introduced for manufacturing in March 2026, is a particularly clear example. Rather than basing incentives mainly on the type of activity or sector, the framework links them to measurable outcomes. These include greater economic complexity, higher-value jobs, stronger domestic supply chains, the development of industrial clusters, inclusivity and sustainability. In effect, Malaysia is asking investors to demonstrate how their projects will contribute to the country’s longer-term industrial ambitions. MIDA’s explanation of the New Incentive Framework sets out these six intended outcomes and the move towards a more outcome-based approach.
Vietnam has set out a similarly explicit shift in its approach. A resolution adopted in June 2026 aims to make the country one of Asia’s leading centres for foreign investment, innovation, research and development, and high-tech manufacturing. It places greater emphasis on investment from companies with strong technological and management capabilities, as well as on developing Vietnamese suppliers and increasing the domestic value created by foreign-invested businesses. The government’s stated ambition is to move from attracting investment by volume towards developing the contribution of the foreign-invested sector. A subsequent government action plan translates this direction into measures including incentives linked to technology transfer, research and development, training, domestic suppliers and green and digital transformation.
Thailand is also using incentives and sector strategies to steer investment towards specific capabilities. Its updated electric-vehicle measures link support to domestic production commitments, while a new national semiconductor and advanced electronics strategy sets out a longer-term ambition to build a more integrated industry. The roadmap covers research and chip design, manufacturing, assembly, packaging and testing, with the aim of strengthening existing capabilities while developing new ones. The semiconductor strategy announced in October 2026 sets out targets for investment, industry revenue and employment through to 2050.
Indonesia’s downstreaming strategy reflects a different starting point, but a related intention to capture more value domestically. Investment in processing and manufacturing is encouraged as part of a wider effort to develop industries around the country’s natural resources. This is not limited to minerals: the government’s definition of downstream investment also includes activities connected to plantations and forestry, oil and gas, and marine and fisheries resources, as set out in BKPM’s 2025 investment report.
These policies make the countries’ investment propositions more specific. They also make the offer more conditional: investors are being asked to contribute particular technologies, skills, supply-chain relationships or production capabilities, rather than simply bring capital into the country.
What the figures actually show
Investment announcements and headline figures are useful indicators of how much interest a country is attracting, but they do not all measure the same thing. Approved projects, registered capital, realised investment and money actually disbursed tell different parts of the story. Looking at how governments report these figures also reveals how much evidence they provide about the progress of their investment strategies.
Malaysia offers one of the clearer examples of reporting on implementation. According to the Malaysian Investment Development Authority (MIDA), 84.9% of manufacturing projects approved between 2021 and 2025 had reached some stage of implementation, ranging from production to factory construction or machinery installation. A further 12% were still in the planning stage, while 3.1% had been abandoned. MIDA also reports that more than 90% of projects approved in both 2021 and 2024 had been implemented. The figures do not mean that every project counted as implemented is already operating at full capacity, but they provide a more useful picture than approval totals alone. The breakdown appears in MIDA’s 2025 investment performance report.
Vietnam reports several measures that need to be read alongside one another. In the first nine months of 2026, the country recorded US$50.36 billion in attracted foreign investment, up 76.4% year on year. Within that total, newly licensed projects accounted for US$29.24 billion in registered capital, while disbursed foreign investment reached US$21.07 billion, the highest figure for the January-to-September period in five years. Manufacturing remained the largest sector, attracting US$13.38 billion in registered investment. The distinction between attracted, newly registered and disbursed capital matters: the figures describe different stages of investment, rather than three ways of measuring the same outcome. The figures are published in the government’s September 2026 foreign investment update.
Singapore’s Economic Development Board reported fixed asset investment commitments of S$14.2 billion in 2025, compared with S$13.5 billion the previous year. Companies also committed S$8.9 billion in total business expenditure, up from S$8.4 billion. The associated expectations for job creation and annual value added were lower than in 2024, however: 15,700 jobs compared with 18,700, and S$18 billion in annual value added compared with S$23.5 billion. These are projected outcomes that companies are expected to realise over five years, not results already achieved. The figures nevertheless offer a more nuanced view of the types and expected scale of investment Singapore is securing. They come from the EDB’s Year 2025 in Review.
Indonesia’s investment figures provide evidence of the scale of its downstreaming strategy. Total realised investment reached IDR1,931.2 trillion in 2025, equivalent to 101.3% of the government’s target. Downstream investment accounted for IDR584.1 trillion, or 30.2% of the total, and increased by 43.3% compared with the previous year. The figures suggest that the strategy is becoming a substantial part of the country’s investment activity, although the overall total alone does not show how much additional value or employment individual projects will generate. The figures are from BKPM’s full-year 2025 investment release.
In the first half of 2026, realised investment outside Java reached IDR507.8 trillion, slightly more than the IDR502.8 trillion recorded on Java. The figures support the government’s ambition to spread investment more widely across the country, rather than concentrating it on the main economic centres. They do not, by themselves, tell us how evenly investment is distributed between provinces or how much it contributes to local economies. The breakdown is included in BKPM’s first-half 2026 investment report.
Where the capital comes from
The reported origins of foreign investment add another dimension to the picture, although these figures need to be interpreted with care. In the second quarter of 2026, Hong Kong, China was the largest reported source of foreign direct investment in Indonesia, followed by Singapore, China, Japan and Malaysia. Indonesia’s investment minister said that the Hong Kong figure included investment from China routed through Hong Kong, describing it as the first time in ten years that Chinese investors had moved more aggressively through that channel.
This is a useful reminder that investment-source statistics do not necessarily identify the ultimate owner or origin of the capital. Financial centres and regional holding structures can make the reported source different from the country in which an investor is ultimately based. The figures still show which jurisdictions are recorded as important sources of investment, but they should not be read as a definitive account of who owns the capital. The minister’s comments and the second-quarter breakdown appear in BKPM’s first-half 2026 release.
Vietnam’s figures for the same nine-month period show Singapore as its largest reported foreign investor, followed by South Korea, Luxembourg, Hong Kong and China. Together, the data underline the importance of regional business networks and established international investment relationships to Southeast Asia’s appeal. They also show why a country’s investor-facing story cannot be judged only by the number of countries it names as target markets. The country breakdown is included in the government’s January-to-September 2026 FDI figures.
Continuity and strengths built over time
A country’s investment proposition is not built through campaigns alone. It also depends on institutions, industrial capabilities and relationships that develop over many years. This is one area where the five economies differ, even if they increasingly use similar language around innovation, sustainability and higher-value investment.
Singapore’s Economic Development Board was established in 1961, Thailand’s Board of Investment in 1966 and Malaysia’s MIDA in 1967. These agencies have had decades to build relationships with investors and develop an understanding of the needs of particular industries. The OECD notes that agencies with a degree of institutional autonomy, such as those in Singapore, Malaysia and Thailand, can benefit from greater flexibility and some protection from political interference. This is a question of institutional continuity, rather than a simple measure of political stability. The agency histories and the OECD’s assessment are covered in its review of investment promotion and tax incentives in ASEAN.
Indonesia and Vietnam have different institutional histories. Indonesia’s current investment agency, BKPM, dates from 2007, while Vietnam’s Foreign Investment Agency was established in 2017. Their investment propositions are also shaped by the scale and pace of more recent industrial development, as well as by efforts to strengthen the role of foreign investment in domestic economic transformation. The establishment dates are listed in the same OECD review.
One particularly interesting example of how existing strengths can be combined into a distinctive proposition is the Johor-Singapore Special Economic Zone. Rather than treating the border as a barrier, the initiative presents the two neighbouring jurisdictions as complementary locations for investment. Singapore offers an established base for regional headquarters, finance, research and business services, while Johor can offer land, industrial capacity and incentives for qualifying activities.
The arrangement has already attracted significant interest. Singapore’s EDB reported in October 2025 that Singapore-based companies had committed more than S$5.5 billion in investments in Johor since the agreement to finalise the zone was signed in January that year. Malaysia has also introduced a package of incentives for qualifying new investments in areas including artificial intelligence and quantum computing supply chains, medical devices, aerospace manufacturing and global services hubs. Eligible activities can receive a 5% corporate tax rate for up to 15 years. The investment commitments were reported by Singapore’s EDB, while the tax measures are outlined in the Malaysian Ministry of Finance’s Johor-Singapore SEZ incentive package.
The Johor-Singapore example shows how an investment proposition can extend beyond a single administrative boundary. It draws on the different strengths of two places and gives investors a reason to consider them together, rather than as competing destinations. It also creates a shared interest in making the arrangement work, even though the two jurisdictions continue to report their investment results separately.
How we read it
The five economies are competing for many of the same types of investment. Advanced manufacturing, electronics, digital industries, innovation and higher-value services appear repeatedly in their strategies. Their ambitions are also broadly similar: attract more sophisticated activities, strengthen domestic capabilities and secure a greater share of the value created by foreign investment.
The differences lie in the foundations of each proposition and in how clearly countries explain what they offer. Indonesia builds on its natural resources and the potential for domestic processing. Malaysia combines an established industrial base with a more explicit focus on the outcomes investors are expected to deliver. Singapore offers a specialised regional hub for business, innovation and advanced manufacturing. Thailand is using its manufacturing base to position itself in emerging industries, while Vietnam is seeking to move from its role as a major production location towards higher-value activities and stronger domestic supply-chain links.
There is also a difference in the evidence each country makes available. Investment totals tell us something about the scale of activity, but reporting on implementation, disbursement, jobs and value added gives a better sense of what is actually happening. Malaysia’s project implementation figures, Vietnam’s distinction between registered and disbursed investment, and Singapore’s reporting of both commitments and expected outcomes all help to make the picture more concrete. Indonesia’s figures show the growing weight of downstream investment, while also leaving questions about the results individual projects will deliver.
For places competing to attract international investment, a strong proposition needs more than an ambitious list of target sectors. It needs to explain why investors should choose that location, what the place can offer that others cannot easily replicate, and what happens after the investment announcement. Southeast Asia’s five economies are making increasingly sophisticated cases. The strength of those cases will depend not only on the capital they attract, but on how convincingly they can show what that capital contributes.
This article is part of our series on investment attraction, on how places make their case to investors. Read more in our Investment Attraction section.
Reporting supported by TPBO Senior Associate India & Southeast Asia, Abhinav Bhole.
Editorial note: This article reflects The Place Brand Observer’s interpretation of the information, reports and data available at the time of writing. While we have made every effort to represent the sources accurately, readers should consult the original sources and independently verify relevant figures and claims before using them to inform business, investment or policy decisions.
