Executive summary
Southeast Asia remains one of the world's strongest destinations for foreign investment. Vietnam, Indonesia and Thailand are often compared, but they suit different business models. This guide offers a practical way to choose: start with what your business needs – export manufacturing, domestic consumer reach, or a particular supply chain – and test each market against that need.
The opportunity and supporting evidence
According to the ASEAN Investment Report 2025, prepared by the ASEAN Secretariat and UNCTAD:
•FDI into ASEAN rose 8% to $226 billion in 2024, against an 11% global decline.
•ASEAN remained the top FDI recipient among developing regions for the fourth consecutive year.
•Manufacturing FDI grew by nearly 150% to $44 billion, driven by supply chain-intensive industries and the digital economy.
•The region is increasingly a global supply chain hub.
The same report noted that the 2025 outlook appeared challenging because of investor concerns over tariff escalations and geopolitical tensions.
Countries, sectors and participants
The comparisons below are Nirji's qualitative interpretation. Verify current data with each country's official investment agency before deciding.
•Vietnam: is widely seen as an export-manufacturing base, particularly for electronics and assembly linked to global supply chains. It suits companies whose main question is production cost, export logistics and supplier proximity.
•Indonesia: stands out for domestic market size and natural resources. It suits consumer businesses targeting a large population, and companies in resource-linked value chains such as battery materials.
•Thailand: has long-established automotive and industrial clusters. It suits companies that want mature suppliers, infrastructure and an existing industrial workforce, including those connected to the vehicle transition.
Potential collaboration models
1.Contract manufacturing – to test a market before building your own plant.
2.Local distribution partners – for consumer and B2B sales, especially in Indonesia's dispersed geography.
3.[Joint ventures](/insights/joint-venture-distributor-acquisition-greenfield-market-entry) – where local ownership, licensing or government relationships matter.
4.Greenfield plants – in industrial estates once demand and supply chains are proven.
Operating considerations and constraints
•Foreign-ownership rules, local-content requirements and licensing vary by country and sector.
•Tariff changes can alter the economics of export-led investment quickly.
•Talent availability differs by location within each country, not just between them.
•Infrastructure quality is uneven outside main industrial corridors.
•Incentives usually come with conditions on investment size, location or employment.
Practical next steps
1.Define your primary goal: export base, domestic market or cluster access.
2.Shortlist locations, not just countries – industrial estates differ widely.
3.Check sector-specific ownership and licensing rules with official agencies.
4.Model landed cost and tariff exposure for your key export markets.
5.Talk to existing operators in your sector before committing.
What remains uncertain
Trade policy, tariff changes and regional supply chain shifts make the outlook less predictable than the 2024 figures suggest. Country-level conditions change; check official sources for the latest data.