Against flat FDI inflows in developing economies overall, investment in ASEAN rose by 8 per cent in 2024, to $226 billion – $5 billion short of its 2022 record (figure 1). The region accounted for a 15 per cent share of global FDI inflows, maintaining its status as the leading recipient among developing regions for the fourth consecutive year. Major factors contributing to the increase included international supply chain restructuring prompted by trade tensions, as well as growing investor interest in key industries such as electronics, electric vehicles (EVs), pharmaceuticals and the digital economy.

Figure 1. FDI Inflows in ASEAN and ASEAN Share of World Inflows, 2018–2024 (Billions of dollars and percentage)

Source: ASEAN Investment Report (2025)

FDI in seven Member States rose, pushing up investment in the region. Investment in Cambodia, Singapore and Viet Nam climbed to record levels. More than 60 per cent of total inflows were concentrated in Singapore. This concentration was also led by large-ticket manufacturing investment projects and significant FDI in finance, holding companies and R&D activities.

The number of announced greenfield investment projects rose by 4 per cent, to 1,638 in 2024. This upward trend underscores improving investor sentiment and favourable future investment plans in the region. It corresponds to the increasing numbers of FDI projects realized since the COVID-19 pandemic. In 2024 manufacturing and services, in that order, were the main industrial targets for greenfield investment, accounting for nearly all projects by value.

International project finance deals in ASEAN declined, by both number of projects and value, for the second consecutive year. The value fell by nearly half to $71 billion, reflecting the global situation of international project finance, which declined by 26 per cent . Concerns about tightening financing constraints, uncertainty about interest and exchange rates, and geopolitical tensions were key factors. International project finance in sectors relevant to the Sustainable Development Goals (SDGs) such as health, education and infrastructure fell.

The value of cross-border Mergers and Acquisitions fell by 61 per cent, from $28 billion in 2023 to just $11 billion, with a decline in the number of deals and megadeals.

In 2024, investor from 10 economies contributed 75 per cent of FDI in ASEAN, down from 85 per cent in 2023. These included top 5 sources which are United States, intra-regional investment, China, United Kingdom, and Japan. Intraregional investment rose 45 per cent to $31 billion, pushing its share of FDI in ASEAN to 14 per cent, up from 10 per cent in 2023.

FDI in the top five industries accounted for 87 per cent of total inflows, with finance (including banking and insurance) and manufacturing together accounting for 60 per cent of investment (figure 2). Strong investment growth in the manufacturing and professional, scientific and technical activities sectors significantly boosted overall FDI, offsetting the decline in FDI in finance.

FDI in wholesale and retail trade also rose, driven by increasing consumerism, expanding economies and growing e-commerce activities. FDI in professional, scientific and technical activities, experienced the largest surge. This was followed by the significant increase in FDI in information and communication, driven by rising demand for data centres, cloud computing and the expanding digital economy.

Figure 2.ASEAN Top Five Industry Recipients of FDI, 2023 and 2024 (Billions of dollars)

Source: ASEAN Investment Report (2025)

ASEAN’s significance as global FDI host in 2023 confirmed its long-term trend. The region’s share of global FDI averaged 11 per cent during the AEC 2025 period (2016–2023), nearly doubling from the 6 per cent recorded during the previous AEC phase (2006–2015). The sustained flows are supported by increasing investment in high-value and knowledge-intensive services, strong financial sector activity, rising interest from key Dialogue Partners such as the United States and China, and growing investment in digital and renewable energy industries.

ASEAN Agreements on Investment

Investment is an essential element of overall ASEAN economic integration efforts.  Under the outgoing ASEAN Economic Community (AEC) Blueprint 2025 investment is listed under the first characteristic of the AEC as a highly integrated and cohesive economy, while under the upcoming AEC Strategic Plan 2026-2030 investment is also listed under the first strategic goal of an action-oriented community: realising an integrated single market and production base with new sources of competitiveness. In the area of investment, ASEAN’s main objective is to achieve ASEAN as an attractive investment destination, underpinned by the implementation of existing ASEAN investment instruments and leveraging ASEAN’s potential in unlocking opportunities from emerging megatrends, including technological innovation and sustainable development.

The ASEAN Comprehensive Investment Agreement (ACIA) is ASEAN’s main policy lever to achieve the main objective of realising a free and open investment regime in the region. ACIA was signed by ASEAN Economic Ministers (AEM) on 26 February 2009 in Cha-Am, Thailand and entered into force on 29 March 2012. The ACIA aims to create a liberal, facilitative, transparent and competitive investment environment in ASEAN.

ACIA is a comprehensive agreement that covers investment liberalisation, protection, facilitation and promotion. It adopts a single negative list approach and extends automatic Most-Favoured Nation (MFN) treatment to all Member States. It also carries a comprehensive and detailed investor-state dispute settlement mechanism and many more. ACIA is also looking to prohibit performance requirements, and require provision on Senior Management and Board of Directors (SMBD) to encourage inflow of key foreign managerial and senior management personnel. Various works are on-going to effectively implement the ACIA to ensure that the benefits from the Agreement are realised, as well as to continue enhancing the ACIA, as necessary.  To-date, ACIA has been enhanced five times through five amendment Protocols.

To further complement the ACIA in facilitating investment into ASEAN as the region gears up for a post-pandemic environment and taking into account the potential brought about by global supply chain restructuring, in 2021 ASEAN also adopted an ASEAN Investment Facilitation Framework (AIFF) that each Member State will endeavour to put in place in order to: (i) improve accessibility and transparency of measures of general application and information related to investment conducive to increased investment; (ii) streamline and expedite administrative procedures and requirements for the entry, retention and expansion of investment; and (iii) create favourable conditions for investment and doing business.