Uncertainty has become the new normal for global businesses, with a mix of geopolitical tensions and macroeconomic concerns forcing them to prioritise resilience and restructure supply chains. This has impacted global Foreign Direct Investment (FDI), which fell by 11 per cent in 2024, following a 10 per cent drop in 2023, according to the ASEAN Investment Report 2025.
Against this backdrop, Southeast Asia has defied the odds and emerged as the bright spot for growth, with foreign direct investment (FDI) growing year on year. In 2024, Southeast Asia accounted for 15 per cent of global FDI inflows, attracting US$226 billion, a rise of 8 per cent from 2023. Since 2021, annual FDI inflows have consistently exceeded US$200 billion, above the previous decade’s annual average of under US$130 billion.
In fact, FDI stock in ASEAN rose from US$1 trillion in 2010 to US$3.6 trillion in 2024, equivalent to 1.2 times the combined stock in Africa and South America. Here are five highlights from the report that explain why MNCs are doubling down on Southeast Asia and why Singapore is their strategic hub for expansion.
1. More greenfield investments across diverse manufacturing sectors
Investments into Southeast Asia are increasingly driven by new and expansionary projects. More than two-thirds of inflows comprise of equity capital, while cross-border mergers and acquisitions fell by 61 per cent from 2023.
This signals that businesses are not simply acquiring firms or restructuring their balance sheets. Instead, they are establishing new operations, expanding production capacity, and building long-term capabilities across the region.
Furthermore, manufacturing FDI rose sharply, increasing by 147 per cent year-on-year, particularly in supply chain-intensive sectors such as automotive, electronics and semiconductors. Many of these big-ticket investments were either first-time entries into Southeast Asia or involved significant upgrading and expansion of existing facilities. These investments were driven by rising regional demand and the adoption of advanced manufacturing technologies to improve efficiency and resilience.
Investment spanned major economies, with Chinese firms active in automotive and apparel, US firms in pharmaceuticals and semiconductors, UK investors in aerospace and energy, and other Asian multinationals across automotive and electronics.
2. Digital economy investment is accelerating
Alongside manufacturing growth, investment in Southeast Asia’s digital economy is rising rapidly. Greenfield investment in digital-related sectors more than doubled to US$16 billion in 2024, reflecting rising demand and growing investor confidence in the region’s digital infrastructure, connectivity, and technology ecosystem.
This growth was driven by expansion in data centres, cloud services, software development and technology-enabled business activities. These investments are critical as they strengthen the region’s digital backbone – supporting advanced manufacturing, supply chain coordination, digital trade and cross-border services.
Some of these investments in Singapore include Amazon’s AWS APAC Hub, OpenAI’s APAC Hub, and Databrick’s Asia Pacific & Japan Hub.
Artificial intelligence (AI) is emerging as a key digital technology across Southeast Asia, with companies adopting AI to enhance their supply chains by optimising logistics and improving inventory management. Singapore, Malaysia, and Thailand are leading the region in industrial robot installations, with Singapore ranking second globally in robot density, with 730 robots per 10,000 employees in 2023 – significantly above the global average of 162.
