For developing countries FDI is important source of external financing. Increased FDI activity in Vietnam had significant impact its economic development, and vice versa. Being one of the fastest growing economies Vietnam is an attractive FDI host for Swiss companies. However, the growth trend had a slowdown in recent years. Based on the existing literature on FDI theory and Vietnam data, the thesis aims at examining Vietnam's FDI current drivers, barriers and modes, explaining country characteristics and factors influencing FDI decisions for investors.

As the basis of the thesis FDI related theory and models are explained. Theory is applied to the existing Vietnam empirical data (ITC database) and analyzed in order to understand current FDI activity in the country, including Switzerland relations with Vietnam in terms of MNCs trade and investment history between countries. Recommendations are built on therefore mentioned analysis and examinations. In the conclusion, the author summarizes the findings and gives an outlook on opportunities for Vietnam as an FDI recipient.

Vietnam is benefiting from its geographical location, its policy towards market liberation and tax incentives for foreign investors. The country offers strong incentives for MNCs to be represented in the country. Competitive production factors such as low wages, availability of workforce, and various governmental programs, including tax incentives are attractive arguments for foreign investors. Furthermore, due to several bilateral agreements and its WTO / ASEAN membership the country has gained better access to international markets and good opportunity to serve the neighboring countries. Although the future outlook recommends an investment, various factors are affecting FDI potential in a negative way. Finance, ownership and regulations issues are hindering the country to perform at its full potential. The thesis helps to estimate Vietnam's investment risks and opportunities for the client, and to weight the determinant FDI factors against the investment strategy.