Bright spots obvious in foreign investment mission

Headline indicators already signal this maturation. Registered FDI reached $31.52 billion in the first 10 months of 2025, up 15.6 per cent on-year, while realised capital climbed to $23.6 billion by November, an 8.9 per cent rise and the fastest disbursement growht in five years.

Nguyen Tuan Khoi, foreign investment consultant Dezan Shira & Associates

More important than the absolute numbers is the narrowing gap between commitments and actual capital deployment, reflecting an increasingly capable system of converting licences into operating projects. The full implementation of the Land Law in 2025 materially reduced clearance and valuation issues, enabling investors to move from approval to construction with unprecedented speed.

This marks the first major bright spot: FDI in Vietnam is no longer aspirational capital but increasingly productive capital.

A second and more consequential bright spot lies in the qualitative transformation of FDI composition. Manufacturing accounted for 82.9 per cent of realised FDI in 2025, yet the nature of this manufacturing has changed fundamentally. Electronics, semiconductors, and high-precision engineering have displaced traditional labour-intensive industries as the dominant recipients of foreign capital.

Large-scale projects by Amkor, Hana Micron, BESI, and Foxconn are not isolated investments. They are anchoring an ecosystem that attracts equipment suppliers, materials vendors, and specialised service providers.

Equally significant is the emergence of domestic technological capability. Initiatives such as FPT Semiconductor’s locally designed power management chips and Viettel High Tech’s production of 5G chipsets demonstrate that Vietnam is beginning to internalise intellectual property rather than merely hosting assembly lines. This evolution positions Vietnam higher in the global value chain and enhances the long-term stickiness of FDI by embedding technology and skills locally.

Policy innovation in 2025 constituted a third decisive bright spot. The operation of direct power purchase agreements (DPPAs) broke the monopoly in electricity procurement and directly addressed the requirements of global corporations committed to renewable energy.

By allowing large consumers to contract directly with renewable generators, Vietnam unlocked a wave of green FDI that had previously been constrained by regulatory limitations. The Lego manufacturing agreement, enabling the company’s first carbon-neutral factory to operate on 100 per cent renewable power, provided tangible proof that the mechanism works.

In parallel, establishment of the Investment Support Fund transformed the challenge of the global minimum tax into a strategic advantage. By channelling top-up tax revenues into direct cash grants for research and development, training, and infrastructure, Vietnam shifted from passive tax incentives to active operational support, aligning investor benefits with national objectives for technological upgrading.

Fourthly, infrastructure development stood out as a notable bright spot, further reinforcing Vietnam’s attractiveness as an investment destination. The completion of the Eastern North–South Expressway and the commissioning of Phase 1 of the Long Thanh International Airport in late 2025 fundamentally altered the country’s logistics landscape. These assets reduced travel times between economic zones and expanded air cargo capacity, critical for high-value goods such as electronics and semiconductors.

Importantly, improved connectivity created credible investment opportunities in Tier 2 provinces such as Nghe An, Thanh Hoa, and Quang Ngai, where land and labour costs remain lower than in traditional hubs. The integration of standard-gauge rail links connecting northern Vietnam with China’s Yunnan province further strengthened Vietnam’s role within regional supply chains, enabling more efficient China+1 configurations.

Lastly, institutional innovation emerged as a strategic bright spot with longer-term implications. The establishment of Vietnam’s international financial centre (IFC) in Ho Chi Minh City and Danang signalled an ambition to retain higher value-added segments of global commerce, including finance, fintech, and trade facilitation.

Crucially, on December 11, the National Assembly formally approved the Law on Specialised Courts for the IFC, providing a clear statutory foundation for IFC courts and arbitration bodies to operate under internationally recognised procedures. Generous fiscal incentives, regulatory sandbox mechanisms, and specialised dispute resolution frameworks aim to attract financial institutions and technology-driven service providers.

While execution risks remain, particularly at the local level, the IFC framework expands the scope of FDI beyond manufacturing into capital-intensive and knowledge-based sectors.

Looking ahead to 2026, these developments collectively underpin a bright outlook for Vietnam’s FDI attraction. The government’s ambitious GDP growth target of 10 per cent or higher reflects a readiness to deploy fiscal stimulus and accelerate public investment, especially in transport and urban infrastructure.

More importantly for investors, the policy direction is coherent and consistent: prioritise high technology, green energy, and innovation-intensive activities. Early movers that secure renewable power and invest in local talent are likely to capture the advantages.

Vietnam’s FDI story entering 2026 is therefore defined less by cost arbitrage and more by capability building. The convergence of effective policy execution, upgraded infrastructure, a nascent semiconductor ecosystem, and innovative financial and energy frameworks has reshaped the investment landscape. For global investors, Vietnam now presents not just an alternative manufacturing base, but a platform for scalable, high-quality growth embedded in regional and global value chains.