Swedes maintain their investment momentum

David Liden, trade commissioner and country manager Business Sweden

In 2023 alone, as of August, newly annual registered investment from Sweden in Vietnam reached over $320 million. Compared to other regional countries, from January to July 2023, Sweden contributed $210 million, second only to the Netherlands in the EU and topped the Nordic region in terms of 2023 newly registered capital in Vietnam, and the average capital per project hit $35 million, as compared to $39 million by the Netherlands.

The manufacturing sector continued to be the main component of Swedish investment in Vietnam in 2023. Almost half of Swedish investment in Vietnam in 2023 was attributed to the newly-launched factory in the northern city of Haiphong from Autoliv, a Swedish automotive safety supplier. Another noticeable inauguration is the new 8,000-square metre factory from Trelleborg Sealing Solution in the southern province of Dong Nai, which will attend to the need of fast-growing markets in Vietnam and the wider Asian region, as well as the Europe and North America. The year concluded with Tetra Pak announcing its investment raise to $173 million in the southern province of Binh Duong, another initiative epitomising the company’s continued interest in Vietnam as a production hub.

Vietnam has made efforts to improve the business climate. But is this improvement enough to engage potential Swedish businesses and investors? And what are the important factors to increase Vietnam’s attraction amid stiffening competition from regional peers?

The incentivisation policies towards high-tech manufacturing and the desirable local resources have been a constant set of catalysts attracting capable Swedish investors. If the incentives could be more specified at the product and technology level, more serious interest and focused projects will get underway. Feedback for improvement highlights the need to streamline basic procedures. This includes those for investment and business permits, custom clearance following EU-Vietnam Free Trade Agreement, and regular tax reporting. In addition, transportation in the south and national digital infrastructure needs a comprehensive and strictly executed upgrading plan to support rising global interest.

There is also a need to equip human resources with skill sets ready to participate in innovative and highly technical activities, especially in research and development.

The trend of Swedish investment in the future will not see many changes from last year. Manufacturing will continue to be at the forefront of Swedish content in Vietnam. After 2023, we see new and present firms are actively exploring the potential to upgrade or build new facilities, which have high technical content and are more research and development oriented.

Investors will find opportunities from the need for innovative products and solutions for the energy transition and other infrastructure upgrades, which are high on the national agenda, at least until 2030. We hope continued reforms in investment regulations and incentivisation schemes will help accelerate the technology transfer progress, which is beneficial to both Vietnamese and Swedish counterparts.

The second is investment in the retail sector, as Swedish products are known for their value for money. Some of our well-known lifestyle brands in the Vietnamese market include Electrolux, H&M, Foreo, and IKEA. In November, Business Sweden Southeast Asia has hosted a webinar to publicise the main findings of our study on the regional retail dynamic, in which it shows that retail brands present in nearby markets such as Malaysia and Thailand are starting to shift eyes to Vietnam.

Thirdly, many businesses want to invest in investment funds and school models where they can share Swedish management models and values such as innovation and sustainability.

This year, Business Sweden will continue to assist the Swedish Institute in promoting and interviewing management level candidates from Vietnam for the Swedish Institute Management Programme, with the aim of helping innovative leaders to tackle sustainability challenges and lead their businesses to success through sustainable business practices.

We are also in discussions with other leading institutions for technology to explore the collaboration opportunities in knowledge transfer and skill equipment for sustainability transition, on both project and curriculum capacity.

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Swedish Deputy Minister for Foreign Affairs' Hanoi visit deepens bilateral ties The Swedish Deputy Minister for Foreign Affairs, Robert Rydberg, is visiting Hanoi from June 9 to 11 with the aim of strengthening bilateral relations with Vietnam.

Swedish businesses are eyeing more investment in Vietnam Swedish enterprises in Vietnam have been looking into increasing their investments, even during the recent global headwinds.