The report, themed “New Drivers from International Financial Centers and Free Trade Zones,” was launched by the Vietnam’s Association of Foreign Invested Enterprises (VAFIE) on Thursday.

In his opening remarks, Dr. Nguyen Anh Tuan, chairman of VAFIE and chief editor of the report, emphasized that after five consecutive years of publication, the annual FDI report has become an important information channel, providing a systematic perspective on global investment trends while offering practical policy recommendations for Vietnam.

According to the report, in 2025, Vietnam continued to maintain strong appeal to foreign investors despite global economic uncertainties. Total registered FDI reached about $38.42 billion, while disbursed capital hit a record high of $27.62 billion, reflecting international investors’ confidence in Vietnam’s investment environment and long-term growth prospects.

“This was a highly significant result, especially as the world faced numerous geopolitical, trade, and financial risks,” Dr. Tuan stressed.

A notable highlight of the report is the qualitative transformation of FDI flows. Previously dominated by new projects, 2025 saw a strong rise in capital adjustments, equity contributions, and share purchases. This indicates that investors are no longer merely “testing” the market but are expanding operations and strengthening long-term commitments to Vietnam.

The manufacturing and processing sector continued to serve as the backbone, accounting for more than half of total registered capital. However, the report noted a significant increase in investment in services such as real estate, wholesale-retail, logistics, science-technology, waste treatment, and accommodation.

According to Tuan, this reflects an important trend: Vietnam is no longer just a “manufacturing hub” but is gradually evolving into a multi-pillar economy, with simultaneous development of production, services, consumption, and technology.

In terms of investment locations, traditional growth poles such as Ho Chi Minh City, Bac Ninh, Hanoi, and Dong Nai remained leading destinations. However, capital flows began spreading to emerging provinces like Gia Lai, Phu Tho, and Ninh Binh, indicating substantial room for expanding FDI if these localities improve infrastructure and institutions.

The report affirmed that the FDI sector continued to play a crucial role in Vietnam’s economy, contributing around 21% of GDP, accounting for a large share of exports, and generating a significant trade surplus.

However, a major limitation was the weak linkages between FDI enterprises and domestic firms. In many industries, especially electronics, localization rates remained low, with Vietnamese companies mainly participating in low value-added segments.

“This is an issue that must be addressed if Vietnam aims to enhance growth quality and better leverage FDI inflows,” the VAFIE chairman noted.

Bottlenecks hindering next-generation FDI

Despite positive results, the report identified several key constraints. First is the shortage of high-quality human resources. As global corporations shift toward sectors such as semiconductors, AI, data centers, and biotechnology, the advantage of low-cost labor is no longer decisive. Competition is increasingly based on workforce quality, particularly engineers, technology experts, and managers.

Second, strategic infrastructure has not kept pace with the requirements of next-generation FDI. Investors increasingly demand reliable electricity, clean energy, efficient logistics, modern digital infrastructure, and ready-to-use land.

Third, the global minimum tax is reshaping the FDI landscape. Traditional tax incentives are losing effectiveness, forcing Vietnam to compete based on institutional quality, infrastructure, public services, and implementation capacity.

Feedback from organizations such as the Japan External Trade Organization (JETRO), the Korean Chamber of Commerce (KoCham), the American Chamber of Commerce (AmCham), and Klynveld Peat Marwick Goerdeler (KPMG) shows that the international business community continues to appreciate Vietnam’s political stability, market potential, and strategic location.

However, investors also point out persistent issues, including complex administrative procedures, inconsistent law enforcement, rapidly changing policies with limited transition periods, and poor infrastructure and human resources.

KPMG emphasizes that Vietnam needs to develop deeper strategies for data, R&D, AI, and innovation ecosystems - key factors for attracting high-quality investment in the future.

According to Dr. Tuan, a key highlight of the 2025 report is the role of International Financial Centers (IFCs) and Free Trade Zones (FTZs). If effectively designed and operated, these will serve as new “levers” to attract global financial institutions, innovation-driven capital, and advanced business models.

IFCs can expand capital mobilization for infrastructure, green transition, and strategic industries, while FTZs can create new growth poles by integrating industry, logistics, and trade within global value chains.

“Vietnam’s proactive development of IFCs and FTZs shows a shift in investment attraction strategy, from improving the environment to creating new development spaces,” he noted.

Toward a new phase of FDI attraction

The report delivers a clear message: Vietnam must move into a phase of deeper FDI attraction. This means shifting from passive reception to selective investment attraction, from quantity to quality, and from short-term growth to long-term spillover value. FDI in the new phase must directly support national development strategies.

To achieve this, the report proposes a comprehensive action program: institutional reform, infrastructure development, human capital improvement, stronger business linkages, and new mechanisms to attract green, digital, and high-tech investment.

Presenting Chapter I, Prof. Nguyen Mai, honorary chairman of VAFIE, noted that the global economy is recovering but accompanied by a new risk structure: stronger protectionism, less predictable policies, deeper technological competition, and higher energy security requirements.

International investment is shifting toward higher quality, greener, more digital, and more knowledge-based models. This creates opportunities for countries with transparent institutions, strong infrastructure, and a capable workforce, he said.

In this context, Vietnam has a solid foundation to break through, but can only upgrade its position if reforms are implemented comprehensively, substantively, and measurably at all levels, he stressed.

Prof. Nguyen Mai outlined three key pillars for Vietnam moving forward. First is maintaining macroeconomic stability - the foundation of investor confidence and resilience to external shocks. Second is accelerating institutional reforms toward transparency, consistency, and predictability - an increasingly decisive factor in FDI competition.

Third is upgrading the quality of FDI inflows by shifting from “more investment” to “the right investment,” prioritizing high-tech sectors, clean energy, data, and green logistics.

“Vietnam cannot compete sustainably based solely on low costs or tax incentives; its advantages must come from institutions, infrastructure, and human capital,” he concluded.

VAFIE is the parent entity of The Investor (www.theinvestor.vn) and Nha dau tu (www.nhadautu.vn).

Dr. Nguyen Anh Tuan, chairman of the association, used to be deputy head of the Foreign Investment Agency, under the Ministry of Planning and Investment, and editor in chief of Vietnam Investment Review - a newspaper under the ministry.