Rizwan Khan, managing partner at Acclime Vietnam

Global capital is on the move again. As major economies shift their focus inward, investors are re-evaluating where to place their bets. They are no longer chasing the cheapest option, they’re looking for stability, credibility, and long-term value.

Vietnam is increasingly part of that conversation. Its manufacturing base is proven, but the next stage of growth will depend less on volume and more on value, on how quickly the country can evolve from production hub to trusted innovation partner.

The United States’ new reciprocal tax policies, and the likelihood that Europe and Japan will follow suit, are not simply fiscal manoeuvres. They mark a philosophical shift: developed economies are rebuilding domestic production and tightening control over high-tech supply chains. For export-oriented economies like Vietnam, this moment is both a test and an opportunity, a chance to redefine what kind of foreign investment will shape its next chapter.

According to the UN Conference on Trade and Development’s World Investment Report 2025, foreign direct investment (FDI) inflows into Europe fell 58 per cent last year, while Southeast Asia rose 10 per cent, reflecting a global rebalancing of production networks.

In Vietnam, total registered FDI reached $28.54 billion in the first nine months of 2025, up 15.2 per cent on-year, while disbursement hit a five-year high of 18.8 billion. However, newly registered capital declined 8.6 per cent, signalling that investors are becoming more cautious, focusing on efficiency, resilience, and sustainability rather than expansion at any cost.

Capital expansion by existing investors surged 48 per cent, and equity contributions climbed 35 per cent, a sign of continued long-term confidence, but also a clear indication that Vietnam has entered a selective investment phase.

These shifts in investor behaviour are being reinforced by broader policy changes at the global level. The introduction of the global minimum tax and a wave of new trade policies are prompting multinational corporations, particularly large groups, to reassess their production footprints and cost structures. As traditional tax-based incentives lose effectiveness, Vietnam’s competitiveness will increasingly rely on institutional quality, regulatory transparency, and non-fiscal support mechanisms.

These include improved access to industrial land, high-quality infrastructure, streamlined licensing procedures, and the availability of skilled labour, all of which are emerging as decisive factors for investors seeking stable, rule-based environments in Asia.

Tighter global trade rules do not solely represent constraints; they also open opportunities for economies capable of rapid adaptation. As the US, EU, and China impose stricter standards for quality, transparency, and sustainability, Vietnam can transform regulatory compliance into a competitive strength by upgrading production standards and increasing local value creation.

Mexico’s recent decision to impose import tariffs on over 1,400 products, for instance, has inadvertently created a comparative edge for Vietnam. As a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Vietnamese goods now benefit from tariff preferences and flexible rules of origin, making the country an increasingly attractive base for companies diversifying supply chains and mitigating geopolitical risk.

Nowhere are these changes felt more clearly than in Vietnam’s industrial parks (IPs), where the focus is steadily shifting from scale to sophistication. Over the past decade, Vietnam’s IPs and export-processing zones have been the backbone of its manufacturing success.

But that success has reached a crossroads. The next wave of FDI will not be about how many new factories can be built, but about how smart, clean, and connected those factories are.

Vietnam is evolving towards a more innovation-led mindset, photo Le Toan

Strategic actions

Vietnam is gradually shifting from traditional industrial zones towards eco-industrial, smart, and high-tech parks, a transition anchored in the national’s green growth strategy and the government’s long-term vision for sustainable, innovation-led growth. Recent legal reforms, notably 2024 updates to laws on planning, public-private partnership investment, and bidding, and the establishment of the Investment Support Fund, have accelerated this transition.

Investors now enjoy faster licensing, targeted incentives, and subsidies of up to 50 per cent for research and development (R&D) or capital investment in high-tech projects, alongside tax holidays and reduced land-use fees for certified green facilities.

Ho Chi Minh City, as Vietnam’s industrial powerhouse, leads the charge. With 66 existing zones covering 27,000 hectares, and plans to grow to 105 by 2050, the city is piloting the conversion of five major parks (Tan Thuan, Hiep Phuoc, Tan Binh, Cat Lai, and Binh Chieu) into integrated eco-IPs.

These will combine logistics, R&D, and service functions, supported by skilled labour and modern infrastructure. Between 2025 and 2030, the city targets $21 billion in new FDI, backed by 14 newly approved IPs, signalling a clear pivot towards sustainable, technology-driven growth.

This year is a pivotal moment for Vietnam’s goal of becoming a modern industrialised nation by 2045. The government has anchored its reform drive around a strategic quartet of resolutions on sci-tech and innovation, international integration, institutional reform, and private sector development. The latter in particular secures for private enterprises three essential rights – market access, resources, and property ownership, creating a more level and predictable playing field for both domestic and foreign investors.

These four guiding resolutions are being advanced through three key pillars of reform: institutional efficiency; infrastructure modernisation; and science, technology, and human capital development.

The first pillar is already taking shape. Ministries have been urged to remove at least 30 per cent of existing business conditions and cut administrative processing times by 30 per cent, while expanding the national digital single-window for investment, taxation, and customs. Fiscal modernisation is also advancing under this pillar, with a domestic minimum tax regime being designed to align with Organisation for Economic Co-operation and Development standards and investment incentives reoriented towards high-tech R&D, clean energy, and digital transformation.

These measures represent a shift from a ‘permission-based’ to a ‘performance-based’ model of governance, a crucial step towards efficiency, transparency, and long-term investor confidence.

The second pillar, on infrastructure modernisation, is equally critical. Vietnam is accelerating major transport and logistics projects, from the North-South Expressway and coastal highways to Long Thanh International Airport and Cai Mep-Thi Vai Port, under a streamlined model that delegates greater authority to local governments and separates land clearance from construction. This not only speeds project execution but also opens new corridors for industrial and urban expansion.

The third pillar, on sci-tech and human capital, focuses on preparing Vietnam for the industries of the future. The government is training 100,000 engineers in semiconductors and AI, deepening university–industry collaboration, and strengthening the innovation ecosystem. Vietnam’s Global Innovation Index ranking of 44th among 139 economies in 2025 reflects tangible progress in this field.

The next growth cycle

Global capital is now flowing toward industries that combine innovation, sustainability, and strategic resilience, and Vietnam’s next growth phase will depend on how effectively it positions itself in these areas.

The semiconductor industry is a clear focal point. With established investments from Intel, Samsung, and Amkor, and new expansions by Nvidia and others, Vietnam is emerging as a critical link in the global chip supply chain.

In renewable energy and green technologies, Vietnam is positioning itself as a clean growth hub in Asia. Backed by guaranteed power purchase agreements, grid expansion, and the green growth strategy, this sector offers opportunities not only for energy investors but also for manufacturers supplying green components and materials. The shift towards eco-IPs and smart parks embodies this sustainable direction.

Healthcare and pharmaceuticals are also rising priorities. Rising domestic demand, an ageing population, and supportive licensing reforms are attracting long-term investment in biotechnology and medical devices. The post-pandemic focus on supply security is also driving multinational firms to establish more localised production in Vietnam.

Logistics and smart infrastructure are equally vital. As export volumes grow and supply chains become more complex, Vietnam’s investments in ports, highways, and digitalised warehousing systems are helping reduce logistics costs and enhance competitiveness.

Finally, the digital economy and financial innovation are fast emerging as new pillars of growth. With plans to establish international financial centres in Ho Chi Minh City and Danang, and with a dynamic fintech ecosystem supported by cloud and AI adoption, Vietnam is building the digital foundations of a modern economy.

But beyond sectors and figures, the deeper story is about how Vietnam adapts. Global trade and tax shifts are real, and they will bring pressure, but also opportunity. The task now is not to do more of the same, but to do it better: to make IPs cleaner, smarter, and more reliable places to do business, where investors see long-term value, not short-term cost.

That means investing in people and backing projects that bring real technology and skills into the economy. Vietnam’s next phase will be defined not by how much foreign capital arrives, but by how much of it truly stays and grows with the country.