[Event Recap] Vietnam's Reform and Policy Landscape in a New Era

From tax-driven FDI to high-quality FDI

Vietnam is shifting from a tax-driven FDI attraction model toward a stronger focus on high-quality FDI. While previous priorities included the number of projects, registered capital and strong corporate income tax incentives, current priorities include high technology, semiconductors, artificial intelligence, R&D, green manufacturing and high value-added supply chains.

As Vietnam prepares to adapt to the Global Minimum Tax, the government is gradually shifting toward broader non-tax support measures, including infrastructure support, human capital development, R&D support, land incentives/support and administrative facilitation.

Vietnam is also accelerating the development of high-tech and semiconductor industries to integrate more deeply into global supply chain diversification. Key priority sectors include semiconductors, electronics, AI and data centers, and chip packaging and testing.

Competitiveness priorities for Vietnam’s next growth phase

Infrastructure remains one of the largest bottlenecks for scaling up FDI projects, with priority investments including expressways, ports, logistics systems, airports and power infrastructure.

The government is working to reduce licensing friction, digitalize administrative procedures and improve the overall investor experience, with a target of cutting 30% of administrative procedures. However, implementation remains uneven across different localities.

Vietnam recognizes that its low-cost labor advantage will gradually diminish. Therefore, the government is investing in STEM education, digital skills, semiconductor workforce development and vocational training upgrades to support the transition from a low-cost labor destination to a skilled workforce destination.

The presentation also highlighted the role of the private sector as a key growth driver. This is closely related to FDI, as the government aims to strengthen linkages between FDI firms and Vietnamese enterprises, increase local content and enhance the capacity of domestic suppliers. FDI continues to be strongly encouraged, while greater regulatory scrutiny applies in sensitive sectors such as data, fintech, telecommunications and strategic infrastructure.

Global economic integration

Vietnam continues to leverage major trade agreements, including EVFTA, CPTPP and RCEP, as well as various strategic partnerships, to maintain its position as a global export manufacturing hub.

Green growth and ESG expectations

Vietnam is actively promoting Net Zero by 2050, renewable energy, ESG compliance and carbon reduction. As a result, new FDI projects are increasingly expected to be greener, more energy-efficient and more compliant with EU and US supply chain standards.

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