Vietnam has been affirming its position as one of the leading destinations for foreign direct investment (FDI). Total registered FDI capital entering the Vietnamese market in 2024 reached about 38,23 billion USD, up 3% over the previous year, and disbursed FDI capital reached a record 25,35 billion USD, up 9,4% over 2023. This impressive growth demonstrates the strong confidence of international investors in penetrating the Vietnamese business market.  

Vietnam's attractiveness is reinforced by its stable socio-political foundation, a key factor that provides peace of mind for long-term investors. Vietnam's economy maintains a positive growth rate, with a GDP of over 400 billion USD and a forecast GDP growth rate of 6.7% in 2025, along with the Government's ambitious target of 8%. Vietnam is also actively integrating into the international economy through participating in and signing a series of new-generation Free Trade Agreements (FTAs) such as CPTPP and EVFTA, opening the door to access the global market and facilitating import and export activities.  

This report is designed to provide an in-depth analysis of the potential sectors for FDI in Vietnam, the key capital and legal requirements, the importance of establishing local partnerships, and the indispensable role of professional consulting services in mitigating risks when entering the Vietnamese market. The ultimate goal is to equip FDI enterprises with the knowledge and strategies needed to make informed investment decisions and achieve sustainable success.

I. Potential Industries Attracting FDI in Vietnam

1. Manufacturing and Processing Industry

The processing and manufacturing industry has always played a pivotal role in attracting FDI in Vietnam. In the first quarter of 1, this industry accounted for the majority with 2025 billion USD (4,05%) of the total newly registered FDI capital. This figure is similar to the proportion of 81,7% in the total registered FDI capital in 66,9, affirming the leading position of this industry in the structure of foreign investment attraction.  

Prominent segments in the manufacturing and processing industry include:

• Electronics (semiconductor chips, components, electronic equipment assembly, AI):
  • Vietnam is emerging as an attractive destination for investors in the semiconductor industry, with 174 FDI projects and a total registered capital of nearly 11,6 billion USD. The world's leading technology corporations such as Intel, Samsung, LG, Canon, Datalogic, Foxconn, Luxshare, GoerTek, Pegatron have invested heavily in Vietnam, producing electronic products, components, LCD/OLED screens, printers, and other high-tech equipment. Vietnam has become the third largest semiconductor exporter to the US by 2023, with a value of up to 562 million USD. 
  • The potential lies in higher value-added segments such as semiconductor chip design, electronics, telecommunications and artificial intelligence (AI). The government is actively targeting FDI in R&D and more complex manufacturing processes to improve its position in the global value chain.  
• Automobile and auto parts manufacturing: 
  • The automobile industry attracts a large amount of investment capital from international corporations, contributing to promoting production and expanding the global supply chain. There are currently more than 377 automobile-related manufacturing enterprises, of which 169 are FDI enterprises, accounting for 46,43%. FDI enterprises are focusing on high-value automobile and auto parts manufacturing segments. 
  • Vietnam has strengths in the production of electrical components for automobiles, especially electrical wires, with export turnover reaching about 1,17 billion USD in 2023, ranking 3rd in the world. However, 80% of the main parts and components of automobiles such as engines, gearboxes, and electronic systems still have to be imported, showing great potential for FDI in high-tech supporting industries.  
• Textile (production of fabrics, fibers, high-tech accessories):
  • The textile and garment industry has a great need for FDI capital, especially for the production of fabrics, yarns, and accessories to complete the domestic value chain and take advantage of tariff incentives from FTAs. 
  • There are currently about 3.500 FDI projects in the textile and garment sector, with a total investment of over 37 billion USD. The FDI sector contributes about 65% of the total export turnover of the entire industry. Vietnam has a large deficit in fabrics (importing more than 10 billion USD/year), creating opportunities for FDI in this segment. 
  • New generation FTAs ​​require rules of origin, forcing textile and garment enterprises to develop along the entire domestic value chain. In addition, the “greening” requirement from major markets such as the US and EU promotes investment in advanced, environmentally friendly textile and dyeing technology.  

The concentration of FDI in the processing and manufacturing sector, especially electronics, reflects Vietnam’s strategy to participate more deeply in the global value chain. However, this also reveals the urgent need for supporting industry development and high-quality technology transfer.

Currently, Vietnam is mainly involved in low-value-added assembly, testing and packaging stages in the semiconductor industry. Similarly, the automotive and textile industries still rely heavily on imported raw materials and components. This situation presents a great opportunity for FDI in higher segments of the supply chain, but also a challenge for improving domestic capacity. Without substantial technology transfer and supporting industry development, Vietnam may be stuck in low-value stages, leading to dependence on foreign materials and technology, affecting its long-term competitiveness.  

FDI capital flows tend to concentrate in provinces and cities with developed industrial infrastructure. Bac Ninh is currently leading the country with nearly 5,04 billion USD in registered capital (accounting for 16%), followed by Quang Ninh (2,29 billion USD), Ho Chi Minh City (2,28 billion USD), and key industrial provinces such as Hai Phong, Hanoi and Binh Duong.

2. High Technology Industry

The high-tech industry, especially semiconductors and artificial intelligence (AI), is a key driver of global economic growth, aiming for a revenue milestone of $1.000 billion by 2030. Vietnam is well aware of this potential and is making efforts to attract FDI in areas such as chip design, component manufacturing, and R&D. Cooperation with large corporations such as NVIDIA has made a prominent mark, promising to shape a developed semiconductor ecosystem when entering the Vietnamese market.  

The Vietnamese Government has issued many special incentive and preferential policies to attract FDI into the high-tech industry:

• Law amending and supplementing a number of articles of the Law on Planning, the Law on Investment, the Law on Investment under the public-private partnership model and the Law on Bidding (effective January 01, 01):
  • The law introduced a “green lane” investment procedure applicable to investment projects in high-tech parks, export processing zones, and economic zones, focusing on building innovation centers, R&D, semiconductor industry, and other priority high-tech fields.
  • This process allows investors to receive an Investment Registration Certificate (IRC) in just 15 days and is exempted from certain initial construction, fire prevention, and environmental licensing procedures. This is a breakthrough that significantly shortens project implementation time, reflecting the shift from a “pre-inspection” to a “post-inspection” mechanism in investment management.  
• Investment Support Fund:
  • Established from global minimum tax (GMT) revenue and other legitimate sources, the fund aims to stabilize the investment environment, encourage and attract strategic investors, especially multinational corporations and high-tech projects (semiconductors, AI, R&D).
  • The Fund will provide direct financial support for activities such as human resource training and development (50% of actual costs), investment in fixed assets (up to 10%), production of high-tech products (up to 3% of added value), and investment in social infrastructure (up to 25% of costs).
  • For R&D center projects in the semiconductor and AI industries, up to 50% of the initial cost can be supported.  
• Decree 182/2024/ND-CP:
  • Reforming investment incentive policies, consolidating and enhancing Vietnam's competitive position in the race to attract high-tech industries, creating an important boost to help businesses access necessary financial resources.  

The “special investment procedures” and “Investment Support Fund” policies for the high-tech industry demonstrate that Vietnam is proactively adapting to the global minimum tax (GMT) landscape. The implementation of the GMT from 2024 has reduced the effectiveness of traditional tax incentives. The Vietnamese government’s response has been not only to amend the law but also to introduce completely new and innovative mechanisms. 

The special investment procedure with an IRC issuance time of only 15 days and exemption of some sub-licenses for high-tech projects shows the determination to shorten the administrative process. At the same time, the Investment Support Fund provides direct financial support, without going through tax channels, for R&D activities and high-tech human resource development. This is a profound strategic change, showing that Vietnam is not only responding to GMT but also proactively reshaping FDI policy to attract high-value projects, in line with the orientation of sustainable development and enhancing national competitiveness.

Despite its great potential, Vietnam faces a major challenge in terms of high-quality human resources. Currently, there are only about 5.000 semiconductor design engineers, while the projected demand by 2030 is 50.000 engineers (including 15.000 semiconductor design engineers). Developing human resources to meet the requirements of the high-tech industry is a key factor in realizing this potential.

3. Logistics Industry

Vietnam's logistics industry is witnessing an unprecedented boom, attracting strong foreign investment. The industry has a high growth rate of about 14%-16% annually, and contributes about 4-5% to the national GDP. Vietnam's strategic geographical location in the center of the Asia-Pacific region, along with a wide network of Free Trade Agreements (FTAs), creates a special advantage for the development of the logistics industry, playing a vital role in the economy.  

Potential segments in the logistics industry include:

• Integrated logistics services (3PL): FDI enterprises in Vietnam often look for integrated logistics service packages, not only transporting goods but also including many other value-added services such as customs procedures, warehousing, packaging and product distribution.  
• International shipping: Although most of this market share currently belongs to foreign enterprises, this is still a large potential segment if Vietnamese enterprises increase investment and receive policy support from the State.  
• Specialized services in the logistics value chain: Including freight forwarding services, warehouse rental, customs clearance, and consolidation of small goods.  

Although the logistics industry has great potential and is booming, challenges such as high costs, unsynchronized infrastructure, poor technology and shortage of quality human resources are hindering comprehensive development. 

• Logistics costs in Vietnam remain high, equivalent to about 20% of GDP, significantly higher than the 7%-9% level in developed countries. 
• Transport infrastructure, despite significant progress, has not yet been truly synchronized and developed commensurate with the speed of industrialization, leading to overload and congestion in some key areas. 
• Information technology in Vietnam's logistics industry is still weak and confused, both at the service provider and user side, leading to high costs and suboptimal efficiency. 

In particular, Vietnam's logistics human resources are not only lacking in quantity but also weak in quality, with only about 5-7% of workers in this field being properly trained. The lack of a clear legal basis for some logistics services is also a factor hindering the comprehensive development of the industry. All these factors show that although the industry is growing in scale, its efficiency and ability to provide maximum support to manufacturing industries (especially FDI) are still limited. 

These challenges could become a “bottleneck” for the development of FDI penetrating the Vietnamese market in general if not resolved synchronously through investment in infrastructure, technology, human resource training and perfecting the legal basis.

II. Key Requirements When Penetrating the Vietnamese Market

1. Investment Capital Requirements

The Enterprise Law 2020 does not stipulate a common minimum capital for all types of enterprises. However, investors must contribute the correct amount of assets as committed when registering to establish a business within 90 days from the date of receiving the Enterprise Registration Certificate (ERC). The application for an investment license also needs to demonstrate the investor's financial capacity to meet the registered capital.  

Some conditional business lines require a minimum legal capital to ensure financial security and minimize risks in business operations.  

• Medical field: The minimum investment capital for a hospital is 20 million USD; a general clinic is 2 million USD; a specialized treatment facility is 200 thousand USD.  
• Securities sector: Securities brokerage (VND 25 billion), securities trading (VND 50 billion), securities underwriting (VND 165 billion), securities investment consulting (VND 10 billion).  
• Insurance sector: From 750 billion VND to 1.300 billion VND depending on the type of insurance business.  
• Real estate business sector: Equity capital is not less than 20% of total investment capital for projects with land use scale of less than 20 hectares, and not less than 15% of total investment capital for projects of 20 hectares or more.  
• Margin: Is the amount of money deposited in a bank as prescribed by law to ensure finance for transactions and commitments. For example, for international travel services, the deposit is 250 million VND (Inbound) or 500 million VND (Outbound). The Investment Law 2020 allows investors to ensure project implementation by submitting a guarantee from a credit institution instead of requiring a cash deposit.  

Foreign investors may contribute capital in Vietnamese Dong, freely convertible foreign currencies, gold, land use rights, intellectual property rights, technological processes, technical know-how, or other assets that can be valued in Vietnamese Dong. For capital contributions in cash, it is mandatory to go through a direct investment account opened at a legal bank in Vietnam.

2. Legal and Regulatory Requirements

The legal framework for foreign investment activities in Vietnam is built on the foundation of important laws and decrees:

• Investment Law 2020 (No. 61/2020/QH14): Effective from January 01, 01, this is the most important legal document regulating investment and business activities in Vietnam and from Vietnam to foreign countries. This law has overcome the shortcomings and overlaps between laws related to investment and business, ensuring the consistency of the legal system.  
• Law on Enterprises 2020 (No. 59/2020/QH14): Effective from January 01, 01, regulations on the establishment, organization, management, reorganization, dissolution and related activities of enterprise types (limited liability companies, joint stock companies, partnerships and private enterprises).  
• Decree 31/2021/ND-CP: Detailed guidance on a number of articles of the Investment Law 2020, effective from March 26, 03. This Decree promulgates the List of industries and trades with restricted market access for foreign investors (Appendix I) and the List of industries and trades with investment incentives.  
• Decree 19/2025/ND-CP: Effective from February 10, 02, detailing the Investment Law on special investment procedures. This Decree applies to investment projects in the fields of high technology, semiconductors, R&D, innovation and digital transformation, especially projects in high-tech zones, export processing zones and economic zones. The highlight is the transition from the "pre-inspection" mechanism to "post-inspection", shortening the time for granting Investment Registration Certificates (IRC) to 2025 days and exempting some initial construction, fire prevention and fighting and environmental licensing procedures.  

List of industries and professions prohibited from investment and business: According to Clause 1, Article 6 of the Investment Law 2020 (supplemented by Clause 2, Article 2 of Law 57/2024/QH15), prohibited business investment activities include: trading in narcotics (Appendix I), toxic chemicals/minerals (Appendix II), specimens of wild plants/animals of natural origin (Appendix I CITES, Appendix III of the Investment Law 2020), prostitution, human trafficking/tissue/corpse/human body parts/human fetuses, business activities related to human asexual reproduction, firecracker business, debt collection service business (new regulation), business of buying and selling national treasures, and business of exporting relics and antiques.  

List of conditional business investment sectors and occupations and restricted market access for foreign investors: Decree 31/2021/ND-CP promulgates the List of industries and trades with restricted market access for foreign investors, including 25 industries that have not yet had market access and 58 industries with conditional market access. The “choose-reject” principle is applied, according to which foreign investors have access to the market like domestic investors, except for industries and trades on the List of restricted market access in Vietnam.  

Sub-licenses and specific technical/environmental standards:

• General characteristics of sub-licenses: This is a mandatory document for businesses operating in conditional industries and professions, issued by competent authorities after the business has a business registration certificate and usually has a validity period.  
• Manufacturing industry: Production projects, especially processing and manufacturing industries, must strictly comply with environmental protection regulations and require an Environmental License. The term of an environmental license is 07 years for Group I projects and 10 years for other entities. Processing and manufacturing industrial establishments are required to have an environmental standard certificate. For the textile industry, standards such as RCS, RDS, RWS, GRS, GOTS, OCS, OEKO TEX, FSC, ISO 14001, ISO 5001, BSCI are important to ensure quality and sustainability.  
• Technology industry: High-tech projects in high-tech zones that meet the criteria for high-tech projects are subject to special investment procedures. For specific information technology services such as portals, social networks, online games, data centers, or electronic identification services, businesses may need specialized licenses issued by the Ministry of Information and Communications or the Ministry of Public Security.  
• Logistics industry: It is a conditional business sector. The conditions on the capital contribution ratio of foreign investors vary depending on each specific logistics activity, according to the WTO Commitments and Decree 163/2017/ND-CP. For example, in maritime transport services (except domestic), the foreign capital ratio does not exceed 49-70% (depending on the ASEAN country); in rail/inland waterway/road transport does not exceed 49-51%; in air transport does not exceed 30%; while in customs clearance and freight brokerage services, the capital contribution ratio is not limited.  

Procedures for granting Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC):

• Step 1: Fill out online and submit IRC application: Investors need to ｄｅｃｌａｒｅ information about the investment project on the National Information System on Foreign Investment, then submit a hard copy of the application. The application includes a written request for project implementation, project proposal, a copy of the ID card/passport of the foreign individual investor or the financial report of the last 2 years of the institutional investor, confirmation of the account balance corresponding to the expected investment capital, and a contract for leasing the headquarters/office.  
• Step 2: Submit ERC application: After obtaining the IRC, the investor submits an application for a Business Registration Certificate. The Business Registration Office will issue the ERC within 7 working days if the application is valid. Establishing an FDI enterprise is often more complicated than a purely Vietnamese enterprise and can take from 30 to 60 days, not to mention the arising issues regarding documents and legal conditions.  

Post-licensing procedures:

• Legal seal: After having ERC and publishing the announcement of establishment of the enterprise, the enterprise proceeds to carve the seal. The enterprise has the right to decide on the number and form of the seal within the scope of the law.  
• Open a Direct Investment Capital Account (DICA): This is a mandatory procedure. Foreign investors need to open a direct investment capital account at a legal bank in Vietnam. All investment capital must be transferred to this account within 90 days from the date of receiving the ERC. This account is also used to collect profits and remit them back to the country.  
• Initial tax declaration and electronic transaction registration: Including declaration and payment of business license fees, notification of application of value added tax calculation method, registration of personal tax codes for employees, and registration of electronic transactions with tax authorities.  
• Social and health insurance declaration for employees: It is the responsibility of the business to carry out these procedures.  
• Apply for Work Permit for foreigners: If there are foreign employees working at the company.  

Quarterly, annual tax reporting and annual audit: FDI enterprises are obliged to conduct periodic tax reporting and annual audits in accordance with the law.

See more: Detailed instructions on the process of establishing FDI enterprises in Vietnam for foreign investors

3. Local Partner Requirements

The importance of local partners in a Vietnam market penetration strategy is undeniable. Strong partners bring in-depth knowledge of the local market, helping foreign businesses overcome cultural, language and legal barriers. They also play an important role in building a strong supply chain and maintaining good relationships with local authorities and regulatory agencies, ensuring smooth investment operations and minimizing legal risks.  

Forms of investment by FDI enterprises in Vietnam include establishing 100% foreign-owned enterprises, joint ventures, or business cooperation under BCC (Business Cooperation Contract). The capital ownership ratio of foreign investors can range from 1% to 100% depending on the type of company and business sector, according to the provisions of the Investment Law 2020. In the case of a joint venture FDI company, the ownership ratio and control will be shared between domestic and foreign investors. This creates a combination of the financial and technological strength of the foreign investor with the understanding of the domestic market and business relationships of the domestic partner.  

Leveraging localization is key to foreign businesses’ success and sustainable growth when entering the Vietnamese market. This includes adapting to consumer behavior and culture, developing differentiated products and services based on quality and experience. Manufacturing directly in the target market significantly reduces logistics costs and increases flexibility in meeting customer needs, instead of facing import tariffs or quotas. Vietnam has competitive labor costs and tax incentives, making it an ideal destination for international investors. Leveraging local resources such as labor, tax incentives, or local partner ecosystems is important to build a sustainable competitive advantage.

III. The Role of Professional Consulting Services in Risk Mitigation

1. Common Risks When Penetrating the Vietnamese Market

Although Vietnam is an attractive destination for FDI, foreign businesses still face a number of significant risks and challenges when entering the market:

• Legal risks and complex administrative procedures: Vietnam’s legal system, although improved, still has many scattered, overlapping, and sometimes contradictory documents, making it difficult to apply and comply. Administrative procedures can be complicated, prolonging processing time, especially post-investment registration procedures such as construction permits, fire prevention and fighting permits, and environmental permits.  
• Risks of outdated technology transfer and economic dependence: Vietnam is at risk of receiving many inappropriate and only average techniques from foreign companies. These companies often transfer outdated technology and old machinery and equipment to innovate technology in their own countries. This makes it difficult to determine the real value of the machinery, leading to losses in calculating the capital contribution ratio and profit sharing in joint ventures. Moreover, outdated technology is often accompanied by production processes that pollute the environment and reduce the competitiveness of products in the international market. Over-reliance on capital, technology and consumption networks of multinational companies can also lead to unsustainable economic development, which is considered “false prosperity”.  
• Challenges of suboptimal costs, labor supply and infrastructure: Rising raw material costs and high input prices can make business operations difficult. The supply of highly skilled and technical labor is limited, while foreign labor management policies are quite strict. Vietnam's infrastructure, although improving, still does not fully meet international standards, affecting transportation, installation and construction costs, causing investors to consider.  

Limitations in domestic supply chain: The supporting industry for manufacturing components in Vietnam is still young, making it difficult for FDI enterprises to build domestic supply chains, forcing them to import most of their components and spare parts.

2. Risk Mitigation Consulting Services

Professional consulting services play a pivotal role in helping FDI enterprises navigate the complexities of the Vietnamese market and mitigate risks. Consulting firms provide comprehensive guidance and strategic support to optimize opportunities and ensure compliance.

Consulting services typically include:

• Customized Market Penetration Strategy: Develop tailored market entry strategies based on thorough market research and analysis, including market feasibility studies, financial analysis and competitor assessment, to maximize FDI success.  
• Legal and tax compliance guidelines: Provide in-depth knowledge of local regulations, investment laws, and government policies to ensure compliance. Also, provide expert advice on legal frameworks, tax implications, and investment structures to optimize financial returns and minimize legal risks.  
• Detailed risk assessment: Conduct comprehensive risk assessments to identify potential challenges and propose risk mitigation measures associated with FDI investment projects.  
• Identify and qualify suitable local partners: Assist in identifying suitable local partners, suppliers and distributors to improve operational efficiency and market penetration.  
• Support relations with Government and regulatory agencies: Establish and maintain relationships with relevant government agencies and stakeholders to facilitate approvals, permits and licenses.  
• Transaction support and post-investment services: Provide transaction support throughout the investment process, including assistance with negotiation, contract drafting and execution. Post-investment, ongoing support services include monitoring, compliance management and strategy adjustment to ensure long-term success.  

Using professional consulting services brings many important benefits, including optimizing time and costs, ensuring compliance with complex legal regulations, and supporting informed investment decisions. Consulting firms can help foreign businesses overcome legal barriers, complex administrative procedures, and provide information about markets and partners, thereby significantly minimizing risks when entering the Vietnamese market.

IV. Conclusion and Recommendations

Vietnam continues to be an attractive destination for FDI, with outstanding opportunities in manufacturing (especially electronics, automobiles, textiles), high-tech (semiconductors, AI, R&D), and logistics. The Vietnamese government is showing initiative and flexibility in adjusting policies, especially with the application of the Global Minimum Tax, by introducing new support mechanisms such as “special investment procedures” and “Investment Support Funds” to attract high-quality and high-value-added projects.

However, FDI enterprises still face significant challenges, including the complexity of the legal system and administrative procedures, the risk of transferring outdated technology, limitations in infrastructure and high-quality human resources, and the immaturity of supporting industries. These challenges require a carefully planned market entry strategy and comprehensive preparation.

To achieve sustainable success in the Vietnamese market, foreign investors are advised to:

1. In-depth market and legal research: Conduct a thorough analysis of potential sectors, updated legal regulations (especially the Investment Law 2020, Enterprise Law 2020, Decree 31/2021/ND-CP and Decree 19/2025/ND-CP), and specific requirements on capital, sub-licenses and technical/environmental standards.
2. Take advantage of new incentives: Proactively explore and exploit incentives from “special investment procedures” and “Investment Support Funds” for high-tech projects, R&D, and other priority areas.
3. Building a long-term human resource strategy: Invest in training and developing high-quality human resources, especially in technology fields, to meet the growing needs of the market.
4. Establishing strategic local partnerships: Partnering with experienced and knowledgeable Vietnamese partners can help overcome cultural and legal barriers and build an efficient supply chain.
5. Use professional consulting services: To minimize risks and optimize the market penetration process, seeking support from consulting firms specializing in FDI and Vietnamese law is extremely necessary. Consulting experts can provide a clear roadmap, compliance support, risk assessment, and government relations representation, helping businesses make informed and effective investment decisions.

Vietnam, with its reform efforts and strong growth potential, remains a promising destination for FDI investors. However, the key to fully exploiting this potential lies in careful preparation, flexible adaptability and support from experts with in-depth knowledge of the market and legal framework in Vietnam.