Attracting new FDI flows: What solutions for Vietnam?

Weak domestic and foreign business linkages are a difficult problem to overcome.

At the discussion session within the framework of the Vietnam Development Bridge Forum 2025 - Vietnam Connect Forum 2025, speakers representing state management agencies and enterprises all recognized that Vietnam is still an attractive destination for foreign investors.

Discussion session within the framework of the Vietnam Development Bridge Forum 2025. Photo: Thanh Tuan

Looking back on the 40-year journey of innovation, experts all agree that the FDI sector has been actively supporting Vietnam, helping the country achieve faster growth rates and gradually participate in the global supply chain.

Mr. Nguyen Anh Tuan - Deputy Director of the Foreign Investment Department, Ministry of Finance - also said that the FDI sector is an indispensable and very important element for the country's economic development. Selective FDI attraction has achieved encouraging results.

Statistics show that by the end of March 2025, Vietnam had more than 42,760 valid FDI projects, with a total registered capital exceeding 510 billion USD, ranking among the top 15 countries attracting the largest FDI globally. “ This figure is the best proof of Vietnam’s policies and efforts in attracting FDI ,” Mr. Tuan emphasized.

It is worth noting that in recent times, FDI projects are aiming for projects with high technology and added value, with increased technology transfer. However, the leader of the Ministry of Finance also said that FDI attraction has not been as expected as there are still many problems. In particular, the quality of projects is not uniform, investment in upstream is not high. In particular, the connection between FDI enterprises and domestic enterprises is not effective.

Also stating that the connection between domestic and foreign enterprises is a bottleneck in attracting FDI capital at present, Mr. Nguyen Hai Minh - EuroCham Vietnam, sees the loose connection between FDI enterprises and Vietnamese enterprises from the perspective of internal capacity.

“ A business that goes too fast and a business that goes too slow cannot join hands to progress together, ” said Mr. Minh. At the same time, he said, domestic enterprises have weak capacity, low product quality and management capacity. In addition, strict regulations on investment, tax, land, etc. are also factors that make domestic enterprises “weaker” than foreign enterprises - which enjoy many incentives.

How to increase the quality of capital

Vietnam - an attractive destination for foreign investors is probably no longer a matter of discussion and has been vividly demonstrated through numbers. What needs to be "dissected" here is how to further increase the quality of capital sources.

Representatives of ministries, sectors and economic experts attend the Vietnam Development Bridge Forum 2025. Photo: VnEconomy

Mr. Seck Yee Chung - SingCham Vietnam has a rather interesting view on this. From his personal story, he said that when working in Vietnam, he not only had a job but also had other "investments" such as his family and apartment. Therefore, besides work, he and his family also wanted to enjoy social security such as good education and healthcare.

Looking at FDI enterprises, FDI investment is part of the system and is part of the same ecosystem. Vietnam has done a very good job of attracting FDI as well as investing in infrastructure and human resources to increase attractiveness. At the same time, it has signed FTAs ​​and trade agreements.

“ But it would be great if FDI enterprises were also given attention in other aspects such as finance and improved administrative procedures to help projects get approved faster, ” said Mr. Seck Yee Chung.

Human resources are also one of the factors attracting FDI capital to Vietnam. The new context promotes innovation, improves productivity, and shifts from low-skilled manufacturing to high-skilled industries such as semiconductor technology, making human resources more important than ever. “ Applying new technology requires strong human resources to capture higher resources ,” said President of Fulbright University Vietnam - Scott Fritzen.

He also pointed out that Vietnam has strengths in human resources, but the shortage of senior experts is a "void" that needs to be filled. Vietnam wants to have 50,000 chip engineers by 2030, but currently only about 5,000 are trained, so to reach the desired number, the challenge is not small.

“ We are ready to accompany functional units and Vietnamese enterprises in actions to have a high-quality workforce for national development ,” the President of Fulbright University Vietnam pledged.

Providing a more specific view of foreign investors, Mr. Nguyen Ba Hung - Chief Economist of ADB Vietnam - emphasized that not all FDI enterprises are the same. FDI enterprises should be viewed in different groups to have appropriate development motivation.

Firstly , the export-oriented business group - this group is mainly FDI enterprises of large production chains in the world. This group takes advantage of cheap, high-quality human resources; convenient infrastructure system to be able to operate production at low cost.

Vietnam is very attractive to this group of enterprises, currently about 70% of the export proportion belongs to the FDI group. So how can domestic enterprises participate in the chain, while increasing the quality of capital sources? There is no other way, domestic enterprises must improve their internal strength, apply science and technology, and meet standards.

“ FDI enterprises have no motivation to replace their links with domestic enterprises when this force is not ready ,” said Mr. Nguyen Ba Hung.

Second , the FDI group targets Vietnam's domestic market. Apart from real estate, other sectors have not done well in attracting foreign investment, while the demand for domestic infrastructure investment is huge. However, with infrastructure projects having a very slow capital recovery period of 15-20 years, to attract investment, stable and reliable policies are needed.

Projects may not necessarily be 100% foreign-owned, but can be joint ventures or partnerships. This is also an opportunity for domestic enterprises to gradually transfer technology.

Third , the group of enterprises related to the high-tech service industry, such as banking. Vietnam has a large demand for capital development, attracting FDI in this field is not only beneficial financially but also can learn professional experience to handle large capital opportunities and improve human resource quality.

Deputy Minister of Finance - Do Thanh Trung: Vietnam has a very suitable environment for FDI enterprises to develop. But to go far, we need to go together, need sharing and contributions from the FDI enterprise community itself.

Hai Linh

Source: https://congthuong.vn/thu-hut-dong-von-fdi-moi-giai-phap-nao-cho-viet-nam-384590.html