Vietnam’s New FDI Strategy: Perfecting Policies to Attract Next-Generation Investment into Industrial Parks

Vietnam’s foreign direct investment (FDI) policies are undergoing a strategic shift. While total registered FDI capital reached nearly $31.5 billion in the first ten months of 2025, showing a year-on-year increase of more than 15%, the nature of investments is changing. Investors increasingly seek high-tech, environmentally friendly, and innovation-driven projects, rather than traditional labor-intensive manufacturing

Against this backdrop, policymakers are working to perfect the legal, institutional, and infrastructural frameworks that support the attraction of next-generation FDI, particularly into Vietnam’s industrial parks. These parks, which historically have been central to Vietnam’s FDI success, are now being reimagined as comprehensive ecosystems capable of meeting the demands of global corporations that prioritize technology transfer, sustainable operations, and supply chain integration

Why Vietnam’s FDI Strategy Must Evolve

For nearly four decades, FDI has played a crucial role in Vietnam’s economic growth, contributing to GDP, exports, employment, and integration into global value chains. However, several important trends are driving the need for policy reform:

• Although FDI flows have increased, investment in high-tech and green sectors remains relatively modest compared to total FDI.
• The contribution of FDI to value-added production and linkages with domestic firms remains limited.
• Vietnam’s traditional competitiveness based on low costs and cheap labor is diminishing as other regional economies upgrade their capabilities.

These challenges underscore the need to enhance Vietnam’s appeal to next-generation investors—companies that emphasize innovation, environmental sustainability, strong governance, and technology integration.

Policies Reforms to Attract Next-Generation FDI

1. Institutional and Legal Framework Enhancement

Policymakers have acknowledged that existing policies and implementation procedures remain complex, particularly in post-investment licensing related to land use, construction permits, environmental compliance, and fire safety. Simplifying and clarifying these procedures is essential to reduce risk and uncertainty for global investors.

Vietnam is also considering experimental mechanisms and regulatory sandboxes for emerging fields such as artificial intelligence, digital technology, and green energy. These flexible frameworks could enable faster pilot deployment and scaling of advanced technologies, helping Vietnam keep pace with global industrial trends.

2. Incentives Aligned With Global Priorities

Rather than relying solely on traditional tax breaks, discussions at recent forums have pointed toward cost-based incentives that reward investments in research and development, workforce training, and innovation. This shift aligns incentives more directly with desired outcomes such as technology transfer and value-added production.

Key policy proposals include establishing clear tax incentives for R&D and innovation, special incentive packages for high-tech and semiconductor industries, and national criteria for defining next-generation FDI suitable for different regions.

Integration of ESG standards into investment evaluation criteria is also a priority, reflecting broader global trends where environmental performance and corporate governance significantly influence investment decisions.

3. Infrastructure and Ecosystem Development

Industrial parks must evolve beyond providing leveled land and basic utilities. Next-generation investors are looking for comprehensive industrial ecosystems with:

• Advanced logistics and connectivity
• Renewable energy and smart infrastructure integration
• Business support services and technology incubation
• Workforce training partnerships and R&D facilities

According to industry stakeholders, high-quality infrastructure and ecosystem readiness are critical for attracting multinational corporations that require seamless operations and global supply chain connectivity.

The Role of Green Standards and ESG Integration

Vietnam’s commitment to sustainable development, articulated in its National Green Growth Strategy and Net Zero by 2050 goals, positions the country favorably with global investors increasingly prioritizing ESG factors. Green transformation in industrial parks, such as carbon reduction mechanisms and industrial symbiosis models, can attract strategic partners and reinforce Vietnam’s competitiveness.

For example, proposed policies on greenhouse gas reduction costs offer financial incentives for companies to adopt clean technologies and energy-saving solutions. These mechanisms promote environmentally responsible investment and long-term sustainability.

Expected Benefits for Vietnam’s Industrial Real Estate Sector

For real estate developers and industrial park operators, these policy reforms signal a shift toward higher-value FDI flows. As Vietnam enhances its policies and infrastructure, industrial land demand from quality FDI projects—especially in high-tech manufacturing, electronics, and advanced logistics—should increase. This will likely lead to:

• Greater utilization of modern, smart industrial park spaces
• Rising demand for high-spec logistics and warehouse facilities
• Enhanced opportunities for value-added services integrated within parks
• Stronger linkages between foreign investors and domestic suppliers

Toward a Competitive and Sustainable FDI Future

Vietnam’s efforts to perfect policies for attracting next-generation FDI reflect a broader strategic vision: to upgrade industrial capabilities, promote sustainable investment, and become a premier destination for global capital beyond low-cost labor advantages. With coordinated reforms in law, incentives, infrastructure, and ESG integration, Vietnam is positioning itself to capture higher quality, technology-driven FDI that can enhance economic resilience and long-term growth.

For investors seeking to capture opportunities, Core5 Vietnam provides more than facilities , we are your strategic partner in long-term success.

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