Reshaping capital flows from the US and Europe into Vietnam

Vietnam needs to convert old industrial zones into specialized industrial clusters. Photo: Duc Thanh

Turning Point

Amid persistent global trade tensions and ongoing tariff normalization, investors will shift their focus from seeking pure cost advantages to managing systemic risk and building supply chains that can absorb unpredictable disruptions by 2025, a fundamental strategic imperative to preserve future market access and sustain profitability.

Vietnam is at a turning point. Its potential to become a leading Southeast Asian hub for advanced manufacturing and high-tech industries depends fundamentally on Vietnam’s ability to anticipate and effectively meet the growing demands of demanding multinational corporations.

To achieve this transformation, Vietnam needs to make concerted efforts in governance reform, human resource development, infrastructure modernization, and administrative efficiency improvement. Competitive fiscal incentives, while necessary, are no longer sufficient. Vietnam must commit to supporting the complex transformation of businesses and position itself as a proactive and reliable implementation partner.

FDI remains strong thanks to four pillars

Figures for the first three quarters of 2025 show that FDI commitments remain strong, reflecting investor confidence, but also underlining the urgency of systemic reforms to absorb and effectively use this capital source.

Investors’ strategic orientations are now consolidated into four imperative priorities, including strategic diversification, enhanced system resilience, deep localization, and advanced operational readiness. These four pillars profoundly impact major capital allocation decisions and shape Vietnam’s competitive position as a strategic investment destination in the region.

Strategic diversification reflects a global need to mitigate concentrated geopolitical risks by reallocating capital to more stable and transparent markets. Vietnam’s political stability, strategic location and comprehensive free trade agreements have made it a natural fulcrum for this shift. However, fierce competition is coming from regional countries such as Thailand and Indonesia.

Vietnam's potential to become a leading Southeast Asian hub for advanced manufacturing and high-tech industries depends fundamentally on how effectively it anticipates and meets the growing demands of demanding multinational corporations.

Uncertainty in investor perceptions will increase the cost of risk and limit investment flows. Therefore, transparency and strong institutions are the foundation of this diversification strategy.

The commitment to institutional transparency was clearly affirmed when FTSE Russell upgraded Vietnam from frontier market to secondary emerging market, reflecting successful improvements in financial markets and the removal of barriers such as pre-trading margin requirements.

Systemic resilience is not limited to geographic or financial factors, but also requires an operational ecosystem that can adapt to geopolitical and supply chain shocks. The quality and availability of mid-level technical and managerial workforce plays a decisive role in determining Vietnam’s long-term position in the global value chain.

Industrial zones need to be resilient Vietnam needs to transform old industrial zones into specialized industrial clusters, designed specifically for strategic high-tech industries, where fully integrated infrastructure and compliance with global standards are prerequisites for world- class investments.

Multinational corporations in the US and Europe are undertaking large-scale operational shifts that are reshaping global supply chains. This is a complex process with the greatest strategic risk, with the implementation of transformation and corporate restructuring being a decisive barrier to sustainable success.

Vietnam's long-term success depends on its ability to proactively support and accelerate this transition, turning the inevitable integration costs into real competitive advantages.

Future-oriented industrial real estate development strategies, supporting smart, environmentally friendly industrial parks, will become the focus of upcoming policy programs.

Sustainable finance trends

Sustainable finance is changing the way global capital is allocated, with ESG criteria increasingly becoming a mandatory filter. Vietnam’s access to top institutional capital, from pension funds and sovereign wealth funds, depends on its substantial commitment to green transformation, compliance with labor standards and transparent corporate governance.

Certified green industrial parks and transparent reporting systems are imperative to attract high-quality international capital and mitigate brand risk. Meeting ESG standards requires deep expertise and comprehensive compliance capabilities, highlighting the need to support the overall transformation.

Vietnam’s upgrade to emerging market status is expected to attract significant passive and active capital flows of around US$10.4 billion over the next 12-18 months, making compliance with high-end ESG standards an urgent priority.

Aligning industrial real estate and public-private partnership initiatives with the operational needs of US and European investors will help Vietnam position itself as a hub for risk reduction, innovation, and high value.

Success requires trusted expertise in three key areas that provide the necessary assurance: driving operations; managing restructuring and compliance; leading strategic transformation; and overseeing people and technology transformation for rapid, sustainable growth.

Vietnam now has a generational opportunity to reshape its industrial landscape by exceeding the standards set by global high-tech investors. How Vietnam seizes this opportunity will shape the country’s role as a leading industrial hub, while strengthening its resilience and growth in an increasingly competitive global environment.

Source: https://baodautu.vn/tai-dinh-hinh-dong-von-tu-my-va-chau-au-vao-viet-nam-d428587.html