Title:
Improving FDI Quality: Key Driver for Vietnam's New Growth Model
Keywords:
FDI, Resolution 10-NQ/TW, foreign investment, high-tech, innovation, Ho Chi Minh City, supply chain, banking, external economy, green growth
Introduction
Amid continued drastic global economic volatility and increasingly fierce competition to attract investment capital, Vietnam is in an important transition phase of its foreign investment development strategy. While the main goal in the past was to attract more FDI to supplement resources for economic growth, the requirements have now been elevated to a new level: attracting the right capital, right sectors, right partners, and right quality.
Resolution 10-NQ/TW, issued on June 8, 2026, by the Politburo of the Communist Party of Vietnam on foreign investment development entering the economy, clearly prioritizes attracting FDI into high-tech, high value-added fields such as electronics, semiconductor chips, AI, big data, IoT, biotechnology, advanced healthcare, and modern logistics. At the same time, the resolution emphasizes increasing the localization rate of FDI supply chains to enhance spillover effects of the foreign-invested sector on the domestic economy.
These changes reflect a new development mindset: Vietnam is no longer just a destination for labor-intensive projects, but is gradually becoming a center favored by strategic investors, especially in technology, innovation, and intelligent manufacturing. This also means that FDI quality will become an important indicator for measuring national competitiveness in the future.
1. FDI Continues Positive Growth, but Quality Demands Rise
According to the Foreign Investment Agency under the Ministry of Finance, in the first five months of 2026, FDI inflow into Vietnam continued its positive growth trend. As of May 31, total registered FDI reached nearly $25 billion, up nearly 35% year-on-year. Notably, newly registered projects performed particularly well, with over 1,570 projects and a total investment of nearly $15 billion.
Looking at the structure of attracted investment, manufacturing remains the dominant sector, accounting for 70.4% of total registered capital. This is a positive signal that Vietnam remains a favored destination in the global production chain. Additionally, capital contributed by foreign investors and share purchases increased by 46.7%, reaching nearly $4.2 billion, reflecting growing investor attention to the Vietnamese market.
Particularly, realized FDI reached approximately $9.75 billion, up 9.6% year-on-year, the highest level for the same period in the last five years. This indicator is noteworthy as it shows not only an increase in committed capital but also improvement in disbursement and project implementation progress.
However, in the context where Vietnam aims to shift its growth model towards relying on technology, innovation, digital transformation, and green transition, mere quantitative growth is no longer sufficient. More importantly, FDI must generate genuine spillover value: promoting technology transfer, improving governance capacity, developing local enterprises, and enhancing Vietnam's position in global value chains.
2. Resolution 10-NQ/TW: From "Attracting Capital" to "Building Strategic Investment Foundation"
Resolution 10-NQ/TW is not just a policy guideline; it marks a significant shift in Vietnam's thinking on developing foreign investment. The resolution affirms that the external economy is a crucial component of the national development strategy and is closely linked to the goal of enhancing the growth model based on technology, knowledge, and innovation.
A fundamentally new element of this resolution is the shift in focus from "more FDI is better" to "building a national strategic investment foundation." This means Vietnam needs to proactively select capital that can generate long-term spillover effects and align with economic development priorities, rather than just focusing on registered capital size.
In an increasingly competitive global context, countries compete not only on tax incentives or labor costs, but also on institutional quality, infrastructure, human resources, supply chain connectivity, and policy stability. Therefore, to improve FDI quality, Vietnam needs to build a transparent, efficient, and predictable investment environment; while also improving implementation capacity at the local level to ensure consistent delivery of commitments to investors.
More importantly, the requirement to increase the localization rate of FDI supply chains shows that Vietnam is aiming for a deeper goal: turning the FDI sector from a "production destination" into a "linkage ecosystem" where domestic enterprises can participate in higher tiers of the value chain. This is key to enhancing economic autonomy and resilience.
3. Ho Chi Minh City: FDI Hub and Testing Ground for Breakthrough Mechanisms
Among localities attracting foreign investment, Ho Chi Minh City continues to play a prominent role. According to Huang Wusheng, Director of the Municipal Finance Bureau, as of June 1, 2026, total registered foreign investment into the city exceeded $6.6 billion, fulfilling 60% of the year's plan. With four key FDI projects actively advancing, the city is expected to attract an additional approximately $10.4 billion, bringing the total 2026 FDI to $17 billion, equivalent to 154% of the annual plan.
This achievement shows that, with its large market size, increasingly improved infrastructure, developed service base, and dynamic business ecosystem, Ho Chi Minh City remains one of the most attractive economic centers for international investors. However, to sustain this growth momentum, the city needs to establish more flexible and effective new management mechanisms.
In the draft special city law, Ho Chi Minh City proposes several new mechanisms to enhance FDI attractiveness. Among them is a mechanism to determine land prices within two years, demonstrating commitment to partner with enterprises and reduce investment cost risks. Simultaneously, the Finance Bureau leader stated that project processing will be accelerated to create favorable conditions for investors to start operations early.
This is an appropriate direction because for high-tech projects, especially semiconductors, data centers, and modern logistics, time factors and investment environment stability are often as important as financial incentives. A locality hoping to attract high-quality FDI must have the ability to handle procedures quickly, clearly, and consistently; it must make investors believe they will be treated fairly and can predict long-term risks.
4. FDI Shift to High-Tech Opens Huge Opportunities for Financial System
From a financial perspective, the trend of FDI shifting to high-tech sectors is creating strong demand for specialized and diversified financial services. Zhang Huanggongwei, Business Director of Yuanta Securities (Vietnam), believes that changes in investment capital structure are opening new development spaces for banks and financial institutions.
FDI enterprises, especially in the technology sector, typically have high demand for cash flow management, international payments, trade finance, exchange rate risk hedging, capital structure, working capital, and digital banking services. Therefore, to better serve such clients, banks cannot just offer traditional services; they must build comprehensive solutions tailored to industry characteristics and different project stages.
In fact, many Vietnamese banks have already captured this trend early. MB Bank has established an FDI customer department and set up offices in Singapore, South Korea, and China to directly reach international enterprises and investor groups. BIDV has established a dedicated FDI branch in Ho Chi Minh City, offering financial solutions meeting international standards. Agribank also launched preferential loan programs worth VND 500 billion and USD 100 million. These moves show that the banking system is transforming to more effectively support Vietnam's new FDI attraction strategy.
From a macro perspective, developing financial services for FDI not only helps improve the quality of investment capital but also enhances the economy's connectivity. When the banking system, capital markets, insurance, and supporting services operate synergistically, Vietnam will have better conditions to attract multinational groups with high financial and governance standards.
5. From Investor Perspective: Need for Flexible and Practical Policies
Besides efforts from the state and financial system, investor satisfaction is also an undeniable factor. The Vice President of the Vietnam Association of Foreign Invested Enterprises believes that tax authorities should not mechanically apply benchmark analysis methods to newly established enterprises, but should assess based on actual characteristics of each industry.
This is a very noteworthy suggestion. FDI enterprises, especially in high-tech fields, typically have long investment cycles, high upfront costs, and slower payback periods, requiring several years to reach stable profitability. If management mechanisms are inflexible and do not adapt to industry characteristics, investors may face difficulties in early stages, reducing the attractiveness of the investment environment.
Therefore, institutional reform needs to be combined with the ability to understand investor needs. A modern administrative system must not only be fast but also capable of distinguishing between different business models, providing support at the right time. For high-quality FDI, policy transparency and consistency are sometimes as important as specific incentives.
6. Strategic Role of FDI in New Growth Model
In the context where Vietnam promotes a new growth model based on technology, innovation, digital transformation, green transition, and enhanced strategic autonomy, the role of FDI becomes even more important. Currently, the foreign-invested sector still accounts for a significant share of total social investment, and is also a key driver for exports, employment, and fiscal contributions.
However, for FDI to truly become a long-term development driver, Vietnam needs to view it as a strategic channel for global economic integration, not just a source of capital. This requires selecting the right investment partners, prioritizing projects that bring advanced technology, are environmentally friendly, can connect with domestic enterprises, and help improve the economy's production capacity.
Increasing the localization rate of supply chains is a key requirement. When domestic enterprises participate more deeply in the value chains of FDI enterprises, the economy will reduce dependence on imported inputs, enhance endogenous production capacity, and gradually form supporting industry clusters with international competitiveness. This is also the path for Vietnam to avoid the processing trap and gradually move to a production status with higher technology and knowledge content.
Conclusion
FDI remains one of the most important resources for Vietnam's economic development, but the new stage requires a new approach. Resolution 10-NQ/TW has set the direction: not just attracting capital, but attracting quality, technology, governance capability, and spillover effects. This direction aligns with Vietnam's requirement to transform its growth model amid increasingly complex global competition.
The positive results in the first five months of 2026 show that Vietnam still maintains strong appeal to international capital. However, to turn advantages into sustainable development momentum, Vietnam needs to continue improving institutions, upgrading infrastructure, developing high-quality human resources, promoting connections between FDI enterprises and domestic businesses, while perfecting a supportive financial system.
Through synergy between national policies, local efforts, proactive financial systems, and active adaptation by the business community, Vietnam can fully build a high-quality foreign investment ecosystem, laying a solid foundation for faster, more sustainable, and more autonomous growth in the future.
