In the context of the global economy witnessing a powerful restructuring of supply chains, competition to attract foreign direct investment (FDI) is becoming increasingly fierce, especially under the impact of the global minimum tax, digital transformation, and sustainable development requirements, Vietnam is facing an urgent need to adjust its investment attraction strategy to adapt to the “new rules of the game” of the international economy.
Instead of continuing to pursue the goal of attracting FDI based on quantity as in the previous period, Vietnam is currently shifting step-by-step toward a model of “selective attraction”, placing the focus on the quality of capital flows, the ability to link with domestic enterprises, the level of contribution to global value chains, and the capacity to adapt to the trends of a green economy and digital economy. This is not only a change in development orientation but also brings along important adjustments in legal policies, investment incentive mechanisms, investor selection criteria, as well as state management methods for foreign investment activities.
In this article, Siglaw Law Firm will provide readers with an overview of how Vietnam is changing its policy to attract FDI in the new period of 2026, while analyzing trends in legal adjustment, investment support mechanisms, investor selection criteria, and the orientation for developing high-quality capital flows to help foreign investors and enterprises proactively adapt to the strongly transforming investment environment.
Context and Strategic Orientation of FDI in the New Period
For many years, foreign direct investment has always played a role as one of the important drivers promoting Vietnam’s economic growth. FDI policy in the previous period mainly aimed at attracting large capital sources to create jobs, promote exports, utilize the advantage of cheap labor, and accelerate the industrialization process. This model brought many remarkable achievements, contributing to making Vietnam an attractive destination for many multinational corporations in the fields of manufacturing, electronics, and processing and manufacturing.
However, in the context of increasingly fierce international competition, the traditional FDI attraction model has also revealed many limitations. First of all, the added value of the FDI sector in Vietnam remains low, mainly focusing on processing and assembly stages with low technology content, typically in industries such as textiles and garments, leather and footwear, or electronics assembly. In addition, the level of technology transfer is still limited; many FDI enterprises have not fulfilled their commitments to spill technology over to the domestic enterprise sector, causing domestic innovation capacity to develop slowly. At the same time, the linkage between FDI enterprises and domestic enterprises remains loose, reflected in a low localization rate and domestic supply chains not yet participating deeply in multinational corporations. Finally, this model poses a potential risk of relying on cheap labor, as many FDI projects still choose Vietnam mainly due to low labor costs instead of relying on technological advantages or high labor productivity. This poses an urgent requirement to reshape the policy for attracting foreign investment toward a more efficient and sustainable direction.
Stepping into the new period of 2026, the orientation of Vietnam’s FDI policy has seen a clear change, no longer focusing on attracting investment at all costs but shifting to a selective selection mechanism for high-quality projects. Prioritized sectors include the semiconductor industry, artificial intelligence (AI), digital transformation, high technology, renewable energy, green economy, data centers, smart logistics, and supporting industries. The set goal is not only to increase the scale of investment capital but also to enhance national competitiveness, promote innovation, and upgrade Vietnam’s position in global value chains.
To adapt to the new trends of the international economy, Vietnam is changing its FDI attraction policy along five main directions. First, changing the investment attraction goal by shifting from quantity to quality. Second, changing investor selection criteria, prioritizing technological capacity and sustainable development instead of relying solely on capital scale. Third, innovating investment incentive mechanisms toward focused support for strategic sectors. Fourth, reforming investment management procedures toward transparency, digitalization, and reducing administrative burdens. Finally, reorienting prioritized industries and localities to receive FDI in order to focus on sectors with high added value and strong spillover effects on the economy.
5 major changes in FDI policy
Changing FDI Attraction Goals: From Quantity to Quality
One of the most important changes in Vietnam’s policy to attract foreign direct investment in the new period is the shift in investment attraction goals. If previously, Vietnam mainly focused on attracting large capital sources to promote economic growth, create jobs, and utilize the advantage of low labor costs, the policy focus is now changing toward prioritizing the quality of investment capital flows.
Instead of only caring about the number of projects or total registered capital, Vietnam is paying closer attention to the ability of technology transfer, added value, level of innovation, and the spillover impacts of FDI projects on the domestic economy. Projects with research and development (R&D) activities, core technology, innovation centers, or commitments to training high-quality human resources are being prioritized during the investment selection and licensing process.
This trend shows that Vietnam is gradually moving away from a competition model based on cheap labor to head toward a development model based on productivity, technology, and innovation. This is also the approach that many developed countries in Asia, such as Singapore or South Korea, implemented to enhance endogenous capacity and national competitive position in the long term.
Changing Investor Selection Criteria: From Prioritizing Capital Scale to Prioritizing Quality and Sustainable Development
In parallel with the change in investment attraction goals, Vietnam is also step-by-step adjusting foreign investor selection criteria toward being strict, selective, and quality-focused. If in the previous period, the scale of investment capital was often considered one of the important factors to evaluate the efficiency of FDI attraction, then in the new period, the selection criteria are gradually shifting toward long-term and sustainable factors.
Instead of only prioritizing projects with large investment capital, Vietnam currently focuses on selecting investors with high technological capacity, modern governance experience, innovation capability, and a commitment to long-term attachment to the Vietnamese economy. In particular, projects capable of creating links with domestic enterprises, promoting the development of supporting industries, or transferring technology are highly valued during the investment review process.
Besides, criteria related to Environment, Social, and Governance (ESG) are playing an increasingly important role in Vietnam’s new FDI attraction orientation. In the context where major markets such as Europe, the United States, or Japan are increasingly tightening sustainable development standards, prioritizing projects that are environmentally friendly, energy-saving, carbon emission-reducing, and compliant with international labor standards not only helps Vietnam raise investment quality but also contributes to ensuring the competitiveness of the economy in the long term.
It can be seen that Vietnam is shifting from a model of “prioritizing investors with a lot of capital” to “prioritizing investors with strategic value”—meaning enterprises that bring not only capital but also technology, management knowledge, market networks, and opportunities to upgrade the capacity of domestic enterprises.
Changing Investment Management Methods: From Heavy Pre-checkpoint Control to Post-checkpoint Control, Digitalization, and “Green Channel”
Another notable change in Vietnam’s FDI policy is the powerful reform of administrative procedures and investment management methods. Previously, the investment licensing process often applied a pre-checkpoint mechanism with multiple appraisal steps before a project could be deployed. This helped regulatory authorities control risks but at the same time caused procedures to drag out, increasing market entry costs and affecting the project deployment speed of foreign investors.
In the new period, Vietnam is step-by-step shifting to a more flexible management model in the direction of strengthening post-checkpoint control, meaning focusing on supervising the operation process and compliance level of enterprises after the project is licensed instead of placing too many barriers at the initial stage. This approach is expected to help shorten document processing time, reduce administrative costs, and enhance the competitiveness of Vietnam’s investment environment in the region.
In parallel with that, the digitalization of administrative procedures in the field of investment is also being accelerated to increase transparency, reduce document processing time, and create more favorable conditions for investors to access legal information. For strategic, high-tech projects or those with great spillover impacts on the economy, Vietnam is also orienting the application of a “green channel” mechanism—which is a mechanism that prioritizes the fast processing of administrative procedures for projects meeting specific criteria through streamlining processes, reducing intermediate steps, and strengthening interconnected coordination among state management agencies; helping to accelerate the procedure processing and support investors in deploying projects more efficiently.
These reforms show that Vietnam is not only changing its investment attraction policy but also transforming powerfully in its state management mindset, from a model of tight control before investment to a model of flexible, transparent governance that creates more favorable conditions for enterprises.
Changing Investment Incentive Mechanisms: From Mass Tax Incentives to Selective Support
Another important change in Vietnam’s FDI attraction policy is the shift in investment incentive mechanisms. Previously, Vietnam mainly used corporate income tax incentives, land rent exemptions/reductions, or popular financial incentives to increase attractiveness to foreign investors. However, in the context of increasingly fierce FDI competition and the emergence of the global minimum tax mechanism, relying too heavily on tax incentives is no longer as effective as before.
Therefore, in the new period, Vietnam is step-by-step shifting to a selective investment support model, focusing resources on strategic sectors capable of creating high added value and contributing greatly to the growth model transformation process. Projects in the fields of semiconductors, high technology, artificial intelligence (AI), digital transformation, renewable energy, data centers, or research and development (R&D) are becoming a specially prioritized group of industries in the new investment support strategy.
Instead of only competing with tax incentives, Vietnam is expanding direct forms of support such as developing technical infrastructure, supporting scientific research, training high-quality human resources, supporting technological innovation costs, and developing supporting industrial ecosystems.
In fact, many major corporations like Samsung or Intel have continued to expand their investment operations in Vietnam in the fields of electronics, high technology, and semiconductors thanks to the increasingly improved investment environment along with support policies for technology ecosystem development.
This shows that Vietnam is step-by-step repositioning its role, not just as a low-cost manufacturing hub but also aiming for the position of an innovation and high-tech manufacturing center in the region.
Changing Orientation of Localities and Industries for Investment Attraction: Focusing on High Technology and Sustainable Development
In addition to changing goals, investor selection criteria, and incentive mechanisms, Vietnam is also powerfully reorienting its FDI attraction strategy toward focusing on industries with high added value and localities capable of creating new growth poles. If previously, FDI capital flows mainly concentrated on labor-intensive industries such as textiles and garments, leather and footwear, electronics assembly, or low-cost manufacturing sectors, then in the new period, the policy focus is gradually shifting to high-tech, innovation, and sustainable development industries.
The top prioritized fields currently include the semiconductor industry, artificial intelligence (AI), digital transformation, smart manufacturing, data centers, modern logistics, green technology, renewable energy, and supporting industries. These are all sectors capable of creating large added value, driving technological innovation, and enhancing national competitiveness in the long term.
In particular, against the backdrop of the powerful global supply chain shift taking place after the pandemic and geopolitical tensions, Vietnam is making efforts to seize opportunities to become a strategic destination for major technology corporations in the world. Many localities such as Bac Ninh, Thai Nguyen, Ho Chi Minh City, Da Nang, or high-tech zones are being oriented to become hubs to receive high-quality FDI capital flows thanks to advantages in infrastructure, logistics, and technical human resources.
Not only changing in prioritized industries and regional trends, Vietnam’s new FDI policy also shows a shift in development thinking: from the goal of becoming a “low-cost manufacturing factory” to the orientation of becoming an innovation, high-tech manufacturing, and sustainable development center in the region.
Analysis of Advantages and Limitations of FDI Policy in the New Period
The changes in Vietnam’s FDI attraction policy bring many significant benefits to the economy. First of all, shifting toward selective investment attraction helps raise the quality of capital flows, creating conditions to attract strategic investors from the United States, the European Union, Japan, South Korea, and other developed economies. This not only helps increase investment capital but also opens up opportunities to access advanced technology, improve manufacturing capacity, and strengthen linkages between FDI enterprises and domestic enterprises.
In addition, emphasizing Environment, Social, and Governance (ESG) standards, promoting innovation, and technology transfer will contribute to raising growth quality, supporting Vietnam’s economic development model transformation process toward a greener and more sustainable direction. Reforms in administrative procedures, investment management digitalization, and increased post-checkpoint control also contribute to improving the business environment, reducing procedural burdens, and enhancing transparency for investors.
However, alongside great opportunities, the new policy also poses many challenges. Reality shows that logistics and technology infrastructure in some localities remain un-synchronized, and high-quality human resources are still in shortage, especially in core technology fields such as semiconductors, artificial intelligence, or research and development. At the same time, higher requirements regarding ESG compliance, technology, and corporate governance may also increase initial investment costs for some foreign enterprises.
Furthermore, the transition process from the traditional FDI attraction model to a high-quality selective model may create adaptation pressure for both regulatory authorities and investors, especially in the context where legal regulations and enforcement mechanisms are still continuing to be perfected. Nevertheless, viewed as a whole, the opportunities brought by the new policy are still evaluated to be greater than the immediate challenges, particularly for high-tech, digital transformation, clean energy, and smart manufacturing industries.
Practical Recommendations for Foreign Investors
In the context where Vietnam is powerfully changing its FDI attraction policy, foreign investors need to proactively adjust their market entry strategies to maximize opportunities from the new policies. First of all, enterprises should build long-term investment plans in the direction of increasing localization, transferring technology, training human resources, and meeting ESG standards right from the project preparation stage.
In addition, conducting a comprehensive Legal Due Diligence of the investment project will help enterprises early detect risks related to land, environment, planning, market access conditions, or specific legal requirements for each business line. Investors also need to closely monitor changes in legal regulations and investment support policies to make timely adjustments to appropriate development strategies.
With experience in advising many foreign-invested enterprises in Vietnam, Siglaw Law Firm recommends that investors should coordinate with a team of lawyers right from the project preparation stage to minimize legal risks, optimize opportunities to access investment incentives, and ensure full compliance with current legal regulations.
It can be seen that in the new period of 2026, Vietnam is executing a profound transformation in its FDI attraction policy to adapt to changes in the global investment environment.
In the context where the legal environment and investment policies are constantly changing, timely grasping new regulations, accurately assessing legal risks, and building an appropriate investment strategy will be the key factors deciding the success of enterprises in Vietnam.
For investors and enterprises requiring advice on FDI attraction policies, investment project legal due diligence, establishment of foreign-invested companies, or support in executing investment procedures according to the latest regulations, please contact Siglaw Firm:
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