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An expert said that Việt Nam needs to move towards a new-generation investment attraction model – one that seeks not only capital but also advanced technology, modern governance, innovation and stronger spillover effects on domestic enterprises.

HÀ NỘI — As Việt Nam enters a new phase of development driven by ambitions for fast and sustainable growth, the question of attracting foreign direct investment (FDI) is no longer simply about the scale of capital inflows. Increasingly, the focus is turning to the quality of investment, its spillover effects and its ability to strengthen the economy’s intrinsic capabilities.

From “FDI at any cost” to selective attraction of high-quality investment

Việt Nam currently hosts more than 46,500 valid foreign-invested projects, with total registered capital exceeding US$543 billion and cumulative disbursed capital reaching around $357.6 billion. The FDI sector now contributes more than 20 per cent of GDP, accounts for roughly 70 per cent of export turnover and provides employment for millions of workers.

According to experts, Việt Nam will require enormous investment resources to achieve its high and sustainable growth targets for the 2026–30 period, with the FDI sector and the domestic private sector expected to account for around 80 per cent of the country’s total investment demand across society.

Associate Professor and Dr Hoàng Văn Cường, Vice Chairman of the Việt Nam Economic Science Association, said that Việt Nam’s earlier FDI strategy focused primarily on mobilising foreign capital to expand production and make use of low labour costs. However, that model is increasingly revealing its limitations.

“If Việt Nam continues with the old approach to investment attraction, domestic enterprises will remain peripheral to the foreign-invested sector, while Vietnamese workers will largely participate only in low value-added stages of production. That cannot deliver breakthroughs in labour productivity or growth quality,” he said.

Cường said that Việt Nam needs to move towards a new-generation investment attraction model – one that seeks not only capital but also advanced technology, modern governance, innovation and stronger spillover effects on domestic enterprises.

More importantly, FDI and domestic businesses must be viewed as partners developing side by side, rather than as two separate economic sectors operating within the same economy. Many economists have also argued that foreign-invested firms and Việt Nam’s private companies should become strategic partners capable of sharing benefits, creating new value and generating sustainable growth momentum together.

Weak linkages remain biggest bottleneck

Despite the strong expansion of the FDI sector over recent years, the linkages between foreign-invested and domestic firms remain limited.

Việt Nam is now home to more than one million active businesses, yet only around 5,000 are directly connected to global supply chains or multinational corporations. Notably, only about 100 Vietnamese firms have become tier-one suppliers to major global groups, a figure regarded as strikingly modest.

This highlights the fact that while FDI has grown rapidly, its spillover effects on domestic enterprises are still constrained.

Dr Lê Duy Bình, Director of Economica Việt Nam, noted that the country in the coming period needs not simply “more FDI”, but rather “next-generation FDI” focused on high technology, environmental sustainability, modern governance and deeper integration with local enterprises.

Cường said that achieving such a change will require a fundamental adjustment in investment incentive policies. Rather than relying mainly on investment scale, incentives should be linked to tangible outcomes delivered by FDI enterprises.

These could include the degree of technology transfer, localisation rates, the number of Vietnamese firms participating in supply chains, or the effectiveness of high-quality workforce training programmes.

Many experts believe this approach is better suited to today’s increasing competition in the investment environment, in which Việt Nam can no longer rely chiefly on low-cost advantages but must instead build competitiveness through institutional quality, skilled human resources and innovation capacity.

According to analysts, Việt Nam needs to redesign its investment incentive system centred on measurable outputs rather than simply tax breaks or registered capital. At the same time, the country should accelerate experimental policy mechanisms, improve the investment climate and build ecosystems for high technology, the green economy, artificial intelligence and innovation.

The growth reflecting the northern port city’s strong economic momentum despite challenges in industrial growth and business formation.

Northern Hai Phong port city achieved six out of its eight key socio-economic development targets in May 2026, reflecting the city’s strong economic momentum despite challenges in industrial growth and business formation.

According to the Hai Phong People’s Committee, key indicators including state budget revenue, export turnover, cargo throughput, tourist arrivals, foreign direct investment (FDI) attraction, and social insurance participation all met or exceeded targets set under the city’s growth scenario.

In May alone, export turnover reached $4.1 billion, while cargo throughput at the city’s ports totaled 18.9 million tons. The city welcomed 1.85 million visitors and attracted $692.6 million in FDI during the month.

For the first five months of 2026, FDI inflows reached $1.98 billion, while exports totaled $21.3 billion. Cargo volume handled through the port system reached 77.8 million tons, and tourist arrivals climbed to approximately 6 million.

However, two indicators fell short of expectations. The city’s Industrial Production Index (IIP) rose 13.8% in May, below the targeted 16.7%, while 680 new enterprises were established compared with a target of 910. Despite missing the monthly target, Hai Phong’s IIP growth remained significantly above the national average of about 9.2%. Local authorities remain optimistic about achieving the full-year IIP growth target of 16.3%, supported by strong performance in key manufacturing sectors.

Leading Singaporean companies, including CapitaLand, Sembcorp, SATS, SEA Limited, Keppel and UOB, have expressed interest in expanding investments in Vietnam across sectors ranging from green urban development and industrial real estate to logistics, data centers, digital finance and next-generation industrial parks.

The commitments were discussed during meetings between Vietnam's top leader To Lam and company executives on Saturday during his state visit to Singapore.

CapitaLand eyes green urban projects, logistics, data centers

During a meeting with Jonathan Yap, CEO of CapitaLand Development (CLD) - the development arm of CapitaLand Group, Party chief and President To Lam praised the company's more than three decades of operations in Vietnam, particularly in real estate development.

He said he welcomed CapitaLand's plans to pursue high-quality, green and smart urban area projects that make efficient use of land, integrate with urban infrastructure, and contribute to the modernization of Vietnam's major cities.

The CapitaLand executive said the company is seeking to expand investments in green housing developments, urban area projects, industrial real estate, logistics facilities and green data centets.

He also welcomed Vietnam's recent efforts to streamline investment procedures, decentralize decision-making, simplify business regulations, and accelerate digitalization.

Sembcorp backs expansion of VSIP network

To Lam also met executives of Sembcorp Industries, praising the group's nearly 30 years of operations in Vietnam, particularly through the Vietnam-Singapore Industrial Park (VSIP) network and its energy investments.

He encouraged Sembcorp to expand investment into sectors where Vietnam has growing demand and proposed a long-term goal of establishing at least one VSIP industrial park in each of Vietnam's 34 provinces and cities.

The Vietnamese top leader also called for future VSIP developments to evolve into green and smart industrial parks integrated with innovation centers, digital infrastructure, modern logistics, and low-emission manufacturing ecosystems.

Sembcorp said it supports the vision of expanding the VSIP model nationwide and plans to continue investing in Vietnam while contributing to workforce development, technology transfer and the attraction of additional foreign investors.

Through its joint venture with Vietnam's Becamex, Sembcorp has helped develop the VSIP network from the first industrial park in Binh Duong province in 1996 to a system of 26 industrial parks across the country.

SATS focuses on aviation logistics, SEA expands digital finance

In the aviation sector, To Lam highlighted the longstanding cooperation between SATS and Vietnam Airlines and noted Vietnam's priority on developing modern aviation and logistics infrastructure to support trade, e-commerce, tourism and international connectivity.

SATS said it is interested in expanding investments in Vietnam through the development and operation of air cargo terminals, airport logistics services and partnerships at key airports. The company also plans to share technical expertise and support workforce training for Vietnam's aviation industry.

Meanwhile, SEA Limited said it aims to expand its presence in Vietnam in banking, financial services and development of modern logistics.

The Vietnamese top leader acknowledged the group's operations through Shopee, ShopeePay and SPX, and encouraged SEA to strengthen cooperation in promoting e-commerce, supporting digital transformation among small businesses, and expanding market access for Vietnamese products.

He also urged the company to explore broader applications of artificial intelligence, data analytics and digital technologies to help small enterprises and merchants improve operational efficiency, expand market reach, and participate more deeply in regional digital supply chains.

The discussions also covered cross-border e-commerce, digital payments, digital financial services and financial inclusion initiatives.

Keppel and UOB target green infrastructure, financial services

During a separate meeting with Keppel executives, To Lam welcomed the company's plans to expand its activities in sustainable infrastructure, smart cities and projects aimed at improving quality of life.

Vietnam encouraged Keppel to explore opportunities in green infrastructure, energy saving solutions, climate-resilient infrastructure, low-emission urban developments, data centers, cloud computing, AI infrastructure and digital systems designed to enhance data security and sovereignty.

Other areas discussed included smart urban developments, mixed-use real estate, urban services, infrastructure supporting Vietnam's International Financial Center (IFC), green logistics, sustainable aviation fuel, and innovation ecosystems.

UOB, which has operated in Vietnam since 1993, said it remains committed to expanding investments in banking, financial services, hospitality, real estate and technology ventures.

The bank also pledged support for Vietnam's ambition to develop the IFC that could serve as a regional financial gateway.

To Lam asked UOB to deepen cooperation in financial services supporting the IFC, strengthen regional financial connectivity, and help Vietnamese companies improve corporate governance, access capital, internationalize operations, and integrate further into ASEAN value chains.

The meetings highlighted the broadening scope of Vietnam-Singapore economic cooperation, which is increasingly expanding beyond traditional trade and investment into higher-value sectors characterized by advanced technology, innovation, and modern management practices.

Following the recent elevation of bilateral ties to a Comprehensive Strategic Partnership, the investment plans of major Singaporean companies underscore a new phase of cooperation focused on sustainability, digitalization, and enhancing Vietnam's role in regional value chains.