Building a national strategic investment platform

Deliberate shifts in approaches to investment capital

For more than four decades, Viet Nam’s success in attracting foreign direct investment (FDI) has often been measured by the scale of registered and disbursed capital. However, the quality, effectiveness, and management of FDI inflows have not yet fully matched the country’s potential and advantages, nor have they met the requirements of development in the new phase.

Consequently, when issuing Resolution No. 10-NQ/TW which outlines a strategic restructuring of foreign investment attraction to Viet Nam, the relevant authorities not only focused on attracting capital but also changed the way they view the value of this important source of investment.

Accordingly, the measure of success no longer depends on how many billions of USD of foreign investment Viet Nam can attract, but in what the country can learn, how domestic enterprises can grow, and how far the economy can advance in global value chains.

In other words, foreign investment capital is no longer a goal to pursue at all costs, but rather a mechanism to serve the country's long-term development goals.

Evidence of this can be found in Resolution No. 10-NQ/TW itself, which contains deliberate shifts in Viet Nam’s approach to FDI, moving from a mindset of “attracting investment at any cost” to one of “selective attraction linked to strengthening national capabilities.”

The first shift concerns incentive mechanisms. Resolution No. 10-NQ/TW calls for a gradual transition from input-based incentives towards support linked to the fulfilment of commitments, accompanied by post-investment inspections and the withdrawal of incentives if investors fail to honour their commitments.

The second shift concerns the organisation of investment attraction. Instead of attracting investment according to administrative boundaries, the resolution aims to attract investment based on industry clusters, value chains, and innovation ecosystems.

Accompanying this is a clear message: “Resolutely overcome the situation in which localities compete by lowering standards to secure projects and avoid creating a low-incentive baseline for competition.”

The third shift is the introduction of a strategic investor mechanism, featuring special investment procedures and an open list of strategic technology sectors that will be reviewed and updated periodically. Viet Nam is proactively differentiating investment flows, no longer “rolling out the red carpet” for all sources of capital, but selectively providing dedicated mechanisms for projects capable of leading regional supply chains.

According to Dr Tran Hai Linh, Member of the Central Committee of the Viet Nam Fatherland Front and Chairman of the Viet Nam–Korea Businessmen and Investment Association (VKBIA), the strategic significance of Resolution No. 10-NQ/TW lies in its demonstration of a major shift in Viet Nam’s development thinking regarding the foreign-invested sector.

“In the past, we primarily viewed FDI as a source of additional capital, job creation, and export growth. Today, the requirements are much higher: selective attraction, improved quality, greater efficiency, and stronger spillover effects of FDI on the domestic economy,” he said.

Incentives linked to commitments and post-investment monitoring

One of the notable features of Resolution No. 10-NQ/TW, according to Morgan Stanley Capital International (MSCI), is the principle of “incentives accompanied by commitments.”

Specifically, foreign-invested enterprises are encouraged to invest and conduct business activities, but are also required to commit to technology transfer, R&D activities, the training of Vietnamese workers, increasing domestic value-added content, and developing local suppliers. Importantly, the level of incentives granted will be linked to the fulfilment of those commitments.

According to Dr Bui Quy Thuan from the School of Economics at Phenikaa University, this approach addresses a long-standing limitation. Despite attracting large volumes of FDI, technology transfer to domestic enterprises has progressed slowly, localisation rates remain low, and many projects remain largely focused on processing and assembly activities.

The resolution itself acknowledges that the quality of FDI attraction has not been commensurate with the country's potential.

The key difference this time is that commitments made by FDI enterprises will be directly linked to the incentives they receive and will be subject to post-investment monitoring, rather than merely encouraging technology transfer, as in the past.

However, implementation will not be straightforward. Resolution No. 10-NQ/TW also emphasises that support policies must be consistent with the international commitments to which Viet Nam is a party.

In practice, strict localisation requirements have previously generated debate due to the risk of conflicting with international commitments. Therefore, Dr Bui Quy Thuan believes the effectiveness of the policy will depend on the ability to design regulations that are sufficiently flexible to encourage stronger linkages between FDI enterprises and the domestic sector while ensuring compliance with international obligations.

This will not be an easy task and will require close monitoring as policies are translated into practice.

In particular, Dr Bui Quy Thuan noted that the concept of “strategic autonomy,” mentioned in Resolution No. 10-NQ/TW, should be understood in a practical and comprehensive manner.

In the context of current global geopolitical shifts and uncertainties, strategic autonomy does not mean separating from global supply chains. Rather, it means strengthening the country’s position and control within those supply chains.

This is reflected in various targets set out in Resolution No. 10-NQ/TW. By 2045, the foreign-invested sector is expected to account for around 25% of total social investment and contribute approximately 30% of the country’s gross domestic product (GDP), helping Viet Nam become a developed, high-income nation.

Upgrading Viet Nam’s position in global supply chains

Reflecting these significant shifts in thinking on FDI attraction, Resolution No. 10-NQ/TW sets out a series of specific targets for the period to 2030.

In terms of investment volume, the goal is to attract 40–50 billion USD in registered capital annually and 30–40 billion USD in disbursed capital each year.

By comparison, in 2025, Viet Nam attracted 38.42 billion USD in registered FDI, while realised capital was estimated at 27.62 billion USD, the highest level of disbursement in five years.

This means that even the lower end of the target range requires an increase over current levels. Registered capital must exceed 40 billion USD, while realised capital must rise by around 10% to reach 30 billion USD and by nearly 50% to reach 40 billion USD.

These targets are achievable if strong growth momentum can be maintained, but they will not be easy to attain.

The remaining targets also address long-standing bottlenecks in the economy. These include raising localisation rates in key industries to 45–50% and bringing around 10,000 Vietnamese enterprises into value chains, including between 500 and 1,000 first-tier suppliers.

Combined with targets for 80% of the workforce to receive training and for Viet Nam’s stock market to be upgraded by Morgan Stanley Capital International before 2030, this set of targets demonstrates an ambition to build an economy capable of absorbing and spreading value generated by the FDI sector, rather than simply serving as a destination for investment capital.

By placing FDI within the broader national development strategy and linking it to stronger strategic autonomy, enhanced national competitiveness, and deeper participation in global value chains, Resolution No. 10-NQ/TW seeks to achieve a larger objective.

“The spirit of Resolution No. 10-NQ/TW is aimed at upgrading Viet Nam’s position in global supply chains. This is an appropriate approach in a context where geopolitical competition and supply-chain shifts are having a strong impact on all economies,” Dr Tran Hai Linh emphasised.