Foreign Direct Investment in Vietnam – The High Tech Sector

Vietnam is rapidly emerging as a dynamic global economic powerhouse, with a unique set of factors propelling its growth. A recent report titled ‘Vietnam: A Global Engine of Growth,’ released by Golden Gate Ventures and Boston Consulting Group, underscores Vietnam’s pivotal role in reshaping ASEAN and the global economy.

The report forecasts a remarkable increase of $1 trillion in trade for ASEAN by 2031, driven by major contributors including China, Japan, South Korea, the EU, and the US. Vietnam, leading the pack in GDP growth within ASEAN, is poised to take centre stage.

During escalating geopolitical tensions and the rivalry among major powers in the Asia Pacific Region, Vietnam has solidified its reputation as a reliable investment haven. Its thriving economy and growing appeal to international investors have elevated the country to a premier destination for Foreign Direct Investment (FDI), particularly in the high-tech sector.

In this context of rapid growth, the most recent trend sees the country as a frontrunner in global high-tech manufacturing. The Vietnamese government, in fact, is shifting its focus from rapid but basic growth to a more refined and high-quality form of development. This transformation involves departing from industries that rely on low-cost labour and placing a greater emphasis on fostering innovation, nurturing talent, and fostering the growth of digital, environmentally friendly technology, and advanced high-tech sectors.

Since 2020, major global corporations like Apple, Google, Samsung, and others have recognized Vietnam’s potential and have established new manufacturing facilities in the country. Apple, for example, has already moved the production of MacBook in Vietnam, and has recently opened its first official online store in the country. Japanese camera manufacturer Canon has over 100 local vendors in Vietnam, while electronics companies Panasonic and Brother have dozens each, many of which make difficult components such as TV screens.

Most recently, during President’s Biden visit to Vietnam, Senior executives from major companies like Google, Intel, Amkor, Marvell, GlobalFoundries, and Boeing participated in the Vietnam-US Innovation & Investment Summit, as reported by Reuters. This summit reflects the United States’ interest in boosting Vietnam’s global importance, particularly in the semiconductor industry.

Lastly, the Korean company Samsung invested $220 million in a research and development (R&D) centre in the capital Hanoi, making it the largest in Southeast Asia. This investment signals Vietnam’s ambition to be not only a robust manufacturing hub for hardware technologies but also a centre for developing and testing software and other advanced technologies like artificial intelligence (AI), big data (Big Data), and the Internet of Things (IoT).

This shift towards ‘high-quality FDI’ emphasizes value-added investments in its people by the government, including education, research and development, and supply chain integration. It encourages the establishment of advanced, new high-tech and clean-tech enterprises and businesses that prioritize environmental impact by aligning with regional and global standards.

In conclusion, with its rapid transformation, Vietnam is well on its way to becoming a global tech powerhouse, following a trajectory like China and other countries in the Asia Pacific Region. As it enters its next golden decade of growth, Vietnam’s influence on the global economy is set to continue its upward trajectory.

Disclaimer：

The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D’Andrea & Partners and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.