Sustainable foreign direct investment (FDI) has been a key contributor to Vietnam’s economic growth, with many multinational corporations setting up operations in the country due to its strategic location and competitive labour costs.

Sustainable FDI, long-term, responsible investments that generate social, economic and environmental benefits for both investors and the host country, accounted for approximately 70% of Vietnam’s total GDP in 2020. This sort of investment offers Vietnam numerous opportunities by transferring advanced technologies, stimulating innovation within local firms, enhancing productivity, and increasing the country’s competitiveness worldwide. As well as promoting social progress, attracting FDIs in the green industry can help the nation build its sustainable growth model.

Despite potential benefits and opportunities, Spire Research and Consulting’s Vietnam Chief Representative, Chi Nguyen, points out that foreign investors may face numerous challenges within Vietnam. In addition to issues such as a highly competitive business environment, inadequate infrastructure in areas of energy, transportation and waste management, potential investors may find that complying with the country’s legal regulations and policies can be time-consuming and complex. Culture could create problems in finding and managing reliable partners, too. Thus, foreign investors, Chi observes, may focus on short-term profits instead of long-term sustainability.

A strong legal framework, improved infrastructure, a streamlined approach to finance, investments in human capital, and targeted promotion of sustainable FDI can aid businesses in capitalizing on the opportunities of sustainable FDI, says Chi. By addressing these issues, Vietnam will be able to provide long-term economic and social growth, as well as environmental protection, establishing it as a leader in the region.

Full article is featured in Vietnam Investment Review, 35 years of Foreign Investment in Vietnam.

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Marie Teo
Manager, Group Corporate Communications
Spire Research and Consulting
Phone: (65) 6838 5355
E-mail: marie.teo@spireresearch.com