Riding the ASEAN Wave: Unlocking Vietnam’s FDI Potential

Global FDI reached US$1.6 trillion in 2025, while developing Asia attracted US$644 billion, maintaining its position as the world’s largest developing-region recipient. Southeast Asia also overtook East Asia as the region’s largest FDI recipient subregion, reflecting its growing role in global investment, according to UNCTAD’s World Investment Report 2026.

Against this backdrop, Vietnam has emerged as an important destination for manufacturers, technology companies, and international investors, recording US$27.6 billion. This guide explores the latest regulatory developments, investment incentives, and business establishment process, helping businesses evaluate Vietnam as part of their broader ASEAN investment strategy.

ASEAN as a strategic destination for foreign investment 

In 2025, developing Asia received $644 billion in foreign direct investment (FDI)⁽¹⁾, maintaining its position as the world’s largest developing-region recipient. Within Asia, South-East Asia overtook East Asia to become the region’s largest FDI recipient subregion.

According to UNCTAD’s World Investment Report 2026, ASEAN has continued to attract annual FDI inflows exceeding $200 billion. Investment has been supported by large greenfield projects, particularly in advanced manufacturing, digital infrastructure, semiconductor-related industries, and AI data centres.

These trends indicate that many multinational companies are expanding their regional operations in Southeast Asia and strengthening their corporate, banking, and supply chain presence to support long-term growth across the Asia-Pacific.

Evaluating Vietnam’s strategic FDI appeal 

Vietnam has continued to strengthen its position as an export-oriented manufacturing economy within Southeast Asia. The country benefits from an extensive network of free trade agreements, growing participation in global supply chains, and sustained foreign investment.

In 2025, Vietnam recorded US$27.6 billion in realized FDI, the highest level during the 2021–2025 period, according to the Vietnamese government.

As Oliver Ng, CEO of BBCIncorp, observes, “Vietnam is no longer just a low-cost contingency destination. It has become an essential strategic anchor for global corporations seeking to leverage the ASEAN growth wave.” This shift reflects the country’s evolving role within regional manufacturing and investment strategies, supported by continued policy reforms and deeper integration into global trade networks.

Alongside these economic fundamentals, Vietnam has continued to refine its investment framework through regulatory reforms. Effective from 1 March 2026, the revised Law on Investment introduced updates to streamline investment procedures and support business operations.

These changes provide an updated legal framework for companies evaluating manufacturing, sourcing, or regional expansion in Vietnam.

Market entry: The reversed “ERC-first” setup sequence

Under Article 19 of the Investment Law 2025, eligible foreign investors may first establish a project company by obtaining an ERC before applying for an IRC. This reverses the previous sequence under the Investment Law 2020, which required the IRC to be issued before company incorporation.

By allowing company incorporation before the issuance of the IRC, investors can establish a legal presence and begin selected preparatory activities while the investment application is under review.

This may help align legal establishment with broader project planning, including corporate administration, office setup, banking arrangements, and workforce planning, subject to applicable regulatory requirements.

Trade openness: Next-generation FTA networks

Vietnam has established one of the region’s most extensive free trade agreement (FTA) networks, with 17 concluded FTAs covering more than 60 economies⁽²⁾, while negotiations with the European Free Trade Association (EFTA) continue.

The network includes high-standard agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU–Vietnam Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP).

Combined with Vietnam’s strategic location in Southeast Asia, these agreements position the country as a potential manufacturing and sourcing base for companies pursuing regional diversification strategies, including the China Plus One approach.

The commercial benefits available to individual investors, however, remain subject to applicable rules of origin, product-specific commitments, and regulatory requirements.

Fiscal framework: Targeted corporate tax incentives

Vietnam’s corporate tax incentive regime is designed to support investments in priority sectors, strategic locations, and qualifying project scales.

Eligible investments in digital and high-technology industries may qualify for a 10% corporate income tax (CIT) rate for up to 15 years. Depending on the project’s eligibility, additional incentives may include a CIT exemption for up to four years, followed by a 50% reduction of the applicable CIT rate for up to 9 years⁽³⁾.

Unlike standard corporate tax regimes that apply broadly across industries, Vietnam’s incentive framework is project-based. Eligibility is assessed against statutory criteria, including the investment sector, project location, investment scale, and other qualifying conditions prescribed under the Corporate Income Tax Law and related regulations.

The availability and value of tax incentives may also be affected by the Global Minimum Tax (Pillar Two) rules for multinational enterprise groups.

Vietnam combines a 20% standard CIT rate with targeted incentives for qualifying investments, providing a competitive tax framework within key ASEAN markets.

Deregulation: Trimming of conditional sectors

Vietnam has accelerated its regulatory reform agenda by reducing the number of conditional business sectors.

Effective 1 July 2026, Government Resolution No. 66.17/2026/NQ-CP reduces the list of conditional business lines from 198 to 142⁽⁴⁾, replacing licensing requirements for selected activities with technical standards, professional standards, or post-market supervision where appropriate.

The reform reflects a broader shift from pre-market licensing towards a more risk-based regulatory approach. For businesses operating in sectors no longer subject to conditional investment requirements, market entry procedures may become more straightforward as certain licensing obligations are removed or simplified.

At the same time, regulatory oversight continues through sector-specific standards, technical regulations, and post-licensing compliance mechanisms.

Location-based readiness: Fast-track industrial zones

Vietnam has developed a network of specialized industrial parks, high-tech parks, export processing zones, and economic zones to support manufacturing and technology investments.

Many of these zones offer ready-built infrastructure, dedicated management boards, and one-stop administrative services that coordinate investment procedures and local licensing requirements.

For manufacturers, these industrial ecosystems can reduce the time required to establish operational facilities by providing pre-developed land, factory space, and supporting infrastructure.

Established clusters such as Vietnam – Singapore Industrial Parks (VSIP) and DEEP C Industrial Zones also provide access to integrated logistics networks, supplier ecosystems, and port infrastructure, depending on their location.

Step-by-step: How to set up your business in Vietnam

While the incorporation process varies depending on the investment structure and regulated business activities, foreign investors generally follow a common registration pathway. The key steps below provide an overview of the company formation process in Vietnam.

Step 1. Define your investment structure

Determine the appropriate legal entity, registered capital, business activities, and business location. Foreign investors should also assess applicable market access conditions and sector-specific licensing requirements before proceeding.

Step 2. Incorporate the company (ERC)

Eligible foreign investors may establish a project company by obtaining an ERC under the revised licensing sequence introduced by the Investment Law 2025. The ERC is processed following the statutory enterprise registration procedures once a complete and valid application is submitted.

Step 3. Obtain the Investment Registration Certificate (IRC)

Following incorporation, investors must obtain the IRC for eligible projects and comply with Vietnam’s market access requirements and applicable regulatory deadlines before carrying out investment activities.

Step 4. Complete post-incorporation formalities

After registration, businesses typically complete tax registration, corporate banking arrangements, labour registration, seal or digital signature procedures, and obtain any industry-specific licences required for operation.

Step 5. Commence business operations

Once all applicable approvals and compliance requirements have been satisfied, the company may begin commercial operations.

Businesses located in industrial parks, high-tech parks, or economic zones may benefit from one-stop administrative support and project facilitation, depending on the relevant management authority and project type.

How BBCI supports your business setup in Vietnam

Setting up a business in Vietnam involves more than company registration. Foreign investors must navigate incorporation, investment approvals, banking, tax compliance, and ongoing corporate obligations.

BBCIncorp provides integrated support throughout the business lifecycle, helping companies establish and manage their operations with greater confidence.

• End-to-end incorporation support, including Vietnam company formation, investment registration, and post-incorporation procedures.
• Integrated corporate services, covering accounting, tax, corporate secretarial, registered office, and ongoing compliance.
• Regional expansion expertise across Vietnam, Singapore, Hong Kong, and other key Asian jurisdictions.
• Technology-enabled administration through the BBCI Client Portal and BSmart, providing centralized document management and AI-powered client support.
• Dedicated advisory team delivering practical guidance throughout the business lifecycle, from market entry to regional expansion.

Conclusion

Vietnam’s evolving investment framework reflects a broader effort to improve market accessibility, strengthen manufacturing competitiveness, and support long-term business expansion.

For companies exploring ASEAN investment opportunities, the country’s regulatory reforms, trade connectivity, and industrial ecosystem make it an important jurisdiction to evaluate as part of a regional growth strategy.

Navigating foreign direct investment in Vietnam requires more than completing incorporation procedures. It also involves understanding market access conditions, investment incentives, and ongoing compliance obligations.

BBCIncorp supports businesses throughout this journey with end-to-end incorporation, investment registration, and corporate services, helping investors establish and scale their operations with confidence. Contact our team for tailored guidance on investing in Vietnam.

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