Over the past three decades, foreign direct investment (FDI) has been one of the key drivers of Vietnam’s economic rise. FDI contributes more than 70% of export turnover, creates millions of jobs, and has positioned Vietnam as a regional manufacturing hub. Yet as the country enters a new development phase, its FDI attraction model stands at a critical crossroads: should it continue relying on cost advantages, or pivot toward the “Green–Digital–Transparent” standards to welcome the next generation of FDI?
In the post-pandemic era, global investment patterns have shifted decisively. Multinational corporations now prioritize countries with robust digital infrastructure, clear environmental commitments, transparent institutions, and resilient supply chains. The old criteria of “low cost and abundant labor” are being replaced by “good governance, clean data, and green energy.” Meanwhile, major export markets such as the European Union and the United States are tightening ESG (Environmental, Social, Governance) requirements, enforcing carbon border adjustment mechanisms (CBAM), and demanding full-chain emission reporting and traceability.
Against this backdrop, new-generation FDI—characterized by high technology, clean production, digital transformation, and value sharing—is reshaping the global investment map. Economies that can reform their FDI frameworks toward quality and sustainability will retain their positions at the center of supply chains; those that persist with the “low-cost factory” model will gradually fall behind.
After 35 years of openness, Vietnam is precisely at this inflection point. The country has moved past the “quantity-driven FDI” phase—where the goal was simply to attract as many projects as possible—and is entering the “quality-driven FDI” phase: selective, strategic, and focused on projects that diffuse technology, build human capital, and contribute to long-term productivity. To achieve this, Vietnam needs a smarter, more accountable FDI framework, and a support infrastructure that enables domestic enterprises to absorb and co-create alongside foreign investors.
Ireland stands as a model of successful transformation—from a traditional FDI recipient to Europe’s “new-generation FDI hub.” In the 1990s, Ireland primarily competed through tax incentives. But as other economies adopted similar strategies, it realized a different approach was needed—not merely to “attract FDI,” but to “retain FDI and make it grow with the domestic economy.”
The Irish government established the Investment Development Agency (IDA Ireland)—a semi-public organization operating with flexibility, tasked with sourcing, supporting, and sustaining high-quality FDI projects. IDA goes far beyond licensing or land allocation; it acts as a “conductor of connections” among government bodies, investors, universities, and local enterprises. It implements a “project concierge” model—offering comprehensive assistance covering legal, infrastructure, workforce, and R&D support—helping investors save time, reduce risk, and accelerate operations.
Notably, every FDI project in Ireland is evaluated along three pillars: technology transfer, sustainability impact, and domestic linkage. Projects that merely assemble, consume excessive energy, or pollute are restricted. Conversely, projects that plan to train engineers, collaborate on R&D, or use renewable energy receive priority licensing, infrastructure support, and tax credits.
Thanks to this approach, within two decades Ireland became Europe’s “tech valley,” hosting regional headquarters of global giants such as Google, Meta, Apple, Pfizer, Intel, and Johnson & Johnson. These firms not only manufacture but also conduct R&D, product design, and high-skill workforce training. Ireland’s “new-generation FDI” model tripled its per capita GDP while maintaining environmental and social balance.
For Vietnam, Ireland’s experience highlights an essential truth: to attract next-generation FDI, the approach must change. Instead of “rolling out the red carpet” indiscriminately, Vietnam must develop an FDI Hub—a center for connecting, screening, and cultivating high-quality investment, guided by transparency, professionalism, and strategic direction.
Today, Vietnam is one of the top destinations in the “China+1” wave, as multinationals diversify supply chains beyond China. Yet this opportunity will only translate into real advantage if Vietnam shifts from cost-based to capability-based competition. The country needs not only “clean land,” but more importantly, a “clean institution”: fast and transparent processes, open data, clear ESG evaluation systems, and a business environment rooted in trust.
Some provinces—such as Bac Ninh, Hai Phong, and Binh Duong—have begun developing professional investment promotion centers. However, a national-level coordinating body capable of standardizing, integrating, and directing sustainable FDI strategy is still missing. This is precisely the gap that VAPEDCO can pioneer.
With its mission to connect and develop the private economy, VAPEDCO can evolve into Vietnam’s FDI Hub—a hybrid model combining investment promotion, enterprise support, and FDI quality monitoring. The center could undertake several key initiatives:
- Establish the “Green–Digital–Transparent” Standard Framework for new-generation FDI, including criteria for carbon emissions, renewable energy usage, data security, social responsibility, and technology transfer plans. This framework would guide project selection, promote sustainable capital flows, and prevent “dirty FDI.”
- Build a National FDI Data Platform, enabling investors, enterprises, and localities to access information on investment opportunities, industrial land availability, domestic supplier capabilities, and partnership demands. The platform should operate on open data principles, update in real time, and integrate AI for industry trend analysis.
- Host the “FDI Partnership Program,” a regular forum convening top global corporations and Vietnamese firms to explore cooperation, technology transfer, workforce training, and ESG investment. “Match & Meet” sessions could be held annually across key economic regions—such as Bac Ninh, Binh Duong, and Da Nang—creating substantive bridges between domestic private enterprises and foreign investors.
- Develop an “Aftercare Unit” Expert Network, a dedicated advisory group to help investors resolve challenges while assisting domestic firms in meeting FDI partner standards. “Aftercare” was one of Ireland’s greatest strengths—ensuring investors stay, expand, and build long-term confidence.
- Link FDI with local and regional sustainable development. VAPEDCO could coordinate Supplier Development Programs to help Vietnamese firms achieve international certifications, reduce emissions, and integrate more deeply into value chains. Each FDI project would then not only create jobs but also enhance private sector capacity—embodying the principle of “co-development.”
Of course, these initiatives require an enabling institutional environment: transparent approval processes, incentive policies tied to ESG commitments, and coherent inter-ministerial coordination. Most importantly, a shift in mindset is needed—from “attracting FDI” to “selecting and developing FDI.”
When investors see Vietnam not only as affordable but also as trustworthy, transparent, and technologically capable, they will stay longer, invest deeper, and share more. And when Vietnamese enterprises are standardized and supported to become equal partners, the economy will enter a truly high-quality integration phase.
A new global FDI order is emerging—where capital, technology, and responsibility move together. Vietnam has the conditions to become a regional center of this new capital flow—if it dares to rethink its approach and invest in the “soft infrastructure” of trust and capability.
When VAPEDCO and domestic partners jointly shape an **FDI Hub model—one that selects, supports, and supervises—**Vietnam can become the “smart destination” for new-generation FDI, where each project not only generates output, but also produces knowledge, green energy, and a sustainable future for the economy.
