Why Invest in Vietnam: The 2026 Case and Its Limits

Vietnam attracted USD 38.42 billion of foreign investment in 2025. It also attracted USD 17.32 billion, and USD 27.62 billion.

All three figures are correct. They measure three different things, and they are used interchangeably by almost every guide on the subject.

This page separates them, sets out what the money is actually buying, explains what changed in the law in 2026, and says plainly where the case for Vietnam fails.

82.6%of disbursed investment went into manufacturing, not services

80.5%of new manufacturing investment went to the north, not the south

12 monthsto obtain the investment certificate if you incorporate first

The three numbers, and the one that matters

Registered, all formsUSD billions38.42

DisbursedUSD billions27.62

New projects onlyUSD billions17.32

The first line is an announcement. The third is a subset of the first. The middle line is the only one that describes activity rather than intention, and it was the highest in five years.

The same split runs through 2026. In the first half of the year Vietnam registered USD 34.65 billion, licensed 2,013 new projects worth USD 17.39 billion, and disbursed USD 13.03 billion, the strongest first half on record for implementation.

If a guide quotes one number without saying which of the three it is, it has not read the release.

Where the published figures disagree

The confusion is not only in secondary guides. Reports of the same official release describe USD 38.42 billion as registered capital in one place and as the highest disbursement in five years in another.

• Registered capital is the commitment recorded when a project or an increase is approved.
• Disbursed capital is the money that moved, and it is reported separately by the National Statistics Office.
• The two were USD 10.8 billion apart in 2025, which is roughly the size of a full quarter of investment.
• Where sources conflict, this page follows the National Statistics Office wording: 38.42 registered, 27.62 disbursed.

Confirm which measure a quotation refers to before using it in a board paper. The gap is large enough to change a conclusion.

What the money is actually buying

The composition tells you more than the total.

• Manufacturing took 82.6% of disbursed investment in the first half of 2026. Vietnam is an industrial destination first and everything else second.
• Singapore was the largest source at over USD 7.3 billion of newly registered capital, ahead of South Korea, Japan and China.
• Northern Vietnam absorbs the time sensitive, component heavy supply chains that need short runs to southern China.
• Project count rose faster than capital in 2025, meaning more, smaller entries rather than fewer large ones.

That last point is the one that matters to a founder rather than an economist. The average new project is getting smaller, which is what a market opening to mid sized entrants looks like.

Vietnam is not one market

Treating the country as a single destination is the most common planning error, and the data separates cleanly into three places that do different work.

Two headlines that look contradictory are both true, and the difference is the point.

• The north leads manufacturing. USD 8.63 billion of new registered manufacturing capital across 274 projects in the first half of 2026.
• Ho Chi Minh City leads the total. It was the country's largest recipient over the first seven months once services and acquisitions are counted.
• Hanoi and Bac Ninh sat at 9.5% and 8.5% of the national total over the same seven months, which is a manufacturing concentration rather than a headline one.
• Da Nang is a forward bet. Its free trade zone, international financial centre and Lien Chieu deep sea port are commitments rather than operating infrastructure.

If your business is physical, the north is where the supply chain already is. If it is commercial or digital, the south is where the counterparties are. Choosing on cost alone puts most companies in the wrong half of the country.

The agreement network is the real asset

Low labour cost is the reason usually given, and it is the weakest one. Wages are rising and other countries are cheaper.

The durable advantage is that Vietnam has signed more trade agreements than almost any economy of its size, and they reach markets that do not overlap.

Counts of Vietnam's total agreements vary between sources, from sixteen to seventeen depending on what is treated as in force. More than fifteen is safe; a precise number is not.

The part that is almost never explained is that an agreement can change your rights as an owner, not just your tariffs. Online gaming is capped at 49% foreign ownership under Vietnam's WTO commitments, and open to 100% for an investor from a CPTPP country since 14 January 2024. Same activity, same country, different ceiling depending on where the investor is from. That mechanism is set out in full in setting up in Vietnam as a non-resident.

The rules changed direction in 2026

2026 is not a year of adjustments in Vietnam. The entry framework was replaced.

1 Oct 2025New corporate income tax law takes effect

1 Jan 2026Annual business licence fee abolished

1 Mar 2026Law on Investment 2025 replaces the 2020 law

31 Mar 2026Decree 96/2026 replaces Decree 31/2021

1 Jul 2026Conditional business line provisions take effect

1. 1 Oct 2025New corporate income tax law takes effect
2. 1 Jan 2026Annual business licence fee abolished
3. 1 Mar 2026Law on Investment 2025 replaces the 2020 law
4. 31 Mar 2026Decree 96/2026 replaces Decree 31/2021
5. 1 Jul 2026Conditional business line provisions take effect

The direction of travel is consistent across all five dates: less checking before you enter, more checking afterwards.

• Foreign investors may now incorporate before obtaining an investment certificate, which was not possible before Decree 96/2026.
• The registration application carries a commitment that market access conditions are met, rather than a prior verification that they are.
• The investment certificate must follow within twelve months of incorporation, and the company can do very little until it arrives.
• Provisions on conditional business lines were held back to 1 July 2026, so the framework was still settling months after the rest took effect.

For a founder this cuts both ways. Entry is faster and cheaper to attempt. The consequences of getting the sector analysis wrong now land after you have incorporated rather than before. The mechanics of the choice are in how to register a company in Vietnam.

Where the case breaks down

The transshipment rule changes the arithmetic of assembly

Under the trade framework agreed with the United States, Vietnamese goods face a headline rate of around 20%, and goods merely routed through Vietnam to disguise a different origin face 40%, with no relief.

That penalty is aimed at a specific practice, and it catches an honest business model by accident: light assembly of imported components with little local transformation.

• The liability sits with the importer of record, not the supplier who shipped the parts.
• There is no mitigation and no remission on the transshipment penalty.
• Component sourcing becomes a design decision, not a procurement one.
• A factory audit is proportionate before committing to a supply chain, not after a customs query.

If your plan is to move final assembly to Vietnam while every input still comes from one neighbouring country, the plan needs to survive an origin test before it needs a company.

"One hundred percent foreign ownership" is true in general and false in detail

Vietnam does allow full foreign ownership across most of the economy. The exceptions are real, they are not few, and they are rarely listed with figures.

A separate prohibition list closes some sectors to foreign investors entirely, and a conditional list attaches entry requirements to dozens more. Both lists were reissued under Decree 96/2026 and should be checked against the current text rather than a 2021 summary.

The compliance bill arrives in year two

Formation is not where Vietnam is expensive. Holding the company is.

• Regional minimum wages rose 7.2% on average from 1 January 2026, and several payroll ceilings move with them.
• The Law on Social Insurance 2024 and the Employment Law 2025 widened the categories of people inside compulsory social and unemployment insurance.
• Work permit exemptions have to be analysed before an expatriate starts work, not after arrival.
• Knowledge transfer to Vietnamese staff is now a stated obligation for foreign experts, not a courtesy.
• Payroll, contracts, personal income tax and social insurance filings are increasingly cross checked against each other.

Who Vietnam is wrong for

• A holding company with no operations. Vietnam taxes and administers as an operating jurisdiction, and the certificate regime assumes a project.
• A business in a capped or prohibited sector without a Vietnamese partner it actually wants.
• A founder who will never visit. Residency requirements, banking and the legal representative role all assume a physical presence.
• An assembler with a single foreign input source, for the origin reasons above.
• Anyone who needs certainty in month one. The framework changed in March 2026 and parts of it took effect in July.
• A business that cannot name its business lines yet. Registered scope governs what the company may do, and it cannot be widened until the investment certificate is issued.