As Vietnam continues to thrive among Asia’s top destinations for foreign investment, we are committed to keeping our global audience informed about key developments through the Kenno Vietnam Pulse series.

In June, Vietnam saw sustained FDI momentum, continued tourism recovery, and a structural state reform with long-term implications. Despite external uncertainties, the country remains resilient, supported by improved infrastructure, regulatory clarity, and an expanding domestic market. We also highlight recent policy and corporate moves in AI and manufacturing that align closely with our investment thesis.

Macroeconomic Highlights

FDI remains strong despite global tensions

Vietnam continues to attract manufacturing and high-tech investments, maintaining its competitive edge as companies seek diversification away from China. In the first five months of 2025, disbursed FDI rose 8% YoY to USD 8.9 billion. More notably, registered FDI surged 51% YoY to a five-year high of USD 18.4 billion. While global trade friction — particularly between the US and China — adds some near-term volatility, Vietnam’s position as a key alternative hub remains intact.

Data: Ministry of Industry and Trade

Tourism surpasses pre-COVID levels

International tourist arrivals hit 9.2 million in the first five months of 2025, up 21% YoY. This momentum reflects not only post-pandemic recovery but also structural improvements in service quality, visa facilitation, and infrastructure — especially in air and road connectivity. The expected commissioning of Long Thanh International Airport and ongoing expressway projects are likely to reinforce this trend, creating various advantages across hospitality, retail, and consumer services.

Major administrative reform in progress

Effective July 1, Vietnam’s provincial and municipal administrative units have been consolidated, reducing the total from 63 to 34. This reform simplifies governance into two levels and aims to streamline bureaucracy, lower compliance costs, and improve public service delivery. While the transition may pose short-term implementation challenges, the overhaul aligns with Vietnam’s broader regulatory and institutional reform agenda.

Qualcomm launches new AI R&D center in Vietnam

Qualcomm AI R&D center launch ceremony in Hanoi.
Photo: Vietnam News Agency

Qualcomm has officially launched a new R&D center in Vietnam focused on cutting-edge generative and agentic AI, with applications spanning smartphones, personal computers, extended reality (XR), automotive technology, and the Internet of Things (IoT).

The center supports the government’s broader push in AI, semiconductors, and digital transformation, including ecosystem development and workforce training. We think this move, following earlier initiatives by NVIDIA and others, further solidifies Vietnam’s shift from a manufacturing base toward innovation and IP generation.

Samsung signals continued long-term commitment

Vietnamese state delegates visit Samsung Thai Nguyen.
Photo: Ministry of Public Security

In June, Samsung hosted the Minister of Public Security at its factory in Thai Nguyen, one of the group's largest manufacturing complexes. CEO Na Ki Hong reaffirms Samsung Electronics Vietnam's plan to invest USD 1 billion to expand its operations in Vietnam.

Despite shifting tariff regimes, Samsung’s commitment reinforces Vietnam’s role in the company's long-term manufacturing strategy. Given Samsung’s deep roots in the country and a strong foothold in the global electronics export markets, we see this as a stabilizing sign for Vietnam’s broader tech and manufacturing ecosystem.

New Digital Technology Law supports tech sector

Vietnam's National Assembly votes to pass the new Law.
Photo: Ministry of Science and Technology

Vietnam has recently passed the Law on Digital Technology Industry, formally codifying state support across various science and tech areas — such as tax incentives, institutional and financial support for startups, SMEs, and even large-scale projects in this space.

The law also prioritizes investment in modern infrastructure, such as high-tech industrial zones, 5G networks, and data centers. These foundations create a favorable environment for Vietnam's leading IT firms like our portfolio company FPT to scale internationally and integrate more deeply into global value chains.

VAT cut extended through 2026 to support spending

Vietnam has extended the 8% VAT rate (a 2% reduction from the standard 10%) through the end of 2026. Initially introduced as a post-COVID recovery measure, this ongoing policy aims to support household spending amid macroeconomic headwinds. We expect it to help sustain consumer confidence and support growth across retail and service sectors.

Stay in the know!

And that’s a wrap for this month’s edition of Kenno Vietnam Pulse. We hope you enjoyed reading and found valuable insights into Vietnam’s market landscape. Feel free to subscribe to our monthly newsletter more timely, factual, and actionable updates. If you would like closer look at investment opportunities in Vietnam, we invite you connect with us for more information and tailored advice.