Vietnam ranks among the world’s top 30 destinations for foreign direct investment. In PwC’s 29th Global CEO Survey, APAC CEOs name it their second most attractive international investment destination, behind only the US and ahead of mainland China.
Conversations with business leaders from Türkiye, the UK and the US point to three stages where foreign companies still slow down: Explore, Establish and Expand. Each stage calls for a different kind of local support when setting up a business in Vietnam.
Vietnam is still missing from many foreign investors’ shortlists
Many midsize companies in Türkiye and the UK still ask “Why Vietnam?” before they consider entry. Eray Ulugül raised this for Turkish companies in our analysis of Turkey’s investment footprint, and Sandy Boxall and Anh Vo, founders of UK-based Contract Finder Pro, hear the same question from British firms.
The data shows why. Vietnam ranks second among APAC CEOs but sits outside the global top 10 in the same PwC survey, where Singapore holds tenth place at 6%. Europe and North America also typically account for less than 10% of registered foreign investment into Vietnam.
Figure 1: Top international investment destinations among global and Asia-Pacific CEOs, 2026 vs. 2025
Awareness is strong among large APAC corporations and remains limited among Western and midsize companies. Reaching them takes practical, well-informed messages delivered to the right audience.
→ Read Hoang Le’s full breakdown of the PwC and FDI data.
Setting up a business in Vietnam demands local expertise
Once a company is interested in Vietnam, the question shifts from why to how.
Tax and licensing are the biggest challenges for foreign companies
Travis Mitchell, Executive Director of AmCham Vietnam, names tax clarity and administrative complexity as the two largest hurdles for US companies entering the market. Changing tax rules, unclear sector regulations and lengthy licensing procedures raise compliance risk and delay establishment.
Related: Beyond expert calls: 4 ways expert networks help close information gaps
Foreign companies enter with smaller first commitments
Distance makes it harder for Western companies to follow local developments and respond quickly to change, so many reduce risk with a smaller first step. Turkish manufacturers often start with USD 500K to 5M through partnerships or plug-and-play models before building larger plants.
Local insight on regulation and operating conditions helps companies choose the right entry route before committing larger resources.
→ Read how Turkey’s investment footprint in Vietnam reflects this phased approach.
Established foreign investors are expanding with greater confidence
Companies already operating in Vietnam tell a more positive story. In 2025 FDI data, new projects rose 20.1% in number while their capital fell 12.2%, bringing the average to USD 4.27M. Capital adjustments from existing projects moved the other way: 8.77% fewer in number, at an average of USD 10M each.
Figure 2: Vietnam FDI breakdown by investment type, 2025
Established investors are becoming more selective and more committed. AmCham Vietnam’s 2026 Member Survey supports this: 78% of members expect performance to hold or improve over the next six months, 51% reported higher revenue than the previous year and 32% plan to grow their local workforce.
Figure 3: AmCham Vietnam 2026 Member Survey highlights
Caution remains around regulation, demand and talent. Still, government priority on infrastructure and demand for manufacturing capability continue to favor long-term investors, particularly from markets that remain underrepresented in Vietnam today.
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How Arches supports foreign companies from Explore to Expand
- Explore: market insight and expert perspectives help companies assess whether Vietnam fits their strategy and how it compares with other Southeast Asia markets.
- Establish: regulatory understanding and local partner connections help companies select an entry route and prepare for compliance.
- Expand: continuous market updates and access to industry practitioners help investors adjust as conditions change.
About Arches Custom Research and Consulting
Looking for market insight you can act on?
At Arches, we help corporate and consulting teams go beyond desk research. Our Custom Research and Consulting service combines structured market frameworks, targeted expert validation and local networks, giving teams the clarity they need before committing to a new market.
To discuss how Custom Research and Consulting supports market entry decisions, meet Hoang Le, our Consulting Manager for Vietnam and APAC, who works closely with corporate and consulting teams on early-stage market assessments across the region.
→ Talk to Arches about your plans for setting up a business in Vietnam.
Related: Expert network pricing explained: is Arches expensive?
CPP partnership invitation
We’re calling for Country Partners to help share Vietnam’s potential with foreign business communities – helping them explore, enter, and succeed in the market.
We’re actively looking for trade promotion partners, industry associations, and cross-border advisors interested in co-identifying investment opportunities and supporting businesses through market entry in Vietnam.
→ If facilitating international growth is part of your mission, connect with Hoang Le, Consulting Manager for Vietnam and APAC to explore a partnership.
FAQs
1. What should foreign companies know before setting up a business in Vietnam?
Tax rules, licensing procedures and sector regulations change frequently, so early clarity on compliance is essential. Many companies start with a partnership or plug-and-play model and scale once they understand local conditions.
2. Why are foreign investors expanding in Vietnam?
Established investors are adding larger amounts of capital, and most AmCham members expect stable or improved performance. Infrastructure investment and manufacturing demand continue to create opportunities for long-term investors.
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