How to Invest in Vietnam: A Strategic Guide for European Technology Firms

Vietnam’s investment approval system has undergone a quiet but fundamental transformation. While headline legislation remains largely unchanged, investment evaluation has become more centralized, qualitative, and outcome-oriented, with increased coordination between central ministries and provincial authorities.

Today, regulators assess not only legal compliance, but also:

• Technology relevance and modernity
• Environmental, Social, and Governance (ESG) credibility
• Digital governance and data responsibility
• Long-term contribution to local value chains

This shift is evident in sectoral data. As of 2025, processing and manufacturing accounted for 36.3% of EU foreign direct investment (FDI), while energy and utilities represented 20.7%, and information and communications accounted for 6.6%. This underscores Vietnam’s prioritization of green and digital investment over labour-intensive expansion.

European investors occupy a distinctive position in Vietnam’s strategy for three reasons:

1. EVFTA Maturity
   Five years after coming into force, the EU–Vietnam Free Trade Agreement (EUVFTA) has evolved into a trusted framework. By Q3 2025, 61% of European firms cited tariff reductions as a key competitive advantage, compared to 29% in 2024, reflecting a shift towards a deeper operational integration rather than transactional trade.
2. EU Global Gateway Alignment
   Vietnam is increasingly positioning itself as the EU’s Global Gateway hub in Southeast Asia, particularly with regards to semiconductors, renewable energy, and digital infrastructure. EU experts are actively supporting Vietnam in revising its Law on Science and Technology and in aligning data governance with GDPR-like standards, especially for AI and cybersecurity projects.
3. Higher Implicit Expectations
   European firms are expected to operate under advanced ESG, compliance, and AI governance regimes. As a result, they face higher scrutiny during the licensing and evaluation process, particularly with regard to ESG substantiation and technology transfer.

A notable feature of Vietnam’s current system is the growing incidence of “silent licensing failure.” Rather than formal rejection, projects may remain under extended review or circulate between authorities due to strategic misalignment, not legal non-compliance.

Common issues include:

• Insufficiently defined technology contribution.
• ESG commitments lacking operational detail.
• Data- or AI-driven models without clear governance safeguards.

This reflects Vietnam’s evolving approach of filtering for credibility and alignment, rather than documentation volume.

Looking ahead, 2026 represents a convergence point:

• Advanced EVFTA tariff phases.
• Externalization of EU regulations (CSDDD, CBAM).
• Vietnam’s targeted demand for “anchor” technology investors.

Priority areas include semiconductors (testing and packaging under the EU Chips Act), green industrialization (exemplified by the fully solar-powered USD 1.3 billion LEGO factory), and trust-based AI and cybersecurity ecosystems.

For European technology companies entering Vietnam with the right strategic approach, 2026 offers a first-mover advantage. However, for those relying on legacy entry models, delays and friction are increasingly likely.

European technology companies should no longer view Vietnam as a low-cost expansion destination. It is now a market that is sensitive to compliance issues and requires a strategic approach, as well as board-level attention and long-term positioning.

The direction is clear: In 2026, Vietnam will reward preparation, credibility, and strategic alignment.