Why Invest in Vietnam in 2025

Vietnam’s Emerging Role in AI Development and Technological Innovation

Vietnam is rapidly positioning itself as an emerging hub for artificial intelligence (AI) and technological development in Southeast Asia. While nations like China, India, and Singapore dominate headlines in tech, Vietnam’s quiet but strategic progress often flies under the radar.

Talent Pipeline and Workforce Development

Vietnam boasts a young, tech-savvy population, with 70% under the age of 35. The government has actively supported the development of STEM education through partnerships with international universities and corporations. For instance:

In 2023, Vietnam ranked 6th globally in HackerRank’s AI developer skills index, surpassing countries with larger tech ecosystems.
Universities such as Ho Chi Minh City University of Technology have partnered with leading tech firms to produce AI-specialized graduates.

Growing AI Ecosystem

Vietnam’s startups are actively developing AI solutions tailored to its domestic market. Companies like FPT AI and VinAI Research are innovating in fields like natural language processing (NLP), autonomous vehicles, and healthcare AI.

Notably:

VinAI Research, part of Vingroup, has been recognized as one of the top 20 AI research labs globally, and recently acquired by NVIDIA
Vietnam is leveraging its linguistic diversity—there are over 50 ethnic languages spoken in Vietnam—to build NLP systems that address regional challenges, giving it an edge in Southeast Asian markets.

To support the ecosystem there is Vinnovators, a company specializing in outsourcing AI and tech services for global clients. Vinnovators offers solutions in AI development, data analytics, and software engineering, positioning Vietnam as an outsourcing alternative to traditional hubs like India. By tapping into Vietnam's highly skilled yet cost-effective workforce, Vinnovators is helping foreign companies bring their technological visions to life.

For more information on their services, you can visit Vinnovator’s Official Website.

Strategic Geopolitical Positioning: A Balancing Act Between Superpowers

Vietnam's foreign policy of neutrality is one of its most underappreciated strengths for investors. It maintains pragmatic relationships with global superpowers—China, the United States, and the European Union—making it a politically stable and economically advantageous location.

The U.S.-Vietnam Partnership

In 2023, the U.S. upgraded Vietnam to a Comprehensive Strategic Partnership, signaling stronger collaboration in technology, defense, and manufacturing.
Vietnam is the U.S.’s 10th-largest trading partner, with bilateral trade reaching over $100 billion annually.
The U.S. is heavily incentivizing supply chain diversification from China, making Vietnam a prime beneficiary.

Balancing China’s Influence

While China is Vietnam's largest trading partner, the country has made deliberate efforts to diversify its trade relationships. Vietnam benefits from being part of China’s supply chain while maintaining sovereignty in its economic policies.

Vietnam’s exports to the U.S. have surged by 30% since 2020 due to "China Plus One" strategies adopted by multinational corporations.

Membership in Multilateral Trade Agreements

Vietnam is a member of key trade pacts such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). These agreements allow it to access a combined market of over 2.2 billion consumers, positioning it as a trade-friendly, globally integrated economy.

Vietnam’s ability to act as a neutral yet influential player makes it uniquely attractive for long-term investors looking to navigate the complexities of geopolitics while minimizing risk.

Manufacturing Reinvention: Beyond the Factory Floor

Vietnam’s rise as a manufacturing powerhouse is well-documented, but the nuances of its manufacturing evolution offer deeper insights into why it’s a strong investment bet.

From Low-Cost Labor to High-Value Manufacturing

Vietnam is the world’s 2nd-largest exporter of smartphones, with Samsung alone accounting for nearly 20% of its exports.
Vietnam is shifting its focus from low-cost, labor-intensive goods to higher-value products such as electronics, semiconductors, and medical devices.
In 2024, Intel announced a $1.5 billion expansion of its chip assembly and testing plant in Vietnam, reinforcing its importance in the semiconductor supply chain.

Green Manufacturing and Sustainability

Vietnam’s commitment to carbon neutrality by 2050 is transforming its industrial landscape. The government is incentivizing green investments, such as renewable energy projects and environmentally sustainable manufacturing processes. For example:

Vietnam is a global leader in solar power installation, ranking 7th in solar capacity worldwide.
Factories are integrating renewable energy solutions, making products more attractive to eco-conscious global brands.

The transition toward high-value, sustainable manufacturing signifies that Vietnam is not just competing on cost but is also aligning with global trends in technology and environmental responsibility.

The Underestimated Power of a Domestic Consumer Market

Vietnam’s burgeoning middle class and domestic consumer market often go overlooked by foreign investors who focus primarily on export-oriented growth.

Rapid Urbanization and Rising Incomes

Vietnam’s urban population is projected to grow to 50% by 2035, up from 37% in 2020.
Average income levels have tripled since 2002, creating a sizeable consumer base with disposable income.

Digital Economy and E-commerce Boom

Vietnam’s internet penetration rate exceeds 75%, and the digital economy is growing at an annual rate of 20%, projected to reach $57 billion by 2025.

Companies like Tiki and Shopee Vietnam are thriving, reflecting a robust appetite for e-commerce.
Cashless payment adoption has surged, with mobile wallet penetration increasing by 30% year-on-year.

Growing Demand for Financial Services

With rising incomes, Vietnam is witnessing a growing demand for financial services, including wealth management, insurance, and fintech solutions. The expanding middle and affluent classes are seeking better ways to manage their wealth, creating opportunities for companies that cater to personalized financial planning.

A notable example is 1Long, a financial services provider specializing in wealth management and investment advisory in Vietnam. 1Long leverages technology to deliver tailored solutions for individuals and businesses, addressing the unique needs of an emerging market. Their emphasis on transparency and digital-first services has helped them stand out in a competitive space.

Learn more about 1Long’s offerings on their Official Website.

Cultural Shifts Toward Premium Products

As Vietnam’s middle class expands, consumers are moving toward premium and imported goods. This shift creates opportunities for investments in sectors like luxury retail, health and wellness, and high-end food and beverage products.

The untapped potential of Vietnam’s domestic market complements its export-driven growth, making it a holistic investment destination.

Conclusion

Vietnam offers a unique mix of technological innovation, strategic geopolitical positioning, and a dynamic economy. Its emergence as an AI and tech hub, coupled with a balanced approach to international relations, positions it as a resilient investment opportunity. Moreover, Vietnam’s evolution in manufacturing and the rising power of its domestic consumer market provide diverse pathways for growth.

Investing in Vietnam today is not just about capitalizing on its current trajectory but also about aligning with a nation that is actively shaping its future. With its blend of young talent, strategic foresight, and global integration, Vietnam is primed to become one of the most compelling investment destinations of the decade.