Shaping environment for foreign investment funds
The investment thesis for Vietnam has become significantly more sophisticated over the past few years Previously international investors were primarily attracted by Vietnam s strong economic growth favourable demographics competitive manufacturing base and its role in global supply chain diversification These factors remain important but they are no longer the sole drivers of decisions
Foreign investment funds are increasingly scrutinizing Vietnam through a comprehensive institutional framework beyond mere growth prospects. PwC’s 2025 Global Investor Survey revealed that investors now prioritize factors such as market liquidity, corporate governance standards, transparency, policy stability, and the availability of scalable opportunities.
Angela Yang, a partner at Corporate Finance PwC Vietnam, explained that as Vietnam's capital market matures, investors are looking to deploy and manage capital efficiently over the long term.
The survey, which covered 1,074 professionals across 26 countries and territories, indicated a global shift towards resilience, technology-driven transformation, credible governance, and transparency in financial and non-financial performance. Sectors attracting strong interest include advanced manufacturing, industrial and logistics infrastructure, technology-related businesses, digital economy, energy transition, healthcare demand, and long-term productivity improvements.
Foreign institutional investors have a multifaceted role beyond merely providing capital. They can enhance market liquidity and price discovery by increasing participation, broaden the investor base, and encourage higher governance, transparency, and disclosure expectations. Additionally, they can facilitate the development of sophisticated financial products such as exchange-traded funds, bond funds, infrastructure funds, and sustainable finance products, which support a balanced financial system and provide businesses with diverse long-term funding sources.
Vietnam has already made progress in improving foreign investor access, including easing the full pre-funding requirement and introducing a formal failed-trade mechanism. However, long-term investors will likely prioritize predictability, governance, and market infrastructure over access alone. Policymakers may focus on strengthening the overall investment environment by enhancing settlement infrastructure, custody arrangements, foreign exchange mechanisms, securities lending frameworks, and protection mechanisms.
In the next 3-5 years, prioritizing the modernization of market infrastructure, strengthening corporate governance and disclosure standards, expanding the supply of quality opportunities, and developing a stronger domestic institutional investor base are key objectives. A balanced capital market, supported by a healthy mix of domestic and international institutional participation, will contribute to Vietnam's attractiveness as a destination for long-term capital allocations.
Written by urgent.news from Vietnam Investment Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
