Institutional reform key to attracting strategic foreign investors: expert

From attracting factories to building innovation ecosystems

Assoc. Prof. Dr. Mac Quoc Anh, vice chairman of the Hanoi Small and Medium Enterprises Association (HanoiSME), in a recent interview with VOV, pointed out Resolution No. 10 reflects a strategic transition from opening the door to capital to proactively shaping development priorities and selecting investors that best match Vietnam’s long-term goals.

Rather than measuring success by the number of foreign-invested projects alone, Vietnam should focus on attracting multinational corporations to establish research and development (R&D) centres, design facilities, data centres and regional headquarters, he argued.

“A factory may create jobs and exports, but an ecosystem generates technology, local suppliers, skilled workers, management expertise and sustainable added value,” Anh said.

To achieve this, Vietnam needs to improve institutional quality and policy predictability, develop a highly skilled workforce and strengthen domestic supporting industries so that Vietnamese enterprises can participate more deeply in global supply chains instead of remaining concentrated in labour-intensive segments.

Prioritising quality over quantity

Anh held Resolution No. 10 no longer advocates attracting foreign direct investment (FDI) indiscriminately but instead prioritises projects that contribute to technological upgrading and sustainable development.

Priority sectors include semiconductors, artificial intelligence, big data, cloud computing, biotechnology, advanced materials, green industries, renewable energy, modern logistics and high-value financial and commercial services.

He also stressed the importance of building closer links among government agencies, foreign investors, domestic enterprises, universities, research institutes and business associations.

Under such a model, the Government would focus on creating a transparent regulatory environment and modern infrastructure, while foreign investors would expand local sourcing and technology transfer. Domestic enterprises, meanwhile, would improve governance, digital capabilities and environmental, social and governance (ESG) standards, supported by universities supplying industry-relevant talent.

“When these elements work together, Vietnam will no longer simply be a manufacturing base but a place where innovation, technology and high-value activities are created,” he said.

Institutional reform remains the decisive factor

According to Anh, the ultimate success of Resolution No. 10 will depend not on the policy itself but on its implementation. He argued that institutional reform must precede investment promotion, as next-generation FDI is highly sensitive to the quality of governance.

Strategic investors, he said, seek transparent and predictable regulations, effective intellectual property protection, streamlined administrative procedures, low compliance costs, reliable dispute settlement mechanisms and stable policies.

“If institutions remain fragmented or inconsistent, generous incentives alone will not be enough to retain high-quality investors,” he noted.

Anh also called for stronger national-level coordination in investment promotion rather than allowing localities to compete independently by offering excessive incentives or lowering environmental and technological standards.

Instead, foreign investment should be aligned with national and regional planning, industrial clusters, logistics networks, energy infrastructure and workforce development.

Domestic firms must grow alongside FDI

Anh stressed that Vietnamese enterprises must strengthen their own competitiveness if the country hopes to maximise the benefits of foreign investment.

Without improvements in productivity, corporate governance, digital transformation and compliance with international technical and ESG standards, linkages between foreign-invested companies and domestic suppliers will remain limited.

He proposed establishing a national supplier development programme to help Vietnamese firms upgrade technology, improve management, obtain international certifications and gain direct access to procurement networks operated by multinational corporations.

At the same time, Vietnam should continue upgrading power supply, green energy, digital infrastructure, data centres, logistics, ports, airports, expressways and eco-industrial parks to meet the needs of high-value investment.

Anh added that efforts to upgrade Vietnam's stock market, improve corporate transparency, strengthen investor protection and develop international financial centres would further enhance the country's attractiveness to long-term capital.

Ultimately, he pointed out, investor confidence depends not on policy announcements but on practical experience.

“Investors may be interested in policy messages, but their decisions are based on reality - whether procedures are efficient, infrastructure is reliable, skilled workers are available, disputes are resolved fairly and policies remain consistent,” Anh said.

He called on ministries and localities to translate Resolution No. 10 into measurable action plans with clear accountability and regular dialogue with the business community.

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