Vietnam Shifts Focus to High-Value Investment and M&A

For two decades, international investors asked one simple question about Vietnam: where to put the factory. At the Singapore edition of KPMG’s Vietnam’s Next Cycle briefing, the question had visibly changed to where to place technology, R&D, regional functions and capital. That shift, more than any single headline number, defines Vietnam’s next investment cycle.

Singapore is Vietnam’s second-largest foreign investor, with cumulative registered investment capital of nearly $97 billion across more than 4,500 projects. The city-state was chosen as the first stop for the briefing because it is already one of Vietnam’s largest investment partners and a key regional centre for capital, business headquarters and cross-border deal activity. In the first seven months of 2026, it was the largest source of newly registered FDI, committing approximately $7.5 billion. This figure represents 35.6 per cent of total newly registered capital in Vietnam during the period.

The relationship is also deepening structurally. In March 2025 the two countries raised ties to a Full Strategic Partnership. This represents Singapore’s first with an ASEAN member state, building on the Strategic Partnership of 2013 and the Green-Digital Economic Partnership of 2023. The partnership broadens cooperation into areas such as energy connectivity, the digital economy, innovation and capital markets, including initiatives to enhance stock market connectivity and depository receipt arrangements.

Vietnam’s economy reached approximately $514 billion in 2025 on GDP growth of 8.02 per cent. This was its second-strongest year since 2011 and among the strongest performances in Asia. Momentum has carried into 2026: registered FDI reached $34.65 billion in the first half, up 61 per cent on-year, while disbursed FDI rose 11.2 per cent to $13.03 billion. This is the highest first-half implementation in five years.

Manufacturing still anchors inflows, but the sector mix is broadening. Investors are increasingly targeting advanced manufacturing, semiconductors, AI, digital infrastructure, renewable energy, healthcare and financial services. Vietnam is moving from a low-cost production base to a more diversified investment ecosystem.

Vietnam is running one of the most ambitious reform programmes in its modern history. Politburo resolutions on private sector development, science and technology, foreign direct investment and institutional reform are reshaping the operating environment. The stated objective is to attract not just more capital but higher-quality capital.

Under Resolution 68, the private sector is to contribute 55-58 per cent of GDP by 2030, rising above 60 per cent by 2045. Resolution 10 sets registered FDI of $200-300 billion for 2026-2030, with $150-200 billion disbursed. Government growth ambitions run at approximately 10 per cent a year over the same period, supported by a large-scale infrastructure programme spanning high-speed rail, airports, ports, digital infrastructure and renewable energy.

For investors, the practical implication is that Vietnam’s policy direction is now legible enough to underwrite – while execution risk remains the live question. Yap Wee Kee, partner of Capital Markets Group and Private Enterprise at KPMG in Singapore, added that each member state in ASEAN brings its own distinct sectoral strength. “The opportunity for Singapore enterprises lies in understanding those strengths and aligning their regional strategy accordingly,” he said.

The terms of access are also changing. Capital is no longer allocated on growth prospects alone. Investors want demonstrable governance frameworks, reliable reporting and a credible value creation plan. For Vietnamese companies, governance has become a financing issue, not a compliance one.

Warrick Cleine MBE, chairman & CEO of KPMG in Vietnam & Cambodia, said, “The opportunity in Vietnam is no longer just a growth story. As the market matures, investors are becoming increasingly selective about where they place capital and whom they partner with. Factors such as governance, transparency, talent, operational readiness, and the ability to execute at scale are becoming as important as market potential.”

The strongest message from the Singapore discussion was the growing role of M&A. Discussion participants highlighted increasing interest in growth capital, strategic partnerships, succession transactions and platform acquisitions as Vietnamese enterprises scale and international investors seek established positions. Succession planning was identified as an important consideration for many founder-led businesses, while policy reforms are encouraging greater institutionalisation of the private sector.

The digital economy is also expanding rapidly. E-commerce platforms are growing quickly, creating a need for legal and compliance frameworks to support the sector. Recent reports highlight that a surge in online shopping has created significant challenges related to legal compliance in the sector.