Foreign investors urge Vietnam to accelerate reforms to further boost investment appeal

Vietnam recorded more than US$27 billion in realized foreign direct investment (FDI) in 2025, the highest level in five years, reflecting sustained investor confidence and continued expansion plans.

Speaking with Tuoi Tre (Youth) newspaper, several FDI investors shared their assessments of the business climate and expectations for further policy improvements.

Pegatron calls for more flexible labor policies, sustained incentives

Huang Jen Chieh, general director of Pegatron Vietnam Co., Ltd., a subsidiary of Taiwanese electronics manufacturer Pegatron Corporation, said he hopes the government will introduce more flexible labor-related legal reforms, particularly in the electronics sector, including more diversified workforce arrangements.

He also called for continued FDI incentive policies to support talent development, technological innovation, and productivity while helping ease shortages of highly skilled workers.

Such improvements, he said, would support long-term expansion and strengthen cooperation between foreign investors and domestic enterprises.

Pegatron Vietnam has invested about US$800 million in its factory in Hai Phong City, where the company is headquartered, and is building additional workshops and employee dormitories under the second phase of its expansion, while continuing to purchase machinery and equipment for new production lines.

The company is also training local workers and increasing Vietnamese participation in research units.

Huang said Vietnam compares favorably with India, Malaysia, and Indonesia as an investment destination, though incentive policies remain less competitive than those of China.

He emphasized that investment decisions depend not only on incentives but also on long-term development potential, human resource quality, and political and social stability.

Vietnam continues to attract foreign investors thanks to its improving workforce quality, hardworking labor force, stable political system, and strong international ties — including relations with the U.S. — which give companies like Pegatron confidence to invest, he said.

He added that cooperation between Pegatron Vietnam and local enterprises is expanding, with the share of domestic partners rising from about five percent to 10 percent, and he hopes this will reach 50 percent within three years.

If local companies further strengthen their capabilities, Pegatron Vietnam would be ready to source entirely from domestic suppliers, particularly in packaging, equipment provision, and technical services.

"I hope Pegatron and other foreign companies investing in Vietnam will help local businesses grow over the next five to ten years, contributing to Vietnam's economic development," Huang said.

TOTO highlights legal stability, cost pressures

Similar calls for continued policy reform were echoed by Asada Kyoji, general director of Hanoi-based TOTO Vietnam Co., Ltd., a subsidiary of TOTO Ltd., Japan's multinational sanitary ware manufacturer.

He said investment licensing procedures in Vietnam are convenient and authorities provide strong support, but the legal framework is evolving rapidly, requiring businesses to constantly update and ensure compliance.

Kyoji added that the country would become an even more attractive investment destination if it continues to accelerate policy reform while maintaining long-term policy stability.

He cautioned that slow progress in reform could affect both the broader economy and business operations.

"Measured against GDP growth, inflation, and costs such as raw materials, labor, land leases, and factory rentals, Vietnam remains attractive to investors like us," Kyoji said.

Over the long term, however, costs are expected to continue rising, requiring companies to improve productivity, output, and operational efficiency, an ongoing challenge that must be reviewed and adjusted each year, he added.

Taken together, the investors' views reflect strong confidence in Vietnam's growth prospects while underscoring a shared expectation that continued reforms in labor regulations, institutional frameworks, and policy stability will further strengthen the country's appeal to foreign investors.