Sector Playbook: Where to Deploy Capital in 2025–2027

1. Advanced Manufacturing: Moving Up the Value Chain

2025 Context:
Vietnam’s manufacturing sector continues to attract the majority of FDI, accounting for ~60% of total registered capital in 2024–2025. However, the sector’s composition is evolving rapidly — from low-cost assembly to high-value, technology-integrated production. Electronics, semiconductors, and precision engineering now make up the fastest-growing subsectors, with northern clusters (Bac Ninh, Hai Phong, Thai Nguyen) emerging as specialized ecosystems.

Key Drivers:

• Global supply chain diversification post-China and “China+1” strategies.

• Infrastructure readiness — deep-sea ports, expressways, and special economic zones.

• Government incentives for semiconductor packaging and testing, aerospace components, and EV supply chains.

Investor Playbook:

• Target industrial parks offering integrated utilities, logistics, and power supply to reduce operational risk.

• Engage in joint ventures with domestic firms possessing established supplier networks.

• Factor in electricity reliability and green power certification — many export buyers now require traceable renewable inputs.

2. Renewable Energy & Storage: The New Frontier

Context:
Following the suspension of feed-in tariffs, Vietnam’s renewable energy market is transitioning to a more competitive, market-based model. The National Power Development Plan VIII (PDP8) envisions renewable capacity rising to 47% of total installed power by 2030, requiring USD 120 billion in new investment.

Subsectors of interest:

• Wind & solar hybrid farms (especially offshore wind in Binh Thuan, Ninh Thuan).

• Battery and energy storage systems (BESS) to stabilize grid operations.

• Green hydrogen pilot projects in coastal provinces.

Investment Models:
Given current tariff uncertainties, blended finance structures are increasingly relevant — combining private equity with concessional or development finance to achieve IRRs between 10–14% while maintaining ESG compliance. Investors should consider:

• Partnering with DFIs (e.g., ADB, IFC) for concessional tranches.

• Structuring offtake-linked contracts with industrial parks and export clusters.

• Using carbon credit revenues to improve project returns.

Opportunity:
Renewables are transitioning from policy-driven to demand-driven markets. Large manufacturing exporters are under pressure to decarbonize their operations, creating a secondary market for corporate PPAs (Power Purchase Agreements) with reliable renewable producers.

3. Logistics, Cold Chain & Industrial Infrastructure

Context:
Vietnam’s merchandise exports surpassed USD 370 billion in 2024, yet logistics costs remain among the highest in ASEAN — averaging 16–18% of GDP. The government’s National Logistics Strategy 2035 targets reducing this to 12%. That shift will drive heavy investment in multi-modal logistics, cold chain systems, and smart warehousing.

High-Impact Nodes:

• Hai Phong – Quang Ninh Corridor (Northern gateway to China).

• Ba Ria–Vung Tau (southern seaport and logistics hub).

• Da Nang FTZ (emerging central transshipment and e-commerce logistics zone).

Investor Priorities:

• Focus on industrial clusters with integrated port and customs clearance to improve turnaround time.

• Develop build-to-suit warehousing models for FMCG, pharmaceuticals, and fresh produce sectors — currently underserved.

• Consider infrastructure REITs or logistics funds to pool capital efficiently.

Strategic Tip:
Vietnam’s new FTZ model allows 100% foreign ownership in logistics and warehousing, coupled with accelerated customs clearance — a decisive edge for first movers who invest before competition saturates the hubs.

4. Fintech, Digital Assets & Financial Infrastructure

Context:
As Vietnam pilots International Financial Centers (HCMC and Da Nang), financial liberalization and sandbox environments will accelerate innovation in fintech, digital payments, and tokenized assets. The State Bank of Vietnam’s 2025 Fintech Regulatory Sandbox is expected to open applications for pilot licensing in:

• Cross-border remittance.

• Blockchain-based payment settlement.

• Digital asset custody and tokenization services.

Investor Outlook:

• Fintech adoption in Vietnam is projected to grow at 17% CAGR, reaching USD 25 billion transaction volume by 2027.

• The key driver: 70% of adults now use mobile banking or e-wallets.

Investment Strategies:

• Partner with licensed local e-wallet operators or banks entering the digital asset custody space.

• Target infrastructure plays — data centers, API gateways, cybersecurity firms that support the fintech ecosystem.

• For global funds, monitor the IFC sandbox to test cross-border fund management and crypto-asset offerings under controlled regimes.

5. Sustainable Real Estate & IFC Adjacencies

Context:
The rise of Vietnam’s financial and innovation centers will trigger a spatial transformation. Around 4 million m² of new Grade-A office and commercial space is expected across HCMC, Da Nang, and Hanoi between 2025–2028, with a shift toward green-certified, smart buildings.

The focus is moving from speculative builds to “ecosystem assets” — mixed-use developments aligned with IFCs, universities, and tech parks.

Investor Focus Areas:

• IFC adjacency zones (District 1–2 in HCMC; central Da Nang).

• Green building and LEED-certified projects eligible for green finance.

• Student and talent housing, as financial and tech clusters expand.

Financial Tip:
Pair traditional real estate returns (6–9% IRR) with carbon financing or green bond certification, which can improve yield spreads and attract institutional ESG capital.

6. Human Capital & Professional Services

Context:
Vietnam’s biggest bottleneck is no longer capital — it’s qualified human capital. The IFC Action Plan includes long-term visa incentives and strategic partnerships between local universities and international finance schools. The Ministry of Labour estimates a shortfall of 250,000 mid- to high-skill professionals in finance, IT, and renewable energy sectors by 2030.

Investment Angle:
Private education, upskilling platforms, and specialized HR consultancies are emerging as profitable adjuncts to primary sectors. VCAP Partners projects 15–18% annualized ROI in skill development and workforce leasing services, particularly those serving industrial and financial clusters.

7. Putting It Together: Investment Structuring and Risk Management

Execution Priorities for 2025–2027:

1. Prioritize bankable projects with offtake agreements or anchor clients.

2. Combine equity + concessional finance for energy and infrastructure deals.

3. Use local SPVs (Special Purpose Vehicles) to navigate regulatory transitions smoothly.

4. Align project design with ESG disclosure standards (IFRS S1/S2) for access to green capital pools.

5. Build long-term partnerships — Vietnam’s IFC model favors investors with strategic presence, not short-term capital.

Regulatory Note:
Monitor implementing decrees of Resolution 222 and Decision 114, which will determine eligibility for tax holidays, profit repatriation mechanisms, and access to the financial sandbox.

Conclusion

Vietnam’s investment story is shifting from low-cost production to high-value, sustainable, and technologically integrated growth. For investors looking at the 2025–2027 horizon, the winners will be those who combine financial agility, policy fluency, and on-the-ground partnerships.

Sectors like advanced manufacturing, renewables, fintech, and sustainable real estate offer immediate opportunities — but success will depend on structured execution, credible local alliances, and alignment with Vietnam’s emerging IFC framework.

VCAP Partners stands ready to assist institutional and strategic investors in identifying actionable projects, structuring blended-finance instruments, and connecting with key local counterparts in this rapidly evolving investment landscape.