Vietnam is an increasingly attractive investment destination for German businesses.

Vietnam is emerging as an increasingly attractive investment destination for German businesses, according to a report by the German Chamber of Industry and Commerce in Vietnam, reported by VNA correspondent in Berlin.

Export garment production line at Van Laack ASIA Co., Ltd., invested by the Federal Republic of Germany, in Ngoc Hoi Industrial Cluster ( Hanoi ). Photo: Danh Lam/VNA

Key factors driving this trend include a skilled workforce, an increasingly open investment environment, and a constantly expanding domestic market. The report provides an overview of the current investment situation as well as the development of German companies' production activities in Vietnam.

German investment activities accelerated after Vietnam joined the World Trade Organization (WTO) in 2007 and have been particularly vibrant since the Enterprise Law and Investment Law were amended in 2015. To date, there have been 576 German enterprises investing in Vietnam with a total adjusted capital of 3.7 billion USD, creating at least 50,000 jobs nationwide.

Although Germany is globally renowned for its high-quality industrial production, the reality in Vietnam is that the majority of investment capital is in the service sector, rather than manufacturing. Nearly 50% of investment projects in Vietnam are focused on the service sector, including consulting, business process outsourcing (outsourcing business processes to third parties) and information technology outsourcing (BPO/ITO), as well as logistics.

With bilateral trade turnover reaching 16-18 billion USD/year, many German enterprises have invested heavily in the fields of machinery, chemicals and food trade, which are industries that benefit from Vietnam's strategic location and developing infrastructure. BPO/ITO is becoming an increasingly attractive sector thanks to competitive labor costs and a high-quality engineering force. To date, there are 71 companies operating in this field, focusing on software development and data processing. Digi-Texx is the largest enterprise with more than 1,500 employees in Ho Chi Minh City. Bosch also currently has 4,000 employees in the technology and engineering sector.

Ho Chi Minh City is the number one destination, accounting for more than 50% of the total number of German enterprises in Vietnam, and up to 75% of sales/service activities are concentrated here. As the economic development engine of Vietnam, Ho Chi Minh City is considered a key market and the first gateway when German enterprises enter Vietnam. Hanoi is second, while Dong Nai and the surrounding area of ​​Ho Chi Minh City are the top choices for production activities. More than half of German investment enterprises come from the three key industrial states of Baden-Württemberg, North Rhine-Westphalia and Bavaria, all of which are major economic centers of Germany.

In the period of 2025 - 2026, investment relations between Germany and Vietnam are expected to continue to expand thanks to the European Union - Vietnam Free Trade Agreement (EVFTA). EVFTA has been creating a solid legal foundation to help German enterprises enjoy tariff preferences, while expanding export opportunities from Vietnam to Europe. In addition, Vietnam's goal of achieving zero net emissions by 2050 is also a great opportunity for German enterprises, which are at the forefront of renewable energy, high efficiency and environmental protection technology. The trend of shifting production from China to Southeast Asia, including Vietnam, is creating more advantages for German enterprises to expand production facilities and seek new sources of supply.

A young, dynamic workforce, along with policies that encourage cooperation in vocational education, make Vietnam a sustainable destination for long-term investment. The participation of German companies contributes to improving the quality of human resources through a dual training model and knowledge transfer. Germany is currently among the most active European investors in Vietnam, with a strong presence in both the service and manufacturing sectors. German companies bring not only capital but also technology, management experience and global standards, contributing to the modernization of the Vietnamese economy.

In the coming years, with the context of EVFTA, green growth strategy and the trend of shifting global supply chains, the potential for expanding German-Vietnamese investment cooperation is assessed as very positive.

Source: https://baotintuc.vn/kinh-te/viet-nam-la-diem-den-dau-tu-ngay-cang-hap-dan-cua-doanh-nghiep-duc-20251006175203308.htm