Vietnam: A Rising Manufacturing Hub in Asia in 2026

Vietnam is among the top three most promising manufacturing hubs in Asia, according to the Asia Manufacturing Index 2026 by Dezan Shira & Associates. The country stands out for its strong economic potential, improved tax policies, extensive network of free trade agreements, and significant infrastructure investment. Together, these strengths position Vietnam as an attractive launchpad for high-value manufacturing companies.

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Asia continued to record the strongest manufacturing growth globally in 2026. According to the Asia Manufacturing Index 2026 (AMI 2026) report by Dezan Shira & Associates, Vietnam is among the top three potential manufacturing hubs in the region, ranked across 11 countries in six dimensions: economy, political risk, business environment, international trade, tax policy, infrastructure, and workforce innovation.

In this article, we explore four notable aspects of Vietnam, including its economy, tax policies, international trade, and infrastructure, to highlight the country’s full potential as one of Asia’s emerging manufacturing hubs.

See also: Vietnam Manufacturing Tracker in 2025

Economic growth leads the way

Vietnam has advanced in economic potential, rising two positions from last year. In 2025, Vietnam’s GDP rose 8.02 percent, mainly due to a 9.97 percent increase in the processing industry. GDP per capita reached US$5,026, up 1.4 times from 2020, elevating Vietnam to upper-middle income status.

Vietnam is widely recognized as a high-growth potential economy. According to the 2026 Vietnam Economic Outlook report by UOB, the GDP growth forecast for 2026 was revised from the previous 7 percent to 7.5 percent. UOB attributes these adjustments to robust export performance and ongoing foreign direct investment (FDI), which continue to drive economic growth despite global political uncertainties and US tariffs.

Tax policy and legislative reforms drive investment

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Facilitating seamless market entry and global expansion

Vietnam achieved a major leap in tax policy, rising from fifth place last year to second this year.

The year 2025 marks an important milestone not only in legal development but also in administrative management. On July 1, 2025, the country removed the district from the government system and adopted a two-tier government structure (province–commune) to simplify administrative procedures.

The most effective and proactive legislative efforts were the 10th session of the 15th National Assembly, held from October to December. This session passed a record 51 laws and 39 resolutions, including the Value Added Tax Law, the Tax Administration Law, the Investment Law, and the Personal Income Tax Law. These reforms are expected to help businesses in Vietnam navigate ongoing uncertainties while attracting more new investment in the coming year, particularly in high-value industries.

Broad FTA network strengthens international trade

Vietnam’s international trade also strengthened significantly, climbing from fifth to third place. In 2025, total trade value reached US$930.05 billion, marking an impressive 18.2 percent y-o-y growth. High-value products are listed among the top export and import products, with trade value exceeding US$10 billion in 2025.

A free trade agreement is the most powerful tool to attract foreign investment into Vietnam. To date, Vietnam has signed 17 FTAs, which help businesses access the global market more easily, gain better preferential duty treatment, and create more opportunities for foreign investors. According to Jetro, Vietnam ranks among the top five countries where Japanese businesses achieve FTA utilization rates exceeding 50 percent.

FTAs have also been highly effective in facilitating bilateral trade. Five years after the EU–Vietnam Free Trade Agreement (EVFTA) entered into force, bilateral trade reached US$300 billion, positioning Vietnam as the EU’s top trading partner in ASEAN and its 16th-largest partner globally. This highlights Vietnam’s expanding potential as a major player in international trade.

Infrastructure investments support manufacturing growth

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Vietnam also placed strong emphasis on infrastructure development. In 2025, the country launched a record 564 projects totaling VND 5.14 trillion (US$195.7 million), with the majority funded by the private sector.

Key projects include nearly 3,200 km of expressways, the commencement of Long Thanh Airport, the expansion of Noi Bai and Tan Son Nhat airports, and major energy projects such as the Thai Binh 2 Thermal Power Plant and the Nhon Trach 3 and 4 LNG plants. Port capacities are also being enhanced at Lach Huyen and Cai Mep – Thi Vai.

These investments are expected to improve domestic and international connectivity, enhance logistics capabilities, and lay a strong foundation for sustainable export growth in the coming years.

Conclusion

Vietnam is well-positioned to become one of Asia’s leading manufacturing hubs, as evidenced by strong economic growth, improved tax and business policies, an expanding network of international trade agreements, and sustained infrastructure investment.

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