Vietnam and Germany will officially celebrate the 50th anniversary of diplomatic relations in September (1975-2025), representing a significant milestone that reflects the remarkable progress achieved over the past five decades. This historic occasion not only underscores the strength and depth of the bilateral partnership but also raises expectations for even greater collaboration in the years to come.

In this context, Germany’s direct investment in Vietnam is expected to maintain its positive growth trajectory. This trend is anticipated to continue despite ongoing global economic and trade uncertainties, reflecting the confidence of German businesses in Vietnam’s stable investment environment and long-term economic potential.

Growing presence

German businesses operating in Vietnam continue to view the country favorably. The recently-released “AHK World Business Outlook - Spring 2025 ” from the Delegation of German Industry and Commerce in Vietnam (AHK Vietnam), notes that despite persistent global disruptions, 54 per cent of German businesses in Vietnam anticipate improvements in their business situation over the year ahead.

Notably, 80 per cent of surveyed enterprises rated their current business conditions as either “good” or “satisfactory”, reflecting a relatively stable operating environment. This confidence is further evidenced by future plans, with 38 per cent of companies intending to increase their investments in 2025 while 43 per cent expect to expand their workforce. “These figures reinforce Vietnam’s dual role as both a manufacturing stronghold and a strategic alternative hub for German businesses repositioning in the Indo-Pacific region,” the report emphasized.

The trust of German businesses is not only reflected in the growing number of those choosing to operate in Vietnam but also in the increase in German investment in the country during the opening months of this year. According to figures from the Ministry of Finance (MoF), German investors launched nine new projects in Vietnam during the first four months, with total registered capital of $23.83 million, up 280.6 per cent compared to the same period last year. This remarkable growth marks a highly positive start to the year for German capital inflows.

As of the end of April, Germany had invested in 490 active projects across various cities and provinces in Vietnam, with cumulative registered capital of over $2.83 billion. These projects span a wide range of key sectors, including manufacturing, high technology, logistics, and renewable energy.

Among the more than 530 German enterprises currently operating in Vietnam, many leading corporations such as Siemens, Bosch, Thyssenkrupp, and Mercedes-Benz have been making a strong mark with their increasingly deep presence. These major players not only bring advanced technologies and global expertise but also fulfil a vital role in the process of industrial transformation and modernization across various sectors in Vietnam.

Moreover, German investment in Vietnam is no longer limited to traditional industries but is increasingly expanding into new fields such as green energy and environmentally-friendly production. One notable example of this positive shift is the establishment of a representative office in south-central Binh Dinh province [now part of the central highlands’ Gia Lai province] at the end of last year by the PNE Group, one of Germany’s leading renewable energy companies. It is currently completing legal procedures to implement its offshore wind power project in the province, with a projected total investment of up to $4.6 billion.

This project not only represents a significant leap in investment scale but also demonstrates the harmonious connection between Germany’s superior technological capabilities and Vietnam’s growing demand for a green energy transition. It is also a clear testament to the long-term commitment between the two countries on the journey towards green growth, a circular economy, and sustainable development.

Strategic synergy

In order to attract foreign investment, especially from German businesses, the Vietnamese Government has implemented a range of strong policies to create favorable conditions for investors. One of the key steps in this strategy is the signing of free trade agreements (FTAs) with many countries, among which the EU-Vietnam Free Trade Agreement (EUVFTA) has been instrumental in creating a stable and transparent legal environment for German companies investing in Vietnam.

H.E. Helga Margarete Barth, Ambassador of Germany to Vietnam, emphasized that the two countries hold tremendous potential to deepen and expand cooperation across a wide range of sectors in the near future, particularly as global supply chains are being restructured and the trend of investment relocation becomes increasingly evident.

Germany has long been recognized as a global leader in advanced technology, precision engineering, and the production of high-quality goods. Meanwhile, Vietnam is emerging as one of the fastest-growing economies in Southeast Asia, boasting key advantages such as a young, abundant, and highly-adaptable workforce, along with a rapidly-growing middle class. These attributes are fueling robust domestic consumption and attracting international investment.

Looking ahead, in addition to traditional areas of investment cooperation, Ambassador Barth also noted that German businesses are aiming to expand collaboration with Vietnam in fields such as cybersecurity and AI. This move aligns with the development trends of leading industrial nations and opens significant opportunities for Vietnam to access cutting-edge technologies, thereby enhancing its competitiveness and promoting a sustainable and effective digital transformation.

Beyond the technology sector, finance is seen as a highly promising area of cooperation between Vietnam and Germany, especially as Vietnam accelerates its plans to establish a comprehensive international financial center in Ho Chi Minh City and a regional financial hub in central Da Nang city. This strategic direction not only reflects Vietnam’s ambition to elevate its financial services industry to international standards but also opens up new opportunities for German financial institutions and enterprises to engage more deeply in the Vietnamese market.

At a meeting with Permanent Deputy Prime Minister Nguyen Hoa Binh in Germany earlier this year, many German companies and financial institutions expressed their interest and willingness to accompany Vietnam in developing a modern financial ecosystem. German businesses pledged to share practical lessons and advanced governance experience, support Vietnam in accessing international capital sources, and directly participate in training and improving the quality of the country’s financial human resources.

At the same time, German partners also hope to act as a bridge, introducing and inviting reputable companies and financial institutions from Germany and Europe to Vietnam, to jointly explore opportunities and participate in the development of financial center projects. This cooperation not only helps Vietnam accelerate the realization of its internationally-oriented financial centers but also establishes a solid foundation for a long-term, effective, and sustainable financial partnership between the two countries.