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Finance & Economics

Briefing

1. Introduction2. Macroeconomy3. Currency & Banking4. Trade & Exposure5. Domestic Market6. Investment Climate
SourcesAbout
Aerial view of an industrial park in Thu Dau Mot, Binh Duong, Vietnam

Section 6 of 6

Investment Climate, Financial Risk and Strategic Implications

Singapore is a GO for headquarters, treasury, R&D and high-value manufacturing. Ho Chi Minh City is a CONDITIONAL GO for export manufacturing. Together they work best as hub and spoke.

Next: Sources

Where the money is going

Singapore draws most of Southeast Asia's investment. Ho Chi Minh City's inflows have already beaten last year's total.

Singapore

US$151bnforeign investment, 2025

Up from US$136bn, about 62% of Southeast Asia’s total.

  • Much of it passes through: headquarters and treasury capital, not only new plants.
  • New commitments: about US$11.1bn in 2025, 85% manufacturing, creating 15,700 jobs, two-thirds paying over about US$3,900 a month.

Vietnam

US$10.1bnHo Chi Minh City, January to August 2026

Already above 2025’s full-year US$8.4bn.

  • Nationally, money actually spent by foreign investors has risen every year, to US$27.6bn in 2025.
  • Buying in: US$2.7bn came through stakes in local firms in seven months, a common entry route.
  • Industrial parks are already 21% past their 2026 target.

Where the opportunities are

Singapore pays for AI and research. Ho Chi Minh City offers land, a port and cheap tax in its new financial centre.

Server racks in a data centre

Singapore

  • Sectors: AI chips and servers, biopharma, specialty chemicals, aircraft maintenance and tech headquarters.
  • Tailwind: AI spending lifted growth to 6.1% in the first half of 2026.
  • Budget 2026: a 400% tax deduction on AI spending, about US$29bn for research to 2030, and the Global Trader Programme extended to 2031.
Workers welding metal structures in an industrial workshop

Vietnam

  • Sectors: data centres, biomedical technology and smart electronics.
  • Scale: since the merger the city has 66 industrial zones, the Cai Mep–Thi Vai deep-water port and over a quarter of national industrial output.
  • Financial centre: 10% corporate tax for 30 years, but it must show real deals by November. Promising, unproven.

What could go wrong

Singapore's risks are external and cost-driven. Ho Chi Minh City's are power, delivery and prices.

Singapore

  • US tariff: 12.5% on about a third of exports to the US. Pharmaceuticals, semiconductors and aerospace are exempt for now, so the exemption list is the variable to watch.
  • AI cycle: growth leans on one investment boom.
  • Costs: core inflation fell from 4.2% in 2023 to 0.7% in 2025 but is rising again, and 71.8% of firms name rising costs as their top concern.

Vietnam

  • Power: many city substations already run at full capacity, and Vietnam expects a 4,200 MW shortfall in 2027.
  • Delivery: only a quarter of 2026’s public investment budget was spent by late June. Treat official targets as ceilings.
  • Prices and currency: inflation is at the 4.5% target and the dong is expected to weaken another 2.5 to 3%. Write escalation clauses into contracts.

The rules for foreign investors

Singapore is open but no longer low-tax. Vietnam is loosening, step by step.

Singapore

  • Open: no exchange controls, and capital and profits move freely.
  • Minimum tax: large multinationals pay at least 15% from January 2025, so Singapore now competes with grants and credits rather than low rates.

Vietnam

  • Simpler approvals: the amended Investment Law took effect on 1 March 2026, though its transitional rules are still settling.
  • Capital controls still apply outside the financial centre.
  • Rating: BB+ with S&P and Fitch; Moody’s outlook positive since May 2026.
  • Markets: FTSE Russell’s emerging-market upgrade took effect on 21 September 2026.

Before you commit

Practical steps, in each country and across both.

Office towers of Singapore's Marina Bay and Downtown Core reflected in the bay in daylight

Singapore only

  • Talk to EDB early. Incentives are awarded case by case.
  • Budget for a rising currency. Build a firmer Singapore dollar into cost forecasts.
  • Check the tariff list. Match each product against the US exemptions.
Cargo ships in the Singapore Strait

Both countries

  • Hub and spoke. Singapore for holding, treasury and IP; Ho Chi Minh City for production.
  • Already the pattern. Singapore is the largest source of new investment in Vietnam, at 35.1%.
Aerial view of an industrial park in Thu Dau Mot, Binh Duong, Vietnam

Vietnam only

  • Confirm site power. Check supply before signing a lease.
  • Match currencies. Pair dollar revenue with dollar costs as the dong weakens.
  • Keep origin records. Document every input for US tariff reviews.

The verdict

Office towers at Raffles Place, Singapore's financial district

Singapore: GO

For regional headquarters, treasury, IP, R&D and high-value manufacturing. Not for labour-intensive production.

Plan for changes to the US tariff exemption list, reliance on the AI cycle and high operating costs.
Container barges on the Saigon River with the Ho Chi Minh City skyline at dusk

Ho Chi Minh City: CONDITIONAL GO

For export manufacturing in the industrial belt and services in the city centre.

Conditional on reliable power, delivery against targets and managing currency and cost pressure.