#Vietnam #FDI #VietnamEconomy #Foreign Investment #Supply Chain #Industry #Manufacturing #Human Resources #Economy #VietnamEconomy
If Vietnam is no longer a low-cost labor country but still attracts tens of billions of dollars in FDI capital each year, are we entering a take-off phase like Korea and China before or are we facing the risk of gradually losing our competitive advantage?
On June 19, 2026 at 22:00, the topic "Vietnam is no longer a destination for cheap labor" continues to create much debate among businesses, economic experts and the international investment community. For many years, Vietnam's image has been associated with abundant labor resources, low costs and the ability to produce large-scale export goods. However, the picture in 2026 has changed significantly.
In fact, foreign investment flows are continuing to increase strongly even though labor costs in Vietnam are no longer among the lowest in Asia. This raises important questions about the real motivation for global corporations to continue expanding investment in Vietnam.
Comparison Table of Manufacturing Labor Costs in Asia in 2026
Country Production worker income
Bangladesh 2,000,000- 3,900,000 VND/month
Pakistan 3,100,000 - 4,700,000 VND/month
India 3,900,000 - 6,500,000 VND/month
Indonesia 6,500,000 - 10,400,000 VND/month
Vietnam 7,800,000 - 13,000,000 VND/month
Thailand 11,700,000 - 18,200,000 VND/month
Malaysia 15,600,000 - 26,000,000 VND/month
Converted at the average exchange rate is about 26,000 VND/USD.
Looking at the table above, we can see that Vietnam has now surpassed Bangladesh, Pakistan and many regions in India in terms of labor costs. If a business's only goal is to find the cheapest labor, Vietnam is no longer the number one choice.
The actual cost paid by businesses is much higher than the salary on the contract
An engineer receiving a salary of 20,000,000 VND per month does not mean that a business only spends that amount of money.
Businesses also have to pay mandatory fees, including:
Contribution Rate
Social insurance 17.5%
Health insurance 3%
Unemployment insurance 1%
Union dues 2%
Total 23.5%
Real-life example
* Contract salary 20,000,000 VND
* Contribution cost is about 4,700,000 VND
* Total minimum cost is about 24,700,000 VND
Not included
* Performance bonus
* Shift meal support
* Shuttle bus
* Uniforms
* Training
* Other benefits
Many FDI enterprises report the actual total personnel costsThe actual salary can be 30% to 50% higher than the basic salary.
Why Samsung, LG, and Foxconn Continue to Expand in Vietnam
This is the most remarkable story.
If cheap labor is the deciding factor, large corporations can completely move to Bangladesh or Pakistan.
However, the reality is different.
Samsung continues to maintain a large-scale production ecosystem in Bac Ninh, Thai Nguyen and Ho Chi Minh City.
LG expands investment in Hai Phong.
Foxconn continuously increases capital in Bac Giang and Bac Ninh.
Luxshare, Goertek, Pegatron and a series of high-tech suppliers continue to move to Vietnam.
The reason lies in the new advantages.
Vietnam's New Competitive Weapons
Market of More Than 100 Million People
Vietnam is currently one of the largest consumer markets in Southeast Asia.
Not only producing for export, the business also sells directly to the rapidly growing middle class.
The Supply Chain Has Been Formed
The industrial ecosystem of Samsung, LG, Canon, Foxconn, Luxshare has attracted thousands of satellite businesses.
This is something Bangladesh or Pakistan have not been able to build in a short time.
Accelerated Infrastructure
The period 2021 - 2030 will record thousands of kilometers of new expressways.
Projects lincluding
* North-South Expressway
* Long Thanh Airport
* Lach Huyen Port
* Cai Mep - Thi Vai Port
is helping to significantly reduce logistics costs.
The World's Leading FTA System
Vietnam participates
* CPTPP
* EVFTA
* UKVFTA
* RCEP
This helps goods produced in Vietnam access many large markets with preferential tax rates.
The Quality of Labor is Changing
Every year Vietnam has more than 1 million new workers entering the market.
Hundreds of thousands of engineers, bachelors of technology, mechanics, and automation have been trained.
Many corporations now not only assemble but also set up R&D and product design centers in Vietnam.
Lessons From China, Korea and Taiwan
These three economies once relied on cheap labor.
Then
* Salary increased sharply
* Labor costs increase
* The advantage of cheap labor gradually decreases
But instead of weakening, they switched to competing with each other
* Technology
* Productivity
* Infrastructure
* Added value
* Creativity and innovation
This is also the path Vietnam is taking.
Competitive Model Conversion Table
Old phase New phase
Cheap labor Skilled labor
Simple processing High-tech production
Attract by cost Attract by ability
Low price exports High added value
Competitive salary Competitiveh productivity
Conclusion
By June 19, 2026, the perception that Vietnam attracts investment only thanks to cheap labor no longer reflects reality.
International investors are now choosing Vietnam thanks
* Stable political environment
* Market of more than 100 million people
* Extensive FTA system
* Modern infrastructure
* Complete industrial supply chain
* Strategic location in Asia
* Human resources are increasingly qualified
Vietnam is shifting from a competitive economy based on low costs to an economy competing based on real capabilities. This is not a loss of advantage, but a sign that the economy is moving to a higher level of development.
In the next 10 years, can Vietnam become the largest high-tech manufacturing center in Southeast Asia, or will it be surpassed by Indonesia and India in the race to attract global FDI? Please share your perspective.
#FDI #Vietnam #Foreign Investment #Samsung #LG #Foxconn #Vietnam's Economy #Industry #Supply Chain #ASEAN #VietnamEconomy #Manufacturing #Human Resources #Economic Development #Global Investment
