Importance of Training for Foreign-Based Groups
In 2024, Foreign-Invested Enterprises (FIEs) contributed a significant $20.5 billion to Vietnam's state budget, marking an 12% increase year-on-year and accounting for 24.7% of total budget revenue. With a workforce of 5.1 million, FIEs employ nearly 10% of the economy's total labour force, making them a crucial part of Vietnam's economic landscape.
The Vietnamese government is taking steps to support FIEs and their workforce. Labor training policies are focused on improving both the quality and quantity of the labor market. These policies include mandatory and incentivized vocational training, reskilling initiatives, and support programs aligned with national development goals.
Under the 2025 Employment Law, employers, including FIEs, are encouraged to provide continuous employee training and development programs. This law establishes vocational skills development as a state priority, with a National Skills Qualification Framework (NSQF) designed to standardize occupational skills and certification, aligning them with international benchmarks.
Government policies provide subsidies, tax relief, and priority access to employment funds for companies investing in employee training. Special focus is given to disadvantaged groups, veterans, elderly workers, and youth volunteers. These incentives aim to foster a resilient workforce and reduce unemployment risks associated with industrial automation and economic shifts.
Decree 205/2025/ND-CP on Industry and Skill Development specifically targets the shortage of highly skilled labor in supporting industries. It funds domestic and overseas training programs for outstanding talents, enabling FIEs to upgrade workforce capabilities for Industry 4.0 demands.
FIEs typically offer wages about 20% higher than local companies, reflecting their higher expectations on workforce skills and quality. The government’s upcoming labor market reforms prioritize vocational training and social insurance reforms alongside compliance measures, responding to the fact that only around 28% of workers currently have formal training.
However, concerns have been raised about the rights and welfare of workers in FIEs. NA deputy Nguyen Cong Long has expressed concerns about the lack of investment in training and the exploitation of the domestic labour force. Minister Thang has identified the lack of training programs for workers in 43% of FIEs as a matter requiring attention.
In response, Minister Thang has proposed that labor training should be a condition for FIEs to invest and do business in Vietnam. He emphasized the need to establish clear orientations and policies in selecting and attracting investment partners, prioritizing high-tech industries and those that create high value.
The government is to continue improving the policy framework and create a complete legal foundation for FIEs. The World Bank has released a report stating that Vietnam is facing serious shortages of high-skilled labor, with only 57% of total FIEs in the country implementing training programs for their employees.
In conclusion, Vietnam's labor training policies for FIEs emphasize mandatory and encouraged employer-led skill development, government incentives for training investment, alignment with international standards, and strategic funding to address skill shortages, particularly in technical sectors. These measures aim to boost workforce quality and quantity, facilitating Vietnam’s integration into global supply chains and advanced industrial development.
Vietnam is also to develop policies to support workers and clearly define strategic orientations and prioritized sectors for development. Encouraging links between FIEs and domestic enterprises is crucial to facilitate technology transfer, enhance domestic production capacity, and create a foundation for sustainable growth.
- To enhance the quality and quantity of the labor force, Vietnam's government is implementing education-and-self-development policies that focus on mandatory and incentivized vocational training, reskilling initiatives, and support programs for FIEs, aligned with national development goals.
- The Vietnamese government is proposing that finance for labor training should be a condition for Foreign-Invested Enterprises (FIEs) to invest and do business in Vietnam, as part of their strategy to develop a high-skilled workforce that can integrate Vietnam into global supply chains and advance industrial development.
