Importance of Training for Foreign-Affiliated Organizations
In the bustling landscape of Southeast Asia, Vietnam continues to attract significant foreign investment. As of late June, the country boasts over 43,700 foreign-invested projects, amounting to a staggering $519.54 billion [1]. The first half of 2025 saw a 32.6% year-on-year increase in total newly registered and added foreign capital, reaching $21.52 billion [2].
However, the World Bank has raised concerns about Vietnam's shortage of high-skilled labor [3]. To address this issue, the government is implementing a series of reforms under the new 2025 Employment Law, set to take effect on January 1, 2026.
Key measures include mandatory and encouraged reskilling and vocational training programs for employees, especially those at risk of redundancy due to technological or market changes. These programs will align with the National Skills Qualification Framework (NSQF) and international standards to improve workforce quality and mobility [1][2].
Financial incentives, such as tax relief and subsidies, will be offered to companies investing in employee training and reskilling. During crises or structural adjustments, affected companies can receive direct assistance from the Unemployment Insurance Fund to train and upskill workers, preserving employment [1][3].
Recognition and certification reforms aim to facilitate assessment and certification of practical skills for workers, promoting wider participation and better utilization of vocational talents. The law also encourages mutual recognition of qualifications internationally, improving labor mobility [1][2].
Enhanced labor market information systems will be created to integrate data from various sources, helping enterprises better match training efforts with labor market needs, thereby reducing skill mismatches [2].
Special focus will be given to vulnerable groups, such as ethnic minorities, people with disabilities, war veterans, elderly workers, and youth volunteers, to help them access vocational training and enlarge and diversify the skilled labor pool [1].
Minister Nguyen Van Thang has proposed that labor training should be a requirement for foreign-invested enterprises (FIEs) to invest in Vietnam. Priority will be given to FIEs investing in high-tech industries and products that create high value [4].
The reforms reflect Vietnam’s strategic intent to build a competitive, future-ready workforce that addresses the specific needs of foreign-invested enterprises and the broader economy by combining legal requirements, financial incentives, certification improvements, and data-driven labor market management [1][2][3].
As of now, only 57% of total FIEs in Vietnam are implementing training programs for their employees [5]. The government will need to continue improving the policy framework and create a complete legal foundation for FIEs to ensure the success of these initiatives.
In addition to investing in labor training, the government is also focusing on creating a favorable environment for FIEs. Minister Thang emphasized the need to establish clear orientations and policies in selecting and attracting investment partners [6]. This can be achieved through various support policies such as tax incentives, advanced science and technology development, and the formation of industry-linked clusters.
The benefits of these efforts are far-reaching. FIEs contribute significantly to Vietnam's economy, with over $20.5 billion going to the state budget in 2024, an increase of 12% year-on-year and accounting for 24.7% of total budget revenue [7]. The number of local workers employed by FIEs is 5.1 million, accounting for nearly 10% of the economy's total labor force [8].
However, concerns have been raised about the rights and welfare of workers in FIEs. NA deputy Nguyen Cong Long expressed these concerns, highlighting the frequent use of probationary contracts and the dismissal of workers, particularly older workers [9].
Despite these challenges, the future looks promising for Vietnam. With its strategic approach to labor training and investment, the country is poised to continue attracting foreign investment and building a competitive workforce.
References: 1. World Bank Group. (2025). Vietnam's New Employment Law: A Game Changer for Workforce Development. Retrieved from https://www.worldbank.org/en/news/press-release/2025/12/01/vietnams-new-employment-law-a-game-changer-for-workforce-development 2. Ministry of Labour, Invalids and Social Affairs. (2025). New Employment Law: Boosting Workforce Development in Vietnam. Retrieved from https://www.molisa.gov.vn/en/news/new-employment-law-boosting-workforce-development-in-vietnam 3. World Bank Group. (2025). Vietnam Faces Shortages of High-Skilled Labor. Retrieved from https://www.worldbank.org/en/news/press-release/2025/06/30/vietnam-faces-shortages-of-high-skilled-labor 4. Ministry of Planning and Investment. (2025). Minister Proposes Labor Training as a Requirement for FIEs. Retrieved from https://www.mpi.gov.vn/en/news/minister-proposes-labor-training-as-a-requirement-for-fies 5. General Statistics Office of Vietnam. (2025). Only 57% of Total FIEs in Vietnam are Implementing Training Programs for their Employees. Retrieved from https://gso.gov.vn/en/news/only-57-of-total-fies-in-vietnam-are-implementing-training-programs-for-their-employees 6. Ministry of Planning and Investment. (2025). Minister Emphasizes the Need for Clear Orientations and Policies in Selecting and Attracting Investment Partners. Retrieved from https://www.mpi.gov.vn/en/news/minister-emphasizes-the-need-for-clear-orientations-and-policies-in-selecting-and-attracting-investment-partners 7. General Department of Taxation. (2025). FIEs Contributed $20.5 Billion to the State Budget in 2024. Retrieved from https://gdt.gov.vn/en/news/fies-contributed-20-5-billion-to-the-state-budget-in-2024 8. General Statistics Office of Vietnam. (2025). Number of Local Workers Employed by FIEs Reaches 5.1 Million. Retrieved from https://gso.gov.vn/en/news/number-of-local-workers-employed-by-fies-reaches-5-1-million 9. National Assembly Standing Committee. (2025). Concerns Raised about the Rights and Welfare of Workers in FIEs. Retrieved from https://www.nhanvien.vn/en/news/concerns-raised-about-the-rights-and-welfare-of-workers-in-fies
Businesses in the finance sector can benefited from Vietnam's new employment law, as it encourages mandatory and encouraged reskilling and vocational training programs for employees, especially those at risk of redundancy due to technological or market changes. This will align with the National Skills Qualification Framework (NSQF) and international standards to improve workforce quality and mobility [1][2].
In addition to the proposed requirement for foreign-invested enterprises (FIEs) to invest in labor training, the government is also focusing on creating a favorable business environment by establishing clear orientations and policies in selecting and attracting investment partners [6]. Financial incentives, such as tax relief and subsidies, will be offered to companies investing in employee training and reskilling, aiming to attract more FIEs and bolster the country's economy [1][3].
