top of page
  • Writer's pictureBjörn Koslowski

UPDATE: Current Status of German Investments in Vietnam

Vietnam has recently developed into an attractive investment location for German companies. They are drawn in by the reasonable and high-quality labor, open investment environment and growing local market. Within this post we will 1) introduce the overall investment status and 2) take a look into German manufacturing operations in Vietnam.


The first German investments flowed into Vietnam shortly after the country opened its doors to foreigners. In 1992, Bültel (producing fashion for brands such as Camel Active) settled down in Binh Duong. In the same year Tatonka (an outdoor brand) opened a backpack production line in HCMC. German investments started to really gain steam when Vietnam ascended to the WTO (2007) and received another impetus with the 2015 amendment of the enterprise and investment law. Today, 380 companies from Germany have invested roughly 2.7 billion USD in Vietnam (this being an adjusted value; not simply FDI). They have created some 47,000 jobs.

No. of (new) German invest projects p.a. in Vietnam 1992 to 2019

Many may think of Germany as an industrial powerhouse excelling in high-quality and high-tech production. While this is certainly true, most investments from this country in Vietnam are actually from the service sector.

German investment projects in Vietnam by industry

1/3 of investment projects are general services industries (e.g. consulting), business process offshoring/outsourcing (short: BPO) and logistics. Because the bilateral trade of 10 billion USD p.a. involves a good number of physical exchange of machinery, chemicals and food there are also a lot of companies from these fields invested in Vietnam.

Regarding functions of their investments, most German companies focus on sales and aftermarket activities. For example, Zott is marketing its products (you might know "Monte" pudding) with over 750 staff in Vietnam. 69 companies are operating manufacturing operations here with Bosch being the biggest single investment (more beneath).

German investment projects in Vietnam by function

Business process offshoring/outsourcing (BPO) has lately become an increasingly interesting function for German investments. They are lured in because of the low labor costs combined with high HR quality. About 50 companies have been established in this field so far. They are mostly active in programming and post-processing (see graphic above). The biggest single employer in this industry is Digi-Texx with over 1,500 employees mostly located in HCMC.

German BPO providers by Vietnamese city (selection)

German investment projects by province/city in Vietnam

The most important investment destination by far remains HCMC. Over half of all German companies in Vietnam have been established here. When taking a look solely at sales/service functions, over 70% are located in HCMC. This makes sense because the greater HCMC area contributes over 40% of Vietnam´s GDP. It therefore has to be considered as the most important market and the first point of entry into the country. Hanoi comes in as a distant second while Binh Duong and Dong Nai are first and foremost attractive locations for manufacturing operations.

Origin of German investment projects in Vietnam by German state

While Germany has 16 states, over half of the invests in Vietnam come from companies headquartered in just three of them: Baden-Württemberg, Northrine-Westfalia and Bavaria. These are the most populous states of Germany and also its industrial centers. So, this result can be expected.

Germany is one of the most proliferate investors from Europe in Vietnam. Its companies contribute to the socio-economic development of their host country:

  • They are among the most popular employers and invest into the education of their staff e.g. through dual vocational programs or engagement with local universities.

  • German companies are applying global standards to Vietnam e.g. in operating most recent technologies, aiming for environmental sustainability and holding up highest standards of compliance.

  • Wherever possible, they are trying to work with local suppliers. In the process, the investors are transferring managerial and technological know-how into the Vietnamese economy.

Having said this, German investors are also very long-term oriented. Once invested, they tend to stay and therefore show big interest into the development of the local communities. Vietnam is deemed a very attractive investment location in our home country. Hence, we expect an increasing number of sustainable high-quality investments from Germany in Vietnam.

Germans in Vietnam at a glance


Currently, there are 69 manufacturing sites of German companies located in Vietnam.

  • As can be seen beneath, most of them are active in apparel. It might surprise some that this is an industrial field German companies concentrate on. After all, this is the country of car and machinery manufacturers. Albeit, Germany also has a rich tradition in textile manufacturing. For example, the greater Reutlingen region is well known for its many successful textile suppliers as well as OEMs such as Hugo Boss or Trigema. Both kinds of players, textile OEMs and suppliers, are active in Vietnam.

  • Furthermore, 15 chemical companies are invested in Vietnam. While many other industries mostly use Vietnam as an export manufacturing hub, these chemical enterprises typically supply local customers.

  • Because Vietnam until recently did not have local car OEMs, German companies did so far not develop a broad supplier base. However, with Schaeffler, Bosch and Mercedes-Benz the industry contributes some of the biggest German investments in Vietnam.

German manufacturing investments in Vietnam by industry

The largest German investments have been implemented by Bosch (automotive), Messer Gases (chemicals) and B.Braun (medical equipment). Bosch is employing a major manufacturing complex for pushbelts in Dong Nai while also operating an R&D center in HCMC. Messer is supplying gases to local customers such as Ho Phat from its main production hubs in Hai Duong (northern Vietnam) and Quang Ngai (central Vietnam). B.Braun manufactured medial equipment in its two factories in Hanoi. The products are sold in Vietnam as well as shipped to worldwide customers.

Biggest German investments in Vietnam by charter capital

Most German manufacturing operations are located in southern Vietnam concentrating on Binh Duong, Dong Nai and HCMC. The capital Hanoi and its "harbor city" Haiphong are the most important investment locations in the North. In the center, Quang Nam is an emerging investment location combining low land with low labor costs and boasting very good living conditions.

German manufacturing investments by region/province

Investments in northern Vietnam concentrate on the economic corridor between Hanoi and Haiphong. B.Braun and Messer are some of the oldest and biggest investments here. Latest addition has been ZF which is supplying Vinfast through its facilities in Haiphong. Tesa (Beiersdorf) also recently announced that they will build a new plant in Haiphong.

German manufacturing investments in northern Vietnam

Most existing German investments in central Vietnam may be found in the provinces of Binh Dinh and Phu Yen as well as the greater Da Nang region (including Da Nang, Quang Nam and Quang Ngai). Especially the Da Nang area combines relatively low land prices with favorable personnel costs. For these reasons four new investors within our projects decided to go there during recent projects.

German manufacturing investments in central Vietnam

*The smaller map above shows the provinces Binh Dinh and Phu Yen

The overwhelming majority of German manufacturing investments is clustered around 30 to 40 km of the business district of HCMC. The region is the traditional epicenter of foreign investments in Vietnam. It boasts some of the oldest (bültel, tatonka/mountech) as well as many of the biggest plants (e.g. Bosch, Schaeffler, Friwo) of German companies in Vietnam. It is also quite diverse with HCMC as the administrative and economic center of the region, Binh Duong and Dong Nai as established manufacturing hubs and Long An as an upcoming investment destination.

German manufacturing investments in southern Vietnam

The main driver for recent manufacturing investments in Vietnam have been so called "China plus one" strategies. Generally, the idea is that companies with a foothold in China are experiencing several challenges with their existing investments in the middle-kingdom which lead them to diversify to locations abroad. In this context Vietnam offers low labor costs (ca. 1/3 of China), an open and welcoming investment environment (e.g. with most business sectors open for WFOEs) as well as an overall similar business environment to China (which is culturally similar to Vietnam). However, companies typically keep their existing manufacturing in China as they are still mostly content with their operations there and because Vietnam´s northern neighbor is an important market. But when it comes to building up new capacities German investors lately often choose to add locations abroad - e.g. in Vietnam - to diversify their Asian footprint and to reduce individual country risks.

Motivations for "China +1" investments of German companies in Vietnam

Since 2014, we have supported 13 German customers with finding and establishing suitable locations and information on their investments in Vietnam (and some more have not yet implemented their operations). They represent a majority of new manufacturing plants from Germany in Vietnam. Our organization has a great network to local industrial zones and service providers. If you are pondering an investment in Vietnam we might be able to help you out. More information:

We have created a comprehensive overview of German investments in Vietnam. Please send a mail to if you would like to receive it!

1,551 views0 comments

Recent Posts

See All


bottom of page