Countries and markets 2/2025: Relations between Finland and Vietnam are improving – Vietnam has become an increasingly important trading partner for Finland in Southeast Asia

Vietnam is a politically stable and rapidly developing country that offers many opportunities for export companies. Vietnam has grown, alongside Indonesia, to become Finland’s largest trading partner in Southeast Asia. In 2024, Finnish exports to Vietnam amounted to around EUR 300 million in total. Bilateral relations between Finland and Vietnam deepened in October 2025, when Finland and Vietnam agreed on a strategic partnership to further increase their mutual cooperation and trade. Finnvera’s export credit guarantees and export financing instruments can be widely used in Vietnam.

Vietnam has rapidly developed from a poor, war-torn country into a dynamic and fast-developing lower-middle-income country. Vietnam is one of the fastest growing economies in Asia, and its growth prospects remain stable in the medium term. 

Vietnam’s economy is diverse and growing rapidly – Trade plays a major role in its economy

Vietnam is aiming for an upper-middle income level, as defined by the World Bank, in the next few years, and a high income level by 2045. Vietnam has a diverse service sector, a strong production sector, and a large domestic market. The median age of Vietnam’s 100-million population is approximately 33 years – offering the young workforce it needs for its growth but, on the other hand, the country suffers from a shortage of educated workers. Vietnam’s economic structures are quite strong, its public finances are on a healthy basis, and external debt remains at a moderate level. Growth is expected to remain strong and inflation moderate. Vietnam has worked vigorously to open up its market, and today trade plays a vital role in its economy. It can be assumed that Vietnam will continue to dismantle any barriers to trade while also developing its private sector. Its domestic market is dynamic and constantly evolving, providing new business opportunities.

Changes in Vietnam’s business environment after its administrative restructuring

Administratively, Vietnam is a socialist one-party system. Vietnam’s society is tightly controlled by the Communist Party of Vietnam with controls for example on political rights, freedom of expression, and civil rights. On the other hand, this strict control has also served to ensure the country’s currently high level of political stability. Corruption remains a significant challenge in Vietnam, as it is omnipresent in society, although it may not be so clearly noticeable in the private sector. Vietnam’s reduced civil rights, weak rule of law, and widespread corruption may pose risks to its social stability in the future. However, with strong economic growth, the living standards are constantly improving, so any dissatisfaction with political shortcomings is likely to remain under control.

Vietnam has recently enacted major administrative reform, which has also had an impact on its business environment. The country has restructured its ministries and merged a record number of provinces and municipalities. These measures have resulted in a significant reduction in the state’s administration. 

The reorganisation has caused some short-term unpredictability in Vietnam’s operating environment as, in connection with the mergers, a large number of public sector employees were laid off and changes were made to legislation and operating practices. The merging of different administrative branches may also have an impact on ongoing investment projects, as these new administrative actors reassess the development projects and their funding. Over the longer term, however, these administrative reforms aim to reduce corruption and make Vietnam’s operating environment more business- and investment-friendly, for example through lightened bureaucracy and eased permit and licence processes. 

Vietnam is an important trading partner for Finland in Southeast Asia

Vietnam is constantly expanding its external relations and maintaining close ties with all great powers while also seeking to remain geopolitically neutral. EU-Vietnam relations are good and expected to improve over time. The United States is an important partner country for Vietnam, but the 20% tariff rate imposed by the United States may undermine both their trade relations and Vietnam’s economic development. Relations between China and Vietnam have been strained at times, particularly due to the territorial disputes in the South China Sea. At the same time, however, both countries have a similar political ideology and very strong trade relations. Vietnam has friendly relations with Russia, and recently Vietnam has also strengthened its relations with North Korea. 

Bilateral relations between Finland and Vietnam have remained good for the past 52 years, and Vietnam has grown, alongside Indonesia, to become Finland’s largest trading partner in Southeast Asia. In 2024, Finnish exports to Vietnam amounted to around EUR 300 million in total. The diplomatic, commercial, and economic relations between these two nations is set to deepen further: in October 2025, Finland and Vietnam agreed on a strategic partnership during an official visit by the General Secretary of the Communist Party of Vietnam to Finland. Finland is the first Nordic country to sign a strategic cooperation agreement with Vietnam. During the visit, the General Secretary’s delegation met with the President of the Republic of Finland, Finland’s high-level administration, and representatives from Finnish companies. Several memoranda of understanding were signed between Finnish and Vietnamese companies to further promote trade and investments.

Vietnam and Finland have a long history of collaboration in many areas, such as health care, the water sector, and education, and Finland is eager to continue these efforts. In addition, both countries are set to promote cooperation and trade especially in the fields of renewable energy, technology, digitalisation, the circular economy, agriculture, and infrastructure.

Finnvera provides various instruments to guarantee and finance exports to Vietnam

Finnvera’s country policy for Vietnam includes some restrictions, but Finnvera’s export financing instruments are fairly widely available, as long as the buyer’s credit risk and the project’s financing structure are in good order. Finnvera can also issue direct export credits to a creditworthy buyer in Vietnam. Finnvera is also participating in the Ministry for Foreign Affairs’ Public Sector Investment Facility financing instrument projects, which are concessional loans granted to public sector investments in developing countries. Finnvera’s liabilities in Vietnam currently amount to around EUR 16 million in total. Vietnam's country risk classification and country policy are available in Finnvera’s country classification map. 

As in many other markets, Vietnam’s market is competitive. The Finnish Embassy in Hanoi and the Team Finland network support all companies and sectors throughout Vietnam. They help companies build connections, provide market insights, and offer support in overcoming obstacles to accessing the Vietnamese market.

Author:

Senior Adviser Nea Tiililä is responsible for Finnvera’s country risk management in Southeast Asia, Oceania, and Eastern and Southern Africa.

Read also:

Finnvera's country classification map.