In your experience, what are the biggest challenges facing foreign investors and businesses in Vietnam?
It really depends on industries and sectors; in Vietnam, there are very specific provisions and challenges for some business areas, whereas for others these don’t apply. However, if I were to take a broad view of the generic challenges I have observed while working with investors in Vietnam, there are a few patterns that take shape:
A lack of clarity within the legal framework and how it applies for investors seeking to undertake business in Vietnam is certainly top on the list. Even though there are strong fundamentals within the legal/investment structure, with specific laws governing each segment of the key investment sectors, when delving into the details, the implementation procedures and the interpretation of legal requirements can be tedious. That is why successful investors take time to understand the market, undertake feasibility studies from a commercial and legal perspective, talk with experts with practical experience in the country and can then take clear and informed decisions that fit their exact needs.
Another challenge is the business culture alignment, which encompasses the human workforce as well and how investors plan to undertake their business, with the shared involvement of all stakeholders.
There are also some challenges in regards to market entry restrictions for certain sectors, however these are not prevalent, as more than 80% of business activities in Vietnam are open to foreign investors.