Doing Business in Vietnam

AN INTRODUCTION TO DOING BUSINESS IN VIETNAM 2017

Despite a weak global economy, major foreign investors continue to prioritize their investments

into Vietnam. The country is steadily becoming an important manufacturing base for electronics

makers who are searching for the next location in the world that is able to provide a well-

educated and low-cost workforce. On the heels of major investments from the likes of Samsung,

Foxconn Technology Co., Intel Corp., LG Electronics and Canon Inc., investors are also beginning

to drastically expand their investments into the country. The steady inflow of capital sends a

strong signal that Vietnam not only looks attractive from the outside but can retain value for

investors at a variety of locations on the value chain.

Vietnamese businesses are optimistic about the economic future of the country and are also

looking to grow their businesses to meet upcoming demand. A prime example is VietJet,

a discount airline that is aggressively expanding its operations throughout the country. In a

groundbreaking move, and one that is highly indicative of Vietnam’s rapidly emerging business

environment, Vietjet has chosen to raise capital via IPO rather than through conventional debt

markets.

The country has a growing workforce; however, there is still a noticeable lack of high-tech

skills among job seekers. The Vietnamese government is pushing ahead with skills training

programs. Foreign companies are also investing in the future of the country’s workforce. Intel

is leading a group of technology companies, including Siemens, to train Vietnamese workers

by funding training programs intended to develop a high-tech workforce within the country.

An additional reason to be positive about Vietnam is the soon to be implemented European

Union Vietnam Free Trade Agreement (EVFTA) which will place Vietnam in a prime position

vis-à-vis tariff free trade links with some of the biggest markets in the world. Furthermore, the

proposed Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership

(RCEP) could accelerate growth in Vietnam and ASEAN even further in the years to come.

On top of this, research shows encouraging results on the efforts to improve the ease of

conducting business in Vietnam. Vietnam ranks 82nd out of 190 countries in the World

Bank’s “Doing Business 2017” overall ranking, up 9 positions from 2016. Similarly to the overall

improvements of doing business in 2017, several aspects of Vietnam’s investment environment

show significant movement; however, areas for improvement prevail:

• “Paying taxes” rose 11 positions year-on-year to 167,

• “Protecting investors” rose 31 positions to 87,

• “Starting a business” is ranked at only 121 (falling 10 positions year-on-year), while

• “Resolving insolvency” ranks at 125 (rising 1 position year-on-year).

This publication, designed to introduce the fundamentals of investing in Vietnam, was compiled

by Dezan Shira & Associates, a specialist foreign direct investment practice, providing corporate

establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence

and financial review services to multinationals investing in emerging Asia.

Preface

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