Lawyer in Vietnam Dr. Oliver Massmann – The most investor friendly country in ASEAN

Vietnam is the most investment worthy place in ASEAN – this is a common response of many foreign investors when being asked about their investment plan in the upcoming years. This is not an exaggeration about Vietnam’s current investment environment as well as its potentiality but is in fact based on valid and practical grounds, where improved economic diversification, international integration, reformed investment legislation and good economic policy must be counted.

Economic recovery and stable development

According to a recent statistics by the General Statistics Office in late December 2023, the GDP growth of Vietnam in 2023 is estimated at 5.05 percent. Specifically, the economy is projected to expand by 6.72 per cent year-on-year in the fourth quarter, surpassing the growth rates of 3.41 per cent in the first quarter, 4.25 per cent in the second quarter, and 5.47 per cent in the third quarter. The scale of Vietnam’s GDP at current prices in 2023 is estimated at VND10.2 quadrillion (US$430 billion). GDP per capita is expected to reach VND101.9 million ($4,284), which is $160 higher than the previous year. “The world in 2050”, a study made by PwC, concludes that Vietnam will have the second highest annual GDP-growth rate worldwide. There will be an average growth by 5.3% each year, from 2014 till 2050. That means Vietnam will have the fastest growing economy within Asia till 2050. In addition, the inflation rate is controlled by the Government with Consumption Price Index to be in the range of 3-5% for the whole year, which is far below the maximum allowed inflation rate of 4.5% in 2023. These two important macroeconomic indices have proved the Government’s success to a certain extent in recovering and maintaining stable development of the economy.

Government’s sound economic policy and positive results

Together with macroeconomic stability and controlled inflation, the Government of Vietnam is fiercely improving the business and investment environment and making great attempts to achieve key economic indicators of top regional countries. In 2019, the Politburo issued Resolution No. 50-NQ/TW outlining strategies to enhance foreign direct investment (FDI) until 2030 (Resolution 50). According to Resolution 50, foreign investment sector plays a pivotal role in Vietnam’s economy and is deemed one of its most critical contributors. For that reason, Vietnam encourages FDI on projects that utilize advanced, emerging, high, or clean technology, modern management methods, and contribute positively to global production and supply chains. For the implementation of Resolution 50, the Prime Minister issued Decision No. 667/QD-TTg approving the strategy for foreign investment for the period 2021-2030 on 2 June 2022 (Decision 667). According to Decision 667, it is the Government’s strategy to (i) attract foreign investment projects that utilize advanced technology, new technology, high technology of the fourth Industrial Revolution, modern administration, and contribute to global production and supply chains; (ii) build and develop innovation centers and financial centers of regional and international scale to drive socio-economic development; (iii) increase the proportion of investment capital contributed by countries and territories to the total foreign investment capital of Vietnam, aiming for more than 70% by 2021-2025 and 75% by 2026-2030. This includes targeted nations and regions such as Korea, Japan, Singapore, China, Taiwan (China), Malaysia, Thailand, India, Indonesia, Philippines (Asia); France, Germany, Italy, Spain, Russian Federation, UK (Europe); and the United States of America (America).

Vietnam’s regional and international integration

Until now, Viet Nam has negotiated, signed and put into effect a number of bilateral and multi-lateral FTAs with almost all the big economies in the world. Of the figure, 16 FTAs involving more than 60 partners have become effective, covering all continents with a combined GDP accounting for nearly 90 percent of global GDP, making Viet Nam one of the countries in the region taking the lead joining bilateral and multilateral economic cooperation frameworks.

Looking at the liberalization level of market access under the WTO, Vietnam is on par with Singapore – the most developed country in SEA region. With the participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and European Union–Vietnam Free Trade Agreement (EVFTA) of Vietnam. Within SEA region, Vietnam is the second country after Singapore that has concluded an FTA with the European Union. The EVFTA, CTPPP, and EVIPA (Investment Protection Agreement with the European Union) were signed by Vietnam in just a period of three years, from 2018 to 2020. The agreements with the world’s largest trading bloc – the EU – have cemented Vietnam’s position as a potential destination for corporate giants from all over the world. While Vietnam is the only SEA country having successfully concluded an FTA with the EU, Malaysia and Vietnam are the two SEA representatives in the CTPPP. Thus, from an international trading and investment perspective, Vietnam is unmatched when it comes to partnership and openness of market access. From a domestic perspective, Vietnam has made its move by ways of replacing the Law on Securities to ease the last FOL in public listed companies at 49 percent and allow the 100 percent FOL for non-critical business sectors.

On another note, the Investor State Dispute Settlement (ISDS) provision under the CTPPP and EVIPA also plays an important role in Vietnam’s investment attractiveness since it provides the investors with high standards of legal certainty and enforceability and protection. Under that provision, for investment related disputes, the investors have the right to bring claims to the host country by means of international arbitration. The arbitration proceedings shall be made public as a matter of transparency in conflict cases. The final arbitration award is binding and enforceable without the local courts’ review of its validity. The Government of Vietnam has to fully implement this commitment within five years from the entry into force of the EVIPA.

Investment legislation

The Government is really aware of the importance of institutional reforms in improving the business climate. It is becoming more important when the new trade pacts are coming into effect very soon and institutional reforms are among the conditions of these agreements. New laws considered the most liberal and investor-friendly in the region, such as the new Enterprise Law, Investment Law and Public Private Partnership Law, have been adopted. Barriers to business and investment are removed to pave the way for an open, transparent and full-of-opportunity environment for foreign investors. The 2014 Investment Law and the 2020 Investment Law make a great attempt to reduce the number of prohibited business activities and conditional business activities. More importantly, the 2020 Investment Law inherits 2014 Investment Law on provisions regulating M&A activities. Accordingly, foreign investors will not need to undergo lengthy investment certificate procedures when buying stakes in Vietnamese target companies. The change, since 2014, has partly ended years of uncertainty and frustration faced by foreign investors eyeing Vietnam market entry or expansion via M&A. As a result, for the year 2023, according to the Ministry of Planning and Investment (MPI), Vietnam attracted approximately USD36.61 billion and saw a rise of 31.2% year on year. Of the figure, 20.19 billion USD was invested in 3,188 new projects, a year-on-year surge of 62.2% in capital and 56.6% in project number. At the same time, over 7.88 billion USD was injected in 1,262 underway projects, down 22.1% over the same period last year. Meanwhile, investment through capital contribution and share purchase deals hit over 8.5 billion USD, up 65.7% year on year despite a 3.2% decline in the number of transactions. According to the MPI, the major investment destinations in the country this year include Ho Chi Minh City, Hai Phong, Quang Ninh, Bac Giang, Hanoi, Bac Ninh, Binh Duong, and Dong Nai. In 2023, M&A deals were made all around Vietnam. According to data released by KPMG Vietnam, the number of transactions in the M&A market in Vietnam during the first 10 months of the year, there were 265 deals with a total value of USD4.4 billion

Relaxed foreign ownership in public listed companies

In an attempt to ease burdens on investors, on 26 June 2015, the Government issued Decree No. 60/2015/ND-CP to provide more flexibilities in foreign ownership ratio in public listed companies, up to 100% in certain cases. Decree 60 also allows foreign investors to make unlimited investment in Government bonds, bonds guaranteed by the Government, bonds of the provincial authority or enterprises. Foreign investors may also invest in securities investment fund certificates, shares of securities investment companies, non-voting shares of public listed companies, derivative securities, and depository receipts. On 31 December 2020, the Government issued Decree No. 155/2020/ND-CP to replace Decree 60 and Decree 155, principally, inherited all of the above regulations for foreign investors.

Government’s reduced monopoly over distribution and production of power

In Vietnam’s energy market, EVN has long been known as the state monopoly in transmission and distribution of electricity. Investors find it extremely hard to negotiate the Power Purchase Agreement with EVN. With an open and competitive market, foreign investors will find it more attractive to invest in this sector. They are now no longer required to sell the electricity they generate to EVN but can sell it to other distribution companies or even transmit/ distribute through their own system.

In recent years, several decisions and regulations were issued to develop a competitive electricity market. It is expected that the wholesale market and retail market for electricity will be established soon for investors to participate. Further, as recorded in the Power Development Plan VIII (PDP 8), it is encouraged that the distribution of power will be supported by investors in the future and it is reasonable to expect relevant regulations in the coming time to support this idea.


Country Limitation of market access* Country Limitation of market access*
Malaysia medium Myanmar high
Indonesia medium Cambodia medium
Philippines medium Laos medium
Singapore low India high
Thailand medium China medium
Brunei high Vietnam low

Vietnam ties in first place with Singapore, thus it provides highest possible protection for investment

Vietnam is a country of changes and currently offering increasing opportunities for foreign businesses. The underlying strength of the economy is reflected in, among others, controlled macroeconomic indicators, strong productivity gains and extensive integration into regional and global economy. It is now exactly time for foreign investors to start their business plans and grasp the upcoming clear opportunities.


Please do not hesitate to contact Dr. Oliver Massmann under if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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