Vietnam is a true emerging market. It offers ground floor and growing opportunities for all kinds of investments. The country’s economic growth rate has been among the highest in the world in recent years, expanding annually at 7-8.5 percent, while industrial production has been growing at around 14-15 percent per year. By principle, the country maintains a policy of encouraging foreign investments. Apart from being an attractive business venue, it had implemented recent efforts to encourage investors from different parts of the globe. A new telecommunications law is passed by the National Assembly on the same year which opens up new opportunities for trade and investment by foreign firms.

The Good Points

The great things that come along with foreign investments is one reason why every country would want to attract more businesses into their soil. Foreign investments in Vietnam have created jobs for more than 1.2 million direct labors and millions of other indirect labors. It has contributed much not just in improving the quality of human resources, but in enhancing the living standards of the population as well.
The operation of foreign invested enterprises in Vietnam also encourages domestic enterprises to renovate their technology and management methods to sharpen competitiveness in the rapidly expanding global market. Foreign investment contributes to broaden the international relations and international economic integration and speed up the process of trade and investment freedom.
The Challenges

Despite their efforts to make Vietnam’s business environment attractive to foreigners, looks like the government has so many loopholes to plug. Foreign investments in Vietnam are generally regulated by the Ministry of Planning and Investment (MPI) through the Law on Foreign Investment (LFI) and several other related implementing regulatory agencies.

Somehow, the country’s move to establish a legal framework to support a healthier and more transparent business environment and to level the playing field between domestic and foreign investors have become a burden for so many investors wanting to penetrate Vietnam’s market. It takes 12 procedures and 94 days to start an investment in Vietnam, which, the length and complexity of the process alone may easily turn foreign investors away.
Normally, a foreign business needs an average of 68 and 42 days to establish in regional and global countries respectively. In Vietnam, foreign businesses must apply for approval in the form of an investment certificate from the MPI, which alone, could takes an average of 57 days to obtain. The need to translate the documents into Vietnamese before obtaining a licensing authority or a notary public to certify them as a “true copy” in the country of origin further complicates the entire procedure. More so, they must legalize said documents with the embassy or consulate of the country of origin in Vietnam and with the Vietnamese Department of Foreign Affairs.
Making Matters Worse
The evolving nature of regulatory regimes and commercial law in Vietnam, combined with overlapping jurisdiction among Government ministries, often result in a lack of transparency, uniformity and consistency in Government policies and decisions on commercial projects. The regulations on foreign investments include a lot of limits for these businesses to expand and operate.
Foreign businesses are limited in strategic services sectors including fixed-line and wireless or mobile telecommunications, electricity transmission and distribution, and select transportation sectors. The electricity transmission, distribution and media sectors operate under direct government control and are closed to foreign businesses. They can only provide a maximum share of 49 percent of capital in domestic and international air transportation industries. In accordance with Vietnam’s commitment to the World Trade Organization, foreign businesses are further limited to provide capital amounting to 49 and 51 percent of the total investment in telecommunications infrastructure and services.
Furthermore, the land clearance processes for leasing industrial lands take from a few months to several years. In leasing private lands, the procedure could take about 120 days in Vietnam compared to 66 or 61 days average in the region and around the globe.
Improving the Business Climate for Foreign Investors
Like most of the world, Vietnam is actively competing for foreign investments. Over the last decade, the country has achieved significant successes in economic reform and reduced poverty levels, supposedly to improve its attractiveness to foreign operations. 
However, the government recognizes that there is more to be done. A recent legislation has reduced the time and economic costs necessary to start a business, making it easier for more international businesses to open operations. A series of other amendments and supplements in order to improve the climate outside investors were proposed, yet results are yet to be seen. If the government and responsible sectors will succeed in promoting the country to global investors, Vietnam will be a powerhouse of foreign investments fully able to compete with any other nation.