This second OECD Investment Policy Review of Viet Nam uses the updated OECD Policy Framework for Investment to present an assessment of the investment climate in Viet Nam and to discuss the challenges and opportunities faced by the Government of Viet Nam in its reform efforts. It includes chapters on foreign investment trends and performance, the entry and operations of foreign investors, the legal framework for investment, corporate governance and competition policy, tax reforms, investment promotion and facilitation, infrastructure connectivity, investment policy framework for green growth, and policies to promote and enable responsible business conduct.

The Government of Viet Nam has achieved tremendous progress since the launch of the Renovation Policy, or Doi Moi, just over three decades ago. Market-oriented structural reforms have allowed it to become one of the world’s fastest growing economies, dramatically reducing poverty and delivering socio-economic progress. It has increasingly integrated into the world economy by attracting growing amounts of foreign direct investment which have fuelled sustained export growth. Although Viet Nam stands out from other emerging economies, notably for its social inclusiveness, some investment climate challenges still need to be addressed. These include boosting slowing productivity growth, helping public institutions cope with the rapid pace of legislative activity and ensuring economic growth is inclusive, balanced and sustainable.

The economic transformation of Viet Nam over the past three decades has been almost unparalleled. Since the launch of Doi Moi (or “Renovation”) policy in 1986, market-oriented structural reforms have paid off handsomely. Once one of the poorest countries in the world, Viet Nam is now a lower middle-income market economy. Tremendous socio-economic progress has been achieved, poverty has been substantially reduced and a middle class is rapidly emerging. The pace of economic growth has been impressive, with a remarkable capacity of the Vietnamese economy to weather global storms. Viet Nam has been one of the fastest growing economies in the world, boasting an average growth of almost 7% over the past two decades. In many ways, Viet Nam is the envy of its neighbours, not only its growth performance, but also its ability to attract growing amounts of foreign direct investment and to sustain export growth in difficult times.

The economic transformation of Viet Nam over the past three decades has been almost unparalleled. Since the launch of Doi Moi (or "Renovation") policy in 1986, market-oriented structural reforms have paid off handsomely. Viet Nam was once one of the poorest countries in the world but is now a lower middle-income market economy. Tremendous socioeconomic progress has been achieved, poverty has been substantially reduced and a middle class is rapidly emerging. The pace of economic growth has been impressive, with a remarkable capacity of the Vietnamese economy to weather global storms. Viet Nam has been one of the fastest growing economies in the world, boasting an average growth of almost 7% over the past two decades. In many ways, Viet Nam is the envy of its neighbours, not only its growth performance, but also its ability to attract growing amounts of foreign direct investment and to sustain export growth in difficult times.

This chapter reviews trends in foreign direct investment in Viet Nam using various national and international data sources. It looks at the performance of foreign investment relative to neighbouring and regional economies and its impact on the local economy. It also includes a specific section on trends in mergers and acquisitions and one assessing how foreign direct investment statistics are compiled in Viet Nam.

This chapter provides an overview of the framework for the entry and regulation of investment in Viet Nam and reviews existing regulatory restrictions to foreign direct investment. It looks at the current regime for investment licensing and regulation, reviews key policy reforms covering foreign investment liberalisation and benchmarks the remaining restrictions against those in other countries.

This chapter provides an overview of Viet Nam’s legal framework for investment. It examines the quality of the country’s investment policies and the level of legal protection granted to both domestic and international investors. Particular attention is given to the new Investment Law enacted in 2015. The chapter looks into the rules for expropriation, contract enforcement and dispute settlement as well as the regimes for intellectual property rights and for access to land. It also reviews Viet Nam’s international investment treaty practice, including its relation with ASEAN practice and its legal framework for investor-state dispute settlement.

This chapter provides an overview of Viet Nam’s corporate governance framework and its competition policy. The first section addresses ongoing reforms to the ownership and governance of state-owned enterprises, the rights of shareholders, disclosure and transparency rules, and the independence and effectiveness of boards. The second section reviews the institutional aspects of competition and the substantive provisions of the Competition Law.

This chapter provides an overview of Viet Nam's tax system, including recent and planned reforms, and an assessment of the country's investment incentives regime. It provides an overview of existing incentives, their implications for the tax administration and proposes options to ensure that tax incentives achieve the government's policy goals in a cost-effective manner. The chapter also looks at tax governance and transparency issues.

This chapter provides an assessment of the investment promotion and facilitation framework in Viet Nam. It examines existing strategies and institutions governing investment promotion and facilitation with a particular focus on the Foreign Investment Agency, Ministry of Planning and Investment, as well as the role of provinces and special economic zones. It highlights key reforms and remaining challenges to improve the business environment and attract higher value-added investments. It looks at existing mechanisms for private sector consultation and also provides recommendations on measures to encourage business linkages with small and medium-sized enterprises and other policies to maximise investment spillovers.

This chapter examines the current context of infrastructure development in Viet Nam. It reviews connectivity challenges and recent reforms to boost infrastructure investment, including private participation in infrastructure through public-private partnerships. It also proposes recommendations to overcoming the remaining obstacles to improving the legal and institutional framework for private investment in infrastructure.a

This chapter assesses the investment framework for green growth in Viet Nam. It looks at challenges and opportunities for sustainable economic growth and provides an assessment of the regulatory framework for green investment, focusing notably on environmental protection, climate change, renewable energy and energy efficiency. It also reviews the institutional capacity to design and implement green growth policies as well as financial policies and instruments for green growth and investment.

This chapter provides an overview of the responsible business conduct landscape in Viet Nam, outlining the actions the government has taken to facilitate, promote, enable, co-operate on and exemplify responsible business practices. It also provides recommendations for how the climate for responsible business conduct in Viet Nam could be further enhanced with a view to promoting sustainable development.