Vietnam's drive for foreign investment

World Finance - 15/07/2017 4:47:00 CH


While economies around the world have suffered from market instability, a number of regulatory changes and pro-bussiness policies have allowed Vietnam to thrive.

The global economy experienced a sluggish year in 2016, with several unexpected events such as the Brexit vote and Donald Trump’s surprise election victory, stunting growth around the world. However, despite the uncertainty, Vietnam’s economy has remained stable, with GDP growth exceeding the averages posted by neighbouring south-east Asian countries and emerging Asian economies. The country’s stock markets also generated significant uptrends throughout the year, with the VN and HNX indexes having grown a combined 15 percent year-on-year and the total market capitalisation of Vietnam’s most prominent exchanges amounting to 37 percent of GDP.

Vietnam’s success can be largely attributed to the state’s commitment to creating an attractive business environment for both dosmetic and international companies. Building on the country’s solid foundations, the government has introduced a number of regulatory changes to help increase both foreign direct investment. This pro-business attitude has also stimulated growth in the private sector, driving local business and impoving competition.

Cutting the red tape

Under the management of the State Bank of Vietnam (SBV), the Vietnamese financial system has continued to thrive. The government’s commitment to creating a favourable business environment has seen foreign investment grow significantly in the past decade, with FDI businesses now accounting for 7.16 percent of the country’s export turnover. The introduction of new regulatory frameworks has been key to attracting these high levels of foreign investment, and has helped control inflation, motivate economic growth and stabilise the interest rate domestically.

By adopting active and flexible fiscal policies, the government has turned Vietnam into a business hub. Some changes involve a daily adjusted rate, providing tax breaks to specific sectors, reducing corporate tax and providing a number of support packages to both foreign and local businesses…

 

 

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