Brian Jeffrey
Recent reports show Vietnam has 1,733 outward investment projects worldwide, totaling $23 billion. However, these investments need careful preparation due to potential risks.
Compared to other countries, Vietnam’s outward investments are relatively small, around $400-500 million annually, accounting for just 0.15 percent of its GDP. In contrast, China invests substantially more abroad.
Vietnamese investors receive some financial support for overseas ventures, yet incentives are limited when compared to countries like Japan and South Korea, which have more robust government backing.
Initially dominated by state-owned enterprises (SOEs), Vietnam has seen a rise in private investors engaging in outward investments in recent years. The trend indicates a diverse investment landscape.
While traditional business setups abroad remain prevalent, Vietnamese enterprises are increasingly acquiring foreign companies to access new markets and technologies.
Investors are now targeting developed economies apart from traditional destinations and diversifying into sectors offering higher value addition such as technology, finance, and manufacturing.
Despite agreements with many countries on investment protection and double taxation avoidance, Vietnamese investors often overlook legal and policy aspects of international markets, leading to potential legal pitfalls.
Understanding legal frameworks and market conditions is crucial for protecting investments amid diverse risks.
Major Vietnamese corporations like PetroVietnam and Viettel have encountered both success and setbacks in overseas ventures due to varying market conditions and regulatory challenges.
Investors are advised to thoroughly research target markets, participate in local legal processes, and assess risks adequately before venturing abroad.
Investing in foreign markets is akin to a marriage; lacking deep market understanding can lead to substantial risks and financial losses.
Adhering to local laws, engaging with political institutions, and conducting thorough market analysis are essential for successful overseas investments.
Preparing for potential challenges and devising contingency plans are crucial elements in safeguarding investments from unforeseen circumstances.
