PHÂN TÍCH VÀ ĐÁNH GIÁ MÔI TRƯỜNG KINH DOANH QUỐC TẾ
TẠI VIỆT NAM
Analysis of international business environment in Vietnam
Introduction:
Globalization, international economic integration leading to international business
are external tends today. International business environment brings many opportunities
to companies such as development of products beyond national borders, access to
widely international markets, even more easy-going and favorable markets than
domestic ones; access to more stable and cheaper sources of materials; access to cheap
and rich sources of labor force in under-developing and developing countries;
prolongation product cycle; reduction of investment expenses in new researches,
technologies, and machineries, expense in training employees…; risk diversification in
economic – political disability; more profits through oversea investments, high
reputation in international market. Such issues aim to optimize corporate finance. This
is the motivation for companies to participate in international business activities.
Apart from such advantages, international business also poses many difficulties,
challenges and risks such as political risks caused by political instability; different
legislation from local country and changes of policies in business environment;
differences in culture, taste in invested countries; monetary and exchange rate
policies…Those factors require care and seriousness from companies in their
management. They should learn, grasp and valuate customers’ taste, legal basis and
institution, cultural features, micra-economic trend, financial monetary system, political
risks in countries they want to invest before their investment. Therefore, access to
multi-national market and international financial infrastructure create strategic options
in new competition but at the same time companies have to face the increasing
flexibility and diversity.
Within the scope of this thesis, we mention international business environment to
international companies in Vietnam, helping them to understand more Vietnamese
business environment in order to make appropriate investment decision to Vietnam.

1

Analysis of international business environment in Vietnam:
To help international companies to have sufficient and objective look at and
assessment on international business environment in Vietnam in order to appropriate
investment decision, we should fully, properly evaluate strong and weak points,
advantages and disadvantages of international business in Vietnam:
I. Strong points of international business in Vietnam:
1. Large population and potential market: Vietnam’s population is large with quite
fast population growth rate. At present, Vietnam has a population of about 100 million.
This is a big and potential market as its economy is quickly developing with GDP
growth rate of 8-9% for many years. Even in the world economic crisis, Vietnam’s GDP
was still 5-7%/year. People’s income is increasing and purchase power is improving.
2. High rate of young population within working age: Vietnam’s population
growth is quick. Its rate of employment within working age over 15 years in 2011 was
58/5/%(51398,4/87840) – Source: General Statistics Office. Every year, dozen of
thousand of young people graduating from vocational schools, colleges and universities
attend working market, producing a huge source of work force, helping foreign
investors to find their employees.
3. Vietnam’s work force learns quickly, works creatively, enthusiastically and has
passion in new technologies. This is Vietnamese tradition and cultural beauty and also
the advantage of Vietnam’s work force.
4. Vietnam is an agricultural country that underwent dozens of years of war,
subsidy economy with over 70% of population working in agriculture. Recently, it has
transformed into a market economy, participated in international economic integration
with cheap and rich workforce. The current minimum wage is 1,050,000 VND/month.
The minimum wage in the highest sector is only 2,000,000VND/month. Features of
Vietnam’s work force are a competitive advantage, shaping certain attraction to foreign
investors who are seeking to invest in places with low labor cost. It helps foreign
investors to reduce product cost, increase competitiveness and optimize financial

investment profits.
5. Quite stable politics: Vietnam’s political institution is stable. Over decades
under the sole leadership of Vietnamese Communist Party, such institution has
2


remained unchanged with very few political instabilities, riots, racial and religious
conflicts, terrorisms causing social disorders. Stable politics and society establish
confidence, stability for companies, in general, and international companies, in
particular, in Vietnam to operate and limit risks resulted from social disorder.
6. Vietnam is still among poor countries and has taken part in international
economic integration. There are many potential areas not uncovered. Those are free and
fertile lands for international investors to implement their investments, operate with
high profits such as telecommunication, banking, hospitability, tourism and leisure.
7. Yearly GDP growth rate requires the demand on consumption of materials,
goods and services for socio-economic development: With its yearly GDP growth rate,
it requires a huge source to provide for economic development. Backing the past years,
public sector has considerably invested in infrastructure with large scale such as the
National Highway No. 1, 2, 5 … opened and upgraded Tan Son Nhat, Noi Bai, Da
Nang, Can Tho airports…ports…big hydropower plants, built many new and modern
urban zones, trading centers…for production and business of big companies. Such
factors form a big market for product, goods and service consumptions.
8. International investors in Vietnam have more original advantages than domestic
ones in all areas: Their grater capital, more modern technologies, more advanced
management…are factors that make them successful in Vietnam market.
II. Weak points:
Vietnam is still among poor countries and has taken part in international economic
integration. Although many attempts have been made to improve business environment,
infrastructure, to gain economic development at high level and certain achievements,
Vietnam has just got rid of poverty and its business environment still remains many

limits such as:
1.

Poor and limited infrastructure: Despite its attempts to considerably improve

infrastructure, to upgrade, to widen and to build many roads, bridges, airports, ports
such as: upgrading and widening the whole route of the National Highway No. 1 from
Lang Son to Ca Mau, National Highway No. 5 from Hanoi to Hai Phong, National
Highway No. 2 from Hanoi to Lao Cai, Ha Giang, National Highway No. 18, opening
Ho Chi Minh road, road linking Hanoi and Dien Bien; widening Noi Bai, Tan Son
3


Nhat, Da Nang, Can Tho airports and Hai Phong, Sai Gon, Da Nang ports…, its traffic
infrastructure is still poor and limited. This has not met the demand, expectation for
economic development, in general, and for foreign investors, in particular. Traffic in
many regions is not convenient. In big centers like Hanoi and Ho Chi Minh city, people
face traffic jams, old-fashioned railway, no big railway or highways. Backward
infrastructure is an important factor that reduces efficacy of international investors,
raising concerns in their consideration of investment to Vietnam.
2.

Legal framework: For the past years, Vietnamese Government has made its best

attempts in order to create more convenient legal framework for international investors
in Vietnam. Such attempts range from issuance of Law on Foreign Investment to
unification of laws on enterprise with Law on State-owned enterprises in order to create
a fair playground for any companies without distinction of company types. Taxation
system is improved in accordance with that in developed countries. Income tax is
replaced by value added tax. Policies in import tariff, special consumption tax,

corporate income tax are renewed. Policies on personal income tax are issued and
renewed. Vietnamese legislation has been more completed and advanced than ever.
However, Vietnamese legislation on management of companies, in general, and
international companies in Vietnam is still unsound and insufficient. Many laws are
overlapping, asynchronous with unclear contents. Policies are not persistent. Business
environment is not transparent. All those factors challenge companies to consider their
long-term strategies, making a big barrier to international companies to Vietnam.
3.

Administration: Vietnam is heavily administrative. A common saying for any

transactions is “Any red seals?”. To fix a procedure, a company may go through many
agencies, levels, doors with mountains of papers. According to 2013 Business
Environment Report in Vietnam released by the World Bank and International Finance
Corporation in the morning of October 23 rd in Hanoi, Vietnam’s criteria for
construction permits was in 28 th rank with 11 procedures, 110 days and an expense of
67% per capita income (1,260 USD). In criteria of tax payment, Vietnam was in 138 th
rank with 38 turns of tax payment, 872 hours for tax payment each year.
Complicated administrative formalities go though many processes, levels, doors,
consuming a lot of time and efforts of companies, even removing business
4


opportunities of many companies. Actually, it is a big barrier for international
companies to consider whether they should invest in Vietnam or not.
4. Widespread corruption - a national disease:
A report on Public Administration Performance Index (PAPI) released on May
03rd, 2012 in Hanoi revealed that corruption in public administration continued to be
alarming. This report was made by cooperation between Vietnam Fatherland Front,
Centre for Community Support Development Studies (CECODES), People’s Petitions

Board under the Standing Committee of National Assembly and the UN Development
Program in Vietnam on the basis of collecting data from interviews with 13,642 people
nationwide.
The survey revealed that corruption was a prominent problem in sectors and
industries measured by PAPI. More specifically, in terms of bribery practices in public
sector, many people stated that bribery practices were present in public health care
(31%), in public employment (29%), in application of land use right certificate (21%),
for more attention of teachers to their children at schools (17%) and in application of
construction permits (16%). Moreover, 13% of interviewed revealed that public
officials used budget for their personal businesses.
Such investigations are at national level. They did not greatly change in data got
from surveys in five centrally-controlled municipalities compared to data in 57 other
provinces. This partially reflected the widespread extent of corruption and bribery practices

in all cities and provinces.
In terms of corruption control in local government, interviewed people stated that
the level in which local governments strictly resolved corruption was quite low.
Nationwide, just 22.95% of participants said that their local governments were strict in
resolve corruption discovered. This rate was highest in Hanoi (50.66%), and lowest in
Bac Lieu (5.39%).
Ms. Pratibha Mehta, permanent coordinator of the UN in Vietnam said that PAPI
was “an objective and sharp tool in monitoring public administration performance and
providing public services”.
“PAPI helps Vietnam’s policy makers and the international development
community to understand opinions, desires and experiences of people. Then we will
5


learn specific lessons in reducing corruption, improving efficacy of public
management, increasing people’s satisfaction in the public administration apparatus”

According to 2013 Business Environment Report in Vietnam released by the
World Bank and International Finance Corporation (IFC) in the morning of October
23rd in Hanoi, in criteria of tax payment, Vietnam was in 138 th rank with 38 turns of tax
payment, 872 hours for tax payment each year. Total tax rate counted for 34.5% to tax
rate of corporate income tax of 25% as regulated. All proved corruption in Vietnam.
5. Monetary and financial policies
+ Monetary policy:
Vietnam’s monetary policy has been in regular changes, instable causing
instability and high inflation. According to Forbes, inflation among the highest rates in
Asia made production cost escalade and profits of companies reduce. Since 2008,
Vietnam’s Consumption Price Index (CPI) has exceeded 20% for many months due to
excess of import to export and continuous devaluation of Vietnamese dong. This fact
causes difficulties to companies that produce and sell their products at a place and in
access to foreign currency.
In response to high inflation, Vietnam has implemented the tightening monetary
policy, increased compulsory reserve to banks, reduced credit growth rate, and caused
tight money. As a result, companies find it very difficult to access credit capital. They
have to get loans at rate of 14-16%/year for short-term loans and at 14.5-17% for longterm loans, even 23%/year at some points of time. Due to the tightening monetary
policy, banks in Vietnam have to face unpaid debts and insolvency of companies. Total
bad debts of banks in Vietnam are about over 200,000 billion VND. This fact is called a
Coagulation blocking the economic blood vessel.

According to 2013 Business Environment Report in Vietnam released by the
World Bank and International Finance Corporation (IFC) in the morning of October
23rd in Hanoi, Vietnam’s criteria in credit capital was ranked 40th in the world.
Exchange rate risk to international investors in Vietnam poses a big problem. It is
because Vietnam’s weak economy, high inflation, high dependence of economy in
export and import. Besides, Vietnamese dong is always devaluated in comparison to
USD, EURO. For example, inter-bank exchange rate between VND and USD
6



determined by the State Bank of Vietnam was 16,061VND/USD on January 01 st, 2007,
20,870VND/USD on November 30th, 2012 (source: the State Bank of Vietnam). As a
result, exchange rate deviation between January 01 st, 2007 and November 30th, 2012 is
1.299 times (30% higher).
+ Under-developed financial market: Legal institution for financial activities is not
sufficient, asynchronous. Many types of financial activities that have been present in
developed countries for hundreds of years are not present or not popular in Vietnam’s
financial market. Many forms of international financial and monetary activities that
facilitate companies to mobilize capital, to insure risks… are not applied in Vietnam
such as additional contract for money (termed contract, future contract, currency
selection right, insurance tools for exchange rate risk…)
Asynchronous and instable financial and monetary markets produce a big barrier
for international investors in their consideration of investment or business in Vietnam
6. Some tax policies are not favorable to international business in Vietnam:
although tax policies show some positive new changes, their procedures are still low
and do not satisfy expectations of companies, in general, and foreign-invested
companies, in particular. Tax rate of corporate income tax is high.

Oversea profit

transfer is charged. Corporate income tax is adjusted to decrease from 32% to 28% and
25% at present. However, this type of tax still remains quite high compared to that in
other countries. In Thailand, such tax is dramatically dropped from 30% to 23%. In
Japan, Korea or Taiwan, such tax for small and medium companies is just 17%. High
corporate income tax means reduction of profit to companies, which also creates a
barrier for foreign investors when they want to invest in Vietnam.
7. Trade balance and impacts of global financial crisis
+ For the past years, Vietnam’s trade balance has been unbalanced in the direction

of excess of export (commercial value of import is higher than commercial value). Data
of current account of Vietnam from 1997 to 2008 was as follows:
Chart:
Structure of Vietnam’s current account from 1997 to 2008

7


Source: CEIC Database
The chart shows that the status of Vietnam’s current account is mainly affected by
the status of trade balance due to goods transactions that count for high ratio in total
income and expenditure of current accounts (accounting about 70%-85%). While
current transfer of net current capital (including sponsor and national oversea currency
exchange) present positive influences on current account. Recently, Vietnam’s import
and export are affected too fast and strongly by the accession to WTO. Despite quite
quick growth of export ratio, it has not caught up with import growth rate when tariff
barrier is gradually removed. This causes foreign goods enter Vietnam strongly while it
is not easy but long to promote export rate. Increase of import is resulted from other
factors such as demands of the economy. It was this situation that put deficit to
Vietnam’s trade balance, up to 13.67% compared to GDP in 2008. Additionally,
according to economic experts, the deep root of of such situation is export capacity of
Vietnamese goods when it is not actually involved in regional and international supply
chain. Added values in goods for export are still low. Because export focus is only put
on some main jobs, the economy is easily vulnerable at external “shock”. While,
demand of import for processing goods for export, contributing to infrastructure
development… has accelerated for the past years.
The unbalance of trade balance leads to foreign currency insufficiency for import,
foreign currency reserve in order to ensure stable economic development.
+ Impacts of global financial crisis to Vietnam’s economy: The world economic
crisis brings many negative impacts to Vietnam such as: difficult export reducing 1.7%

8


of GDP; high interest rate, great losses of companies, reduction fo FDI, gold price
boom drawing capital to gold; increase of credit risk insurance and increase of
exchange currency risk and exchange rate fluctuations.
- In term of workforce:
+ Low technology qualification, low management skill, few skilled workers.
+ Low work principle, under Asian habits, wet rice culture – agricultural
production.
+ Strike: for the past years, more and more strikes of workers have happened for
demand of wage improvement. According to domestic press, there were 978 strikes in
2011 compared to 541 in 2007. Strikes for demand of wage improvement delay
production and business activities of companies, increase wage costs, wage, reduce
profits of investors.
-Purchase power to products and services is limited due to people’s low income
and the taste of people with high income towards export products of high quality and
reputation.
III. Advantages:
Vietnam is calling for foreign investment. Therefore, many policies that attract
and create favorable conditions for foreign investments are carried out. They include:
- Completing legal framework on foreign investment in order to help them invest
in Vietnam, creating an equal mechanism with Vietnamese companies.
- Establishing a series of industrial parks, processing and exporting zone in order
to attract foreign investment.
- Implementing tax policies so that they can attract foreign investors.
+ Exempting or reduce land rent for investors in difficult areas where no or rare
Vietnamese investments.
+ Creating tax barrier to protect foreign investors in Vietnam tax rate of import
tariff, special consumption tax should be high to imported products and goods that can

be made domestically. Exemption or low tax rate of import tariff, special consumption
tax to imported accessories, parts that serve assembly and production in Vietnam.
+

9


+ Encouraging the import of made-in-Vietnam products by preferential tax
policies: it should apply tax rate of 0% for output VAT; input VAT of companies is
deducted while no output VAT is applied. Those measures will reduce costs of
companies, promote price competitiveness of made-in-Vietnam products for export.
- Due to its recent accession to international integration, there have been many
potential areas of production and business that have not or rarely been invested.
- Vietnam owns various natural resources for production and business demands at
site of companies such as minerals, agricultural products, forestry products…
- Some basic input factors for production and business are still partially protected,
subsidized though their selling prices such as electricity, water or are free of use charge
such as traffic infrastructure invested by the state budget. This helps investors to lower
cost and increase profits.
- Business environment is extensively improved such as legal framework,
administrative reform, anti-corruption.
IV. Difficulties:
- Vietnam has rich culture and history with 54 different ethnic groups. Each
region, ethnic group has its own cultural features and customs. Consequently, it is not
easy to access, learn fully cultures, customs of ethnic groups, regions in order to set out
appropriate production and business plans.
- Legal framework is asynchronous, not tight, which sometimes the leak for public
servants to annoy companies.
-Administrative formalities are still very complicated, through many steps,
procedures, consuming time, raising costs, even causing companies to miss their

business opportunities.
- Language barrier: Foreign language of both public servants and employees is
limited. Most part of employees does not know how to use English (the most popular
foreign language) or knows very little, not sufficient for their communication. Almost
public servants know how to use English, but still not sufficient for their studies or
communication at work.
Like in other countries, foreign investors will meet the following risks for their
investments in Vietnam:
10


1. Exchange rate risk: As mentioned above, the exchange rate between VND and
USD has increased by 30% from 2007 to 2012. This is one of the important risks for
any investment in Vietnam.
2. Policy risks due to political changes made by the State or the Party. Investment
is long-run activity that has been prepared for many coming years. Therefore, changes
in policy may cause accidental problems. Policies can be right today but wrong
tomorrow. Particularly, Vietnam is still under its renovation, transforming from
administrative and subsidy management into market economy, under its international
integration. As a result, its management mechanism is always under changes. Many
laws that were passed yesterday change today, particularly policies on VAT, import
tariff, special consumption tax, corporate income tax directly involving and affecting
companies. Such policies may change projects of many companies from profits to
losses, or even bankruptcy (for instance, foreign automobile companies in Vietnam will
face difficulties as the Government allows import of old vehicles, reduces import tariff
to imported vehicles or raises tax on transfer of properties, vehicles registration fee,
traffic fee, vehicles keeping fee, forcing vehicle buyer to have parking space available
prior purchase). Or wage changes without any notices or plans bringing difficulties to
companies.
3. Legal risk: It is still unclear in definitions of right and wrong, legal and illegal

in investment and business environment in Vietnam. Such concepts are informally
expressed. As a result, a significant scandal like Vinashin can occur while a fire or debt
payment can be considerer criminal activities and cannot be settled by arbitration. For
example, a company having joint partnership with state-owned company, the investor is
not shielded and still be vetoed by Vietnamese partners as expressed in Vietnamese
style. So does labor dispute.
4. Micra-economic risk: This causes economic instability, high inflation, too big
public debts, state budget deficit, currency devaluation resulting in increase of costs,
difficulties in access to capital and credit.
5. Cultural risk. Vietnam still maintains some Asian habits such as “ An important
person, the whole village was by” or exclusive confidence and trust in family members from
11


political relations to appointment or bribery of family members or in outsourcing contract,
material supply contract.

6. Environmental and ecological risks: Infrastructure is out of date and cannot
respond to natural disasters or simply just unavailability of water or power.
7. Work force risk. Vietnamese work force is not skilled and compliant with
working rules. Advantage of cheap work force somehow cannot compensate low
working performance. Work force does not strictly follow regulations like that in other
ASEAN countries. Recently, many strikes have happened in foreign invested
companies causing production delay and causing foreign companies to raise wage,
which increases unplanned cost.
8. Political risk: Change of political system, social disorders due to riots, racial
and religious conflicts, terrorisms have not present but not absolutely impossible.
Beside the political system under the leadership of Vietnamese Communist Party in
accordance with Marxism–Leninism with the near target of building socialism towards
building communism, foreign investors are afraid of the nationalization of private

assets including those of foreign investors when then decide to invest in Vietnam.
VI. General assessment of international business environment in Vietnam
- According to WB’s data, Vietnam’s business environment has still remained
some problems for years without improvement:
+ At present, some of Vietnam’s criteria are underappreciated in the comparison to
those in other countries in the region or in the world such as: investor protection
(ranked 116th ), tax payment (ranked 151th), bankruptcy settlement (ranked 142th
among 283 countries).
+ According to WB’s statistics, cost of time for Vietnamese companies to pay tax
is 941 hours/year, much higher than the average level of other middle-income countries
(350.2 hours/year) and other countries in the region (236.9 hours/year).
+ Duration of bankruptcy settlement in Vietnam is 5 years. Cost of time in this
procedure is much longer than that in other middle-income countries (3.3 years) and
other countries in the region (2.9 years).
+Although Vietnam’s criterion in investor production shows improvements (6
times higher than that in 2011), it is still underappreciated, ranked 166 th among 183
12


economies. With the scale from 0-10, this criterion of Vietnam just gets 2.0 points,
much lower than the average level in other middle-income countries (5.5 years) and
other countries in the region (6.3 years).
- In 2012, among 10 individual criteria ranked to build the national rank, there are
6 criteria ranked lower than those in 2011, including: (i) business incorporation (from
100th – 103rd); (ii) property ownership right registration (from 43 rd to 47th); (iii) credit
access (from 21st to 24th); (iv) tax payment (from 129th to 151st); (v) cross border trade
(65th to 68th), (vi) business bankruptcy (from 130th to 142nd). In which some criteria are
much lower than those in 2011 such as tax payment (22 ranks lower); bankruptcy
settlement (12 ranks lower).
However, as evaluated by Bloomberg, Vietnam’s business environment has made

considerable progresses in 2012 such as: 6 criteria are assessed including: economic
integration level (10%), business incorporation fee (20%), labor and input materials
cost (20%), transportation cost (20%), less tangible costs (20%) and consumption level
of local customers (10%) to rank 50 economies with best business environments in the
world. By surveying 160 economies in the world, the Best Countries for Business
Ranking is released by the Bloomberg. In which Vietnam is ranked 49 th in the top of 50
countries, equally to Cyprus island. Particularly, Vietnam is in higher rank than 3 other
countries in BRIC group including Russia, India and Brazil. Among ASEAN countries,
just 3 countries are ranked in the top 50 including Singapore ranked 9 th, Malaysia
ranked 32nd and Vietnam ranked 46th. Vietnam is ranked 3rd among 3 ASEAN countries.
Despite its 46th rank, Vietnam gets 36.2% of total points from 0% - 100%, while such
number of the first rank country of Hong Kong is 49%.
Among 6 Bloomberg’s criteria, that of Vietnam’s economic integration level gets
the highest point of 64.5% and the lowest point falls in less tangible costs as this
criterion assesses corruption, intellectual property protection, tax and accounting
adjustment ability. Vietnam gets 19.3% for this criterion.
Previously, in January 2012, Bloomberg predicted that Vietnam would be among
50 world leading economies in 40 years. More recently, in February, Vietnam was
categorized as the most potential frontier market in 2012.

13


VII. Some recommendations in order to create better environment for foreign
investment in Vietnam.
Foreign investments in Vietnam for the past years have produced great benefits
such as fast economic growth, labor attraction, job creation, unemployment settlement
that indirectly helps to stabilize society, increase contribution to state budget, and raise
income for employees; improvement of competitive environment; access advanced
science and technologies and management from other countries. There are still some

disadvantages apart from such advantages such as overexploitation of natural resources
causing serous environmental pollution, differentiation and increase developmental gap
among regions and classes; increase of social evils, diseases and possible effects or
dependence on requirements of the investors. However, international business and
reception of foreign investment are external trends today. Therefore, each country
should promote its strengths and limits their negative impacts to society, economy and
politics.
For Vietnam, in order to create a better environment for foreign direct investment,
the following policies should be implemented synchronously:
1. To quickly stabilize micra-economy, reduce inflation to one digit rate, tray to
maintain inflation rate of 3-6%/year, ensure positive interest of deposit, attract sources,
money, gold, human sources and reasonably and effectively exploit natural resources
for socio-economic development.
2. To ensure and maintain social order and security, avoid political disorder, racial
and religious discrimination, terrorism, riot, overthrow, demonstration, strike causing
disorder in business of companies, especially foreign companies.
3. To continue to complete legal framework on foreign investment in Vietnam:
Synchronously issuing legal system on business management, in general, and on
foreign investment, in particular. To create favorable and fair business environment for
companies (Vietnamese state-owned companies, private companies and foreigninvested companies); to persistently and stably maintain policies to create favorable
conditions for foreign investors in Vietnam.
4. To enhance administrative reform in the direction of reducing administrative
formalities, to minimize time for administrative formalities, to help companies focus
14


their time and energy on production and business, to raise efficiency of investment
capital.
5. To promote the combat against corruption: It is also the commitment of
Vietnamese Communist Party and Government in the last session of National Assembly

in November 2012. Corruption in Vietnam is popular and causes obstacles to
production and business activities of companies, reducing confidence of investors.
6. To complete management system on money and finance.
To carry out flexible monetary policy for ensuring stability.
- Exchange rate policy: To apply policies that respect market, to actively carry out
passive policies, that is the Government waits for trend formation in the market and
then issues its policies in order to confirm such trend to pull exchange rate to its actual
relation.
- To complete monetary and financial markets: To implement flexible monetary
policies, to ensure that credit policies provide safe margin in order to strengthen the
market, to develop the economy stably and avoid hot development and formation of
bubbles to the economy.
To reform and complete tax policies: to simplify procedures in VAT, import tariff,
special consumption tax, corporate income tax, oversea profits transfer tax and in
customs for companies; to apply tax at a reasonable extent in order to help companies
reinvest, increase after tax profits; to carry out oversea profits transfer tax reasonably in
order to create more attractive competition for foreign investors in Vietnam than that in
other countries in the region and in the world.
7. To promote construction, completion of infrastructure, facilitating socioeconomic development, in general, foreign investment, in particular.
8. To boost human resource training, shaping human resources of high quality,
qualification and working principles.
Conclusion
Activities in international business environment are external trends nowadays.
Upon determining their meanings and significance, Vietnamese Government has paid
attention on attracting foreign investment, improving business environment, facilitating
15


foreign investors to operate in Vietnam. At present, Vietnam’s business environment is
showing more advances than the past. In fact, although Vietnam has become an

attractive destination for foreign investors, it still remains some problems as mentioned
above. However, Vietnamese Government has identified such problems and
implemented remedies with determination of making Vietnam the most competitive and
best country of business environment in the world. Vietnam has advantages of stable
politics and society, no riot, racial and religious discrimination, demonstration, cheap
and huge work force, improved infrastructure, some underdeveloped economic areas,
positive signs of micra-economy, gradual control of inflation, decrease of interest rate.
Besides, Vietnam is promoting its completion of legal system, administrative reform,
anti-corruption, renewal of tax policies… All aim to create favorable, transparent and
clear environment for companies, in general, and for foreign companies, in particular.
Therefore, at present and in the future, international should decide to invest in Vietnam
as it is a destination with safety, potentials and success.

16