Vietnam economy is expected to continue growing optimistically in 2018 with FDI remains to be the main driver of the economy. Total disbursed FDI is expected to grow at double digits, due to the large amount of FDI registered in 2017.
Total registered FDI reached $35.9 billion in 2017 - a record for the past decade and export revenue was $214 billion, increased by 21 percent from 2016, with a trade surplus of $2.7 billion, as stated in the report of Grant Thornton Vietnam.
Negotiations on a number of trade agreements including CPTPP, RCEP and EVFTA, which are expected to conclude in 2018, will become a driving force for FDI growth.
Vietnam continues to be an attractive destination for investors when compared to its neighbors, ranks 55 out of 138 in terms of competitiveness, according to the Global Competitiveness Report of World Economic Forum's (WEF) 2017-2018.
Vietnam was chosen as the most attractive destination, followed by Myanmar and Indonesia, according to the report of Grant Thornton Vietnam.
Growth in disposable incomes, coupled with Vietnam's bright economic prospects and steady inflation over the last few years, have contributed to increase in consumer confidence, which results in spending increase, more than 80 percent from 2010 to 2016.
With this rate of growth, Vietnam has become a potential market for consumer products, and consumer-driven industries such as food and beverages, retail, services, and public goods, high art.
High and stable economic growth, together with stable inflation are two factors that have had a great impact on investment decisions in Vietnam.
Additionally, the rise of the middle class and the disposable income also boost investment level, according to the survey results. These positive factors contribute significantly in reducing the risk assessment of investments in Vietnam.
Despite this, barriers to investment still exist, most notably the inconsistency and transparency of investment policies, procedures and regulations.
This is an issue that is frequently encountered by small and medium enterprises, and state-owned enterprises with old management systems. For these enterprises, corporate governance is still relatively a new concept.
Although the regulation does not discriminate against foreign investors, investment opportunities in Vietnam are still constrained by the lack of transparency in working procedures with regulators.
In particular, licensing procedures usually require the approval of various ministries, agencies and local authorities, as well as different approach of these agencies in the interpretation of investment laws and regulations.
Transparency in business is often considered one of the three most important elements to consider when investing in Vietnam. Transparency of the financial management system, business operations and business processes will increase investor confidence in the transaction and increase the likelihood of transaction success.