Vietnam looking to lift restrictions on foreign investment in push for privatisation

Vietnam will relax regulations in an effort to make $7 billion from share sales

Vietnamese Prime Minister Nguyen Xuan Phuc has appealed for foreign investment in state-owned enterprises at a recent business forum in The Hague. The Prime Minister said Vietnam will lift restrictions on foreign investors in areas including services, telecommunications, finance and banking, and raise the limit on foreign ownership levels.

Privatisation and acquisitions have reduced the number of state-owned enterprises in Vietnam from 6,00 in 2001 to around 700 at the end of last year, according to official data.

As a result foreign investors are now keeping an eye on the wave of privatisation, and are especially keen on strong performers such as dairy giant Vinamilk and top brewers Sabeco and Habeco. These firms are among a group of 10 companies that the government plans to divest from, a move that could bring in as much as $7 billion.

Shapshot of the Economy

Vietnam is trying to open up its economy, and has set a GDP growth target of 6.7 percent this year.

The US remains Vietnam’s largest export market followed by China and Japan. Australia represents the eleventh largest export market for Vietnam.

On with World Bank’s Ease of Doing Business Index released last November, Vietnam climbed nine places from the previous year to 82 out of 190 global economies, but is still lagging behind ASEAN peers Singapore, Malaysia, Thailand and the Philippines.

The country’s actual Foreign Direct Investment inflow increased 6.5 percent from a year ago to $7.72 billion in the first six months of 2017.

The country has already signed 12 free trade agreements, and a deal with the EU is imminent.

The Netherlands is currently the top European investor in Vietnam with $7.65 billion.

What does this mean for Australian Investors?

The continued relaxation of investment restrictions in Vietnam and other ASEAN countries creates huge opportunities for Australian Company’s to be ‘first to market’. ASEAN is regarded as the fasted growing region in the world with annual growth rates in GDP of 5% compared to 1.4% in the US, Europe of 2.1% and Australia of 0.3%. As a member of Morison KSi, Greenwich have a strong network across the ASEAN region.

Contact us today to see how we can assist with your expansion plans within the ASEAN region.