A report on private investment by Grant Thornton Vietnam revealed that 72% of respondents agreed that Vietnam is attractive to investors. However, the percentage of respondents evaluating the business environment as “highly attractive” has tumbled to 2%, a reduction of seven points against last year.

 

Myanmar took the lead due to the rapid economic growth rate, infrastructure and new investment law favoring foreign investors. Meanwhile, Vietnam holds the advantages of human resources, low labor costs and a fast-expanding middle class.

 

However, investors in Vietnam struggle with problems like corruption, bribery, political interference and inconsistent interpretation of laws and regulations. Besides, inadequate infrastructure coupled with bureaucracy and administrative procedures have discouraged investors in the country.

 

The report also showed that food and beverage and retail are the most attractive sectors to foreign investors.

 

The lower-than-expected pace of State-owned enterprise restructuring is another obstacle. In 2016, only 55 State-owned enterprises were equitized successfully, compared to 220 enterprises that went public in 2015.

 

Experts and foreign investors see the equitization of State-owned enterprises creating lucrative investment opportunities.