While the opportunities in Vietnam are promising, the Foreign Commercial Service acknowledges that doing business in Vietnam remains challenging. U.S. industry concerns persist related to bureaucratic delays, as well as the lack of progress in advancing energy projects and the impact on U.S. commercial interests in the market.
The evolving nature of regulatory regimes and commercial law in Vietnam, combined with overlapping jurisdictions among government ministries, often results in a lack of transparency, uniformity, and consistency in government policies and decisions on commercial projects. In December 2024, Communist Party General Secretary To Lam unveiled Vietnam’s most ambitious bureaucratic restructuring since the 1986 Doi Moi reforms, announcing a comprehensive plan to streamline the country’s administrative apparatus by merging ministries, cutting at least one-fifth of the public sector workforce, and reducing government ministries from 22 to 17. The reforms also include a dramatic reorganization of local government that will reduce
Vietnam’s provincial-level administrative units from 63 to 34; the associated resolution passed by Vietnam’s National Assembly, Resolution 60, eliminated the district level of administration entirely, creating a new two-tier system. This sweeping overhaul is designed to reduce bureaucratic inefficiencies, accelerate economic growth, and position Vietnam for its goal of becoming a high-income country by 2045. Vietnam has a comprehensive anti-corruption legal framework compared with other Asian countries, with significant enforcement improvements since 2017 under a recent anti-corruption campaign that has prosecuted numerous high-ranking officials. However, corruption and administrative red tape remain significant challenges for foreign companies doing business in Vietnam. Vietnam ranked 81st out of 182 countries in the most recent Transparency International Corruption Perceptions Index, an improvement from its ranking of 104th in 2020. By comparison, within Southeast Asia, Singapore continues to rank among the least corrupt countries globally, while several regional peers—including Thailand, Indonesia, and the Philippines—rank lower than Vietnam.
In addition, Vietnam’s application of taxation laws remains one of the most challenging issues for U.S. businesses operating in Vietnam, including the risk of double taxation. Many firms operating in Vietnam, both foreign and domestic, continue to find ineffective protection of intellectual property to be a significant challenge. Vietnam remains on the Special 301 Report Watch List, reflecting ongoing concerns despite recent reforms. Online piracy remains rampant in Vietnam. While Vietnam continues to host piracy sites and services worldwide, recent high-profile enforcement actions–including the 2024 shutdown of Fmovies, the world’s largest pirate streaming operator–demonstrate increased government commitment to IP enforcement.
While Vietnam officially established a specialized IP Court effective January 1, 2025, it has not yet become operational due to ongoing preparations and is expected to begin functioning by late 2025 or early 2026. The country continues to rely heavily on administrative enforcement actions that prioritize ending infringing behavior rather than imposing meaningful penalties, consistently failing to deter widespread counterfeiting and piracy.
While Vietnam has reduced tariffs on many products in line with its WTO commitments, high tariffs on selected products remain. The U.S. industry has identified a range of products, which include agricultural products, processed foods, and nutritional supplements, that have significant export growth potential if Vietnam’s tariffs could be reduced further.
Furthermore, investors often run into poorly developed infrastructure, high start-up costs, unexpected tax assessments, arcane land acquisition and transfer regulations and procedures, and a shortage of skilled personnel.