© Crown copyright 2017
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: firstname.lastname@example.org.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/overseas-business-risk-vietnam/overseas-business-risk-vietnam
We aim to provide information on this page on the key security and political risks which UK businesses may face when operating in Vietnam
DIT’s Exporting to Vietnam Guide provides useful information on developing your overseas trade in the Vietnam.
Vietnam is a one-party state ruled by the Communist Party of Vietnam (CPV) which provides strategic direction and decides all major policy issues. The country is led by the so-called “four royal pillars”: CPV General Secretary, State President, Prime Minister and National Assembly Chair. Policy, which includes promoting stability, retaining the political status quo, domestic economic development and international integration, is made on a consensus basis by the nineteen-member Politburo. Regional security, especially in relation to the South China Sea, is a major foreign-policy priority for the CPV.
Party leaders and the leaders of the government, are selected every 5 years at the National Party Congress. The most recent Congress was held in January 2016 and in May 2016 a national election was held to elect the 500 Deputies who make up the National Assembly, Vietnam’s legislative body.
Vietnam is one of the more politically stable countries in South East Asia. Its leadership does not welcome dissent. Internal conflict is rare although recently there have been a small number of high-profile protests including in relation to an environment disaster in Central Vietnam. There are restrictions on freedom of speech which can affect internet usage, particularly the use of social media and personal blogs, access to which can be blocked without notice.
Economic growth averaged 6.2% in recent years. The government aims to achieve the growth of 6.5% in 2017. GDP per capita has increased by 350% since 1991 (2nd only to China) and Vietnam now has the fastest-growing middle-class in South East Asia. Although slowing in recent years, growth has now ticked up again, led by the foreign-invested manufacturing sector.
The country has long been an attractive FDI destination, particularly for Japan, South Korea, Taiwan and Singapore. FDI inflows average 8% of GDP annually, the highest among major emerging markets in ASEAN and proportionately larger than China. More than half of total FDI stock is in manufacturing. Electronics and mobile phones, in particular, have since 2010 attracted large investments; around 70% of Samsung’s smart-phones are now made in Vietnam. Most manufacturing outputs are for overseas markets.
In 2016 total exports were valued at £141.3Bn (ex-rate USD/GBP =0.8) with mobile telephones and spare parts being the greatest (27% - Samsung has a large manufacturing facility) followed by textiles and garments (19%). Imports were valued at £112.6Bn with machinery and spare parts being the largest (26%) followed by electronics, computers and spare parts (25%).
Total UK good exports to Vietnam were £482m, led by machinery and transport equipment. Imports from Vietnam totalled £3.78Bn with the largest being computers, electrical goods and mobile phones. The UK is the largest EU investor in education and training and second largest in financial services.
Total trade already amounts to 150% of GDP. Negotiations on the EU-Vietnam FTA were concluded in August 2015 and ratification is expected in 2018. Vietnam was a member of the Trans-Pacific Partnership (TPP) but since US withdrew from the agreement, Vietnam’s position towards TPP11 remains unclear. Vietnam was one of the countries which signed up for the deal and made commitment to major reforms mainly for better US market access.
The state’s presence in the economy remains large in Vietnam: it maintains full ownership of more than 700 SOEs. Under the light of fiscal deficit, the Government is keen on boosting the participation of non-state sectors in the economy including privatising several major SOEs and increasing the use of PPPs for infrastructure development. The recent commitment to sell some of the most lucrative SOEs with a more transparent (and credible) timeline is estimated to pump USD 7 bil to the State Budget.
Vietnam is ranked 82th (out of 190) in the World Bank’s (WB) “Doing Business 2017” report, increase by 9 in overall rank in comparison with the previous year. This is attributed to a notable increase by 31 in the rank for protecting minority investors. The significant improvement recognises the efforts of the new leadership elected in early 2016, who have continuously sent a strong commitment to create a favourable condition for the business environment.
Read the World Bank’s more in-depth publication on the issues of Doing Business in Vietnam.
In the Global Competitiveness Report 2016-17 published by the World Economic Forum, Vietnam is ranked 60 (out of 138). Both reports highlight red tape and corruption as continuing challenges for foreign companies seeking to do business in Vietnam.
The UK Prime Minister David Cameron’s official visit to Vietnam in July 2015 was a significant step towards developing a stronger bilateral relationship, building up on the UK-Vietnam Strategic Partnership agreement signed in September 2010. 2016 saw visits from the former Foreign Secretary Philip Hammond (April 2016), Deputy Speaker of the House of Commons (October 2016), Secretary of State for the Environment (November 2016) and the Duke of Cambridge (November 2016). The last 2 visits were for the Illegal Wildlife Conference hosted in Hanoi (with support from the UK). 2017 has already seen the Secretary of State for International Trade (February 2017) visit and the Deputy Prime Minister of Vietnam visit the UK (April 2017).
Read the latest political and economic updates on Vietnam.
Vietnam is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, otherwise known as the New York Convention, and its provisions are incorporated into Vietnamese law. However, unofficial statistics suggest that international arbitration awards are recognised in only approximately 50% of cases within the country.
Further, businesses have expressed disappointment with how the Court process operates. There are issues of transparency and enforcement of judgments as well as litigation being expensive and lengthy.
3. Business and Human Rights
Until 30 June 2018 ‘British Citizen’ passport holders travelling for tourism or business can enter Vietnam for up to a maximum of 15 days without a visa. If you have a different type of British nationality – for example ‘British national (overseas)’- you’ll need to get a visa before entering Vietnam. You must get a visa before you travel to Vietnam if you want to stay for longer than 15 days and/or if you wish to re-enter Vietnam within 30 days of your departure. If you plan to leave Vietnam and re-enter from another country make sure you get a multiple visit visa before travelling. Make sure you know before you travel the type of visa you need for the purpose and duration of your trip. If you’re travelling for business reasons you should contact the relevant Vietnam government department in advance to check whether any licenses are required to carry out your duties. Vietnam has ratified the core conventions of the ILO: ILO100 - Equal Remuneration for Work of Equal Value, ILO111 - Discrimination in Employment and Occupation, ILO138 - Minimum Age for Employment and ILO182 - Worst Forms of Child Labour Convention. The right to freedom of association and to collective bargaining remains restricted in Vietnam. Vietnamese workers are not free to join or form independent unions and all unions must be affiliated with the Vietnam General Confederation of Labour (VGCL). In June 2012 the Vietnamese National Assembly approved a revision of the Labour Code which included a number of important provisions including: extending maternity leave to six months; setting out the requirement for a minimum wage; preventing employees from working more than 50 percent over their official working hours in a day; reducing the maximum term of work permits for foreign nationals working in Vietnam from three years to two years and removing the work permit exemption rule for foreign workers coming to Vietnam to work for less than three months. At the same time the National Assembly also passed an amended version of the Law on Trade Unions, which defines the responsibilities of officially recognised trade unions to protect workers’ legitimate rights. The amended law did not remove the requirement for all trade unions to be officially affiliated to the Vietnam General Confederation of Labour (VGCL) nor the restriction on foreign workers from joining unions.
For more information on human rights issues in Vietnam see the 2015 Annual Human Rights Report on Vietnam.
4. Bribery and Corruption
It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to offer a bribe anywhere in the world.
In addition, a UK commercial organisation can be considered liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
Corrupt practices are widespread in Vietnam. Anyone engaged in business in Vietnam may encounter, and at the very least should prepare for, the challenges of corruption in one form or another. Practices such as facilitation payments, bribes and giving and receiving expensive gifts in order to develop business relationships are still common.
The Party Leadership and Government have publicly committed to addressing corruption and have taken a number of concrete actions, including adopting and improving anti-corruption laws, developing anti-corruption strategies, strengthening relevant institutions and ratifying the UN Convention against Corruption (UNCAC). But this has yet to translate into effective action on the ground as prevention and enforcement activity remains weak.
British companies should not engage in any activities regarded as corruption under the UK Bribery Acts. Not only are there issues of business integrity to bear in mind, but it is also illegal. Invariably, corruption is related to lack of professionalism and control, all of which are damaging to long-term business.
After four consecutive years (2012-2016) without change, Vietnam’s score on Transparency International’s 2016 Corruption Perceptions Index improved by two points to 33/100, putting Vietnam 113th out of 176 countries in. This increase, although modest, reflects the Government’s renewed efforts to tackle corruption.
The business community and civil society in Vietnam are seeking to promote clean business in Vietnam. For example Towards Transparency, a Vietnamese NGO, works with foreign companies to share best practice on business integrity with Vietnamese partners in the value chain so that they all operate in line with international standards. The Governance and Integrity Working Group (GIWG) of the Vietnam Business Forum (VBF), a platform for high-level dialogue between the Vietnamese government and the business community, also promotes greater business integrity in Vietnam through its work with the UK and other international donors. The British Business Group Vietnam plays an active role in this process. Under the FCO’s Prosperity Fund, the British Embassy worked closely with the Vietnam Chamber of Commerce and Industry (VCCI) and IBLF Global, a UK-based NGO, to develop a toolkit to support SME’s in tackling corruption. By the end of the project over 1200 SMEs across Vietnam had been trained on how to use it.
5. Terrorism Threat
There is a low threat from terrorism, but you should be aware of the global risk of indiscriminate terrorist attacks which could be in public areas, including those frequented by foreigners.
See our Reduce your risk from terrorism while abroad page.
6. Protective Security Advice
Please read the information provided on our Protective Security pages.
7. Intellectual Property
When exporting to Vietnam, it is essential to register your rights there as soon as possible in order to be able to defend and enforce them. IP rights are territorial in nature which means that registrations in the UK or another country’s jurisdiction are not automatically enforceable in others.
Following accession to the World Trade Organisation (WTO) in January 2007 Vietnam has updated its IP laws to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Vietnam is a signatory to the following:
- the Paris Convention - for the protection of industrial property;
- the Madrid Protocol - Protocol relating to the Madrid Agreement concerning the International Registration of Marks;
- the Rome Convention - for the protection of Performers;
- the Patent Cooperation Treaty (PCT) - International Convention for the Protection of New Varieties of Plants;
- the Berne Convention - for the protection of Literary and Artistic works.
Under EU – Vietnam FTA, concluded in December, 2015, Vietnam commits to a high level of protection, going beyond the standards of WTO TRIPs agreement. With this agreement, EU innovations, artworks and brands will be better protected against being unlawfully copied, including through stronger enforcement provisions.
Among others, the EU pharmaceutical sector will benefit from improved data protection and of the possibility to get an extension of the patent up to two years if there are delays in the marketing authorisation. In a specific annex on pharmaceutical products, the Parties have agreed to a set of other provisions facilitating trade in these products, which are of great importance in the EU-Vietnam trade (second export item, amounting to about 9% of total EU exports to Vietnam). Vietnam has also taken commitments concerning procurement of pharmaceutical products and has allowed foreign-invested companies to import and sell medicines to distributors and wholesalers within the country.
There are still concerns, however, in particular on enforcement. Some surveys have identified deficient enforcement and coordination between IPR enforcement agencies, lack of trained IPR officials and awareness of consumers and public still as the main weaknesses of the system.
Vietnam is actively trying to address concerns by raising awareness of intellectual property rights and the penalties attached to infringements, through its work with international partners. Mainly enforcement on IPR is done through administrative measures and now Vietnam is putting in place heavier fines and penalties for copyright infringement.
However, concern is rising among rights holders that Vietnam’s IP enforcement system has not yet developed sufficiently to control the rapid growth of piracy and counterfeiting despite the substantial legislative work completed over the past several years. Vietnam is a priority country for the UK and remains in the 3rd category of priority countries for the EU.
IP Top Tips for businesses:
Most IP disputes are handled by administrative authorities instead of courts (although Vietnam is looking to develop and increase IP courts). However the expertise to deal with complex cases is limited. It is important to obtain expert opinions to facilitate the resolution of the case.
Certain objects, such as logos, can be protected as both a copyright and a trademark – this can give an extra avenue to enforce IP rights.
Vietnam works under a first to file system, meaning he first person to file an IP right there will own that right when granted. This means an earlier user may find they are infringing a later filed registration.
Vietnam is part of the ASEAN Patent Examination Co-operation (ASPEC), a regional patent work-sharing programme among 9 participating ASEAN Member States (AMS). The purpose of this programme is to share search and examination results between the participating offices to allow applicants in participating countries to obtain corresponding patents faster and more efficiently. ASPEC is free of charge and operates in English.
Customs registration in Vietnam is relatively simple but can be very effective. As levels of counterfeiting and piracy can be high, it is recommended that businesses register with Vietnamese customs.
Businesses are generally encouraged to learn more about IP issues relevant to their specific industry sector and to consider defensive measures early in their plans to enter the Vietnamese market.
The UK Intellectual Property Office has an IP attaché based in Singapore with specific focus on providing support and advice to UK companies in Vietnam.
Useful information can also be found at:
the Intellectual Property Office - a UK Government agency providing free and impartial advice on protecting and registering your IP in the UK and abroad;
the ASEAN IPR SME Helpdesk, a project funded by DG Enterprise and Industry of the European Commission to provide free information and training for European SMEs in the ASEAN region;