Economy & Business > Unique Characteristics of Vietnam Economy


Including a couple of conglomerates (i.e, Petro Vietnam, Songda), most of the Vietnamese companies are based on SOE(State-Owned Enterprises) structures. Since the ‘Doimoi(Economic Renovation)’, many of these SOEs have been restructured through either equitisation, merger or ownership transfer into private companies. However, due to their origin, many companies are somewhat ‘diversified’ while most of the business fields lack synergy. As time passes, companies are tending to specialize.

Although the Vietnamese government is actively enticing FDI, most of its portion is invested in importing raw materials rather than constructing basic infrastructures. With the imported materials, they merely assemble or process products and export them. Consequently, the country’s economy is being built on the basis of low-value added industries which eventually create a fragile economy.
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Limitation of investment – Foreign investors can only own 49% of a company’s stock. The rest of the 51% is owned by either the government of Vietnamese people. Therefore, foreign companies must be engaged with Vietnamese people by forming joint stock companies.