M&A IN VIETNAM – TRENDS AND CHALLENGES

Investing in Vietnam is a perfect choice in the wave of shifting production activities by many multinational corporations to diversify their supply. Particularly, mergers and acquisitions (M&A) become the priority channel for foreign investors when building operations in Vietnam.

1. In brief of the M&A market

Vietnam has implemented various measures since 2015 to strengthen its legal framework and improve the efficiency of market governance. As a result, the government has strengthened its management in taxation, investment, competition, and e-commerce. The closure of tax loopholes on indirect transfers, the establishment of clear frameworks for e-commerce, and the implementation of stronger rules on investment and competition have all contributed to a more level playing field. Supply chain disruption is still a concern for multinational corporations.
Corporations are actively seeking new solutions to diversify supply and relocate production to other countries, with Vietnam being regarded as an ideal choice. Therefore, in the face of the risk of global economic recession, Vietnam continues to be a bright spot in terms of economic development potential and a potential destination for investors in the region.

2. Dispute resolution of M&A 

In M&A disputes, the participation of arbitration presents a number of advantages because there are a number of procedures and characteristics as follows:
– First, the procedure of third party addition and consolidation of arbitration proceedings
– Second, the involvement of experts in dispute resolution
– Third, the confidentiality of the referee is high
– Fourth, resolve disputes faster and more friendly

3. Trends and challenges

Vietnam is placing a greater emphasis on environmental, social, and governance reporting and compliance. The Law on Investment contains provisions to reject project extensions that employ outdated and environmentally harmful technologies. Furthermore, a decree scheduled for release in 2022 will establish requirements to reduce greenhouse gas emissions and pilot a domestic carbon credit market. This will generate revenue opportunities and add value for companies that prioritize sustainability.

4. Conclusion

In conclusion, the M&A laws in Vietnam reflect the country’s efforts to attract foreign investment and promote economic growth. The trends in M&A activity have been on the rise in recent years, driven by sectors such as real estate, manufacturing, and services. However, there are challenges that need to be addressed, including the need for clearer regulations, transparency, and a more efficient approval process. As Vietnam continues to open up its economy and reforms its legal framework, it is crucial for policymakers to continually evaluate and update the M&A laws to ensure a conducive environment for both domestic and foreign investors.

#mergersandacquisitions #trends #challenges

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Harley Miller Law Firm “HMLF”
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