Vietnam plans tax breaks, fee cuts to lure overseas investors

Vietnam Seeks to Lure More Overseas Investors to Stock Market

New Reforms to Boost Attractiveness of Vietnamese Stock Market

Vietnam’s authorities are planning a series of reforms to lure more overseas investors to the stock market, aiming to ensure the country’s fastest-growing economy has enough capital inflows.

Measures to Attract Foreign Investors

Measures being considered include tax breaks and fee incentives for fund management companies to encourage overseas investors to play a greater role in the market, said State Securities Commission of Vietnam vice-chairman Bui Hoang Hai. "One of the key priorities for regulatory agencies in 2025 is to address bottlenecks, ensuring the market is more attractive to foreign investors, particularly through reforms aimed at boosting the stock market," he said.

Additional Regulatory Steps

Additional regulatory steps planned to boost the appeal of Vietnam to foreign funds include streamlining account-opening rules for indirect investment capital accounts, and requiring companies to comply with a regulation to make disclosures in English. The country’s main stock exchanges in Hanoi and Ho Chi Minh City have both been asked to expedite the introduction of a new trading system to speed up settlement, he said.

Challenges Faced by Foreign Investors

Despite these efforts, there are still a number of deterrents to greater involvement by foreign investors, including limits on overseas ownership in popular industries such as banking, transport, and retail, said Ruchir Desai, a fund manager at Asia Frontier Capital in Hong Kong. The potential impact of policies introduced by new US President Donald Trump may also make overseas investors wary, he added.

Impact on the Market

Vietnam’s benchmark VN Index has slipped 2.8% over the past three months, in part due to concern about higher US tariffs. The dong has weakened about 0.5% over the same period.

Potential Consequences of Emerging-Market Status

Should the stock market achieve emerging-market status, Vietnam may attract $5 billion to $6 billion of capital inflows from passive and active funds, said Wanming Du, director of index policy at FTSE Russell.

Conclusion

Vietnam’s efforts to reform its stock market and attract more foreign investors are crucial to ensuring a steady flow of capital inflows and supporting the country’s economic growth. While challenges remain, the country’s authorities are taking steps to address these issues and make the market more attractive to overseas investors.

Frequently Asked Questions

Q: What are the new reforms aimed at?
A: The reforms are aimed at making the Vietnamese stock market more attractive to foreign investors, particularly through tax breaks and fee incentives for fund management companies.

Q: What are the current challenges faced by foreign investors?
A: The main challenges include limits on overseas ownership in popular industries such as banking, transport, and retail, as well as the potential impact of US President Donald Trump’s policies.

Q: What is the potential impact of emerging-market status on Vietnam?
A: If the stock market achieves emerging-market status, Vietnam may attract $5 billion to $6 billion of capital inflows from passive and active funds.