Positive institutional changes boost Vietnam's M&A market

November 28, 2024 | 09:56

(0) user say

Vo Ha Duyen, chairwoman of law firm VILAF, stated that recent positive institutional changes have helped make Vietnam's merger and acquisition (M&A) market more attractive.

Sharing insights at the 2024 Vietnam M&A Forum, themed "A Blossoming Market," hosted by VIR on November 27 in Ho Chi Minh City, she emphasised that efforts to reform administrative procedures and accelerate digital transformation have been key factors driving positive changes in Vietnam's M&A market.

The most significant development, according to Duyen, is the reduction of regulatory burdens and the expansion of investment opportunities, particularly in green technology, renewable energy, and sustainable development.

"Specifically, the new Telecommunications Law, effective from July 1, has expanded several services, including data centres, cloud computing, and basic internet access, aligning with the trend of transforming telecom infrastructure into digital infrastructure, while also providing a clear and fair legal environment for businesses," she said.

Vo Ha Duyen, chairwoman of VILAF. Photo: Le Toan

Moreover, Vietnam has gradually eased foreign ownership limits, now allowing up to 100% foreign ownership in many sectors, such as e-services and gaming services. “This change has made it easier for foreign investors to enter these fields.”

In the renewable energy sector, Vietnam has implemented a mechanism for direct electricity sales between investors and enterprises, a practice that was not possible before, as consumers had to buy directly from Vietnam Electricity.

However, Duyen also pointed out the challenges to be mindful of in M&A activities in Vietnam. These include changes in tax policies, such as the global minimum tax, corporate income tax, and special consumption tax.

"Many policies are still in draft stages and under review, so investors need to carefully assess the potential impact these changes may have on future M&A deals. This could lead to delays in some transactions.”

Despite these challenges, the VILAF chairwoman expressed optimism about new mechanisms that are expected to have a positive impact.

“A special investment procedure is currently being considered by the National Assembly during its eighth session, which is expected to be approved. This procedure would apply to certain projects in innovative industries, research and development, semiconductor integrated circuit manufacturing, high-tech industries, and high-tech products, with preferential investment policies under the direction of the PM,” she said.

"Investors need to take the time to assess how these changes will impact their decisions and potential future M&A deals," she added.

Despite the challenges, with the anticipated positive impacts, Duyen expected 2025 to see more M&A deals compared to this year, particularly in sectors such as logistics, manufacturing, technology, and finance.