Vietnam’s White-Collar Crime Definition: A Growing Concern for Foreign Investors

As Vietnam continues to attract foreign investment and grow its economy, concerns about white-collar crime are on the rise. The country’s anti-corruption crackdown has led to the resignations or removals of senior government leaders and private sector executives, causing uncertainty among foreign investors.

Background

Vietnam’s anti-corruption campaign has resulted in improved transparency and accountability. However, this drive has also raised concerns about the potential impact on business operations and investment decisions.

Economic Growth

According to recent reports, Vietnam’s economy hit 8% growth in 2022, exceeding average rates of 7.1% between 2016 and 2019. In 2023, forecasts expect Vietnam’s GDP growth to slow to a “moderate” 6.3%, which is still remarkable considering the current global macroeconomic outlook.

Foreign Investment

Foreign investment in Vietnam has also seen significant growth, with approximately USD 27.72 billion invested across sectors in 2022. However, investment numbers fell in Q1 2023, citing lower global demand and uncertainty about Vietnam’s domestic situation.

Anti-Corruption Drive

The anti-corruption drive has targeted senior government leaders, including former President Nguyen Xuan Phuc, and two out of four deputy prime ministers. Multiple senior-ranking members of the government, Communist Party of Vietnam (CPV), and security apparatus have been arrested, investigated, and prosecuted on charges including bribery, abuse of power, and fraud.

Private sector companies have also been scrutinized, with investigations into real estate, banking, and healthcare sectors. Some experts believe that the crackdown is part of Vietnam’s efforts to bolster its position as an attractive destination for investment and business expansion.

Positive Developments

Despite the concerns, many experts see the anti-corruption drive as a positive development for the market and long-term prospects. Transparency International’s Corruption Perception Index 2022 showed Vietnam improved by nine points from its score of 33 in 2018 to a score of 42 in 2022, ranking 77th out of 180 countries surveyed.

Opportunities and Challenges

For PE funds, foreign investors, and multinational corporations with an eye on Vietnam, the ongoing anti-corruption drive presents both opportunities and challenges. While it is essential to tighten due diligence on business partners and other third parties, it is also crucial to understand the political and reputational exposure for existing or potential investments or businesses in Vietnam.

Conclusion

As the country continues to ride out the remainder of its concerted anti-corruption drive, companies and investors must ask the right questions and seek specific legal advice based on particular situations. With healthy growth and opportunities across sectors, including consumer retail, manufacturing, and logistics, Vietnam remains an attractive destination for foreign investment.