Overall political stability is assured, despite the internal conflict within the ruling Communist Party of Vietnam (CPV) – though that conflict is itself a significant source of risks for businesses in sectors close to the government (such as banking, real estate, oil and gas) or in partnerships with Vietnamese conglomerates that lean disproportionately to one side of national or local political divides. The key risk issues for foreign business are, then, indirect and intermittent, and stem from being caught up in high-level or local-level factional infighting. The internal discord does not affect the CPV’s disposition towards foreign investment. The government continues to liberalise sectors and promote a range of bilateral or multilateral trade and investment agreements and initiatives. The CPV’s main challenge is maintaining the public legitimacy that allows it to justify its monopoly on political power. The CPV believes that its legitimacy will be sustained if economic advances continue, and so pursues an increasingly open economy and market-oriented development model. The CPV has total control of the political system. There are no rival power centres and there is little public desire for their emergence. Dissident voices gain little acceptance, allowing the CPV to crack down with uncompromising force on any calls for greater democracy or other political reform. Forced regime change is very unlikely, and the cycle of personnel transition at five-yearly intervals, when CPV Congresses occur, will continue. 

Vietnam is strengthening its regional and global relations through a more prominent role in the Association of Southeast Asian Nations (ASEAN), and pursuing stronger ties with countries in Europe, Central Asia and South America. It is now the most assertive country in the region with respect to pushing new bilateral and multilateral trade agreements.

Its strong support for trade co-operation – such as with the reformulated Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into effect in December 2018 – sets Vietnam apart from others in South-East Asia that are encumbered by domestic resistance. There are no serious tensions between Vietnam and its neighbours or key economic partners, aside from China. International criticism on human rights grounds after government crackdowns on dissidents will periodically arise and delay – but not derail – ratification of trade agreements with Vietnam (such as the EU-Vietnam trade agreement, which came into effect in August 2020).

Investment-related policymaking and sudden regulatory shifts are generally on favourable trajectories for business, often as a result of Vietnam’s increasing enfoldment into the WTO and other multilateral trade and investment agreements. Restrictions on foreign investment are being slowly removed, with resistance focused on preserving interests in certain sectors (for example banking, telecommunications) rather than on a nationalistic or other ideological basis. 

Corruption is pervasive throughout every layer of government and society. Levels of corruption are expected to remain high over the next three to five years unless government and business make a concerted effort to improve transparency and enforcement – currently an unlikely scenario. The CPV has sought to alleviate investor perceptions regarding non-payment risks after the collapse of state-owned shipping company Vinashin in a 2010-12 corruption scandal. The company left various foreign creditors unpaid and there followed years of aggressive legal actions in foreign courts against the Vietnamese state. 

Vietnam is considered an Aauthoritarian Regime in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 136 out of 167 countries scored.

The country ranks 117 at the 2020 Human Development Index developed by the United Nations Development Programme.

Vietnam is not an easy place to do business. Even with the concerted efforts of the government for the last few years to facilitate business, only limited improvements have been delivered. 

The principal complaint of business, across various processes (for example, establishing a business, paying taxes, connecting utilities), is that there are an excessive number of steps to take and interactions with a high number of administrative offices. The result is that processes are time-consuming and costly. Interactions with the bureaucracy are frequently problematic, subject to delayed handling, excessive layers and processes, and requests for facilitation payments. Issues of land access – leasing, zoning or clearing – are a common source of delay for investments, in urban or rural areas (but particularly the latter), and these are exacerbated by political infighting. Foreign investors do not have the right to own land. This restriction also applies to individual Vietnamese citizens. According to the 1992 constitution, all the country’s land belongs to the people, and is administered or managed by the state. 

One important reason for this heavy bureaucracy burden is Vietnam’s status as a socialist state, with many of the registration requirements across multiple offices explained by reluctance to disband any agency with nominal links to the party apparatus. Another reason is a lack of skilled personnel or sophisticated systems. Regarding the first, Vietnam has a large and inexpensive unskilled or semi-skilled pool of labour, but a shortage of skilled workers, which recent education and training reforms seek to address. As a result, skilled workers demand relatively (for the region) high salaries, which they then frequently look to negotiate upwards. Improving the country's education system is a priority for the government. Vietnam is attempting to skill-up and modernise but lags regional peers. The major reason, however, is demands for facilitation payments that pervade almost all state interactions, for companies and citizens alike.

Infrastructure is basic and often inadequate in rural areas. Transport routes are limited, with roads in rural areas often unable to support heavy vehicles (for example, materials for industrial or power projects). Budgets for repair, operation and maintenance are typically insufficient, and investors in remote locations often have to fund essential actions themselves. However, it is true that there has been a high level of investment in the last decade, combined with intensive support from the international donor community, that has resulted in a marked improvement in the country’s infrastructure. Telecommunications services are reliable in most areas, with multiple providers and continuing upgrades as 4G and 5G services begin to take hold in some locations. Power shortages are an increasingly pressing issue for the government.

The government continues to miss deadlines to equitise (local term referring to privatisation) state-owned enterprises (SOEs). The process remains complex – especially disagreements over issues such as valuations or divestment models (for example, the stake made available to investors). The government will redouble efforts to attract substantial private investment in transport and power infrastructure, through the passed 2020 Law on Public-Private Partnerships.

Overall, Vietnam ranks 70 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 104 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

Crime levels remain low, though pickpocketing, bag-snatching and various scams targeting foreigners are common in cities such as Hanoi and Ho Chi Minh City (HCMC). Petty crime is prevalent in main cities, though the risk of violent crime impacting personnel is low. Crime statistics are not made available, at either the city or country level, though state media reports regularly on the above-average rates of crime in Hanoi and HCMC. However, while rates are almost certainly above the national average, they would still be low by international standards. Petty theft – such as pickpocketing and bag-snatching – is the most serious threat to foreign nationals.

General security risks stemming from the presence of organised criminal groups are slightly higher in areas bordering Cambodia, where banditry and smuggling occur. Kidnap is usually confined to the local population or to Vietnamese who have returned from abroad and incidents are rare even then. Companies in rural areas, such as power plant operators, can face low-level extortion demands, with non-payment occasionally leading to vandalism or intimidation of staff.

Strikes or protests from workers demanding higher salaries are commonplace, occasionally affecting foreign-invested manufacturing plants and industrial parks favoured by foreign firms; violence is not a common result, though isolated cases occur. The most significant trigger of unrest is public anger stirred by Chinese actions in the disputed waters of the South China Sea. Protests on this issue have occurred in the past in Hanoi and HCMC but have not had significant security implications for anyone other than their several dozen participants. Social tensions are most prominent in Central Highlands regions, where many of the country’s ethnic minorities live. Many of these ethnic minorities have been economically marginalised and have grievances against the state. However, they show no sign of forming new anti-government “insurgent” movements.

Vietnam’s relatively good relations with its neighbours and its ASEAN membership mitigate inter-state war risks. Moreover, terrorism poses a low risk, including in major cities such as Hanoi, Ho Chi Minh City and Da Nang. Vietnam is a low-priority target for transnational terrorist groups, and there has been little to suggest the grievances of Vietnam’s marginalised ethnic minorities in rural areas have the potential to form any domestic insurgency.

Overall, Vietnam ranks 64 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.

Vietnam is currently among the most cyber-attacked countries in the world.  According to Kaspersky cyber threat map, it is ranked as the 6 most cyber-attacked countries. 

Vietnam’s government has since 2014 invested heavily in its technical and operational cyber capabilities. In 2018, Vietnam said it had created a Cyberspace Operations Command, which likely spearheads its strategic offensive cyber operations under the authority of the Ministry of National Defence.

Vietnam’s government does not publish statistics on cybercrimes in the country. However, open sources regularly report on social engineering scams against customers of financial institutions and on cases of social media account hijacking, where criminals message the users’ contact lists to elicit money or purchase gift cards. Visitors to Vietnam are likely at heightened risk of credit card fraud when making purchases or withdrawing cash. Although most domestic cybercriminal actors retain limited capabilities, Vietnam has been targeted by more sophisticated campaigns, likely of foreign origin.

Proof of vaccination against yellow fever is required if traveling from a country with risk of yellow fever transmission and over one year of age.

Vietnam ranks 50 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

Travelers to Vietnam should note a few other risks as well in this regard. First, typhoon season lasts from June to December. The country sees an average of ten storms per year, particularly the northern and central regions.

In November 2009, Typhoon Mirinae, after battering the Philippines, left 50 dead in Vietnam; the majority of the deaths were due to the severe flooding that struck the provinces of Phu Yen, Binh Dinh, and Gia Lai (center). Typhoon Sarika hit in mid-October 2016, leading to 30 missing people and flooding in over 120,000 homes in Quang Binh province.

The summer monsoon season regularly results in significant flooding (Red River basin in the north and the Mekong delta in the south).

Drought, heatwaves, and floods are also natural risks in Vietnam, which counts among the five countries most affected by the climate imbalance.