Vietnam remains an attractive destination for foreign investors despite challenges, according to EY, one of the world’s leading accounting companies.

To Singaporean investors, Vietnam is considered the second best destination, after Myanmar, according to EY (formerly Ernst&Young).

Max Loh, the EY’s regional managing partner for ASEAN, said that with total investment capital of more than 23 billion USD, Singapore is the fourth biggest investor in Vietnam, followed by Japan, the Republic of Korea and Taiwan .

New Singaporean investors continue to show interest in the country, while those have already invested want to maintain or expand their business, according to Loh.

EY, however, said Vietnam faces several challenges, including bad debt, a lower-than-expected GDP last year, and the record number of bankruptcy.

Nevertheless, EY praised the Government for addressing these problems.

As for regional competition, Loh said Vietnam should not have its focus on Myanmar alone.

“Myanmar has many attractive opportunities as Asia’s last significant frontier economy, but at the same time, it has its weaknesses such as infrastructure and an undeveloped financial system,” he said.

To become more attractive, EY experts said that Vietnamese companies should increase productivity, restructure their business and develop innovative practices.

Having low costs and cheap labour is not an advantage anymore, as these competitive advantages do not last forever, according to the expert.

Companies need to move up in the value chain and adapt to rapidly changing conditions, both locally and internationally.-VNA