I. PEST Analysis
1. P (Politic):
Tax Policies: In the article ‘Tax affecting foreigners doing business in Vietnam’ (vietnamembassy-usa.org, 2015), the author mentioned these the following taxes that may affect foreigners while conducting business in Vietnam:
Corporate Income Tax
Capital Transfer Tax
Personal Income Tax
Employment Laws: The Labour Code creates a legal framework that sets out, amongst other things, the rights and obligations of employers and employees with respect to working hours, labour agreements, payment of social insurance, overtime, strikes, and termination of employment contracts.
Political Stability: The one-party system is generally conducive to short-term political stability.
During recent years, many laws and regulations have been enacted to establish the legal framework for the open-door policy and to comply with the integration requirements of international agreements, of which the most important laws include: the Civil Code (2005); the Labor Code (1994, as amended in 2002 and 2006); the Commercial Law (2005); the Law on Enterprises (2005); the Law on Investment (2005); the Law on Credit Institutions (1997, as amended in 2004); the Land Law (2004); the Law on Accounting (2004); Law on Real Estate (2006); Law on Tax Administration (2006); Law on Social Insurance (2006); Law on Personal Income Tax (2007, effective as 1 January 2009); Law on Corporate Income Tax (2009); Law on Value Added Tax (2009).
Trade and Tariff Restrictions
2. E (Economic):
Economic Stability: In one of their press release, the World Bank (2014) states that Vietnam’s macroeconomic stability continues, enabled by easing inflation, strengthening external accounts, and stabilizing the foreign exchange market.
Economic Growth: Vietnam’s economy accelerates in 2014. The economy expanded 6.0% over the same period of the previous year. Growth prospects remain...