HCM CITY (Biz Hub) — Viet Nam remains an attractive destination for foreign investors despite challenges, according to EY (formerly known as Ernst & Young), one of the world's leading accounting companies.

Max Loh, the EY's regional managing partner for Asean, said that, with total investment capital of more than US$23 billion, Singapore was the fourth biggest investor in Viet Nam, followed by Japan, South Korea and Taiwan.

New Singaporean investors continue to be interested in Viet Nam, while those who have already invested want to maintain or expand their business, said Loh.

EY, however, said Viet Nam faced several challenges, including bad debt, a lower-than-expected Gross Domestic Product (GDP) last year, and the record number of bankruptcy.

Nevertheless, EY praised the Government for addressing these problems.

"In a globalised world, every country competes for investment dollars. Every country wants to upgrade itself and be value-added," 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, they said.

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

Tran Dinh Cuong, managing partner of EY in Viet Nam, told Viet Nam News that EY was in the process of changing its business strategies worldwide, and this would be reflected in its Viet Nam operations as well.

"Emerging markets, including Viet Nam, will play an important role for us to reach our general purpose," he said. — VNS