Overview of Vietnam Free Trade Agreements (FTAs)

Many ASEAN businesses expressed their desire to choose Vietnam as a new market to expand their business. At the same time, most businesses feel confident in developing their business in Vietnam. In this article, we will provide Overview of Vietnam Free Trade Agreements (FTAs).

1. Definition of Vietnam Free Trade Agreements (FTAs)

Vietnam Free Trade Agreements (FTAs) is a treaty between two or more countries in which the countries agree on certain obligations affecting trade in goods and services as well as investor protections, intellectual property rights, and other areas. Under a free trade policy, goods and services can be bought and sold across international borders with very low or zero tariffs, quotas, subsidies, or government prohibitions that are barriers to trade.

According to statistics from the World Trade Organization, there are more than 200 free trade agreements in force. Free trade agreements can be made between two individual countries or can be reached between a trade bloc and a country such as the European Union-Chile Free Trade Agreement or the ASEAN-China Free Trade Agreement. The number of free trade agreements has increased significantly over the past decade. From 1948 to 1994, the General Agreement on Tariffs and Trade (GATT), the predecessor of the World Trade Organization (WTO), received 124 notification letters. Since 1995, over 300 trade agreements have been issued.

The formation of FTAs is currently an inevitable trend in the integration and development process that countries cannot stand aside from. Realizing this, in recent years, Vietnam has actively participated in negotiating and signing bilateral and multilateral FTAs.

15 Free Trade Agreements in action in Vietnam

2. Vietnamese government support for FDI

If you are looking to export your products or services, Vietnam may have Vietnamese government support for FDI and negotiated favorable treatment through an FTA to facilitate easier procedures and lower tariffs for you. Accessing the benefits of an FTA for your products may require more documentation but can also give your products a competitive advantage over products from other countries. FTAs typically address a wide range of government actions that could impact your business:

  • Reduction or elimination of tariffs where eligible. For example, a country that typically imposes a 12% tariff on imported products will eliminate tariffs on products originating (as defined in the FTA) in the exporting country, making your products more competitive in the market.
  • Intellectual property protection: protection and enforcement of intellectual property rights in the FTA partner country.
  • Product standards: the ability of exporters to participate in the development of product standards in the FTA partner country.
  • Service businesses: the ability of service suppliers in the exporting country to provide their services in the FTA partner country.

To date, Vietnam has signed 16 FTAs and is negotiating two more. The most recent FTAs that Vietnam has participated in are CPTPP (effective from January 14, 2019), EVFTA (effective from August 1, 2020), and UKVFTA (effective from January 1, 2021).

3. Comparing Vietnam and other ASEAN markets

Vietnam has many advantages in the competition to attract foreign investment. Currently, Vietnam is one of the countries receiving the most FDI in the region. In the first 8 months of the year alone, the total FDI capital in Vietnam reached nearly 21 billion USD, an increase of 7% over the same period last year, with traditional partners such as Singapore, Hong Kong (China), Japan, China, Korea, etc.

This is the result of an open economy, diverse FTAs with many regions and global economic markets, competitive costs as well as an abundant, hard-working workforce. Vietnam also elevates itself in the global supply chain by encouraging high-quality FDI, enhancing human resource training, and aiming to realize its aspiration of becoming an important link in the global semiconductor industry.

Vietnam also possesses a growing middle class and a potential digital economy. Vietnam is predicted to be the 10th largest consumer market in the world by 2030. According to the e-Conomy SEA report, in 2023, Comparing Vietnam and other ASEAN markets, Vietnam is the fastest growing digital economy in ASEAN with an impressive growth rate of 20%. Currently, Vietnam’s Digital Industry Development Law is being drafted, expected to be passed in 2025, a testament to the Government’s interest in this field.

Vietnam’s FTA network as of 2025

4. Risks of investing in Vietnam

However, Vietnam still has a number of challenges and Risks of investing in Vietnam to overcome to fully take advantage of these advantages. The first is to further strengthen the training of highly skilled personnel, grasping the knowledge of new and constantly changing technologies.

The second is Vietnam’s infrastructure development. Vietnam needs more quality highway and airport projects, convenient connections between regions, and needs to promote upgrading industrial park infrastructure to create a competitive advantage in the medium and long term. Third, tax issues and administrative procedures need to be simplified and processing times reduced.

Vietnam is a fast-growing, dynamic and relatively resilient region in the face of recent global economic fluctuations. Vietnam’s potential is still large and there is still much room for further exploitation. If foreign businesses find it difficult to adapt to the rapidly changing regulations and policies in Vietnam, please contact us S4B Vietnam. We would be honored to bring a consistent and understandable regulatory framework as a positive step for your business to enter the Vietnamese market.

>>>Read more: Opportunities for foreign-invested enterprises in the healthcare sector in Vietnam

S4B Vietnam

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  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn

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