Investors should be wary of Vietnamese practices

Despite a record of poor corporate mismanagement and widespread corruption, Vietnam is attracting strong foreign direct investment FDI. During the first four months of this year the country received $8.2 billion of inward flows, a 17% increase over the same period in 2012, according to the country's Foreign Investment Agency.

But investors need to beware.

They should expect to pay for government licences for almost everything, and once set up, not be surprised about the scale of related party payments, where staff direct supply contracts to family and friends.

“Corruption is endemic, but it is perhaps because of an unsurprising short-termism that characterises...