Vietnam’s Next Global Investment Challenge? It Isn’t Just About Money. 

 After years on the watchlist, Vietnam is set to be classified as a Secondary Emerging Market by FTSE Russell in September 2026.

The milestone could attract greater interest from foreign investors and open new financing opportunities for Vietnamese businesses. Yet access to international capital also brings new expectations, particularly around financial reporting, corporate transparency and investor engagement.

For companies that have long relied on bank credit and informal borrowing, adapting to these expectations may require a significant shift in how they approach financing.

The question is no longer simply whether Vietnam can attract more global capital. It is whether Vietnamese companies are ready to compete for it.

Can Vietnamese Companies Move Beyond Bank-Centric Financial Reporting?

One of the first challenges is adapting financial reporting practices to the expectations of international investors.

Vietnamese corporate borrowers have traditionally relied on Vietnamese Accounting Standards (VAS), which are relatively tax-accounting-driven and place considerable emphasis on prescribed accounts and reporting formats.

Under this model, businesses typically provide statutory accounts alongside private financial, operational, cash-flow and collateral information directly to banks. This allows lenders to assess repayment capacity and monitor loans periodically.

Equity capital markets (ECM), however, operate differently.

Investors assess companies using a broader range of information, including publicly available financial disclosures, market comparisons and, where relevant, independent credit assessments.

As Vietnam moves towards Secondary Emerging Market status, companies may need to shift from providing sufficient information to secure loans towards delivering standardised, credible and transparent information to a wider investor base.

According to Steven Derek Brown, Director of Lightspeed Limited, businesses cannot afford to wait until the end of the financial year to disclose significant developments.

Material events – whether positive or negative – should be communicated publicly in a timely manner to reduce information asymmetry and the risk of insider trading.

Aligning Disclosures With Investor Lenses

But the transition involves more than changing reporting standards. It also requires companies to rethink how they communicate their financial performance and future prospects.

Banks typically focus on a borrower’s ability to repay loans through reliable cash flows and realistic business projections.

Equity investors, particularly those pursuing growth-oriented strategies, may place greater emphasis on expansion potential and the possibility of substantial returns.

Martyn Terpilowski, CEO of Bvarta, illustrates the difference through a hypothetical growth projection.

A bank may consider a forecast of 20-fold growth unrealistic, while certain growth-focused investors may find a stable business less attractive if it does not fit their higher-risk, higher-return investment strategy.

This does not mean all institutional investors seek aggressive growth or that banks disregard business potential. Rather, different sources of capital assess risk and opportunity through different lenses.

For Vietnamese companies, the challenge is understanding those expectations and communicating their investment case accordingly.

The real barrier to capital-market access may therefore be less about the availability of funding and more about whether businesses are prepared to be scrutinised, compared and valued by investors beyond the traditional banking system.

Why Investor Relations Could Become Vietnam’s Next Competitive Advantage

Financial transparency is only part of the transition.

Companies seeking international capital must also build relationships with investors whose expectations and decision-making processes may differ considerably from those of domestic banks.

In traditional bank financing, relationships often develop through direct communication, established knowledge of the borrower and compliance with contractual obligations.

International equity investment introduces a broader and potentially more geographically dispersed investor base.

These investors may expect ongoing dialogue about corporate strategy, performance, governance and risk – not simply periodic financial statements.

For Vietnamese companies accustomed to dealing primarily with local bankers, this can represent a substantial change.

Brown notes that interacting with portfolio management teams at foreign financial institutions may be unfamiliar territory for businesses whose financing experience has largely centred on domestic bank loans.

The shift also requires companies to communicate their growth strategies with greater clarity and confidence.

Terpilowski highlights the importance of networks and relationships in equity fundraising, noting that founders can sometimes secure multiple funding rounds even after previous business failures.

Such outcomes reflect the role that investor confidence, professional connections and the perceived potential of a business can play in capital allocation.

However, building those relationships requires more than knowing the right people.

Investors also assess the consistency of disclosures, the credibility of management and how effectively companies respond to risks and uncertainty.

For businesses with limited exposure to international capital markets, meeting these expectations can be challenging.

Investor relations, therefore, needs to evolve from a compliance-driven activity into a strategic business capability.

Companies that can communicate consistently, explain their growth prospects and maintain investor confidence may be better positioned to compete for international funding.

Will Vietnam’s FTSE Russell Upgrade Translate Into Real Investment?

Vietnam’s anticipated FTSE Russell upgrade represents an important milestone in the country’s efforts to develop its capital markets and attract international investment.

However, a change in market classification does not automatically guarantee a significant increase in capital flows.

Matthew McGarvey, Co-founder of Xylem Capital, cautions that the upgrade alone may not immediately “move the needle”.

The benefits will depend on whether improvements in market access, liquidity and investor participation follow.

For Vietnamese companies, Brown identifies several practical steps that could help strengthen their readiness for international capital:

• Adopt International Financial Reporting Standards (IFRS) to better align financial disclosures with the information needs of global investors.
• Engage experienced advisers and specialists who can connect businesses with potential international capital providers.
• Strengthen investor relations to meet international expectations for transparency, communication and engagement.
• Study other FTSE Russell Secondary Emerging Markets to understand how companies engage with international investors.
• Learn from regional counterparts that have developed more established capital-market communication practices.

These steps could help companies move beyond traditional bank financing and become more credible participants in international equity markets.

Yet company-level improvements must be accompanied by broader market development.

Terpilowski emphasises that attracting large institutional investors, including major global investment institutions and sovereign wealth funds, also requires attention to market liquidity.

A company may present a compelling investment case, but institutional investors still need confidence that the wider market can accommodate their investment requirements.

McGarvey similarly points to the importance of broader reforms that translate improved market classification into tangible gains in market access, liquidity and investment flows.

In other words, Vietnam’s capital-market transition involves two interconnected challenges: preparing companies to meet international investor expectations and ensuring the market itself can support greater institutional participation.

Neither can be addressed through a classification upgrade alone.

The Door to Global Capital Is Opening – But Who Is Ready to Walk Through?

Vietnam may be approaching a new chapter in its capital-market development, with the prospect of access to a deeper pool of international investment.

But taking advantage of that opportunity will require more than meeting the technical conditions of an upgraded market.

For Vietnamese businesses, the next phase is about earning the confidence of investors who have more choices, higher expectations and little reason to overlook weak disclosures or limited engagement.

That means treating financial reporting and investor communications not simply as compliance requirements, but as strategic tools for building credibility, explaining growth potential and sustaining long-term relationships with international capital.

It also means recognising that a company’s readiness to attract investment depends on more than its financial performance alone.

Transparency, management credibility, investor relationships and the ability to communicate through uncertainty will increasingly matter.

Vietnam’s market upgrade may open the door. But the real test will not be how much capital becomes available – it will be which companies are prepared to compete for it.

Editor’s Note:

This article was contributed by NewInAsia Senior Editorial Fellow Le Ha Phuong (Nora), a freelance podcaster and former radio producer who creates current affairs content by blending expert insights with engaging storytelling.

In this piece, she explores how Vietnam’s capital-market upgrade is testing companies’ readiness to attract global investment, highlighting the growing importance of financial transparency, investor relations and effective communication.

To pitch your story or share your perspectives on capital markets, investment, corporate finance and business transformation across Asia, contact the NewInAsia editorial team.

Read the Chinese article here.

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