Vietnam’s recent reclassification (or imminent reclassification) to Emerging Market (EM) status is a historic milestone, a powerful global affirmation of our nation’s economic resilience and commitment to reform. This achievement unlocks the gates for a massive influx of global capital, including billions in passive investment and trillions controlled by active fund managers. This will fundamentally lower the cost of capital for our listed corporate champions.
The Dangerous Capital Divide
Despite this celebratory backdrop, a critical threat is emerging for the vast majority of enterprises: the non-listed firms that form the backbone of the Vietnamese economy. The positive effects of the EM upgrade are not distributed equally; instead, they create a widening Capital Divide.
Listed giants gain access to cheap, abundant international equity capital, giving them an immense strategic advantage to finance massive expansion, invest in R&D, and secure the best talent. In stark contrast, non-listed SMEs remain constrained, relying on local bank financing that is significantly more expensive. This disparity in the cost of funds is an existential competitive threat.
Capital-rich listed entities will systematically out-compete private, capital-constrained firms, leading to Market Share Consolidation—and potentially forced closures or heavily discounted acquisitions.
The Mandate for Professionalization
Failing to recognize this shift—and failing to act—will result in severe competitive disadvantage. For every single enterprise, regardless of listing status, comprehensive professionalization is no longer a voluntary exercise; it is the unavoidable price of admission to the world’s major capital markets and the only reliable defense against being outmanoeuvred.
The path to survival and prosperity requires a full embrace of global best practices, making your company “EM-Ready” to ensure viability and attract international Private Equity (PE). This includes:
Establishing truly independent and competent Boards of Directors to separate ownership, management, and oversight.
Strictly adhering to International Financial Reporting Standards (IFRS) and securing high-quality audits from reputable international firms.
Simplifying complex ownership structures and resolving historical ambiguities to become “audit-ready” for future M&A or IPO processes.
The new market dynamic is a potent form of natural selection, favoring the professional and the transparent. The response must be collective, comprehensive, and immediate.
