ASEAN has made significant progress in tariff reduction, but why do non-tariff barriers (NTBs) continue to pose major challenges for businesses?

Doan Vu Hoai Nam, senior associate at ASL Law

ASEAN has made significant progress in tariff reduction through frameworks like the ASEAN Trade in Goods Agreement. However, NTBs rooted in technical standards, regulatory approvals, and local compliance practices continue to present substantial hurdles. One major challenge is the fragmentation of technical standards across jurisdictions.

While Vietnam has aligned many of its national standards with international systems such as ISO and IEC, the enforcement of these standards remains uneven across provinces, leading to additional compliance costs for businesses, particularly in sectors like electronics, agri-food, and pharmaceuticals.

Licensing and market access requirements constitute another complex layer of NTBs. Conditional sectors such as logistics, education, telecommunications, and renewable energy often involve foreign ownership caps, joint venture mandates, or prolonged approval processes. These regulatory structures vary by country and often lack transparency, complicating expansion strategies.

Moreover, admin procedures add further unpredictability. Businesses frequently encounter delays ranging 15-90 days, especially in emerging sectors such as digital services, education, and renewable energy.

Local enforcement practices also reflect a high degree of administrative discretion, leading to risks of inconsistent implementation and opaque decision-making. For businesses operating across multiple ASEAN markets, this necessitates robust legal compliance mechanisms and proactive engagement with regulators.

How can companies tailor contractual frameworks to better navigate ASEAN’s diverse legal systems and mitigate regulatory delays?

In an uncertain geopolitical landscape, legal preparedness becomes a tactical necessity. Vietnamese and foreign companies must move beyond reactive risk management towards integrated legal foresight. Full regulatory mapping for each jurisdiction should form the basis of market entry planning, including employment rules, environmental standards, and data regulations.

Contractual frameworks must also be adapted to ASEAN’s diverse legal landscape. This includes incorporating multi-tier dispute resolution mechanisms, jurisdiction-specific indemnity clauses, and contingency planning for regulatory delays.

Intellectual property (IP) protection is another critical pillar. Companies should proactively secure trademarks, patents, and copyrights in each target market to mitigate risks related to certification exclusivity or brand misuse. For digital and research-intensive firms, IP strategy is central to sustaining long-term value.

Legal collaboration with local advisors provides indispensable regulatory insight, enabling businesses to anticipate legal changes and respond promptly to compliance issues.

What are the most urgent legal or procedural reforms Vietnam needs to implement to unlock its full foreign investment potential?

Vietnam has made notable strides in refining its legal and institutional frameworks to foster a more investor-friendly environment and advance regional integration. The recent amendments to investment and PPP laws, alongside regulatory simplification in various resolutions, have focused on reducing compliance burdens, streamlining investment procedures, and increasing transparency.

Nonetheless, several areas remain critical for improvement to unlock Vietnam’s investment potential and strengthen ties with strategic partners like New Zealand, particularly in high-tech agriculture, renewable energy, education, and digital services.

One pressing need is the modernisation of licensing procedures in conditional sectors, where multi-agency reviews, paper-based applications, and inconsistent criteria can significantly delay project implementation. Streamlining these procedures would help enhance transparency and confidence.

Similarly, while Vietnam has aligned around 60 per cent of its national standards with international norms, fragmented enforcement across provinces and agencies creates operational inefficiencies. Addressing this requires stronger inter-ministerial coordination and consistent technical implementation.

Another area of concern is border and customs management, where overlapping documentation requirements, non-unified port practices, and unpredictable application of inspections continue to hinder trade facilitation. Expanding the National Single Window and digitising customs clearance procedures across all major ports and checkpoints would significantly improve trade predictability.

Additionally, visa and work permit delays for foreign experts, especially in sectors critical to Vietnam’s agenda, limit the ability of firms to deploy international talent. Developing fast-track pathways for professionals in strategic fields would enhance human capital mobility and project readiness.