The prospects for foreign direct investment in the transitional economies of Southeast Asia

Cambodia, Laos and Vietnam all actively welcome foreign direct investment (FDI) activity, and have done so for a number of years.1 FDI inflows are regarded as an important method of boosting economic development and growth, and assisting in the transition process – consisting of both economic reforms and business liberalisation measures – currently underway in these three countries. On paper at least, the (still evolving) laws and regulations pertaining to FDI activity are relatively liberal, such as permitting 100 per cent foreign-owned business ventures across a fairly wide range of business sectors. As FDI inflows have accrued, and the confidence of policy-makers has grown, the foreign investment regimes in these transitional economies have continued to improve, in tandem with marked improvements to the wider business environment in these host countries.