Local firms can gain the access to foreign capitals via seeking for loans or joining a partnership with foreign firms, said local experts at a recent workshop in Ho Chi Minh City.

To be allowed to access foreign lending from foreign credit institutions, local firms must register with the State Bank of Vietnam (SBV) for medium and long-term loans, while they don’t need to do so if seeking for short-term lending, according to investment promotion workshop held by the Vietnam Chamber of Commerce and Industry (VCCI).

Currently, there are more foreign-invested credit institutions operating locally with a variety of credit packages fulfilling the need of both individuals and organizations, so it is now more convenient for the local businesses to gain the access to foreign lending.

But if local firms want to clinch deals with their foreign partners for the establishment of joint ventures, or to reach them for a merger/acquisition deals, or call for foreign investment via the local stock market, they must think twice.

“Local firms should be careful if considering those possibilities as they can be considered as a double-edged sword,” said Nguyen Minh Duc, director for a business consultancy department under Ernst & Young Vietnam.

“Vietnamese businesses should determine who your partners are and their main motivation when agreeing to pour money into your firms,” he added.

“Mapping out a detailed future plan on how to make the best use of the foreign capital inflow is also another factor to be under consideration.”

“For the two main types of foreign investment, financial investment and strategic investment, most foreign firms would have thought about their real benefit and profit rate of their investment.”

“A win-win solution is the best one, and to reach it, local firms have to understand the main purpose of their foreign partners and become more transparent in business operation,” he added.