Tiresome educational qualifications paperwork can deter foreign investors

In 2009 I and a group of friends returned to Hanoi with the intention of opening a small service company connecting Singaporean and Vietnamese businesses.

The company's shareholders agreed I would be CEO. Everything was complete, save for the final step which was to register me as the CEO.

The first office I went to was under the Ministry of Foreign Affairs and issued entry permits. The young clerk behind the counter went over my documents and said, "Because you graduated overseas, you need to obtain consular authentication from the place of issue and bring it back."

Vietnamese law stipulates that an individual must have a bachelor's degree or higher to be granted a work permit as a specialist or head of a foreign enterprise.

I was dumbfounded. Returning to where I had studied just to obtain consular authentication would be extremely inconvenient and expensive. The plan to establish a company in Vietnam had to be put on hold and we had to continue running the business from Singapore.

More than a decade has passed now, and with Vietnam's efforts to simplify administrative procedures one would have thought the regulations related to the diploma would have been simplified. But no.

The leader of a tech company with operations in Malaysia and Singapore told me that the degrees required for entering Vietnam were giving him a headache.

His company, which was worth of millions of U.S. dollars, is considering a joint investment in the tech sector with a local firm. He therefore needs to visit Hanoi for about a week, and authorities there have asked him to submit a copy of his university diploma along with details of his work experience.

In Singapore, where his and my companies operate, foreign entrepreneurs and investors are so used to the openness and convenience of regulations. Investors can complete the procedures for establishing a new business in a day, there are no qualification requirements for business owners and managers, and no consular attestation of foreign investors' educational qualifications is required.

In Singapore, investors can complete all the procedures online without stepping foot in the country.

Many tech companies and startups from Vietnam have come to Singapore to establish businesses there due to the ease of operating, selling shares, and raising capital.

Recently one of Vietnam's largest business groups moved bag and baggage to Singapore perhaps due to this convenience.

In Vietnam it takes companies three to six months to obtain a license to buy and sell shares and complete other related procedures, but in Singapore this can be done in a single day.

Back to the Malaysian entrepreneur, to whom I had elaborately explained the regulations. I found there was one thing he said I could not disagree with: that a person's management skill, knowledge or experience is not reflected in a university degree.

If everyone is forced to comply with this requirement, even entrepreneurs like Bill Gates, Elon Musk and Mark Zuckerberg will find it difficult to get past the university-degree barrier and enter Vietnam as investors.

Certificates and diplomas are no guarantee of a person's ability to run or head a business.

Furthermore, these degrees can easily be bought or obtained by having others take exams in their place.

In the last two years, despite the pandemic, Vietnam has improved conditions for foreign experts to work, fostering economic recovery. But how do we welcome foreign investors?

Opening up is only the first step in a challenging recovery process after two years of stagnation.

Since last November Singapore and Cambodia have had vaccine passports, green lanes, vaccinated travel lanes, and business travel lanes.

More impressively, Cambodia has fully opened up, allowing foreigners to freely enter the country for tourism or business purposes without any quarantine regulations.

The Malaysian investor mentioned above might pause and wait. But he might also reconsider his investment decision and move to another country with more convenient regulations.

And what about us? Should we continue with these unrealistic requirements and miss out on investment and cooperation opportunities with foreign partners?

I sincerely hope not.

*Michael Nguyen Minh is an economist and financial expert, and a member of the Singapore Business Association. The opinions expressed are his own.