Vietnam’s journey toward MSCI Emerging Market status is making steady progress—but the road ahead requires more than policy reforms. It requires structural change that global investors can trust.
Following MSCI’s latest Market Accessibility Review, market experts believe Vietnam is unlikely to be added to the MSCI Emerging Markets Watch List before June 2027. While the country has received recognition for its efforts to modernize market infrastructure, several long-standing barriers continue to prevent a Watch List inclusion.
According to industry experts, Foreign Ownership Limits (FOL) continue to be one of the most critical issues highlighted by MSCI. Restrictions on foreign ownership, fully subscribed foreign ownership quotas (“foreign room”), unequal access to information, offshore FX market limitations, and account-opening procedures remain key obstacles to international investors.
One frequently discussed solution is Thailand’s Non-Voting Depository Receipt (NVDR) mechanism.
NVDR allows foreign investors to gain the economic benefits of owning shares in companies whose foreign ownership limits have already been reached—without violating ownership restrictions. The structure has helped improve market accessibility and liquidity for international investors while maintaining domestic ownership regulations.
However, experts also emphasize an important lesson:
NVDR is a useful short-term solution—but it is not a substitute for comprehensive market reform.
Despite operating the NVDR mechanism for more than two decades, Thailand still faces challenges under several MSCI assessment criteria related to foreign ownership and equal investor rights. This demonstrates that sustainable market upgrades require broader institutional reforms rather than relying on a single technical solution.
Indonesia’s experience highlights that market classification is not permanent. Maintaining investor confidence requires continuous improvements in transparency, market accessibility, and regulatory consistency.
For Vietnam, this means that external opportunities alone will not determine an upgrade. The country’s ability to consistently implement reforms and meet international standards will ultimately shape its position within global capital markets.
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