Bill Magennis, a partner in Allens Arthur Robinson’s Hanoi office, said the firm’s business in Vietnam has more than doubled in the past six months.

“At the moment we are seeing the highest level of foreign investor interest that we have seen since prior to the Asian financial crisis, and it’s fair to say that a vast number of international institutions are currently investing here.

“For more than 10 years the government has been trying to equitise the major state-owned corporations because 15 years ago the state owned anything of any significance. They’ve equitised some small companies but just now they have started on the big ones,” Magennis said.

Equitisation is the process of converting state companies into ordinary companies having shares, and the process involves a partial sell-down to the private sector, including foreigners.

AAR is currently advising the state on the equitisation of Bao Viet, the main national insurer, and is acting for a bidder in the equitisation of Vietcombank, the main bank in Vietnam. It is also acting for a bidder for a new share issue by the recently equitised second insurer Bao Minh.

Because of the standards required by foreign investors, large and complicated due diligence exercises are required, which Magennis says can only be done by bilingual people because most documents are in Vietnamese.

“What you can say is that the M&A area has come of age and there’s a whole string of these projects in the pipeline, such that international lawyers are now required … to make these transactions work. They can’t be done by fly-in fly-out lawyers because you need large quantities of local law capability,” he said.

AAR, which expanded into Vietnam at the start of 2007 when it merged with Phillips Fox’s Vietnam practice, has 23 lawyers and legal fee earners on the ground with offices in Hanoi and Ho Chi Minh City. That’s up from 13 lawyers at the start of the year.

In addition to the 23 lawyers, the AAR Singapore office supplies lawyers when required and currently there are six working full-time in Vietnam.

Magennis said one of the biggest challenges they faced in their work was reconciling the expectations of foreign investors with Vietnamese business people.

“There are often cultural misunderstandings. The biggest challenge at the moment is that Vietnamese corporations and business people are looking for long-term strategic partners and genuine transfer of know-how, and are looking for partners to take them into foreign jurisdictions,” he said.

“[But] many of the foreigners are looking for a quick dollar. They want to get in fast, watch the investment value go up, and sell out. So there are different expectations. What this leads to is one of the prominent subjects in transactions, which is lock-up periods — that’s an issue that’s at the forefront at the moment.”