The country ranks 91st out of the 178 economies in improving business climate, while it dropped six ranks 104th among 175 economies in the last year report.
Of the 10 indicators of the 2008 report, Vietnam holds the highest ranking of 40th in contract enforcement, followed by the improvement in credit access with the 48th position, compared to 83rd out of 175 countries last year.
The country took the 63rd position in the international trade and 84th in labor hiring and firing criteria.
The report showed that average expenses for setting up a business in Vietnam were down to 20 per cent against per capital income.
While, the three indicators including protecting investors, closing a business and paying taxes are at the lowest levels of 165th, 121st and 128th, respectively.
The current procedures for dealing with bankruptcy in Vietnam remains complicated and take much time, according to the report. For instance, dealing with a case of bankruptcy in the country often takes over five years with a recovery rate of merely 18 per cent.
Among the East Asian countries studied by the financial institutions, Vietnam runs behind after Singapore, Thailand, Malaysia and China.
WB and its arm IFC conducted the report from April 2006 to June 2007, based on 10 criteria including starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
Despite the remaining weaknesses in the investment environment, Vietnam will lure more foreign investment wave, said Sin Foong Wong, IFC Country Manager for Vietnam, Laos and Cambodia.
According to statistics from the Ministry of Planning and Investment, Vietnam attracted record foreign direct investment of US$9.6 billion in the first nine months of this year, up 38 per cent on-year