VIETNAM is being touted as the next Asian dragon and there is no shortage of US companies queuing to get in, but even after the US embargo is lifted the corporates will have to keep their patience. The communist government is wary of short-term investors looking for a quick buck and has set up a system of strict controls over inward investment. Liam McMillan, deputy executive director of the Poon Kam Kai Institute of Management, spends much of his time in Hanoi. The institute, part of Hong Kong University Business School, is working with Vietnam's National Economic University and providing consultancy services to Western companies. ''The first thing US companies have to know is 'be patient'. A lot of companies have not been prepared to spend enough time developing relationships,'' Mr McMillan said. The only way companies could operate in Vietnam was with a licence from the State Committee for Co-operation and Investment (SCCI), he said. This group granted licences only to companies that met strict criteria. There are four levels of venture. The first is representative office, which even US companies currently have. This type of set-up is not allowed to make money. The second level is business co-operation, where a limited partnership with a local group is set up. Then comes a joint venture company, and finally a fully-fledged foreign investment. Currently more than 500 companies from 42 countries have foreign investments in Vietnam, according to Bloomberg. Getting in can be a difficult process. The SCCI has been trained in auditing applications by World Bank and IMF officials, according to Mr McMillan. ''There are all sorts of caveats on investment - things like training provisions, guidelines on the share-out between foreign and local partners in joint ventures and tax guidelines,'' he said. ''If rules are broken or accounts not regularly submitted, the licence to operate will be revoked and the business simply shut down,'' he said. Mr McMillan said several Hong Kong companies had already had this happen to them. Keeping close contact with the authorities would pay dividends, he said. ''People don't realise how much things come down to personal relationships,'' he said. The rules are complex. For instance, foreign ventures have a special tax system with more than four different rates applied to them, according to accountants KPMG Peat Marwick. Since October 1992 the standard rate of profit tax for ventures has been 25 per cent for investment projects in banking, financial consultancy, insurance and accounting. For other businesses it is 23 per cent. But there is also a pair of preferential rates of 15 per cent and 20 per cent. These are charged to businesses considered to be a ''priority activity''. Then there is a ''special preferential rate'' of 10 per cent. This is for joint ventures which are involved in key infrastructure projects.