Why Vietnam Is an Attractive Destination for Foreign Investment
While the rest of the world is thrown into a frenzy, Vietnam has been on the up and up. From the US-China trade war to the coronavirus outbreak, Vietnam as a nation has been unphased.
In our 2020 Asia Salary & Market Insights, we talked in detail about Vietnam’s win from import substitution, and the growth of the economy’s GDP at a high time of uncertainty. Now, facing a global pandemic, Vietnam comes out victorious once again.
As of the last Wednesday of February, all 16 patients (including a 73-year-old patient), were announced to be cured and discharged from the hospital.
On top of that, they also gained viral success on Tik Tok. Their catchy Covid-19 safety song went to become a dance challenge and was even featured internationally on John Oliver’s Last Week Tonight Show.
All this is not coincidental. Over the years, the Vietnamese government has been investing heavily in building up its nation and the results are evident. Here are 8 reasons for Vietnam’s success and why you should invest.
8 Reasons Why You Should Invest in Vietnam
1. Strategic Location for Foreign Investment
Vietnam has an upper hand over other Southeast Asian economies thanks to its strategic location. Close to major markets in Asia as well as shipping routes, Vietnam is an ideal location for foreign investors.
Effectively enhancing trade, their 2 biggest cities are strategically positioned in the South (Ho Chi Minh) and the North (Hanoi), making Vietnam a bridge into neighbouring locations.
2. Stable Economy Growth with a Positive Track Record
From 2002 to 2018, poverty rates in Vietnam declined sharply from over 70% to below 6% according to the World Bank Group. Vietnam’s rapid economic growth over the past 30 years has been nothing less than remarkable.
Showing phenomenal growth, it is one of the fastest expanding economies in ASEAN. With its progress projected to continue through to 2024, Vietnam is a market of boundless potential for foreign investment success.
3. Substantial Market Size & Growing Local Market Opportunities
A population of 95 million means a strong purchasing power. With an emerging middle class, Vietnam holds great market growth potential. In fact, PWC forecasts Vietnam to be among the Top 20 economies in the world by 2050, making any business investment a profitable one.
4. Doing Business in Vietnam is Getting Easier than Ever!
The Vietnamese government has made numerous amendments over the years, modifying regulations and opening up the market for investment.
The increased transparency has invited more foreign investment. Simplifying basic procedures like getting electricity and paying taxes, Vietnam’s new regulations have welcomed many new ventures.
On top of this, the low setup cost is another big contributing factor to investing in Vietnam. Compared with many other countries, in Vietnam, for most businesses, there are no minimum capital requirements. This significantly lowers the barrier of entry, a flexible and cost-effective investment compared to others.
5. Exceptional Talent from a Growing Workforce
One of the key advantages of Vietnam over China is its young demographic. According to the Ministry of Education and Training, 97% of the working-age population is literate, with over 52% of its population at their prime working age (Source: PWC). This equals a strong and vibrant workforce.
On top of this, the government has also taken measures to train its people. Meeting the demand for high-skilled industries, Vietnam offers increased vocational and technical training. For foreign businesses, this means access to a larger candidate pool of young talent to advance the business.
6. Competitive Labour Costs
Aside from the strategic location, competitive labour costs another reason why businesses are choosing Vietnam over China. The growing economy with its low minimum wage poses as a cost-efficient alternative to China, especially in the manufacturing industry.
7. Infrastructure Boom with Government Investments
The Vietnamese government has successfully created an investment climate by implementing and upgrading local infrastructures. Investing heavily to facilitate movement around and within the country, Vietnam is the ideal place for foreign businesses to set up their Asia Hub.
8. Strong Investment Culture through Trade Agreements
Vietnam is a significant player in ASEAN (Association of Southeast Asian Nations), lowering intra-regional tariffs as well as promoting trade in this area. Healthy relations with EU members as well as China has also allowed Vietnam to benefit greatly during the US-China trade war, making it advantageous to set up businesses in Vietnam.
Links International provides PEO and Secondment services, a simple and cost-effective way for businesses to expand into Vietnam. Get in touch with one of our representatives to learn more!
Consult professionals in the area
Vietnam is quickly growing. The government is actively amending regulations to create a more inclusive investment environment as well as increase the standards of living for its people. If you’re looking to invest in the market, make sure to do ample research and consult with local professionals to give your business the best chance of success.
Use PEO to expand your business into Vietnam
Secondment has long been known to be an effective way for businesses to venture into a new location. Not only is it flexible but it also helps save time and cost when entering a new market. Connect with one of our representatives to learn how PEO can help you expand your business.
Secure your business with payroll outsourcing
You want to minimise the risk when entering a new market. Links payroll outsourcing services can help you do that. Our payroll outsourcing services have 100% professional in-country support. Minimise costs and streamline your business with Links Asia payroll outsourcing services.
- Highlights from Vietnam’s New Labour Code
- Expanding into Vietnam? Here’s the Smart Way to Do It
- How to Pay Overtime in Vietnam: Everything You Need to Know
- How does the Labour Law in Vietnam Compare with HK and SG?
- Expanding into Southeast Asia: Business in Vietnam
- What Level of Payroll Risk do you have in Vietnam?
- How to employ and payroll staff in Vietnam
Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, Employer of Record (EOR), recruitment and more! Contact us for more information on how we can help leverage your HR function.