Why you should invest in Vietnam ?
You are finding new idea and innovations? It is the right time to expand your business and invest in Vietnam. Here below 7 reasons why Vietnam is one of the most attractive countries for investors all over the world
Reasons for investing in Vietnam
1. Growing population
Vietnam’s young and growing population provide cheap alternative and great skilled workforce. And it is and advantage while cost of labor has been increasing in China significantly. Although minimum wage rates increase yearly, Vietnam labor cost is still quite low among Southeast Asia’s top emerging markets.
Vietnam has population of over 97 million people, ranked 15th largest in the world. It is predicted that Vietnam’s population will reach 04 million by 2030. Steady population growth indicates a promising future for its labor force.
Labour cost of some Asian countries
2. Fast growing economy
It is shown that Vietnam is one of the fastest-growing economies in the world with an average growing rate of 6.46% (according to World Bank). This country is expected to become the 20th largest economy by the year 2050.
With this stable and prospering economy, there will be more industrial sectors appearing in Vietnam, and then you will have greater business opportunities.
3. Supply Chain Shift to Vietnam
Due to COVID 19, companies around the world are planning alter their supply chains to be less dependent on China by diversifying production lines. Vietnam is a good choice for manufacturer. Tech giants such as Apple, Google, Samsung and others have already been doing so.
4. Vietnam has strategic location
Many companies have been convinced that Vietnam is a prime location for trading. Vietnam is in center of Southeast Asia, shares borders with China and have a long coastline. These will help you to set up business within and outside the country.
Vietnam Snapshot
5. Free trade agreements
Having several free trade agreements (FTA), Vietnam can offer duty reduction. Here below is trade agreements between Vietnam and relevant members:
– ASEAN – AEC: this FTA is signed with purpose create a single market and production base in the region. There are 10 members: Singapore, Thailand, Indonesia, Malaysia, Philippines, Brunei, Vietnam, Myanmar, Cambodia and Laos
– ASEAN – Australia/New Zealand (AANZFTA) is Agreement Establishing the ASEAN –Australia – New Zealand Free Trade Area
– ASEAN – China (ACFTA) is signed with the aim of establishing an ASEAN – China Free Trade Area
– ASEAN – Hong Kong
– ASEAN – India (AIFTA) is signed with the aim of establishing an ASEAN – India Free Trade Area.
– ASEAN – Japan (AJFTA) includes commitments on trade in goods, services, investment and economic co-operations
– ASEAN – South Korea (AKFTA) is signed with aim of establishing an ASEAN – Korea Free Trade Area.
– CPTPP (TPP11) includes Canada, Mexico, Peru, Chile, New Zealand, Australia, Japan, Singapore, Brunei, Malaysia and Vietnam
– RCEP (ASEAN+5) is agreement between ASEAN and China, Korean, Japan, India, Australia and New Zealand
– Vietnam – Chile is the very first FTA between Vietnam and a South American country.
– Vietnam – EU (EVFTA) is a new generation FTA between Vietnam and 28 European Union member states
– Vietnam – Eurasian Economic Union is agreement between Vietnam and Eurasian Economic Union (EAEU – including Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan)
– Vietnam – Japan (VJFTA) is FTA between Vietnam and Japan in which both Vietnam and Japan give the other more preferences than AJFTA
– Vietnam – South Korea (AKFTA) is FTA between Vietnam and South Korea in which both countries give the other more preferences than AKFTA
– Vietnam – The UK (UKVFTA) is FTA between Vietnam and UK with negotiation based on the principle of inheriting commitments in EVFTA
6. Vietnam’s openness to foreign investors
For many years, Vietnam has been reducing restrictions on foreign ownership: almost industries allow foreign direct invest (FDI). Moreover, Vietnam government offer a lot of incentives to encourage FDI:
– Lower corporate income tax rate or exemption from the tax for several industries
– Exemption from import duties on specific goods like raw materials
– Reduction or exemption from land rental or land use taxes
The incentives are even better for certain locations called manufacturing area. The investing processes are much easier due to improvement and attempt from Vietnam government.
Vietnam open opportunities for investment
7. The development of Vietnam infrastructure
The infrastructure through country is improved constantly. Network of expressways, airports and seaport make transportation in Vietnam much easier.
– Expressway: Vietnam has expressway network that eases transportation between regions and even neighboring counties as Laos, Cambodia, China
– Airports: Vietnam have 3 main international airports and 1 planned international airport: Noi Bai International Airport; Da Nang International Airport; Tan Son Nhat International Airport; Long Thanh International Airport. These will support for freight by air from Vietnam to all over the world.
– Seaports: with long coastline, Vietnam has many seaports: Haiphong, Danang, Cai Mep and Cat Lai (HCM). You will have many choice for sea freight here.
Contact TTL logistics for investing procedures in Vietnam
The above is some reason why you should spend money in Vietnam. However, you should be aware of some risk while bringing money to an emerging economy. Feel free to contact us, we will give you some advices with local experts.
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