Reasons for doing business in Vietnam
On September 30, 2015, Vietnam Global Investment Forum in Hanoi attracted 700 delegates from 32 countries who come for investment opportunities. That is the proof for the great potential of Vietnam in the eyes of foreign investors. Nobody can deny the improvement of Vietnam’s economy in the past 30 years although many problems still remained. Here are several reasons why doing business in Vietnam is worth investing.
1. Profound integration
Vietnam is in a profound integration process which results in many huge opportunities for foreigners doing business in Vietnam. Up to now, Vietnam is a member of ten free trade agreements. Five more agreements are still under negotiations. Significantly, European Union and Vietnam reached agreement on free trade deal on August 4, 2015. That is a milestone in financial, economic and investment corporation between Vietnam and EU. This agreement supports European investors doing business in Vietnam to expand their production and business activities. Furthermore, Trans-Pacific Partnership (TPP) with 12 partners was signed in February 2016. The agreement is a better access to the US market which helps Vietnam attract more international manufacturers. Thanks to the trade deal, the inefficient economy of Vietnam is hoped to have more reforms.
2. Administrative reform
Most foreign investors find complicated procedures are the most irritating when doing business in Vietnam. However, Vietnam government has determined to reform institutions and administrative procedures dramatically. That promises to bring the best conditions for production and business activities. In fact, most of administrative procedures in finance sector have been reformed thoroughly, especially in taxation and customs procedures. The Ministry of Finance has simplified 38 and removed 7 customs procedures, as well as simplified 7 and removed 1 taxation procedures. About 420 hours spent on paying tax has been reduced. These reforms help enterprises save 21.5 million workdays.
3. Geopolitical advantages and labour market conditions
Vietnam has geopolitical advantages in the region when locating on the sea route connecting Europe and North-East Asian countries. There are many main point habours such as Hai Phong, Da Nang, Cam Ranh and Sai Gon. Goods can be delivered from Vietnam to many places in the world. In addition, Vietnam government has enacted many preferential policies for key sectors and areas of the economy.
Labour market with young workers is another attractive point to foreigners doing business in Vietnam. With 54 million young and hardworking workers, Vietnam is a promising labour supply market.
If you have any questions, do not hesitate to contact our HR Services for new businesses.