According to recent research by UOB, most Vietnamese businesses remain optimistic about the business environment and have plans to invest in foreign markets over the next three years.
UOB Vietnam’s 2024 Business Outlook Study, which surveyed over 4,000 businesses including large enterprises and SMEs in seven key markets across ASEAN and China, reveals these insights. The study included 525 businesses from Vietnam.
Mr. Lim Dyi Chang, Director of Corporate Banking at UOB Vietnam, highlighted that most Vietnamese businesses maintain a positive outlook on the current business environment, with this optimism surpassing the regional average. However, he noted that this optimism is “cautious.”
“Enterprises are eager to expand when the economic outlook improves, but recent experiences have taught them to prepare for challenging times. This cautious approach is a prudent practice,” Mr. Lim shared.
To enhance business performance this year, companies plan to increase the adoption of digital solutions, upgrade equipment or facilities to boost productivity, and diversify sales channels to promote growth.
Notably, nearly 90% of Vietnamese businesses surveyed expressed interest in expanding abroad. Mr. Lim Dyi Chang noted that this could involve investment activities, establishing offices and business locations abroad, or engaging in international trade.
Of these businesses, nearly 70% identified ASEAN as their top choice for expansion, with Thailand being the most favored destination, followed by Singapore, Malaysia, and Indonesia. Mainland China was the second most popular market, with 37% of businesses looking to invest there.
However, expanding abroad presents significant challenges for Vietnamese businesses. About 40% of survey respondents cited a lack of customers in new markets and difficulties in finding suitable partners. Legal, regulatory, compliance, and tax barriers were also significant concerns.
To successfully expand into foreign markets, Vietnamese businesses are seeking financial support such as tax incentives or refunds (42%), and grants or subsidies for new markets (40%).
In addition to financial support, over 40% of Vietnamese businesses are looking for non-financial assistance, such as connections with large enterprises that could become potential customers in foreign markets.
Reflecting on this trend, Mr. Tran Ngoc Liem, Director of VCCI Ho Chi Minh City branch, stated that Vietnam is a truly open economy, with export turnover at times doubling the GDP. Vietnam currently participates in 15 effective FTAs, with plans to increase this number to 19 in the near future.
“This presents opportunities for the Vietnamese business community but also poses challenges. As the economy integrates more deeply, we become more susceptible to global issues. Therefore, businesses need to carefully strategize and develop robust response plans,” Mr. Liem said.
Related
Source: Vietnam Insider