Over the last few years, Vietnam has turned out to be one of the most attractive hubs for SMEs wanting to leverage their growth. Being one of the southeast’s booming markets, Vietnam has overtaken itself as a go-to destination for individuals, both investors and entrepreneurs, as well as companies to expand their exposure and sourcing opportunities.
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Vietnam’s thriving economy, strategic location, and business-friendly environment attract entrepreneurs seeking opportunities in various sectors.
1. Rapidly Growing Economy
The country has a record of constant economic growth packed with a 6-6.5% GDP rate growth for 2024. This consistent quality is not only a result of the manufacturing, exports, and domestic consumption of the country’s economy, but it is also the ultimate factor underpinning the country’s economic development. Vietnam’s stable prices, exchange rate, and increasing foreign investment demonstrate its strong appeal as a business destination.
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For the Vietnam, the growing middle class, migration to urban centers, and government impelled economic reforms are plus points in its growth success. The state’s determination to create a business market, oriented by the market, e.g. through reforms in taxation, investment, or even trade policy, is unchanging thus attracting foreign businesses too.
2. Favorable Business Environment
A big advantage of investing in Vietnam is its good business environment due to low costs of labor, taxation and a number of preferences trade agreements. Vietnam joined many free trade agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EVFTA with the European Union. This allows businesses to lower tariffs, while expanding market access for their own products.
In this video, a foreign entrepreneur shares insights on doing business in Vietnam and his involvement in import / export from Vietnam to multiple countries.
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Vietnam possesses an increasingly skilled a large number of young and dynamic people in the country are available for joining the workforce at a low cost, making it a profitable place for manufacturing especially of export oriented businesses of different industries such as electronics, textiles and footwear. Vietnam government’s pro-business policies such as tax holiday for several years and incentives to the foreign investors have made easy setting up of foreign venture.
3. Strategic Location
Vietnam’s position in Southeast Asia makes it the perfect gateway for businesses in import-export activities. Being a member of Association of Southeast Asian Nations (ASEAN), Vietnam has the best preferential trade access to a market of more than 650 million people. Not only that, with its boundary connected to China – one of the largest markets in the world and other big players such as Japan and South Korea, you would have an added advantage in global business.
Vietnam’s advanced shipping ports, expanding infrastructure, and improving access through highways, railways, and airports makes the country an ideal trade and logistics gateway. Its geographical location offers businesses the opportunity to effectively manage their supply chain as well as effortlessly reach markets in Asia and beyond.
4. Diverse Business Opportunities
Vietnam is one of the fastest developing economies in the world and with that come several business areas where expats continue to be in high demand.
- Vietnam is one of the largest global exporter of electronic, textiles and footwear. With competitive labor cost and increased industrial zone for production and export, Vietnam emerges as one of the attractive location for manufacturing and export.
- The technology sector is on fire with e-commerce, fintech and software development undergoing hyper-growth. Combine Vietnam’s young, tech-savvy population and surging digital economy and it becomes an attractive market for tech startups and investors.
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On the other hand, Vietnam has also become an attraction for renewable energy projects such as solar energy, wind, hydro-power and biomass thanks to the policies of the government. The incentives being provide by the government for development of renewable energy makes this sector one of the most attractive areas for investment.
- Vietnam is one of the world’s largest exporters of agricultural products so there are plenty of opportunities in agribusiness, food processing and export for the taking.
- The fast growing consumer base and middle class in Vietnam are like the perfect garden for the businesses dealing with wholesale, retail, and distribution.
Vietnam is for sure one of the most attractive places in South East Asia to do business. It has a fast growing economy, qualifies as the best environments for businesses and is situated in an ideal location. Foreign entrepreneurs and investors have a really great place to enter business in Vietnam.
It is not plain sailing with the issues to understand the rules and adapt, as well as logistically, but the opportunity – cost balance of doing business in Vietnam remains very much in favor of the positives. Given its further expansion and modernization, Vietnam remains an extremely promising destination of global business.
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Source: Vietnam Insider