Vietnam is being evaluated as an economic bright spot in Southeast Asia based on its impressive economic growth and foreign direct investment attraction. So why is Vietnam so attractive to foreign investors? Let's find out what factors attract FDI in Vietnam!
- Favorable geographic location and potential market
- Young and highly competitive workforce
- Competitive labor costs
- Political stability
- Open door policy for investors
- The legal environment has improved significantly.
- Infrastructure is improving.
- The business environment is improving.
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Favorable geographic location and potential market
Vietnam has a long coastline, close to the world's main shipping routes, located in the heart of Southeast Asia – both the connecting center of the region, and a gateway to penetrate economies in the western part of indochina. Vietnam. Two major cities in Vietnam, the capital Hanoi, located in the north, have very favorable business opportunities. Ho Chi Minh City, with the largest population, is located in the south, is considered the industrial "mecca" of Vietnam.
In recent years, with its open-door policies, incentives and attractive business environment, in recent years, Vietnam has attracted a large number of projects and FDI. The Vietnamese market is always open to FDI sources while also having preferential policies for foreign investors such as incentives on corporate income tax, land and water rent incentives, training support, human resource development, credit support, Supporting science and technology transfer…
Young and highly competitive workforce
Vietnam's population is currently about 98.46 million, including more than 50% of the population aged 25 and under. Possessing young, highly skilled workers with a good working spirit and a literacy rate of more than 90%, Vietnamese people are equipped with high levels of education and ready to serve in highly skilled industries such as information technology, pharmaceuticals and financial services at a more competitive cost than other countries in the region.
Competitive labor costs
Besides the abundant, quality labor force, labor costs in Vietnam are considered very competitive compared to the region. Most Vietnamese workers have good work skills and a high adaptability to the working environment while labor costs are only 10% or 5% in industrialized countries and lower than in countries with similar income levels.
Vietnam's political stability is one of the leading factors that attract investors to Vietnam. If you look at some countries in the region, it is easy to see that most countries have experienced coups or political crises, while Vietnam's politics has always been stable, ensuring consistency in economic development policies.
Open door policy for investors
Vietnam is always open and encourages to welcome foreign investors through up-to-date actions and adjustments to investment regulations. Vietnam is continuing to implement preferential policies to attract foreign investors such as corporate income tax exemption, import duty exemption, rent and land use exemption, etc. The government also pledged to continue reforming administrative procedures to create favorable conditions for investors.
Vietnam views the success of FDI enterprises as its own success. Therefore, the Government is committed to ensuring a stable socio-political environment, protecting the legitimate rights and interests of investors, creating a favorable environment for FDI enterprises in the country.
The legal environment has improved significantly.
Along with significant efforts to improve economic growth over the years, Vietnam's legal and institutional framework is also gradually improving.
Vietnam's management system is highly appreciated by the open business environment, transparent investment policies, along with favorable profit-based incentives for businesses. Updates and changes in the respective laws are expected to make business operations in Vietnam less burdened and benefit foreign businesses investing in Vietnam.
Infrastructure is improving.
In the past, limited infrastructure, especially transport infrastructure, was identified as one of the causes of invisible barriers in the process of attracting foreign investment to Vietnam. However, in recent years, in order to remove these barriers, the government and localities have been actively deploying to attract all resources to invest well in infrastructure, arterial roads, airports, routes to the border gate, borders, economic zones, industrial parks.
The business environment is improving.
According to the Department of Foreign Investment, in recent years, Vietnam's business investment environment has been constantly improving in the direction of openness, transparency, and in accordance with international standards.
Another demonstration of Vietnam's economic opening is the signing of many bilateral and multilateral free trade agreements with many countries and regions to attract foreign markets and investment to Vietnam such as bilateral trade agreements with the US, South Korea, Japan, the European Union, the ASEAN Economic Community, CPTPP, etc. are continuing to negotiate on many other trade agreements. Strengthening integration with the world will bring many advantages for investors from these countries and regions when investing in Vietnam.
These are the reasons why Vietnam has become a high fdi attraction as it is today. If you need to invest in Vietnam, come to our services.
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