+971 4 8327 893

Top Reasons To Invest In Vietnam

Investing in VietnamPutting capital into emerging markets all over the world can be an attractive opportunity for people and companies eagerly looking to invest in rewarding regions, but there are many important risks that ought to be understood first.

While the profit and growth performances in emerging markets are often impressive, they are also accompanied by high risk profiles, and certain regulatory and political variables that are prone to change easily.

As an emerging market, the population and industry in Vietnam is growing at a solid pace, and its economy in general is starting to become known as a key player around the globe.

Even though sound financial advice on how to invest in Vietnam – Global Eye Vietnam is the best way to start, for most people who want to include a balance or risky and safe investments, combining ETFs and low risk products could be a good initial consideration.

Macro-Economic Factors

Low Labor Costs

Even in the presence of a minimum national wage, which appears to be increasing steadily, compared to many other countries in the region, the labor cost in Vietnam is quite low. Compared to China specifically, wage costs are almost half.

In recent times, partly due to rising labor costs in China, manufacturers have started to look towards Laos, Cambodia, and Vietnam to keep manufacturing costs in control.

Setup Expenses

Compared to several other states, the setup costs for many business areas favor new industries and businesses, which means starting a business is a lot simpler.

The minimum capital levels usually ought to be enough to cover the planned costs of the business, and have to be paid 3 months from the date the company is registered.

Economic Growth

Economic growthThanks to economic reform and the inflow of foreign direct investment, the growth of the GDP in the country has been one of the fastest in the world. Estimates suggest that the average has hovered close to 6.5% since the start of the millennium.

Incentives For Foreign Investment

Alongside Vietnam’s strategic location and high GDP growth, the national regulations are highly favorable to foreign investment, and are regularly updated to facilitate external players.

For certain foreign companies, such as those investing in technology, there are even more competitive incentives, including exemptions and low corporate tax and land or land-use tax, and the waiver of import duty on raw materials.

Recent intelligent reform, including opening up more areas for foreign investors to participate in, is helping the country add to its foreign direct investment figures, led in large part by giant multi-nationals, including LG and Nestle.

Major Risks

The two most notable risks of investing in the country are overwhelming government control of the economy, and the fact that it still retains its status as an early stage economy.