Why is Vietnam always attractive to foreign businesses?

DNHN - Vietnam attracts foreign businesses thanks to its favorable investment environment, abundant labor, and competitive costs. Open-door policies and free trade agreements also enhance the country's appeal to global investors.

Awakening investment potential

Recently, UOB Bank held the annual regional conference "Gateway to ASEAN - Cửa ngõ vào ASEAN" 2024 in Vietnam. More than 600 delegates, including experts, business leaders, and trade partners from ASEAN, China, and Hong Kong, along with Vietnamese authorities, participated.

With the theme "ASEAN - The Gateway to Global Economic Integration," the conference explored the strong potential of ASEAN, focusing on factors driving sustainable growth through foreign investment, innovation, and effective supply chain management.

Vietnam is located in the heart of Southeast Asia, one of the most dynamic regions in the world. With a coastline stretching over 3,200 km, the country holds a strategic position in connecting major markets in Asia, such as China, Japan, Korea, and other ASEAN countries. The presence of major seaports such as Hai Phong Port, Ho Chi Minh City Port, and Da Nang Port provides businesses with easy connectivity to international markets, enhancing the efficiency of goods transportation.

Vietnam possesses a young and abundant labor force, with more than 60% of the population under 35 years old. This not only provides a rich human resource pool but also brings dynamism and flexibility to businesses. Especially, the government's strong investment in education and vocational training has enhanced the skills of the workforce, reducing the shortage of high-quality personnel in key industries such as information technology, manufacturing, and services.

Therefore, our country has implemented many important economic reforms to attract foreign investment. The government has made efforts to improve the investment environment by simplifying administrative procedures, minimizing costs and time for businesses, and enhancing transparency in legal regulations. Free trade agreements (FTAs) that Vietnam has signed, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), open up significant opportunities for foreign businesses to access the Vietnamese and regional markets.

Additionally, Vietnam has consistently maintained impressive GDP growth rates in recent years, with an average annual growth rate of about 6-7%. This growth not only comes from the expansion of the manufacturing sector but also from the development of service sectors, including tourism, finance, and information technology. Stable economic growth and positive future prospects have created an attractive investment environment for international businesses.

Currently, our country is investing heavily in infrastructure to support economic development. Major infrastructure projects such as the North-South expressway, the Long Thanh Airport project, and new industrial zones are being implemented to improve transportation connectivity and increase market accessibility. Upgrading infrastructure not only helps reduce transportation and logistics costs but also facilitates the production and business activities of enterprises.

A new attractive destination for global investment

In recent years, the government has implemented many investment incentive policies, including tax incentives and financial support for businesses investing in strategic fields such as high technology, renewable energy, and manufacturing. Industrial zones and export processing zones are established to provide facilities and support services for businesses, while offering tax incentives and other support.

Vietnam has actively participated in international and regional economic organizations such as the Association of Southeast Asian Nations (ASEAN), the World Bank (WB), and the International Monetary Fund (IMF). This integration not only helps Vietnam improve trade relations with other countries but also creates favorable conditions for attracting capital and technology from developed countries.

The large population and increasing income levels are creating a large and potential consumer market in Vietnam. The rapidly growing middle class is creating higher demand for consumer products and services. International businesses have a great opportunity to tap into this developing consumer market, particularly in areas such as fast-moving consumer goods, technology, and financial services.

Currently, our country is increasingly focused on environmental protection and sustainable development. The government has introduced policies and programs to reduce environmental impacts from production activities and encourage the use of renewable energy sources. Foreign businesses are increasingly paying attention to investing in environmentally friendly and sustainable projects, and Vietnam is creating favorable conditions to support these efforts.

Vietnam is emerging as an attractive destination for large investments, especially in the processing and manufacturing sectors, attracting more than 72% of FDI capital in 2023. With competitive labor costs, improved infrastructure, and business-friendly policies, the manufacturing sector continues to lead in attracting investment. As an important link in the global supply chain, Vietnam is drawing the attention of major corporations looking to diversify production and restructure supply chains amid global uncertainty.

Vietnam has an open and flexible business culture, ready to adapt to changes and challenges from the market. The quick adoption of new trends and technologies has helped domestic businesses improve productivity and competitiveness. Additionally, the welcoming and supportive attitude of the local business community toward international businesses creates a favorable and positive business environment.

Therefore, our country is emerging as an attractive destination for foreign businesses due to various factors, from strategic geographic location, a young and dynamic workforce, to reform policies and a favorable investment environment. Stable economic growth, improving infrastructure, and investment promotion policies all create an attractive investment environment. International businesses can find many development opportunities in Vietnam, from tapping into the expanding consumer market to investing in strategic and sustainable sectors. With its current potential and advantages, Vietnam is on the path to becoming an important global investment hub in the future.

Nhan Phong - Gia Hanh