The Benefits & Risks Everyone Should Know To Invest In Vietnam
Located at the center of Southeast Asia, Vietnam’s ever-evolving urbanization, continual innovation, stable growth rate, greater economic integration, and socio-economic ambitions make it one of the most profitable investment destinations in the world.
What makes Vietnam so attractive for investing?
Ideal proximity to other major markets
Vietnam serves as a gateway to the Pacific Ocean and the Indian Ocean. To the north, it borders China, the biggest market in the world with a population of more than 1 billion people. To the West, it is adjacent to Laos and Cambodia, the two emerging economies in Southeast Asia.
Figure 1. Vietnam located in the center of Aisa
This strategic location enhances the country’s connectivity because of all major international economic and commercial centers such as Singapore, Kuala Lumpur, Bangkok, Manila, Hong Kong, Taiwan,...
In addition, lying parallel to the established sea trade routes of Asia with a long coastal line of more than 3,000 km and world-class deep-water ports. Vietnam becomes a busy transit hub for cargo and passengers across Asia, from Singapore and other southern countries to China, or East Asian, African, and European countries.
Vietnam has lots of trade agreements that make it easy to do business here. These trade agreements also promote the country’s economic growth.
Certain trade agreements, like those under the World Trade Organization, make it easier for foreign organizations to invest in Vietnam. Vietnam also offers tariff reductions through trade agreements, such as in the case of the Free Trade Agreement with the European Union.
Figure 2. Vietnam has lots of Free Trade Agreements (FTAs)
Other trade agreements and relevant memberships include the following, among others:
Member of ASEAN and ASEAN Free Trade Area (AFTA)
Bilateral Trade Agreement (BTA) with the US
Trans-Pacific Partnership (TPP)
Free Trade Agreement with Japan
Free Trade Agreement with Korea
Vietnam has rich natural resources
Vietnam has an abundance of natural resources including oil, gas, coal, and various mineral resources. Besides that, Vietnam is blessed with other natural resources including hydropower, marine resources, tropical forest, and agriculture. And the Vietnamese government has tried to shift its economic activities from plain natural resource extraction to other higher value-added activities and toughen their environmental protection policy.
Figure 3. Phong Nha Ke Bang is the most beautiful cave in the world
In term of resources for tourism and related-service development, with 4 UNESCO-designated heritages (Hue Imperial City, Phong Nha–Ke Bang Cave, Hoi An Ancient Town, My Son Sanctuary), lots of stunning beaches, mysterious tropical forests, breathtaking mountainous landscapes, other historic places, and a thousand-years-old culture.
Vietnam can allure and fulfill the desire of any visitors. Staying in Vietnam offers tourists a nowhere-to-be-found travel experience that will leave them a lasting impression and enrich their life with new flavors and perspectives.
Benefits & risks you should know before investing in Vietnam?
Above lots of positive things that encourage you to start investing in Vietnam, there’s still some potential deal-breaker here, you should consider all the benefits & risks that might occur before making the final decision.
- About Taxes: foreign investors may be subjected to several taxes, namely enterprise income tax, value-added tax, special consumption tax, and import and export duties. Taxation is one of the most cumbersome business processes in Vietnam as it requires significant time and money from foreign investors.
- Cumbersome procedures to have a construction permit: obtaining a construction permit in Vietnam is not easy. Foreign investors must work with many authorities, such as the Department of Construction, the Firefighters Prevention Department, the Department of Natural Resources and Environment, and the municipality.
And when disputes are arising out of investment projects during the process of investing in Vietnam, the questions of governing law and dispute resolution forum often make foreign investors frustrated.
Wrapping it up
There’re lots of countries in the world that can be a great place for investing, too. But when you come to Vietnam, especially when you choose to invest after considering the benefits & risks you might have, this will be the best place to invest in many years to come.
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