Vietnam has successfully prevented the spreading of the Covid-19 virus, twice! Thanks to the initial containment, Vietnam has resumed almost all businesses, including international commercial flights, for the economic recovery.
How can Vietnam become an investment paradise after the Covid-19 pandemic?
Although the Covid-19 pandemic is causing massive difficulties in relocation decisions and activities, Vietnam is still an attractive investment destination for many multinational companies in the world. Here are some reasons why investing in Vietnam if you do not want to miss the opportunities to create valuable profits after this hard time.
1. Openness to foreign investment
Geographic advantages and a developing economy are not the only reason to be convinced about why to invest in Vietnam, but also because Vietnam always welcomes foreign direct investment (FDI) and encourages it by constantly renewing regulations and encouraging FDI.
The Government of Vietnam offers a number of incentives for foreign investors to invest in certain geographical areas or areas of special interest, and maybe even more after Covid-19. For example, in high-tech or healthcare businesses. These tax benefits include:
Reduction of corporate income tax or tax exemption
Exempt from import duties, such as raw materials
Reduce or exempt from land rent, land use tax
In July 2015, Vietnam also implemented Decree 60/2015 / ND-CP which allows foreign investors to invest in more fields than before.
2. A lot of trade agreements
One sign of openness to the global economy is that many Vietnamese trade agreements have been signed to make the market freer. Some agreements that Vietnam has signed or organizations that Vietnam has participated in as a member:
Member of ASEAN and ASEAN Free Trade Area (AFTA)
Member of the World Trade Organization (WTO)
Bilateral trade agreement (BTA) with the United States
The free trade agreement with the European Union (effective in 2018)
All of these agreements show that Vietnam wishes to boost the country's economic growth and will continue to commit to trade with other countries, which so important for investing to recovery the economy after Covid-19.
3. Growing population & young demographics
With over 95 million people (in 2018), Vietnam ranks as the 14th largest population in the world. By 2030, the population will grow to 105 million, according to Worldometers.
Along with its growing population, Vietnam's middle class is growing faster than any other Southeast Asian country. Steady economic growth means greater income, in turn, will lead to a growing middle class. A Nielsen market research firm estimates that the middle class in Vietnam will grow to 44 million by 2020. And it makes Vietnam quickly become a hot labor market with cheap labor cost on the world, compete with China.
4. Competitive labor costs
Despite the annual minimum wage increase, Vietnam is still a country with low labor costs. Wages in Vietnam are still less than half of the wages in China.
An increase in wages in China has forced manufacturers to seek a market with lower labor costs. Vietnam with low minimum wages and a developing economy is a low-cost alternative to China.
5. Low setup costs
In contrast to many other countries, there is no minimum capital requirement for most industries in Vietnam. In fact, there is no need to own a high capital to establish or register a company here. You can start a business in Vietnam without having a large charter capital in your back pocket.
Just make sure you have enough money to cover your company's planned expenses. And after the Covid-19 pandemic, the Government of Vietnam will have more policies to lower the cost even more for foreign businesses to set up and invest.
The Covid-19 pandemic is inflicting high and rising human costs worldwide, as a result of the pandemic, the global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis. And seems like Vietnam, with all advantages above, will be a little bright spot between a moody worldwide economy for investing activities.
Another article: The Benefits & Risks Everyone Should Know To Invest In Vietnam
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