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WHY CHOOSE VIETNAM FOR MAKING INVESTMENTS

WHY CHOOSE VIETNAM FOR MAKING INVESTMENTS

1. Strategic location
Vietnam is located in the heart of Southeast Asia, as the center which connects different parts of the region and is the gateway to penetrate the economies in the western area of the Indochinese Peninsula. Vietnam is adjacent to China - the country with the biggest population and economy in the world. Vietnam is also bordered by other countries in Southeast Asia and is an economic corridor for inland countries to access the East Sea. Therefore, Vietnam is a nation with favorable and advantageous conditions for trade and production in the region. Furthermore, Vietnam has a long East Sea coastline which is close to the world's main shipping routes. This is a perfect location for international trade in Vietnam. The two biggest cities in Vietnam are Hanoi and Ho Chi Minh City. Hanoi is located in the North with very good business opportunities. Ho Chi Minh City in the South is the locality with the biggest population and is considered to be the leading industrial, commercial and servicing center in Vietnam. Mien Trung - the central region of Vietnam - is the gateway to the sea and the launchpad for the Tay Nguyen (Central Highlands) provinces, creating the East-West economic corridor connecting with Laos, Cambodia, and Northeastern Thailand. The potential and need for opening doors to integrate with international markets is huge. This area also has over 80 recognized historical and cultural monuments, many beautiful beaches, and some typical ecosystems such as lagoons, sandy dunes, and coral reefs which are good for developing the ocean economy. The location of Vietnam is also convenient for air and rail transportation. Regarding air transportation, the flying time between Hanoi or Ho Chi Minh City and the major airport in neighboring countries is only 2 to 3 hours, which is very convenient for the transport of import and export goods. Regarding the railway, Vietnam lies on the Trans-Asia railway route running through 26 different countries, which is also ideal for transporting goods.

2. Political stability
Political stability in Vietnam is one of the most attractive features of the country to investors. For several decades, Vietnam has not experienced political crises. The politics and society are always stable, which helps maintain the consistency of its economic development policies and ensures safety for investors.

3. Booming economy and private sector
With an average growth rate of 6.3% over the past 10 years, Vietnam has one of the fastest-growing economies in the world. Along with high growth rates, Vietnam is undergoing fundamental changes in economic structure with a greater role for the private sector. In Vietnam, private economic groups are consolidating their roles and contributions to the economy, not only in traditional fields such as real estate, tourism, and food processing but also in newer sectors such as electronics, telecommunications and mechanical engineering. These groups are leading in investment activities not only inside but also outside the country and successfully developing and launching products and projects of regional and international stature, which helps Vietnam achieve a higher profile in the international arena.

4. Potential market
with a population of more than 96.2 million people1 and per capita income increasing year after year, the Vietnamese market is becoming more and more attractive to enterprises who intend to produce products for and trade in the domestic market. This is reflected by the high proportion of FDI into local market-oriented industries such as consumer goods, heavy industry, real estate, construction materials, and distribution.

5. Abundant labor resources with technical skills, competitive labor costs
The labor force aged 15 and over in Vietnam in the second quarter of 2019 was 55.46 million people, of which, those who were of working age totaled 48.8 million people2. The proportion of trained workers with degrees and certificates was 22.37% (those who had university and post-graduation degrees accounted for 10.82%; college degrees: 3.82%; intermediate education degrees were 4.65% and pre-intermediate education degrees: 3.08%). Labor costs in Vietnam are considered to be very competitive in the region. Most Vietnamese workers have good working skills and high capacity to adapt to the working environment while the cost for them is equal to only 10% or 5% of that of industrialized countries and lower than that of the countries with similar per capita income to that of Vietnam.

6. Natural resources
Land resource: Vietnam's land is very diversified, fertile, and favorable for agricultural and forestry development. Furthermore, Vietnam has a strong horticultural sector, building on the 15,000 plant species that grow in the country. Diverse mineral resources: Vietnam has significant reserves of energy such as oil, gas, and coal. Vietnam is also rich in minerals such as bauxite, iron ore, lead, gold, gemstones, tin, chromate, coal, granite, marble, clay, white sand, and graphite. The total oil reserves proven in 2019 was 4.4 billion barrels, which is equal to 0.3% of the world’s discovered oil reserves and is the 2nd biggest in East Asia, the 3rd biggest in Asia, and the 28th biggest in the world. Along with 871 billion cubic meters of gas and an estimated 48,878 million tons of coal reserves, Vietnam's energy resources are the major sources of revenue from exports and major support to domestic industries. The estimated bauxite reserve of 8 billion tons is the 3rd biggest one in the world and largely untouched. Additionally, Vietnam also has an estimated iron ore reserve of 520 million tons. Remarkable water resource: Vietnam has a dense river network (2,360 rivers). The two biggest rivers, the Red and Mekong Rivers, form two vast, populous, and rich deltas. The river and stream system annually transmits up to 310 billion m3 of water.

7. Open-door policy and investment incentives
Vietnam always welcomes foreign investors by regularly updating and adjusting regulations on investment. Vietnam participates in bilateral and multilateral free trade agreements with many countries and regions to expand markets and attract foreign investment capital into Vietnam such as Bilateral Trade Agreements (BTAs) with the United States, South Korea, Japan, the European Union, and the agreements signed within the framework of the ASEAN Community such as the ASEAN Trade in Goods Agreement and ASEAN Trade in Services Agreement, etc. and is continuing to negotiate on many other trade agreements. Promoting the integration with the world will bring many benefits for investors who come from those countries and regions when they invest in Vietnam. Vietnam is continuing to implement preferential policies to attract foreign investors through measures such as corporate income tax exemption and reduction, import tax exemption for some categories of goods and land rent and land use fee exemption, etc. The Government of Vietnam commits to continue with administrative procedure reform to create all possible favorable conditions for investors. The capital and other legal assets of investors will not be confiscated or seized by any legal or administrative measures and foreign-invested enterprises cannot be nationalized. Foreign investors are entitled to remit overseas their capital, profits, loan principal and interest, proceeds, and other lawful assets[1].

 
[1] Vietnam Investment Promotion Guidebook