Why Vietnam is an attractive destination for foreign investment?

Nowadays, the trend of moving international manufacturing and FDI in Vietnam and is growing. This shows the growing confidence among investors in the market. Here are the reasons why Vietnam has become an increasingly attractive destination for foreign investors.

Read more: Granting investment registration certificate (IRC) to foreign investor in Vietnam

Trade agreement for foreign investment

Vietnam has always been welcoming to foreign investment and encourages it by constantly renewing regulations and providing FDI incentives. After officially becoming a member of the World Trade Organization (WTO), Vietnam has participated in many international cooperative agreements including various free trade agreements (FTA) with many regional and global partners. Recently, Vietnam has has ratifies EVFTA, which brings many opportunity for foreign investments. Here are some trade agreements that Vietnam has joint:

 – ASEAN Free Trade Area (AFTA)

– World Trade Organization (WTO)

– The U.S.-Vietnam Bilateral Trade Agreement (BTA)

– EU-Vietnam Free Trade Agreement (EVFTA)

– Trans-Pacific Partnership (CPTPP)

Best destination for foreign investment

Vietnam is located in the center of  Southeast Asia, on the East of the Indochinese peninsula, closed to many major markets in Asia, especially is the neighbor of the second strongest economic country in the world – China. The country possesses an ideal location for international trade with the long coastline to the East Sea, which is the main international transportation and the perfect conditional venue for trade activities.

Infrastructure development

Demand for transportation assets is higly from strong GDP growth due to a rapidly growing middle class, increasing urbanization. It reflects strong traffic and freight volumes supported by strong and sustained economic growth as well as increasing connectivity and improving logistics.

Vietnamese Government has improved the infrastructure development to be able to attract foreign businesses set up factories, offices, production chains in Vietnam. Better and modern highways, airports, seaports are the key factors that will facilitate transportation and logistics activities for businesses, help reducing their running cost and create an ideal foreign investment environment.

Abundance of natural resources

The abundance of natural resources of oil, gas, coal… has attracted iternational exploration companies. Morover, Vietnam is also rich in other natural resources including marine resources and agricultural potential. It implies that there are many opportunities for investors to set up a business/project in our country. Investors have a potential market to exploit in such sectors, help them gaining benefit to their business income.

Substantial market

Vietnam’s economy has had a great leap forward since 30 years. With over 96 million inhabitans and young worforce, Vietnam has the domestic consumption potential. Moreover, there are considerable changes in spending habits of Vietnamese people. Demand for modern retailing services is surging, making retail trade sector an attractive investment field for domestic and foreign investors.

With more than 96 million residents, Vietnam ranks at the 15th most populous country in the world, the 3rd most populous contry in ASEAN. Vietnam’s high population and young workforce contributes to the consumption potential in the country

Low setup costs and competitive labor costs

A minimum capital is not required for most bussiness lines in Vietnam. Investors can open a business with a charter capital in accordance with their scope of operation, without a large amount. However, the amount of capital must be fully paid within 90 days from the day company is registered.

The average income of one Vietnamese is about 2,800 USD a year. Therefore, new startup has the ability to attract talent to work for the company with a salary that may be less than $200-300/month. For people with years of work experience or prestigious qualifications, the salary may be $1,000.

Tax Incentives for Foreign Investment in Vietnam

FDI companies are benificial from a wide range of incentives when operating in Vietnam, including tax incentives that allow them to pay only 10.7% in corporate tax on average, compared to 20 percent for regular businesses. In the upcoming revision of its incentive policies for FDI enterprises, Vietnam will focus on attracting foreign investment into areas of manufacturing with high added value and technological content.

Why should you use our service?

With over 10 years of experience operating in the field of law with a team of experienced, enthusiastic personnel. LNP LAW is confident to bring the best service to customers in the fields of Investment, Intellectual Property, Business. The above article has summarized Why Vietnam is an attractive destination for foreign investment?

Customers wishing to invest in Vietnam will receive the services:

– Advice, support, answer your questions related to foreign investment in Vietnam

– Drafting papers related to invest in Vietnam

– Representing customers to submit documents, receive results, solve legal issues with the competent state agencies;

– Other jobs requested by customers.