Business in Vietnam
Six reasons - Why Vietnam is important for your business
1. Hard and Dedicated Workers
Vietnam’s labor force is eager to learn, crafty and has high morale. The country has very good basic education, with the literacy rate of more than 95%. Vietnam is currently experiencing so called “golden population structure”, i.e. for every two people working there is only one dependent person.
Furthermore, the working population is very young, and a great number of graduates enter the labor market every year.
Regardless of the generally low wage costs ,Vietnamese are perceived to have high work ethics and strong qualit awareness. Therefore, "Made in Vietnam" stands for high-quality products at relatively low costs.
2. Stable Economic Growth of > 6%
Vietnam’s economy is steadily growing with an average rate of 6% during the past 5 years. For the period 2016-2020, the Vietnamese government targets a GDP growth rate of 6.5 – 7%. The increase in industrial production in recent years at an average of 10% per year, coupled with rising FDIs and exports offer a particularly optimistic perspective.
Additionally, Vietnam saw more manufacturing and technology-based investment projects during the recent years. Intel, Samsung and LG are some of the companies that include Vietnam in their long-term strategies.
3. Retail, Sales, Consumption
With a young population of 94.3 million people, Vietnam is one of the TOP retail markets in the world. Due to the dynamic economic growth, the disposable income of the population is steadily increasing, and a high-spending middle class is emerging. As an example, the average annual GDP per capita in Ho Chi Minh City is $5,200+.
Many areas of Vietnam’s market are still young, and therefore not densely occupied. Additionally, the local population has strong brand awareness, and Western products enjoy high reputation. Finally, Vietnamese are one of the most optimistic consumers in the world.
4. In the Center of ASEAN
Vietnam is located in the middle of one of the fastest growing regions in the world. ASEAN does not only provide Vietnam with a safety net in regards to regional and global problems, but it also constitutes a bridge to the wider world and offers its members numerous Free Trade Agreements.
For foreign companies, the central location offers two advantages:
- Sales opportunities within the entire ASEAN region, as well as other big Asian economies such as China, Japan and South Korea
- Diversification of country risk
5. Stability and Security
In addition to its strong economic growth, Vietnam is considered a stable macro-economy. Inflation, one of the major economic issues that Vietnam was experiencing in recent years has dropped from 18.7% in 2011 to 3% in 2016. Furthermore, Vietnam is a very peaceful and safe country.
According to World Bank's Political Stability and Absence of Violence Index, Vietnam ranks considerably better than most Southeast Asian countries, taking second place after Singapore. Moreover Vietnam faces very little ethnic or religious tensions. The crime rate is among the lowest in Southeast Asia, and violent crimes are extremely rare.
6. Vietnam and the World
The integration of Vietnam into the global economy, which started with the Doi Moi reforms of 1986 continues to scale. Apart from joining the WTO in 2007, Vietnam signed a number of bilateral and multilateral Free Trade Agreements (FTA), individually, or by being part of ASEAN. Vietnam is today connected to the markets of the EU, South Korea, China, Japan, Australia, Eurasia Economic Union, etc.
In 2015, Vietnam exported goods worth 162 billion USD, which is an increase of 7.9% over the previous year. On the other side, the country imported goods valued at 165 billion USD, presenting a 12% increase over 2014.
Finally, according to the World Economic Forum's Global Competitive Index, Vietnam is the world's 55th most competitive country, ahead of 6 EU member states!