Vietnam, a southeast Asian country, is believed to be trustworthy for the foreign direct investments due to its massive outcome in line with excavated amalgamation into the regional and world economies. 

Vietnam also took some real-world steps, and knowledge of a twine of success, in various aspects of FDI promotion – such as the outline of export treating zones and business zones, the supply of groundwork facilities, the allocation of FDI management authority to local governments. 

The legal framework entry of FDI has been improved and tariffed 1987 by endorsements and improvements were to the Foreign Investment Law alongside other legal pecuniary since passed regarding trade rights. 

Foreign investment preserved their trust in Vietnam despite countless complications last year and the country is perceived as a safe terminus for development and FDI sector has prevailed to be an important driver of Vietnam’s economic growth with its influence to GDP escalate significant. 

Vietnam is familiar with a long war fought in the 1960 and 1970 but now the country has launched to attract the attention of foreign investors. This massive shift has highly and prearranged the economy to a socialist oriented market economy and expressively seizure more international investors towards them by their diversity towards forfeiture markets.

Vietnam’s Economy:

Vietnam’s Economy Began to Influence the Agricultural chiefly feudal system off until the French colonization off in the mid of the 19 th century. In the course of 1970 and 1990 Vietnam was a member of Comecon and heavily dependent on the Soviet Union and its allies. 

The termination of Comecon led to craft liberalization, currency depreciation, and a policy of economic improvement. while the ensuing 1990s, tens of thousands of businesses were twisted and the economy nurtured at a rapid clip. 

The advance emanated to an abrupt halt during the Asian Financial Crisis in 1997 insistent the country to focus on macroeconomic solidity rather than growth. The economy has matured to a gross domestic product (GDP) of $219.8 billion, with stable credit rating durable disseminates to the US and the unassertive public debt relative to its growth rates. 

The country’s economy is cripplingly contingent on foreign direct speculation to fascinate capital from overseas, but that capital has been fashioning resilient economic growth. World’s famous warehouse recently estimated that Vietnam may be the firmest budding of the world’s economies with a potential annual GDP growth rate of 5.2%, which would make it the world’s 20 th largest economy by 2050 stated by the company. 

Vietnam’s Investment Opportunities:

Vietnam with its collaboration with APEC in 1998 and WTO in 2007 has been performing its obligations to international economic amalgamation with vigor. It also opened the door to cross border trade over the world. In 2018, within ASEAN, Vietnam is implementing its obligations to cut 98% of tariff lines. 

In terms of trading with the Republic of Korea, Japan and Australia, Vietnam is reducing the taxes implemented for the products on a sensitive list.  

It is also endersing its imperative status in South East Asia and the Asia Pacific region. It also possesses a proven convenient geographical location that can be to remain an attractive investment destination in the region. 

The foreign investment encouragement small scale labors in Vietnam to start up a new scale and changed their life styles by the direct investments on their properties.

It also promoted and progressed the country’s economy and also upgraded the domain’s livelihood and in turn encouraged more investors towards them by their massive inflows for their valuable investments.

FDI Inflows in Vietnam 2022:

Vietnam’s FDI inflows in 2019 amounted to USD 161 billion a massive increase from the previous year whereas total FDI stock grasped USD 161 billion in 2019, bestowing to the UNCTAD’s 2020 World Investment Report. 

The main investor are Japan, South Korea and Singapore with the manufacturing and processing sectors attracting the most FDI followed by real estate and professional activities which in turn encourages more investors in Vietnam by their massive return. 

Vietnam ranked 70th out of 190 Countries by the World Bank’s 2020 Doing Business Report, having fallen one spot in the year. This was despite the country assembly making some progress on the ease of doing business mainly with regards to paying taxes. 

According to preliminary data from the Vietnamese government, sworn FDI will reach a ten-year high of USD 38 billion in 2019. The country’s Foreign Investment Agency anticipates Vietnam to fascinate international investors deterring or reviewing their projects in China amid budding epidemic disease concerns. 

According to UNCTAD’s latest Global Speculation Trends Monitor unconfined on 24 Javier 2021, Global foreign direct investment (FDI) drifts fell 42% worldwide in 2020 paralleled to 2019, but grew 12% in East Asia. 

In this context, according to data from the Ministry of Planning and Investment, the total fresh itemized capital, adjusted capital, capital impact, and share grasps by foreign investors stretched 28.5 billion USD, down 25 per cent linked to the same period last year and the lowest FDI capital recorded since 2017. This census is related to Vietnam’s foreign investment during the past decade.

Preliminary Ways for investing in Vietnam:

Foreign investors can invest in Vietnam in several ways such as

•  Launching a new enterprise.

• Obtaining or devoting in an existing enterprise companies

•  Locale up a branch or demonstrative office or using contractual arrangements. 

 Factors for investing FDI in Vietnam:

• Sturdy and stable growth appraised at around 7-8% over the next ten years (Business France, 2021) with a positive economic outlook

• A fresh, reasonable, trained and fast-growing workforce

• Socio-political permanency

• A provincial hub of inexpensive and eye catching industrial production

• A government that seeks to liberalize the economy and host free-market

• Agricultural and energy construction sectors that can rely on abundant possessions but are still significant under-exploited

• A deliberate location (sharing borders with China, located in the center of Southeast Asia and a long coastline)

Preliminary factors to be withheld for improving FDI in Vietnam:

The main obstacle to the development of the FDI inflows in Vietnam are listed below: 

• Weak health and transference infrastructure

• Weak financial structures and in precise the banking sector: the parameter of the monetary sector has many shortcomings and its lack of independence vis-à-vis the government makes it opaque.

• A complex business atmosphere: financial reserves are to a whole series of opaque regulations that cannot be legally guaranteed and intellectual property rights are not systematic subject

• A non-transparent legal framework: the jurisdictionary system subject is to politically promoted, and commercial often take years to steadfastness

• High risks of corruption and dishonesty.

• Great of enlargement and scarcity in many regions

• Repetitive with autonomy in China on the subject of the South China Sea

• Partial public sector, with high levels of SOE debt and reducing earnings on fairness

• Inadequate foreign exchange monies.

Top Industries Investment Opportunities need to consider for foreigners:

• Construction and Building:

One of the best investment industries in Vietnam for foreigners is the construction materials. The business in Vietnam is an open door to all investors to sell constructions and building materials like cementing, roofing or home fitting materials.

eventually they can start a business in the construction industries like painting services, plumbing, home decoration and repairs home renovations etc. many countries invest more in Vietnam and think of the site as a good platform for the foreign direct investment.

The construction and building still attracts the FDI especially big cities like Ho chi Minh, Hanoi.

• Beauty and Cosmetics:

According to Mintel’s global market research, the prettiness and grease paints retail bazaar in Vietnam has been predicted to be priced at US$1.7 billion annually, a figure that will likely extend to US$2.35 billion by 2018. 

Even though the Vietnam market is small, and the growth in most beauty and body care categories is expected to continue to inflate over the next decade as the country moves into the middle-income ranks. 

This is a great occasion for emigrated investors who are looking at the connotation in this business. Foreign investors can take advantage of natural aromas to produce and sell cosmetics in the Vietnamese market because the demand for beauty is accumulative.

• Agricultural:

There’s the truth that any speculation industry in Vietnam in the food industry can make sales as long as the business owner employs the right stratagem to promote and market the business. Vietnam’s environmental conditions are well suited for trees or crops. Foreign investors can use natural resources such as land, water, climate and weather to create a farm, produce agricultural products. So they can always find an agricultural product that can process sales and export.

About Us - VIIPIP

VIIPIP is a best commercial consulting organization led by a main consultant with more than 20 years of practical expertise aiding international firms in practical business possibilities in Vietnam. 

Get in touch with us for real estates, commercial, industrial parks in Vietnam.  

Our mission is to help businesses overcome challenges and conduct business in Vietnam. We assist our customers in navigating international investment initiatives through our network of well-established local partners.

Contact us for any queries related to foriegn investment in Vietnam

Email: [email protected]

Phone number: +84 9824 191 63