VIET NAM – PRESTIGIOUS INVESTMENT ENVIRONMENT
Foreign investors should seriously consider Vietnam as a destination for their businesses and investment due to the following:
Firstly, Viet Nam has a stable and dynamic economy.
Since 1986 and the Doi Moi (renovation) policy, the national economy has basically changed from a centralised/planned system into a market-based system which has opened up the economy to the greater effects of international integration and globalization. The Vietnamese economy has been continued to grow exponentially. One of the key economic changes was the equalization between State and private rights and ownership in the economy that has been heralded as an important step in promoting and encouraging foreign investment into Vietnam.
In the past few years, Vietnam has been one of the fastest growing economies in Asia. With a GDP of USD184 billion in 2014, and a growth rate of around 6%, Vietnam has risen to the level of the other Asian dragons. With almost USD150 billion of exports in 2014, Vietnam has a very stable economical balance (considering imports represented USD148 billion for the year 2014).
More importantly, Vietnam’s economy was not greatly affected by the global financial crisis in 2008. Vietnam currently possesses an overall credit rating of B from such rating agencies as Standard & Poor’s (BB), Moody’s (B1) and Fitch (B+).
Furthermore, the recent accession into the WTO as well as the execution of many bilateral and multilateral agreements with other countries of Vietnam demonstrates the country’s positive economic outlook. This process created important links between Vietnam and global economy, creating opportunities for foreign investors to move into the Vietnamese market.
Secondly, the labour force is young and competitive.
As mentioned, Vietnam has a young but work-ready population with about 80% aged 15 or over who in the near future will make up the primary labour force of Vietnam – estimated at around 53.6 million with about nearly 0.8 million being added every year. Moreover, Vietnam labours are highly regarded as young, hard-working, highly literate and easy to train. This is one of the competitive advantages of Vietnam in comparison with other labour markets in the region.
Most Vietnam labourers have good working skills and are highly adaptable to new working environments. However, to satisfy the requirements of foreign investors in particular business lines and professions, further training is still recommended.
Thirly, the investment policy system is open and transparent.
The economic policies in general and the policies of investment and doing business in particular in Vietnam have been dramatically improved in recent years. The transition from centralised planning to use market-based principles was an important step in developing the economic policy of Vietnam. This laid down a foundation for the stable development of the economy.
The Vietnamese Government has changed its mind several times since this transition. The cautious and reserved viewpoints of State leaders that served the country during the Cold War has been replaced with a more open and friendly approach that appears to be more compatible with Vietnam’s current focus of trying to attract and encourage foreign investment. These policies have successfully attracted foreign investors and furthered the national economy. Especially, the integration into the world economy has liberalized the nation’s trade regime, correcting the regulatory environment to foster a safe and attractive investment environment.
Most importantly, the Vietnamese Government has attempted to make the economic system more transparent throughout various measures. The uncertain and risky labels of the investment environment in Vietnam which previously turned away foreign investors have been overhauled. Greater transparency has been strengthened not only in macro-economic policies but significantly has been maintained in projects and plans.
Finally, the legal system is stable and improving.
In recent years, following the periods of transition, integration and globalization, Vietnam is on its way to build and improving the legal system in general and the laws relating to the investment and business in particular. Originating in amendments of the Constitution in 2001 and in issuance of the amended Constitution in 2013, which recognizes the multi-sector economic system and the specification of the Civil Code 2005 reaffirming individual ownership, the National Assembly has also passed many laws and regulations governing the various instruments in a socialist-oriented market economy.
Generally speaking, the current legal system of Vietnam has become more comprehensive and stable. The adoption of a series of laws such as the Law on Commerce, Law on Enterprises, Law on Investment, Law on Competition, Law on Intellectual Property, etc. have closed several loopholes and inconsistencies, giving confidence to domestic and foreign businesses.
In short, these legislative achievements have created many opportunities for foreign investors to do business in Vietnam. Together with an open and transparent economic policy system as well as a stable and improving legal system, Vietnam is providing the word several compelling reasons to be the first choice for international investors.