Riding The Waves in Vietnam!
Being the third largest market in Southeast Asia and one of the fastest-growing economies in the world, Vietnam becomes a strategic place for many foreign entrepreneurs to invest and set up a business. Low costs and regulations that encourage foreign investment are only two of the key elements that attract foreign businessmen. Let us dive straight into it.
Photo by Chuttersnap
Vietnam has a plan to develop smart cities that are a part of the ASEAN Smart Cities Network and they are namely Ho Chi Minh City, Hanoi, and Danang. There is demand in Vietnam for smart solution providers in urban management, security, and transport. Smart systems for flood monitoring and government services for its citizens will be massively beneficial. Additionally, the government had announced an initiative to move towards a 90% cashless economy by 2020. To achieve it, the government has been promoting e-payment services such as cards and mobile apps and the plan is to have them in restaurants, petrol stations, hospitals and etc. Naturally and concurrently, payment infrastructure and cyber security for online transactions will be upgraded.
GDP per capita to quadruple through 2020s
Vietnam’s economy is predicted to sustain a growth rate of approximately 7% during the 2020s and that translates to a 4 fold increase in the country’s capital income from USD2,500 in 2018 to USD10,400 by 2030. Vietnam posted the highest 10-year GDP growth of 7.08% in 2018; however, international organizations including the World Bank projected the country’s economy to grow between 6.6 to 6.8% in 2019 due to unfavorable global economic conditions this year. Higher incomes resulting from faster growth also usually reduce socio-political instability and make it easier to introduce structural reforms, creating a virtuous cycle. Furthermore, research showed that urbanization, with the associated concentration of income, wealth and population, would propel Vietnam’s commercial success by 2030. By then, the country’s urban consumer market will expand to 46 million consumers and USD169 billion worth of spending.
Modern infrastructure is one of the key factors for economic growth and the government is not underestimating its importance given how it is investing in its improvement. New urban rail networks, the expansion of regional airports as well as an international hub airport are all part of major infrastructure development programs. Additionally, Landmark 81 standing at 462m high, the tallest building in Vietnam and second tallest in Southeast Asia was completed last year.
On top of the above, there are other multiple compelling reasons to venture into Vietnam such as its strategic location, being a member of various trade agreements, government support for foreign businesses, abundance of labor and competitive wages. Areas of opportunity include the manufacturing, energy and consumer sectors. Not forgetting technology, as 40,000 tech talents graduate each year.
Lastly, many assume that businesses must be able to speak the local language in Vietnam. However, let us vanquish this misconception. The inflow of foreign investments and multinational corporations have made English a common language of communication.