The launch of Doi Moi in 1986 formed a successful story for the economy of Vietnam in the past 50 years. Along with that, multiple social trends have helped Vietnam become a middle-income country in one generation. Looking back between 2002 and 2023, we saw an increase of 3.8 times the GDP per capita. The poverty rate reduced significantly from over 32% in 2011 to below 2% in 2022.
Looking back at when COVID-19 forced a massic lockdown onto the economy of Vietnam three years ago, we saw a resilient Vietnam, even though it suffered from continuous delay for reopening, sustained on a solid economic foundation, with hidden opportunities to be found. It dealt with some of the worst reductions in GDP growth in 2021. However, economy experts and performance analysts observed a strong rebound in 2022, which is now a dream come true.
Vietnam’s GDP increased by only 3.32% in the first quarter of 2023.
However, that’s the risk many countries in the world are facing. It doesn’t make Vietnam deviate from being one of the most promising lands for business opportunities. Young and passionate Viet Kieu around the world are coming back to Vietnam to open a company or pursue a career path they have dreamed of for a long time.
This video will teach you the steps to follow and the requirements for foreigners, as well as :
- The best business ideas to consider in Vietnam;
- The red tape, bureaucracy and downside of doing business in Vietnam;
- A step-by-step guide on how to get started;
The advantages of doing business in Vietnam
Projected 6,3% GDP growth in 2023
In collaboration with the Department of Economic Affairs, Ministry of Foreign Affairs, Deloitte Vietnam has introduced “Doing business in Vietnam 2022 – 2023.” This publication offers readers a comprehensive understanding of Vietnam’s investment climate, various business organization models, taxation principles, and prevailing business and accounting practices.
This is by far the highest GDP growth rate in the same quarter in the last 10 years – according to the General Statistics Office (GSO). 2022 encounters a robust 8% of GDP growth.
Nguyen Thi Huong – the director of the GSO gave out a statement about the socio-economic status of Vietnam in the past 6 months: Most fields and industries have prospered significantly during the half-year course in 2023. The processing and manufacturing industry; retail sales of consumer goods and services; and export are by far the most outstanding indicators of the tremendous achievement of such high GDP growth.
According to a report from ResearchAndMarkets, the construction industry in Vietnam is expected to grow by 15.4% in 2023. The sector of services remains the main contributor to Vietnam’s economic growth. In the first three months of 2023, it reached a contribution of 2.9 percentage points.
So far, almost every industry is recovering rapidly. Despite the harm from inflation, Vietnam’s resilience will help the country to remain an area of growth.
Vietnam welcomes new technology, digital services, and outsourcing
Technology and outsourcing play a major part in forming the global workforce in 2023. Regarding technology, some may think that a communist country like Vietnam wouldn’t welcome such a thing. Now, we can barely felt the vibe of communism. The trend in Vietnam is tech startups all day.
If you have been in Vietnam for a while, you may have noticed that Vietnam, like any other developed country, has many new tech startups coming into production every year. There are tech companies providing software solutions, technological consultancy, digitized products, and more.
Digital service is a booming land for advancement, too. Website development is in huge demand, digital advertisements are everywhere, mobile apps as part of the up-sale strategy, and online communication has taken the industry to the next level. There is just so much to exploit here in Vietnam.
Regarding outsourcing, the demands are in all fields, with jobs always available for non-degree holders and certified job seekers. Vietnam is an ideal spot for such an opportunity because developed countries like the US want to outsource from Vietnam. The South East Asia country has a workforce with a decent skill set and educated, and it offers just a reasonable price due to its low cost of living.
The 3 sectors above show why 2023 is an ideal time to open a business in Vietnam. You have advanced technology at affordable prices. You have hundreds of companies that you can outsource for basic-to-medium-level projects at a much lower rate compared to other countries in the West and Asia.
Vietnam has many networking events to expand your connection
The first impression of Vietnam is its diversity in culture, characteristics, and mindsets. People say about the lack of openness in the mind of Vietnamese. However, what we can usually witness is the opposite. It might be true to the older generation, but not the generation that are entrepreneurs, go to networking, and make friends.
Such is the premise to welcome foreigners to Vietnam. Since the number of foreigners began to increase in 2016, networking events started to explode. In Saigon, there are always 1 to 2 networking events for everybody to join. You can join in these events to get to know the people, chit-chat, and eventually get their contact, which may lead to a potential partner in the future.
Vietnam welcomes entrepreneurs with a low budget
Not every entrepreneur has millions of dollars or even hundreds.
But here in Vietnam, the costs to open a business is quite low. You may need around $2,000 – $3,000 to get started for incorporation fees and invest a recommended capital of $15-20,000 to run and execute your business.
The disadvantages to run a business in Vietnam
The hardship of working with the authorities
You may get into time consuming processes when working with the authorities in Vietnam. Along with the language barrier, it will be a real deal to overcome if you want to start doing business here in Vietnam.
The hardship also comes with red tape and the bureaucracy in Vietnam. Sometimes, you may feel you are doing unnecessary steps, which cost you more money without direct results that may cause hassles. Hiring an assistant or a local staff to assist you on those paperwork can be an effective way to take it out of your shoulders.
Too much of lawyer/accountant/visa agent
As foreign business owners, we know nothing about the laws. Regulations change every single day, especially the frustrating visa policy, which has only happened recently.
As business owners here in Vietnam, we all have to prepare for events like this. As much freedom as we have here in Vietnam, ambiguity is its weakness.
Regulations can change without a specific heads-up. Choosing a reliable and trustworthy law firm and accountant can assist you along your journey.
Europeanbusinessreview team advice to you
A few things to keep in mind when you come to Vietnam to do business:
- Always do your due diligence first
- Evaluate if your business model fits the demands in Vietnam before investing a lot
- Spend time in Vietnam as a tourist, get to know the people and the culture first before you jump in
If you have any other questions related to this, you can get tailored advice from business firms such as Movetoasia’s (get the details on this page) so you make sure you have the full understanding, take time to find the right partners who are legitimate in the industry.