“Vietnam” is a magical word attracting investors from across the world due to its growing economy, both before and during the COVID-19 pandemic.  Many have predicted that once COVID-19 has petered out Vietnam will continue going strong.  Dr. Supaporn Sukmak of the Office of Overseas Trade Promotion in Ho Chi Minh recently shared his insights on business opportunities in Vietnam.

Every positive factor can be spotted in Vietnam.

Dr.  Supaporn said Vietnam has been able to cope well with COVID-19 as a result of its strict and efficient government policy in implementing regulations and measures to quickly control the situation, such as imposing lockdowns, suspending international flights from high-risk countries, and conducting proactive infection testing.

At the same time, the Vietnamese government has implemented measured stimulating the domestic economy by injecting money through three important mechanisms comprising: 1) interest-free loans for the household, economic, and industrial sectors; 2) delaying tax payments and reducing space rental fees; and 3) encouraging the financial sector to support Vietnamese entrepreneurs, such as by reduction/exemption of interest on loans and service fees, corporate tax reduction, and placing a priority on local SME business groups.  The stimulation of SME businesses will help boost the economy in the country, supporting the well-being of its people.

Apart from advantages in terms of the number and structure of Vietnam’s younger population, representing both the labor and consumer markets, the country’s regulations and investment promotion policies under free trade agreements (FTAs) with other countries, especially important markets such as the European Union, UK, and including ACEP agreements with ten ASEAN countries and strategic partners, have offered favorable sentiments for its economy.  Free trade agreements of this nature have also served as a great attraction for investors, helping accelerate its economy even further.

Where are the opportunities for Thai investors?

Thais have become major investors in Vietnam through small, medium, and large, projects.  In 2020, Thai investment climbed to seventh place from the ninth place by investments in various forms, including FDI, value addition for projects, buying stock in Vietnamese companies, and other means.

Dr. Supaporn has noted interesting investment opportunities in basic utilities and infrastructure projects, such as electricity, water, and roads because Vietnam still needs investment for further developing the country.  Currently, there are some Thai companies investing in renewable energy, comprising solar, wind, and hydro power plants, as well as pipe-laying and other related activities.

At the same time, the younger members of Vietnam’s growing working-age population also have high purchasing power. Their social characteristic is transitioning into urbanization, leading to a change in consumer behavior and opportunities in retail and wholesale businesses such as supermarkets.  These retailers also serve as a distribution channel for Thai products. Vietnamese consumers tend to favor Thai products for their quality and reasonable prices, offering advantages for Thai consumer products and trading companies importing Thai products.

The manufacturing industry, whether packaging, or service sectors related to manufacturing, software, and manufacturing management, offers promising hope due to the expansion of manufacturing. It is apparent that there are plenty of opportunities for Thai investors in Vietnam in many sectors.

How to prepare to invest in Vietnam?

Dr. Supaporn recommended that investors should carefully study investment information before entering the market. Thai business models may not be practical, as the Vietnamese market has its own unique characteristics amid challenges and restrictions, especially concerning laws and regulations that are being updated frequently to accommodate various sectors.  Therefore, it is important to do your homework and keep up-to-date on information in order to identify which government agencies are involved in your business and other related factors such as the labor market, minimum wage, etc. The Offices of Overseas Trade Promotion in Hanoi and Ho Chi Minh City have various information supporting investors and can recommend law firms to offer in-depth advice.  The offices also offer facilities such as meeting rooms and intelligence data and can help with financial partners and sector alliances. Siam Commercial Bank’s Ho Chi Minh City Branch will be happy to provide advice on investment information and comprehensive financial services by its experts

Customers interested in doing business in CLMV or Great Mekong Subregion (GMS) countries (Cambodia, Laos, Myanmar, and Vietnam) can contact Siam Commercial Bank’s overseas branches, ready to provide the services you need. Contact us - here -

Source: Vietnam 2021 - Trade Opportunities Post COVID-19 Crisis, broadcast on Phonlamuangdeegital Facebook, March 26, 2021