Opportunities for Business in Vietnam

Vietnam’s economy is rapidly developing, attracting growing interest from foreign investors. Many entrepreneurs consider registering a company in Vietnam as a strategic move to enter Asian markets and reduce costs compared to China.

Why Open a Company in Vietnam?

1. Low Costs

• Labor: Wages are lower than in China (minimum wage in Ho Chi Minh City — $196, Shanghai — $378).

• Warehousing: Warehouse rent in Ho Chi Minh City is around $5 per m² vs. $8 in Shanghai.

• Living expenses: Cost of living is 60% lower than in China.

2. Geographic Advantage
Vietnam borders southern China, enabling direct access to Chinese supply chains.

3. Trade Opportunities and Investment Support

• Access to international markets through free trade agreements with the USA, EU, China, Japan, Korea, India, Canada, Australia, and New Zealand.

• The Eurasian Economic Union–Vietnam FTA facilitates entry for Russian companies, making Vietnam especially attractive.

• Development of industrial zones: 4 key economic zones, 325 industrial parks, 17 coastal economic zones, and 3 tech parks.

• Government support for foreign investment: tax incentives, creation of free economic zones, and infrastructure development.

4. Tax Advantages

• First year of profit — tax-free.

• Standard corporate tax rate — 20%.

• VAT — up to 10%.

• Free zones — 0% corporate tax, VAT, and customs duties.

• Exports — exempt from duties and VAT.

• Tax incentives for major projects — up to 15 years.

• Healthcare and education — 4 years tax-free, then 50% of standard rate.

• 80 double taxation avoidance agreements.

• Preferential 10% rate for IT, high-tech, environment, renewable energy, infrastructure, science, agriculture, medicine, and education.

5. Political Stability and Economy

• Political stability since 1975.

• Average GDP growth — 7% over the last 20 years.

• Low unemployment (~2%) and stable inflation (3%).

• USA and EU are Vietnam’s largest buyers.

• Strong financial system: foreign reserves of $84 billion in 2024.

6. Domestic Market Potential

• Population ~100 million, with a rapidly growing middle class.

• Growing demand for electronics, automobiles, appliances, digital services, real estate, retail, and entertainment.

7. Challenges of Registering a Company in Vietnam

• Process takes at least 4 months, with 14 steps.

• Official business language — Vietnamese, posing challenges for foreigners.

• High social contributions (21%), strong labor unions, and low labor productivity.

• Bureaucracy: 30+ tax payments per year, mandatory reporting in VND, complex import/export documentation.

• Corruption and weak intellectual property protection.

• Currency restrictions: VND is not freely convertible.

8. Best Business Directions in Vietnam

• Manufacturing and export to ASEAN, EU, USA, and Russia.

• Real estate investment: foreigners can acquire long-term (up to 50 years) land lease rights.

• Use Vietnam as a trading hub for entering Asian and European markets.

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Opening a business in Vietnam offers low costs, tax benefits, and access to international trade agreements (including with Russia). Despite bureaucratic and infrastructure challenges, Vietnam remains one of the most promising strategies for international investors, especially in manufacturing, export, and trade.