Aside from the investment scene, there are a number of other reasons why international investors are interested in investing, or living in Vietnam. You’ll find out in this article the top four major reasons to invest in this Southeast Asian country.
Sustainable Investment Schemes
Vietnam realizes that the need for a green energy transition has never been more important, as seen by its goal of attaining carbon neutrality by 2050.
As a result, the country has the most extensive installed solar power capacity in Southeast Asia and is one of the top ten countries in the world in terms of solar energy capacity constructed by 2020.
The country intends to triple its installed wind and solar power producing capacity to 31-38 gigatonnes by 2030, which will necessitate investment. This has cleared the road for international companies to participate in Vietnam’s untapped Wind-Energy possibilities.
A Cheap Workforce
With a population of 100 million people, Vietnam is one of Asia’s most populous countries. Despite a significant increase in the old population in recent years, the country still has a comparatively young population, with a median age of 32.5 in 2020. Every year, over 1 million new employees enter the labor field, bolstering the country’s human resources.
Furthermore, the minimum salary in Vietnam maintained the same in 2021 as it did in 2020, at 190 USD per month. As a result, the country’s economic progress was substantially supported by a young and inexpensive labor population.
Government Incentives
The two main corporate income tax (CIT) incentives in Vietnam are preferential tax rates (lower tax rates) and tax holidays. Companies can also benefit from customs tariff incentive programs and land leasing exemption provisions, which can help them save money.
Preferential Tax Rates
Companies have the option of paying CIT at a lower rate than the standard 20%. There are three levels of preferential treatment: ten percent, fifteen percent, and seventeen percent. Depending on the specific arrangements, these lower fees may apply for the length of a project or for a certain period of time. With a few exceptions, such as high-tech firms or projects, the advantageous tax rate usually begins in the first year of income creation.
Tax Holidays
Companies can qualify for a certain period during which they are exempt from paying CIT, usually 4 years. Companies may obtain a partial tax holiday once a tax holiday is completed, requiring them to pay just half of the tax due. The tax-free period usually begins the first year of profit or the fourth year of income-generating, whichever comes first. Companies may be eligible for a tax vacation and favorable tax rates in certain circumstances.
A Strategic Location
Vietnam is a popular commercial destination due to its strategic location in the heart of Southeast Asia. It is also important to note that it shares borders with China as well as major international maritime channels.
Vietnam’s major cities are equally well-located. Hanoi is located in the north, and Ho Chi Minh City lies in the south. This facilitates doing business both within and outside of the country. Da Nang, in addition to these two cities, boasts a plethora of commercial options.
Conclusion
With these advantages, there is little doubt that Vietnam will remain an attractive destination for investment in the coming years. Foreigners can take advantage of the booming economy, affordable workforce, and other government benefits to start a business here.