Vietnam has made many improvements in the areas of social injustice and the welfare of its citizens. In recent years, this country has focused on developing low-cost manufacturing. They are becoming competitive in trade and marketing in light industry and high-tech companies. Foreign investors are showing greater interest in relocating their business to Vietnam. Among the reasons for these recent investment interests are the financial advantages of lower corporate taxes, a population of young workers who can be employed at low cost, and more people being trained in high tech skills. Also, trade agreements are being negotiated which will open up more of the world’s markets without excessive tariffs and trade restrictions. Vietnam sees the importance of good relations with the United States. They welcome new businesses, especially high-tech companies, to invest in and establish businesses and trade with their country.
Location of important industrial sites:
In recent years, the number of industrial parks in Vietnam has grown as foreign investments establish themselves there. The area around Ho Chi Minh City is attracting the highest number of foreign investments. Binh Duong and Dong Nai provinces are two more areas with many new industrial sites popping up. When choosing a location for a business investment, geographic location and the existing industries present in the area are important criteria. For example, the garment and textile industry is concentrated in North and South Vietnam. The South is a good location for an import/ export business since a large commercial port, airports and major highways are nearby.
Foreign investors are attracted by the vast number of young workers who are inclined to work in light industries. This translates into low labor costs. The areas of light industry factories are populated with young laborers willing to work for lower wages. Foreign investors who represent high-tech industry would likely locate in places like The Saigon Hi-Tech Park in Hi Chi Minh City that caters to high-tech companies.
As more businesses are showing interest in locating in Vietnam, the infrastructure of the industrial parks is improving. Improvements such as higher quality factories, warehouses, roads and sources of water and electricity are on-going.
The country is encouraging both domestic and foreign investment by allowing tax reductions for Corporate Income Tax and other incentives for businesses.
Top importers and exporters to Vietnam
China is still the major importer into Vietnam. Other countries with high imports to Vietnam are ASEAN, Korea, Japan and Taiwan. The United States and Europe import much less. In contrast, exports from Vietnam show a different story. The U.S. is the top export destination from Vietnam. Asean, Japan and China also receive sizable exports from Vietnam.
The most common items manufactured in Vietnam:
The manufacture of garments and textiles is the most important export industry. More than 1.3 million workers are employed in this industry. China is the only country to export more garments to the U.S. than Vietnam. Investors are finding it easier and more lucrative to establish themselves in Vietnam as opposed to China. Considering revenue, the manufacture of shoes is a high export business.
Vietnam has become an important manufacturer and exporter of electrical and electronic products. The Samsung Company is now the largest exporter and this company is trying to make Vietnam a global center for its products. The Intel Company has begun manufacturing its CPUs in Vietnam. The pharmaceutical industry is making progress in growing this market. Although Vietnam is creating a strong market for auto sales, they are also striving to develop a domestic auto industry.
Commodities of importance in Vietnam
At the present time, Vietnam is the world’s second largest exporter of coffee. Only Brazil exports more. Experts tend to believe that Vietnam has the potential to be No.1 because their climate is more favorable to coffee growing and because the costs involved are cheaper. Other lucrative commodities that are exported include crude Petro, rubber and fish fillets.
Currency and bank Information:
Most financial transactions need to be made in Vietnamese dong. The banking system in Vietnam has improved in recent years and is becoming more stable. Vietnam has a variety of banks in operation including local banks, state-owned banks and some foreign banks. A primary goal is to minimize regulations so more foreign banks can be established in the country.
The country of Vietnam is emerging as a very promising location for international companies to base their operations or invest in existing companies in the Vietnam market. A large and young group of laborers who are trained in light industry and increasingly in high-tech fields is a strong incentive for foreign investment. Financial advantages, as well as a climate of political and social integrity, are attracting foreign investors.