Advantage to setting up business Vietnam
Advantage to setting up business Vietnam
Our writing might be helpful for the foreign investors as advantage to setting up business Vietnam. For the last 30 years there has been a gradual improvement in the economy of Vietnam. In fact, in the last couple of years, Vietnam has been attracting interests from foreign investors from all over the world. Foreign investors and companies have been eyeing up Vietnam as the perfect country to enter the Asian market from. Despite the few problems which still persist in this great country, there are several factors which act as advantage to setting up businesses in Vietnam. Listed below are such advantages.
Labor Force: Despite being a fairly small country, Vietnam has a huge population. In fact, the capital of Vietnam, Hanoi, has a population of around 7 million alone. The massive population number makes Hanoi the perfect place to start businesses which are more labor intensive. The population isn’t just your regular workforce. They are both highly skilled as well as qualified too. Despite the fact that people think highly skilled labor force will increase the cost of labor, the high supply of labor in Vietnam actually brings down the cost. It makes for an effective and competitive labor market from which foreign investors can choose from. With a young labor size of 54 million, the choices for workers are endless. It is no surprise to see foreign manufacturing companies are branching out to Vietnam to utilize both the highly skilled and cost-effective labor force of the country.
Economic Pace– While we did mention that the economy of Vietnam has seen a gradual growth in the past three decades, it is in the recent times where the economic growth has sped up. In 2014, the GDP of Vietnam has seen a commendable rise of 8.8%. The country has managed to keep the inflation rates steady too which is a very big feat. All these have seen the economy of Vietnam to become very stable and consistent and have also given a rise in purchasing power to the citizens of Vietnam. We all know people who are looking into foreign countries for investment prefer to inject their capital in countries with a stable economy which is why Vietnam is perfect for setting up new businesses right now.
Taxation policies– One of the prime attraction factors for foreign investors is the taxation policies of a country. If the tax rates and policies are favorable, then more people will be eager to invest in that country. Vietnam as it stands, are looking for more FDIs and their taxation policies are indicators of that. They have created separate taxation policies which allow tax breaks to foreign investors. The Ministry of Finance has gone on to simplify 38 different customs procedures and have removed 7 custom procedures as well. Similarly, 7 tax policies have been made easier to implement and 1 such tax policy have been removed. This is likely to save foreign investors a total working hour of 420 hours, which could be spent on improving their businesses. The government is also allowing tax breaks to businesses which have a low capital so that they can be developed further with less hindrance.
Administrative Policies– A major advantage of starting your business in Vietnam is the way their administrative policies are set up. Conducting your business in this country is very easy. There are very few barriers to entry. The procedures to open a business are fairly simple and straight forward. As long as you can show the necessary documents, you can easily start your business. Dissolution of a business is very simple too so you do not have to think much about exit barriers in case your business experiences trouble times. Transformation of ownership of the business can be done swiftly and effortlessly as well. All these end up providing the perfect conditions for operating a business smoothly and with no additional burdens.
Favorable market– Before one decides to set up a business somewhere; the first thing they should analyze is the market itself. If the market is favorable then your business will have no problems. In Vietnam, the market conditions are on your side. As a foreign investor, you may have to think a couple of times and decide how the locals will react to your business and the kinds of goods and services you provide. However, the population of Vietnam is extremely large, along with a large demand for both goods and services. They are very much open to trying out new products and have the purchasing power to do so. In fact, Vietnam and its market are very much favorable for small or medium sized enterprises they are ones who can benefit the most from such a market. On the other hand, the market also has a very diverse working force too. So not only can you give the market something, you can also take back something for your business too.