Tue, 14 Oct 2014. Last updated Wed, 15 Oct 2014 17:19
On the way to future development, Vietnam has always focused on creating a favorable investment environment to attract Foreign investors in Vietnam. For nearly a decade, the rapid pace of development, Vietnam has gradually risen to become a "powerhouse production" in Asia - Pacific. According to the assumption of economists, there are many similarity between Vietnam economic growth and Chinese one. Here is also a signal showing that Vietnam is one its sustainable development route. In the last three day, there are more reputable manufacturers in the world removing their area of operation in China to Vietnam in an effort to reduce labor cost and complicated legal environment in China. Many investors said that they choose Vietnam as its attractive investment environment, incentive policies of the government on foreign investors, and cheap labor cost. Thus, investment in Vietnam is increasingly attractive.
Up until now, there are many world leading technology manufacturers choose Vietnam, in stead of China, such as Samsung, LG, Nokia, Intel, and Canon, etc. Specifically, Samsung Electronics with 2 large factories in North Vietnam (in Bac Ninh and in Thai Nguyen) brings outstanding growth rate and contributes greatly to the Vietnam products export turnover. Initially, Samsung Vietnam was just an assembly location. Then, the corporation enhanced to invest in manufacturing components and phone in Vietnam. Thanks to Samsung, export of Vietnam phones products is increasing and contributing greatly to the total Vietnam exports. On that accelerating growth, Samsung in Vietnam continues to pour capital into the 3rd plant in Vietnam at Hi-Tech Park in Ho Chi Minh City and promises a strong growth in the near future.
According to the Foreign Investment Department (under Ministry of Planning and Investment), from early 2014 to the date of September 20, 2014, foreign investors registered to invest in Vietnam US $11.18 billion. In particular, investment in processing and manufacturing industry is US$ 7.7 billion, accounting for nearly 68.9% of total FDI in Vietnam in the first 9 months of the year. In second place, it is the real estate business sector with a total investment of US$ 1.2 billion, comprising nearly 11%. It is followed by the construction sector with a total investment of US$ 612.1 million, accounting for 5%, and the health and social assistance sector, for a total investment of US$ 415.7 million, accounting for 4%. Compared to other developing economies in the region, Vietnam has a clear strategy of development in the orientation towards production cost and cheap labor. The manufacturing industry in Vietnam accounts for approximately 25% of total Vietnam GDP. According to statistics, in recent years, Vietnam labor cost is 50% of Chinese labor cost, and 40% in labor cost in Thailand and the Philippines.
Vietnam labor force in working age is about 1.5 million people; most of them are young and increasingly high-skilled labor. In addition, the attention of Vietnam government's investment in education and training in recent years has achieved many important results. It is expected that in the coming time, Vietnam labor force will be able to compete with that os India and Singapore. In particular, with a favorable geographical position - in the heart of Southeast Asia, Vietnam is the key export towards major global markets. Vietnam government will strengthens incentives on finance, income tax reduction for a number of foreign enterprises in Vietnam to 22% (and set a target of 20% by 2016).
Besides, from now to 2015, Vietnam will sign a series of important trade agreements such as Free Trade Agreements (FTAs) and Agreement on the Trans-Pacific Partnership (TPP), etc. Once these agreements go into action, Vietnam will be free to access for many export markets in the world without tariffs and quotas. On the way to future development, Vietnam has always focused on creating a favorable investment environment to attract foreign investors in Vietnam. Since 2013, Vietnam government has invested millions of dollars to improve the infrastructure, railway systems, roads and air routes to best serve the transportation and international trade. With foreign investors and big companies in the world, Vietnam is the ideal choice in the process of finding investment partners.