YOUNG & HUGE LABOUR FORCE – COMPETITIVE LABOUR COST
With over 97 million residents, Vietnam is one of 15 countries that have largest population in the world. The most important thing:
Vietnam has the golden age structure
with more than 60% of people under 54-year-old
(According populationpyramid.net in 2018)
The government has invested more money in education, including increasing vocational training centers. Despite the skilled labor force, Vietnam is still a country with low labor costs. Compared to other Asia countries, Vietnam average wage of manufacture worker only one-third of China's (from Trading Economics in 2019). Now, it is no doubt that Vietnam becomes the best alternative to China considering the low labor cost and growing economy.
FREE TRADE AGREEMENT
Vietnam has entered 16 FTAs. Of these, 12 FTAs have been signed, 1 FTAs have been signed but not yet effective and 3 FTAs are under negotiation.
*Source: WTO Center – VCCI - Data updated as of Feb 2020
ATTRACTIVE TAX INCENTIVE
STANDARD CORPORATE TAX RATE
*Source: Tax authorities, KPMG, Deloitte, EY, PwC, JLL Research Report
HIGHLIGHTED INCENTIVES IN SPECIFIC INDUSTRIAL & ECONOMIC ZONES
|Relating legal document||Example of incentives*|
|Industrial Park (“IP)||
|Export Processing Zone (“EPZ”)||
|Hi-tech Park (“HTP”)||
RAPID IMPROVEMENT OF INFRASTRUCTURE
THE NORTH – WIDENING EXPRESSWAY NETWORK
THE SOUTH – WIDENING EXPRESSWAY NETWORK
CONTAINER PORTS IN NORTH, CENTRAL AND SOUTH
Vietnam has 44 seaports
with a total capacity of 470-500 million tons per year
The major ports in Vietnam include Hai Phong, Da Nang, Qui Nhon and Ho Chi Minh City. However, Vietnam has a number of smaller ports as well, which takes the total number of ports in the country up to 320.
17 Coastal Economic Zones with total land and water surface area of more than 845,000 ha
03 High-tech zones (an expectation of 06 High-tech zones in 2030)
3.6 million workers in Ips and Ezs in H1/2019
Northern Key Economic Zone
- The NKEZ is made up of 7 cities/provinces: Hanoi, Hai Phong, Bac Ninh, Hai Duong, Hung Yen, Vinh Phuc and Quang Ninh.
- Considered as #1 for manufacturers looking to exit China, with lower labor costs while maintaining close proximity to Chinese operations.
Central Key Economic Zone
- The CKEZ comprises 5 provines: Thue Thien Hue, Da Nang, Quang Nam, Quang Ngai and Binh Dinh.
- Key industries focus on light industry projects.
Southern Key Economic Zone
- The SKEZ is formed of 8 cities/provinces: HCMC, Binh Duong, Dong Nai, Long An, Ba Ria – Vung Tau, Binh Phuoc, Tay Ninh and Tien Giang.
- The region is the backbone of the country’s core industrial market (traditional sectors), including rubber, plastics, textile and apparel.
- As the region’s economy is more diversified, small to medium companies find this more favorable to invest.