WHY CHOOSE VIETNAM

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)
  • Decree No. 82/2018/ND-CP
  • Tax holiday/tax exemption/tax reduction are varying across regions and zones and can be subject to both corporate and personal.
  • Popular tax incentives:
    • 2-4 years holiday
    • 3-15 years tax reduction
    • Import duty exemption
Export Processing Zone (“EPZ”)
  • Decree No. 82/2018/ND-CP
  • VAT: 0% for selected goods
  • CIT: 15% tax rate applicable for selected businesses
  • PIT: 50% reduction of the payable personal income tax
  • Imported/Export duty exemption for selected products
Hi-tech Park (“HTP”)
  • Decree No. 99/2003/ND-CP
  • Circular No. 32/2014/TT-BLDTBXH
  • CIT: 0%(4 years) – 5% (next 9 years) – 10% (next 2 years) – 20% (remainder)
  • Imported duty exemption for selected products
  • VAT: 0% tax applicable for selected goods
  • One-gate administrative service

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.

INDUSTRY CLUSTERS

  • 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.