COVID-19 shook the world during 2020, and local and global economies took a major blow.
Bilateral relationships – including the Australia-China and US-China partnerships – rode the rollercoaster, highlighting the impact of international politics on foreign investment.
If you have been considering investing or establishing businesses in new markets – especially in digital technologies – then you should be looking towards emerging South-East Asian economies like Vietnam, one of a handful of countries that came through the COVID-19 crisis with robust economic growth.
Why Vietnam?
Rapidly expanding economy
Vietnam’s young population, burgeoning middle class and continuous GDP growth make it one of the region’s most dynamic economies and a key emerging market for foreign investment. The Vietnamese Government has facilitated this shift by moving to liberalise the country’s foreign investment policy.
Doing Business in Vietnam
Vietnam is an important ASEAN region destination for Australian companies and investors to do business. The benefits for Australians of doing business in Vietnam include:- a stable and growing economy that boasts vibrant technological and entrepreneurial communities;
- low-cost labour that provides efficient and effective resources for Australian companies seeking to outsource their digital technology;
- business registration and start up for Australia companies that is relatively easy, compared to other South-East Asian countries;
- an income tax rate of 20% for most businesses
- tax exemptions or reduced tax rates at 5% are available to businesses involved in Education and Training for up to 4 years, and other industries including, Agriculture and Healthcare, as well as those associated with Manufacturing Important Products.
Digital Innovation
The Australian Government has indicated that investing in Digital Transformation and Emerging Technologies in Vietnam is the way forward for Australian businesses post COVID-19.
Vietnam has established itself as a prime investment
destination for Australian companies looking to establish themselves or expand their efforts in the digital technology market. The country is currently focused on information technology development.
Vietnam’s application of new technologies such as AI, IoT, BigData, Cloud and Blockchain is approaching a world-class standard and the government is promoting the application of IT in businesses, the Digital Transformation wave, building a smart society, e-government, and associated products.
The IT workforce is in Vietnam is large and known for its expertise, adaptability, and low cost. There has been a recent trend of large companies investing and shifting production to Vietnam, due to the impact of international competition, and China Plus One policies of many Asian countries. Vietnam also has quality IT infrastructure, high levels of internet and smartphone penetration, as well as rapid growth in the use of e-commerce mobile payments.
Going forward
Vietnam is already the choice of many multinational and transnational manufacturing enterprises, so why not make it your choice too? Here are some sectors with the most opportunity for Australian investors:- Software Development and Resources Outsourcing – given the IT workforce in Vietnam;
- Low-cost Sourcing and Consulting Services – these services wanted to assist Australian Businesses to set up factories (or similar) in Vietnam or relocate from China; and
- Investors and Fund Managers – Vietnam is looking for general investments.
