With competitive labor cost, the country only comes after Singapore in terms of attractiveness.
In the Southeast Asia region, Singapore tops the list of most favorable expansion destinations for Asian companies, with 32 percent of respondents saying they will invest more, followed by Vietnam, according to a recent survey by United Overseas Bank.
Approximately one in four companies will consider Vietnam because of the country’s stable political setting as well as the favorable economic conditions of low inflation and accommodative monetary policy.
Vietnam’s young and active workforce adds value to its attractiveness as an expansion destination. When it comes to labor cost, no country in the region except Myanmar can beat Vietnam.
Vietnam has become a magnet for investment even for investors from Southeast Asia. Malaysian, Thai and Singaporean companies are the keenest on Vietnam, with 38 percent, 35 percent and 29 percent respectively planning to pour more money in the next three to five years.
In the first nine months, the country has attracted $16.43 billion foreign investment, latest data from the government shows.
Compared to the year 2014, when the Asian Enterprise Reports was first released, there are mismatches in where companies originally planned to expand to and where they actually have operations now. According to the survey, fewer firms are operating in Vietnam than anticipated in 2014. Meanwhile, in Malaysia and Singapore, the number of running enterprises has exceeded the expectations.
Asia’s rising importance continues unabated in the global economy. The region’s share of global economy has jumped from 18 percent in 1980 to 31 percent in 2015, and is forecast to reach 45 percent by 2030.
A total of 2,500 business leaders and key financial decision makers of Asian enterprises based in six regional countries and territories — China, Hong Kong, Indonesia, Malaysia, Singapore and Thailand — participated in the survey.