Why Should You Invest in Vietnam’s Information Technology Sector?

Why Should You Invest in Vietnam’s Information Technology Sector

While the rest of the globe has been in turmoil, Vietnam has been improving. When it comes to international crises, such as the trade war between the United States and China or the coronavirus outbreak, Vietnam has exhibited little to no reaction.

Vietnam has pushed relentlessly to attract additional investment in the Vietnamese IT industry. The government’s attempts to simplify regulations and policies to encourage foreign investment in the IT sector keep the prospect of full digitization in Vietnam during the next decade alive. This article discusses how technological advancements in the information technology sector may boost investment returns.

Information and Communication Technology (ICT) in Vietnam

Digital transformation and digital-based economic development are viable ways for ASEAN countries to pursue their cooperative agenda. Vietnam, which chaired ASEAN in 2017, maintains a strong, forward-thinking effort toward digitalizing all member states.

Vietnam’s ICT sector is a promising market for Australian enterprises, with an estimated annual growth rate of 8% through 2020. The country’s burgeoning digital economy is widely expected to boost Vietnam’s GDP by another $1 trillion by 2025. The success of Vietnam’s online marketplace can benefit the country’s digital economy and other goals. According to the Central Institute for Economic Management of Vietnam, Vietnam’s GDP will have increased by US$28.5 billion to US$62.1 billion by 2030, a 7-16% increase.

Why Should One Invest in Vietnam’s Information Technology Sector?

Foreign technology enterprises looking to expand into new markets have found Vietnam to be a profitable expansion area. For example, Japan’s ICT behemoth Fujitsu has been aggressively adopting its new business strategy in Vietnam. Fujitsu has been present in Japan since 1999, selling exclusively to Japanese enterprises. M-Security Technology Pte Ltd is the sole reseller of a comprehensive variety of security solutions in Vietnam for the US-backed IT Blue Coat Group.

Furthermore, Decree No. 108/2006/ND-CP outlines various elements of the Investment Law as well as the creation of software products and digital content. The decision includes a 10% preferential tax rate for 15 years, a tax exemption for four years, and a 50% reduction for the next nine years as special incentives to stimulate investment.

As a result, Vietnam is today regarded as one of the most promising markets in Southeast Asia. The information and communications technology business, as well as the digital economy, look to be fiercely competitive. The Ministry of Information and Communications envisions the country being a top digital destination and economy in Southeast Asia by 2030. This objective is founded on the fact that numerous new digital technologies have already been tested.

Reasons to Invest in Vietnam’s Industry?

1. Strategic Position for Overseas Capital

Vietnam’s strategic location gives it an economic advantage over its Southeast Asian neighbors. Vietnam is an attractive investment destination for foreign investors due to its proximity to major Asian markets and transportation lines.

Because its two largest cities, Ho Chi Minh and Hanoi, are located in the south and north, Vietnam is an essential trading link.

2. Consistent, Steady, and Improved Economic Growth

According to the World Bank Group, between 2002 and 2018, Vietnam’s poverty rate fell from more than 70% to less than 6%. Vietnam has had phenomenal economic progress during the previous 30 years.

Its incredible growth rates make it one of the fastest-growing economies in ASEAN. Despite the fact that its development is predicted to decrease by 2024, Vietnam remains an appealing market for international investors.

  • Vietnam’s economic output (GDP) from 1995 to 2020
  • Vietnam’s GDP from 1995 until 2020

3. Massive Market Potential & Expanding Regional Market Potential

Because of the vast population of 95 million people, there is significant purchasing power. Because of the country’s increasing middle class, Vietnam’s market has enormous potential. According to PWC, Vietnam’s economy will be one of the world’s 20 largest by 2050, making it an ideal location for any business venture.

4. Doing Business in Vietnam Has Never Been Easier!

The Vietnamese government has made numerous adjustments over the years to open up the economy and make it simpler to invest.

More openness has attracted more foreign finance. By making things like procuring power and filing tax returns easier, Vietnam’s new rules have made it easier to start a business.

Furthermore, the inexpensive initial investment is a significant incentive for enterprises to establish themselves in Vietnam. In Vietnam, there are fewer restrictions on starting a business than in many other countries. This makes it much easier to get started because it is a relatively cheap and adaptable investment when compared to others.

5. The Rising Workforce, Full of Extraordinary Talent

Vietnam’s young population gives it a significant competitive advantage over China. Over half of the population is of working age, and 97% of the population can read and write, according to the Ministry of Education and Training (Source: PWC). As a result, there is a strong and engaged workforce.

Furthermore, the government has established programs to educate its inhabitants. To meet the needs of its growing high-skilled industry sector, Vietnam has increased vocational and technical education. In other words, foreign firms will be able to tap into a larger pool of young talent to help them grow.

6. Low Unit Labor Costs

Aside from its convenient location, Vietnam is luring businesses away from China with its low labor costs. Because of its growing economy and low minimum wage, it is a viable alternative to China, particularly in the manufacturing sector.

7. Government Spending on Infrastructure has Caused a Boom

By implementing and improving local infrastructure, the Vietnamese government has successfully created an investment climate. Because the government is working to improve transportation, Vietnam is an excellent location for international companies to establish an Asia-based headquarters.

How WARREN B Helps in Registering Companies in Vietnam

WARREN B recognizes how difficult it is for international investors to select which company type to choose in Vietnam. As a result, even at this early stage, we give our assistance by giving information and all necessary assistance in registering a business in Vietnam.

We take satisfaction in guiding investors through regulatory requirements, removing client misunderstanding, and making the entire business formation process clear. Foreign investors can begin their businesses in a very short amount of time with our professional guidance. As a result, investors can concentrate their valuable time to important decisions that will ensure the business’s growth in Vietnam.

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