Vietnam has been chosen as the top priority market for future business expansion in Southeast Asia by 40% of US enterprises according to the recent ASEAN Business Outlook Survey released by US Chamber of Commerce.
The country has passed Indonesia, the largest market in the region, to become the first market US companies are looking to expand in across Southeast Asia. Indonesia ranked second with 38%, followed by Myanmar (34%) and Thailand (30%).
More than half of the respondents (53%) believed the ASEAN markets have become more important in terms of their companies’ worldwide revenue over the past two years. 49% expected to increase their ASEAN workforce by the end of 2016.
Expanding business in Vietnam for foreign companies
According to the survey, Vietnam has many competitive advantages for foreign companies, especially from the US, to expanding their business there. Among them are:
- Low labor costs (64%)
- Personal security (62%)
- Positive sentiments towards the US (58%)
- Stable government and political system (45%)
Nevertheless, the country still faces many problems that could hinder their growth and discourage foreign investors in the future, such as corruption (66%), lack of infrastructure (59%), legislations (55%). In addition, more than 40% of respondents said they were dissatisfied with government agencies, especially customs and tax authorities.
Among the top three industries that consider Vietnam as an attractive destination for expansion are:
- Consumer Goods (41.9%)
- Pharmaceutical (40%)
- Wholesale/Retail (37.5%).
Vietnam was also voted the second market for moving investments from China into ASEAN with 17% of the vote, following Malaysia at 19%.
Until April 2016, US investment in Vietnam has reached $30.5 million, placing US at 17th in the ranking of Vietnam’s FDI partners. Top three investors in Vietnam is still held by South Korea with more than $48 billion investment; Japan, over $39 billion; and Singapore, over $36 billion.