Vietnam is an ideal location for business expansion in the region, according to the United Overseas Bank (UOB)’s Asian Enterprise Survey 2016, published on November 10.

At a press conference launching the Vietnam edition of the UOB Asian Enterprise Reports 2016, UOB announced that the survey results found a sense of optimism on Vietnam's potential to attract foreign direct investment (FDI). The survey was conducted with over 2,500 enterprises in six nations and territories across Asia, including China, Hong Kong, Indonesia, Malaysia, Singapore and Thailand.

Among them, 38% of Malaysian firms, 35% of Thai companies and 29% of Singaporean enterprises chose Vietnam to expand their businesses.

The survey found the key factors that influence decisions to choose locations for business expansion in Asia include political stability, good economic climate, growing consumer demand, attractive tax policy, good links among local businesses and government assistance.

Eric Tham, CEO and head of Group Commercial Banking at UOB, said the survey found Asian enterprises continue to seek new growth markets.

One company that has ventured into Vietnam to expand their business is CKL Holdings, a food and beverage conglomerate with manufacturing facilities in HCMC to produce beverages under its signature Sagiko brand. To meet the continuously growing customer demand, in 2015, it established its second factory in Vietnam, which is five times bigger than the first.

According to the survey, the most attractive sectors for foreign investors in Vietnam are manufacturing, healthcare and pharmaceuticals, construction and real estate, and energy and natural resources. These sectors allow the country to build a strong foundation to support its long-term economic growth.

Attending the press conference, Do Nhat Hoang, general director of the Foreign Investment Agency at the Ministry of Planning and Investment, expressed optimism about growth potential and the positive trend of foreign investment in Vietnam. Vietnam obtained a GDP growth rate of 6.7% in 2015, the highest rate since the global economic crisis in 2008-2009. Vietnam has a stable political environment, low inflation and good monetary policy, plus a young and dynamic workforce. These are the advantages that bring the country into the list of top destinations for investment and business in Asia.

“Investments into Vietnam will also create more jobs and boost incomes. This will in turn create new economic opportunities as Vietnam’s growing urban population and expanding middle class spend more on consumer goods, and healthcare and wellness services. In addition, FDI will allow domestic enterprises to build on the capabilities of foreign firms and develop new skills to transition to a high value-added, innovation-driven economy,” said Tham.

Vietnam is among the top 10 countries with the highest foreign investment commitments in Asia, with US$12 billion in FDI approved in 2015. Initiatives for multilateral economic cooperation like the ASEAN Economic Community (AEC), the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) are expected to further lure capital into the region and globally into the country.

Vietnam is also promoting international economic integration through participation in the multilateral economic initiatives and the free trade agreements with the EU, the Eurasian Economic Union, and South Korea, combined with the AEC. These activities will certainly open up more chances for business and investment in Vietnam.

UOB is a leading Asian bank with a global network of more than 500 offices in 19 countries and territories, operating through its headquarters in Singapore, banking subsidiaries in China, Indonesia, Malaysia and Thailand, branches and representative offices.

The most attractive sectors for foreign investment in Vietnam

Malaysia:

Manufacturing 61%

Healthcare and pharmaceuticals 60%

Construction and real estate 38%

Thailand:

Healthcare and pharmaceuticals 67%

Energy and natural resources 54%

Construction and real estate 50%

Singapore:

Energy and natural resources 67%

Manufacturing 42%

Construction and real estate 40%

SGT