Vietnam is one of the most ideal locations to expand businesses thanks to its political stability and rising middle class, according to the United Overseas Bank (UOB)’s Asian Enterprise Survey 2016 released on November 10.

Socio-political stability attracts foreign investments

The survey was conducted with over 2,500 businesses in many countries in Asia including China, Hong Kong, Indonesia, Malaysia, Singapore and Thailand. Over 25% of surveyed businesses said they had expansion plans for Vietnam in the next three to five years.

Firms from Malaysia, Thailand and Singapore showed special interests in Vietnamese markets. Sectors that are predicted to be benefited from foreign investments are real estates, manufacturing, medical and medicine.

According to the survey, increasing numbers of firms are attracted by socio-political stability as two-fifths of asked firms said they were seeking for markets with political stability, good economic environment and growing consumer demand.

Attractive tax policy and close links with local businesses and government's preferential treatments are also among most important factors that affect decisions on business expansion. A young population and rising middle class also provide favourable conditions for many businesses.

Vietnam was considered the second most attractive location to open and expand business after Singapore. Thailand ranked third, followed by Malaysia and Indonesia.

Eric Tham, head of Group Commercial Banking at UOB, said he was leading a group of over 100 firms to visit Vietnam and saw many opportunities.

He said that the entrepreneurial spirit in Vietnam was strong. Despite difficulties, especially after 2009, Vietnam's GDP growth rate reached 6.7% last year. One of the reasons why Vietnam was an ideal location for investors, he said.

Do Nhat Hoang, general director of the Foreign Investment Agency at the Ministry of Planning and Investment, said South Korean and Japanese investors had made Vietnam their priorities. He emphasised that the government was still carrying out administrative reforms in order to improve the business environment.

"We encourage sustainable and environmentally friendly projects, including high technology, biotechnology, health care, and education projects," he said.

Dtinews