HSBC Reports Continued Attractiveness of Vietnam as Foreign Business Destination

HSBC has asserted that, in spite of some transitory difficulties, Vietnam still retains its appeal for international corporations seeking to invest.

Vietnam Remains Attractive Destination for Foreign Businesses: HSBC

HSBC commissioned an online survey of 3,509 businesses in China, India, the UK, France, Germany, the US, Australia, Hong Kong (China), and GCC countries (United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman and Kuwait). Photo: VNA

According to a recent survey conducted by HSBC, there continues to be a strong interest in Vietnam as an attractive destination for foreign businesses. Vietnam has showcased rapid economic growth and demonstrated resilience during and after the Covid-19 pandemic, making it one of the top performers in the ASEAN region.

Vietnam’s strong economic resilience, skilled workforce, competitive cost structures, and fast-growing middle class make it an appealing market for international companies. With the country’s projected growth and rise in consumer prosperity, Vietnam is expected to become the 10th largest consumer market in the world by 2030.

Vietnam Remains Attractive Destination for Foreign Businesses: HSBC

Various international businesses see Vietnam’s growing consumer market as an opportunity, with 27% highlighting the appeal of increasing consumer prosperity. Chinese and Indian companies particularly focus on the opportunity to scale quickly in Vietnam’s sizable market. Additionally, 45% of Indian businesses see Vietnam as a place to develop and test new products and solutions.

Vietnam’s high smartphone penetration rate, vibrant start-up sector, and growing digital economy are other factors attracting international businesses. The country’s importance in global trade flows is evident in the strong interest in the EU-Vietnam Trade Agreement, which aims to eliminate tariffs and reduce trade frictions between the two partners.

Despite these opportunities, foreign firms operating in Vietnam face challenges related to cultural differences and regulatory developments. Australian companies report dealing with cultural issues, while US and Hong Kong firms specifically mention the challenge of adapting to fast-changing regulations and policies in the Vietnamese market.

A gas stove component production line of the Japanese-invested Paloma Vietnam Co. Ltd in the Vietnam - Singapore Industrial Park in Hai Phong city (Photo: VNA)

Vietnam has attracted close to $18.15 billion in foreign direct investment (FDI) in the current year, with the manufacturing and processing sector leading in FDI attraction. Singapore, China, and Japan are the top countries and territories investing in Vietnam.

As of August 20, FDI disbursement was estimated to be about $13.1 billion, indicating a rise compared to the previous year.