Market entry strategies for international investors in Vietnam

Ho Chi Minh City is the locality that many investors seek out with the desire to invest and do business the most in Vietnam. Because Ho Chi Minh City is a special urban area, a large economic and cultural center, an important gateway for trade with countries in the region and the world and is one of the 20 most dynamic cities in the world. In this article, we will find out more about Ho Chi Minh City and market entry strategies for international investors in Vietnam.

1. Ho Chi Minh City’s location is the gateway to the ASEAN market

Ho Chi Minh City has outstanding advantages compared to other localities in Vietnam because with an area of 2,095 km2 and a population of about 10 million people (accounting for more than 9.44% of Vietnam's population), Ho Chi Minh City is the gateway to the ASEAN market, with a population of nearly 700 million people. Along with that, with a 23km long coastline, about 50km from the City Center, the City has the potential to develop a marine economy.

More than 400,000 enterprises are operating, including more than 15,000 enterprises with foreign investment capital (FDI business marketing strategies). As of July 2024, Ho Chi Minh City has 13,015 valid projects with a total investment capital of more than 58 billion USD. More than 120 countries and territories have invested in Ho Chi Minh City.

The diverse transport infrastructure system helps the city become a center for the circulation of goods to domestic and foreign regions. The city has all 4 means of transport connection such as: air, road, rail, waterway; has Tan Son Nhat International Airport, the largest in Vietnam, serving nearly 50 million passengers and more than 500,000 tons of cargo each year, and Cat Lai International Maritime Port, the largest in Vietnam with a transport capacity of 6.4 million TEUs/year, the volume of goods through this port accounts for about 85% of the volume of goods through southern ports and 50% of the volume of goods through ports nationwide.
 

Marketing agencies for foreign companies in Vietnam

The city currently has 14 industrial parks and 3 export processing zones in operation with a total area of nearly 4,130 hectares. At the same time, it owns the most successful High-Tech Park in Vietnam with a scale of about 913 hectares, attracting FDI business marketing strategies with capital of about 12 billion USD. The city will continue to develop industrial parks, according to the plan, there will be 23 industrial parks - export processing zones with a total area of about 6,000 hectares.

The city currently has a modern and widely developed commercial infrastructure throughout the districts with 238 markets, 206 supermarkets, 49 shopping malls and 2,656 convenience stores. The city has more than 20 international schools from many countries such as Japan, Korea, UK, Australia, Canada, USA, Germany, ... fully meeting the training needs according to international standards for high school and university students and nearly 100 prestigious domestic and foreign banks are present here, including many large and prestigious international banks such as Misitomo Mitsui Banking, Mizuho Bank, HSBC, CIMB, Standard Chartered, UOB, HongLoeng Bank.... The city is a place where human resources with high expertise and quality are concentrated with nearly 5 million trained workers.

The city has a population of more than 10 million people, with an average income per capita in 2022 of more than 6,700 USD/year. Within a radius of 50 km, it is possible to access the market of the Southern Key Economic Zone of Vietnam with nearly 20 million people. In addition, the city is also a place with a good quality of life, with more than 200,000 foreigners from all continents currently living and working here.

2. Ho Chi Minh City incentives for foreign investors

Currently, the city is applying 4 main forms of incentives for foreign investors, including: exemption and reduction of corporate income tax by 10% for a period of 15 years or no more than 30 years; exemption of import tax on imported goods to create fixed assets; exemption and reduction of land use fees, land rent, land use tax; preferential fast depreciation...

Market entry strategies for international investors in Vietnam

In particular, the National Assembly of Vietnam passed Resolution No. 98/2023/QH15 on a number of specific development mechanisms and policies, including 44 mechanisms and policies in 7 areas of a breakthrough nature compared to general regulations, with the expectation that the outstanding specific mechanisms and policies will create a legal basis to promote potential and advantages, creating breakthroughs to solve the city's socio-economic bottlenecks.

First, the city is allowed to pilot the urban development model following the orientation of public transport development (TOD)

Second, the city is allowed to invest in the form of Public-Private Partnership (PPP) in the fields of sports and culture; Implement the form of BT contracts in cash; Use the state budget to participate in projects up to a maximum of 70% of the total investment capital (compared to the prescribed level of only a maximum of 50%).

Third, the City has a special mechanism to attract strategic investors in the following areas: Projects to build innovation centers, R&D centers; research and support for high-tech transfer in the fields of information technology, biotechnology, automation, new materials, clean energy (120 million USD or more); Projects on semiconductor integrated circuit industry, design, manufacturing of components, integrated electronic microcircuits (IC), flexible electronics (PE), chips, new technology batteries, new materials, clean energy industry (1.23 billion USD or more).

Does Ho Chi Minh City sound like an attractive investing location to your business? Are you looking to expand your business in Vietnam? Our expert from Faro Vietnam specializes in helping foreign companies with marketing agencies for foreign companies in Vietnam. From strategic planning to localized marketing solutions, we provide comprehensive support to your brand. Please do not hesitate to contact us.

>>>Read more: Vietnam legal compliance for FDI businesses

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