Business Startup in Vietnam – In order to present interesting investment prospects, Vietnam has strong fundamentals, including a young, active, and technologically savvy populace, an expanding domestic market, a developing middle class, and an open economy. In order to take advantage of Vietnam’s strategic connectedness and proximity to Asian markets as a gateway to build their enterprises, many start-ups and international firms have established their offices there. While COVID-19 is probably here to stay for a while, it shouldn’t stop us from investigating the fresh possibilities Vietnam has to offer and seeking approaches to fostering and maintaining the progress.
Reasons for Choosing VietnamTax advantages
1. Tax advantages
The advantages of starting a business in Vietnam are enormous. For conducting business in Vietnam, you may be eligible for several tax benefits. Depending on the industry, the location, and the scale, new investment projects may qualify for tax incentives.
- A flat corporate income tax rate of 20% is applied to annual net profits. A new tax incentive program for businesses offered a 30% reduction in corporate income tax due in cases where an enterprise’s revenue in 2021 falls short of its revenue in the 2019 tax year and its turnover is less than VND 200 billion.
- The maximum VAT rate is 10%.
- Vietnamese withholding tax on international payments ranges from 5% to 15%.
- The Vietnamese government is promoting a number of industries with a 10 percent corporation tax rate, including high-tech and software creation, renewable and environmentally friendly energy, infrastructure growth and scientific research, agriculture, health care, and education. For the next 4 years, investments in health and education will be tax-free.
2. The Need of Human Resources
Vietnam has a young population with an available labor pool. Surprisingly, the country’s average salary rate is more affordable than those of its neighbors, including China, Malaysia, Indonesia, and Singapore.
Each of Vietnam’s four regions has a different minimum wage, which ranges from VND 3,250,000 (US$139) in rural areas to VND 4,680,000 (US$199) in urban areas. Additionally, workers who have received skills courses must be paid at least 7% more than the current minimum wage rate.
On the other side, Vietnam is among the nations with the fewest vacations, which is undoubtedly advantageous given corporate goals. Vietnam is a good place to invest thanks to this level of openness.
3. The Openness to Foreign Investors
One of the most welcoming to foreign investors is this nation. Vietnam has formally joined 15 free trade agreements, including the Regional Comprehensive Economic Partnership and six ASEAN FTAs with China, South Korea, Japan, India, Australia, and New Zealand.
According to the 2018 EVFTA (Europe-Vietnam) Report published by the European Chamber of Commerce (EuroCham) in Vietnam, 72% of EuroCham members thought the EVFTA will increase Vietnam’s competitiveness and make it a hub for European investors, and The Netherlands is a good example.
4. Development of Infrastructure
Vietnam is constantly investing in its infrastructure as a result of its rise as a center for low-cost manufacturing. The country’s transportation system and its capacity for power production and distribution will get the majority of Vietnam’s planned infrastructure spending.
5. Macro Economy Stability
Since 2010, Vietnam’s GDP growth has consistently hovered between 6 and 7 percent, and this pattern has increased Vietnam’s appeal to investors from around the world. It is true that the distribution networks were abruptly disrupted by the pandemic outbreak in the third quarter of 2021, and severe limits left the investors with some doubts. However, with the reform of a number of significant laws that help improve its business environment, Vietnam is prepared to rebound in 2022.
These and other elements have demonstrated Vietnam’s appeal as a business destination in 2022 and the next years.
What support can DATA ENTRY VIETNAM offer
DATA ENTRY VIETNAM and our back-office partner-firms offer a variety of market entrance solution services in Vietnam in order to give investors insights into important areas of undertaking and conducting business here and assist you in making an informed decision to join Vietnam. If you have any questions, you can reach us at info@data-entry-vietnam.com.