According to the United Overseas Bank (UOB) Asian Enterprise Survey 2016*, Vietnam is likely to see increasing investments from its neighbours Malaysia, Thailand and Singapore in the next three to five years.
Enterprises from Malaysia (38%), Thailand (35%) and Singapore (29%)
Vietnam as their top three expansion destinations.
They are among the 28% of all respondents
who chose the country as their favoured expansion destination in the next three to five years.
These Asian enterprises
are drawn to
Vietnam’s stable political and economic climate (41%), large
and growing customer demand (40%) and its
tax and regulatory environment (35%).
With economic growth of 6.7% in 2015 and a young workforce where 60% of its
90 million-strong population is under 35 years old, Vietnam is proving to be an attractive investment
In the first half of 2016, the country
a record US$11.3 billion in
up 105% from the same period last year**.
Eric Tham, Head of Group
said that the findings from the
Enterprise Survey 2016
entrepreneurial spirit of
Asian enterprises as they continue
new markets for growth.
“According to the
survey, the top industry sources of foreign investment into Vietnam are from the
manufacturing, healthcare and pharmaceuticals, construction and real estate, as well as energy and
natural resources sectors. These sectors are key as the country
aims to build a strong foundation to
support its long-term economic growth.
“Investments into Vietnam will also create more jobs and boost income. This in turn will open the doors for
new economic opportunities as Vietnam’s growing urban population and expanding middle class start
spending more on consumer goods, and on healthcare services to ensure their personal health and
wellbeing. In addition, Vietnamese enterprises will benefit from collaborating with foreign companies in the
areas of knowledge sharing and skills transfer,” said Tham.
expand their business
is CKL Holdings, a
food and beverage conglomerate
with manufacturing facilities
in Ho Chi Minh City for the
production of beverages.
Chia Chor Meng,
Group Chairman of CKL Holdings, said,
“We first set up
a production plant
huge consumer market,
availability of work force
By having research and development facilities
products that suit
of the local population. We also tapped
conducive export environment to
our products to 60 countries worldwide.
established our second factory, which is five times
the size of
the first, to meet increasing customer
Vietnam’s government is
increasing its efforts
to attract foreign investment.
One example is the memorandum of understanding (MoU) signed between the Vietnam Foreign Investment Agency (FIA) and UOB in
2015 aimed at increasing investment and trade between Vietnam and Southeast Asia. The MoU is FIA’s first such collaboration with a bank.
Tham added that while
Vietnam’s economy may be affected by global market uncertainties stemming
from a precipitous drop in oil prices and tepid consumer demand in the West, Vietnam’s rapid
development presents many opportunities for Asian enterprises.
“The global economy may be slowing down but the Vietnamese economy is still seeing growth. Asian
companies that are able to seize the arising opportunities, and produce the products and services needed
to meet the rising demands of Vietnam’s middle class, will have a unique opportunity to build strong and
sustainable regional businesses,” said Tham.
Read the UOB Asian Enterprise Reports 2016
*The survey was conducted by UOB in May and June 2016 among 2,500 Asian enterprises across mainland China, Hong Kong,
Indonesia, Malaysia, Singapore and Thailand. The objective was to explore how Asian enterprises are capitalising on business
amid global and regional economic trends and trade flows.
**Source: Doing Business in Vietnam, International Enterprise Singapore