Vietnam has swiftly emerged as one of the most dynamic and attractive investment destinations in Southeast Asia. For investors from Hong Kong and Singapore, the country offers a unique blend of compelling factors that make it an ideal location for business expansion. Vietnam’s rapid economic growth, strategic location in the heart of Southeast Asia, competitive costs, and favorable government policies make it a prime destination for international investors. This playbook outlines why Vietnam is the right place for investors from Hong Kong and Singapore, focusing on its booming economy, strategic advantages, and business-friendly environment.
1. Economic Growth and Investment Opportunities
Thriving Sectors:
Vietnam’s economy is on an impressive growth trajectory, and this trend is showing no signs of slowing down. The country has successfully leveraged key sectors such as Information Technology (IT), Software, Digital Marketing, E-commerce, and Services, all of which are expected to be significant drivers of economic growth for years to come. With a population that is both youthful and digitally-savvy, the demand for tech and online services is growing exponentially. This makes Vietnam an ideal destination for investors focused on the digital economy.
Despite this boom in the digital sphere, manufacturing continues to serve as the cornerstone of Vietnam’s economy. The manufacturing sector remains crucial as it serves as the backbone of the entire supply chain, particularly in industries such as electronics, textiles, and automotive parts. For investors in Singapore and Hong Kong, these sectors offer a wealth of opportunities for growth.
Government Incentives:
The Vietnamese government has taken proactive steps to attract foreign investment, offering a suite of attractive incentives. For example:
- Tax exemptions for small enterprises during their first three years of operation.
- Tax exemptions for the first two years for innovative startups, along with a 50% tax reduction for the subsequent four years.
- Tax exemptions on income derived from share transfers in innovative startups, helping encourage venture capital investments.
Additionally, according to the UNCTAD report, Vietnam is consistently ranked among the top 15-20 developing countries globally that are attracting significant foreign direct investment (FDI). The government’s focus on improving the business climate and easing regulatory burdens is likely to continue, ensuring a favorable environment for investors.
2. Strategic Location and Connectivity
Central Southeast Asia Position:
Vietnam’s geographic location gives it a unique advantage in terms of accessibility to both regional and global markets. Situated in the heart of Southeast Asia, Vietnam borders China to the north, Laos to the west, and Cambodia to the southwest. With a coastline that stretches along the South China Sea, the country is well-positioned to serve as a gateway to other key markets across Asia, Europe, and the Americas.
The country’s major coastal cities such as Ho Chi Minh City, Hai Phong, and Da Nang are strategically located, offering convenient access to international shipping lanes. These cities act as key hubs for trade and logistics, further enhancing Vietnam’s appeal to investors looking to serve both regional and global markets.
Access to Global Markets:
Vietnam’s participation in a wide range of free trade agreements (FTAs) increases its appeal as an investment hub. It is a signatory to 16 major foreign trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). These agreements grant Vietnam preferential access to large markets, reducing tariffs and easing market entry for foreign investors. This expanded market access translates into increased opportunities for businesses to tap into emerging markets across Asia and beyond.
In the first half of 2025, reports from Ho Chi Minh City’s business community show that import-export activities have continued to grow at an encouraging pace. The city’s total import-export turnover is estimated at 56.5 billion USD, representing a year-on-year increase of 13.3%. Exports alone reached 31.6 billion USD, showing robust demand for Vietnamese products across global markets.
3. Cost-Effective Business Environment
Lower Operational Costs:
Vietnam is one of the most cost-effective locations for business operations in the region, making it particularly attractive for labor-intensive industries such as manufacturing and assembly. Labor costs in Vietnam are significantly lower than in Singapore and Hong Kong, which makes it a highly attractive destination for businesses looking to optimize costs. This is particularly beneficial for investors in industries that rely on a large workforce, such as textiles, electronics, and consumer goods.
In addition to affordable labor, Vietnam offers lower operational costs across the board. Real estate prices are generally more affordable compared to both Hong Kong and Singapore, and utilities and other general operational expenses are lower. For investors looking to minimize costs while maintaining profitability, this is a key advantage.
Affordable Cost of Living:
In addition to the low operational costs, the cost of living in Vietnam is also far more affordable than in Hong Kong or Singapore. This translates into a lower cost for hiring skilled workers, as well as lower overheads for companies operating in the country. The favorable cost of living enables businesses to allocate resources more effectively, whether it’s investing in innovation, expanding operations, or improving employee benefits.
When compared to Singapore and Hong Kong, labor costs in Vietnam are 8 to 10 times lower, making it an ideal destination for labor-intensive industries and startups looking to stretch their budgets further.
4. Business-Friendly Regulations
Reforms and Transparency:
Over the past several years, Vietnam has undertaken significant reforms aimed at improving the business climate and making it easier for foreign investors to operate. The country’s legal framework has been steadily improving, particularly in areas like intellectual property protection, corporate governance, and dispute resolution.
The Vietnamese government has also been actively working to simplify business registration processes and enhance transparency in regulatory affairs. The government has committed to reducing the administrative burden on businesses by at least 30%, cutting legal compliance costs by at least 30%, and relaxing business conditions across key sectors.
In line with these reforms, Vietnam’s legal system has become more investor-friendly, with a clear and predictable set of regulations governing foreign investments. This is a key consideration for investors from Hong Kong and Singapore, who value legal certainty and transparency when making investment decisions.
5. Political Stability and Long-Term Success
Stable Political Environment:
Vietnam has demonstrated remarkable political stability, which is a major factor for investors looking to make long-term commitments. Since the country regained independence over 50 years ago, there have been no significant political disruptions, ensuring a safe and predictable environment for businesses to thrive.
Vietnam’s political stability is complemented by ongoing economic reforms and a commitment to maintaining a market-oriented economy. The government has made significant progress in reducing red tape, streamlining business processes, and improving infrastructure, which ensures that investors can count on a stable environment for their operations.
Conclusion:
Vietnam stands out as an increasingly attractive investment destination for investors from Singapore and Hong Kong. The country’s dynamic economy, competitive labor costs, strategic location, and business-friendly environment offer a wealth of opportunities for companies looking to expand into Southeast Asia. With a government that is committed to further enhancing the ease of doing business and a young, tech-savvy population, Vietnam is poised to become a key player in the global investment landscape.
For investors from Singapore and Hong Kong looking to capitalize on Vietnam’s growth, Premia TNC provides tailored solutions to help businesses navigate the Vietnamese market with ease. With our local expertise and comprehensive services, we can assist in everything from market entry strategies to regulatory compliance and operational setup.