The most promising market segments in Vietnam

 27.04.2024

In connection with events in the world, many businessmen are thinking about moving and relocating capital. And also about investments abroad and the opening of production in an apolitical zone. This gives you confidence in the future for yourself and your family. Today we are looking at how and where to invest money in Vietnam so that it works for you.

Vietnam is not only a country with a rich history and amazing culture. Now it is also a rapidly developing market with many promising segments. We present to you the top 5 most promising market segments in Vietnam with opportunities and potential for investors and entrepreneurs.

 

In first place is production in Vietnam.

Today it is one of the most significant business areas in Vietnam. The country's government is providing an unprecedented opportunity to reduce production costs. How does it work?

  • Firstly, the location of production in industrial zones, we have already talked about them in the article Capital allocation in Vietnam. In a nutshell, these are special zones in Vietnam, with full tax exemption for a period of 2 years.
  • Low cost of raw materials and components, developed logistics, duty-free import of many goods.
  • Low labor costs.
  • Obtaining a “Made in Vietnam” certificate, with the ability to sell products around the world, despite sanctions.

The production segment in Vietnam is a tasty morsel that neighbors are slowly nibbling off. For example, the Japanese company Panasonic is finishing the construction of a huge plant. The plant will produce indoor air quality equipment. Tsu, a major manufacturer of electrical wires and circuit breakers in Japan, has also entered the Vietnamese market. They moved their production - a plant for water purification and the production of various filters. This list can be continued for a long time.

In addition to Japan, China, Taiwan, Korea and the European Union are actively developing production in Vietnam. In Vietnam, they sew clothes, produce accessories, polystyrene foam, sanitary ware, cars, construction equipment and much more.

Vietnam provides additional preferences for enterprises processing agricultural products, seafood, and livestock products.

Production in Vietnam is a vast topic, and the subtleties and nuances can be discussed endlessly. There are several articles on our website: Opening a production in Vietnam and Production in Vietnam, of course, there will be more.


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In second place we placed the construction in Vietnam.

Next to production is the construction segment in Vietnam. The residential and commercial real estate market in Vietnam is growing exponentially. And the most important thing about this is that the main buyers of real estate in Vietnam are the Vietnamese themselves. No matter what happens to the global market, real estate transactions still take place here. This is one of the Vietnamese's favorite ways to save their savings. For example, a granny who sells sandwiches and traditional “banh mi” on the corner may have 3 apartments. In Vietnam this can be easy. The granny herself and her family live in a state of disrepair, but the money is invested and life is good.


Contact us for financial estimates and project details.

Let's add numbers to all of the above. A report by foreign real estate analyst Colliers shows that primary sale prices in Hanoi were recorded in the range of $2,500-$4,000/m2. It is expected that by the end of 2023, prices in the apartment market will increase by 4-7% compared to 2022. I would like to note that the cost of developing this type of real estate is 25-30% of the sale price.


In third place is the education and training segment.

This is one of the hottest market segments in Vietnam. Nowadays the quality of education is not enough. This applies not only to schools and kindergartens, but also to the main call made by the Vietnamese Ministry of Education. Teachers and educators do not have enough skills, abilities and understanding of processes to educate the current generation of children and adolescents. That is why this segment is very promising for entering the market.

Here we are talking about the “kindergarten + school” segment and additional education for adults. Foreign language learning centers are in great demand. And not necessarily English, but also Chinese, Korean and the European group of languages.

Tuition prices at international schools in Ho Chi Minh City and Hanoi start from $25,000 in junior classes. And they reach up to $45,000 for a year of study at senior level. Despite the high prices, comparable to those in the best universities in the USA and Europe, sometimes even non-native speakers teach here. You won't find a single professor there.

Speaking about advanced training courses, we are talking about the entire service sector. For hotel and restaurant workers, we can go on and on, but there are no such courses.

Let's share our experience. The personnel that our company recruits are mostly without work experience; we train them ourselves. All because there is simply nowhere to send them for training. If you have experience in creating such businesses, you are welcome, this niche in Vietnam is almost empty. Or, for example, if we talk about kindergarten. You should expect an investment of around $50,000. This takes into account the preparation of all documents, payment of rent and purchase of equipment. With proper marketing, the return on investment is a maximum of one and a half years.


IT segment

One of the most relevant business segments is, of course, the IT sector. There are many companies that want to provide their employees with comfortable living and working conditions.

IT companies are relocating offices and employees to Georgia, some to EU countries. Only a few people know that Vietnam creates excellent conditions for locating IT companies. Such companies receive complete tax exemption for a period of 4 years. They also have the opportunity to employ everyone, including foreigners. This means that employees receive protection in the social sphere.

Of course, there are subtleties and peculiarities of relocating enterprises in Vietnam. We will talk about this in more detail in another article. Let us note that there are very successful IT projects in Vietnam. Such as Grab, Lazada, Shopee and others, which are the market leaders today.


Last on the list, but far from the least important segment is parallel import or reexport

 

How to export and import goods to other countries without importing them to Vietnam. For example, buy products in Australia and send them to Russia. It is impossible to do this under the conditions of anti-Russian sanctions. But the problem is solved through transshipment of goods at pre-customs warehouses in Vietnam. The procedure is already understandable for many, working and tested in other countries, for example, in Turkey. Now in Vietnam you can do this too.

Please note that there are factories of global companies in Vietnam - Komatsu, Panasonic, Hyundai, Apple and others. And it is possible to buy products from these brands in Vietnam. And then, subject to certain conditions, send it to other countries (for example, Russia) and at the same time reimburse VAT.
 

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