Vietnam Ranks as 2nd Most Attractive Nation in ASEAN for US Business
HCMC – According to survey results recently released by the U.S. Chamber of Commerce in Singapore, Vietnam is the second most popular destination for U.S. business expansion among the member states of the Association of Southeast Asian Nations (ASEAN). Indonesia took the top position.
The survey, titled the 2015 ASEAN Business Outlook Survey, gauged opinions from nearly 600 senior executives in U.S. companies engaged in operations throughout all 10 of the ASEAN nations.
According to statements given by those polled in the survey, the reasons for Vietnam’s attractiveness include a stable government and political system, positive sentiment toward the U.S., the availability of low cost labor, and good personal security. Additionally, executives expressed positive views regarding the cost and availability of housing and office space.
Key takeaways from the Vietnam section of the survey include:
- 57 percent of executives expect their workforce to grow in 2014
- 66 percent expect their profit to increase in 2014
- 82 percent expect their profit to increase in 2015
- 95 percent of expatriate employees are generally satisfied with their assignments
However, the survey also detailed a number of worries that executives have about conducting operations in Vietnam – chief among these was corruption. An additional area of concern lay in the perceived reduction in the level of business incentives offered by the government. In the wake of the anti-Chinese protests, business leaders also expressed concern about employee safety.
Looking to ASEAN
Among the survey’s key findings for ASEAN as a whole were:
- 75 percent of executives saw a rise in the level of business their companies conducted in the ASEAN region
- 89 percent of executives expected their business to increase over the next five years
Tami Overby, the U.S. Chamber’s senior vice president for Asia, explained that “[the] survey underscores the confidence that U.S. businesses have about ASEAN, particularly as it integrates economies, deepens its trade and investment relations with major trading partners, and makes the region an important, attractive destination for U.S. investment.” She also pointed to the important impact the ratification of the Trans-Pacific Partnership (TPP), a U.S. led free trade agreement (FTA), will have on the region.
The survey also showed that many U.S. companies were taking advantage of the FTAs that ASEAN has signed with Australia and New Zealand, China, India, Japan, and Korea. Almost half of the executives reported that they have made use of FTAs to export goods to China.
In regards to the increasing economic integration taking place in ASEAN, 53 percent of companies said that they had a strategy in place to take advantage of the implementation of the ASEAN Economic Community, which is scheduled to go into effect in 2015.
However, the survey also highlighted a number of problem areas for businesses conducting operations in ASEAN. As shown in previous studies, one of the key worries among executives was the level of corruption that still exists in the region (excluding Singapore and Brunei). Additional problems included burdensome laws and regulations, lack of transparency, poor quality of infrastructure, and the difficulty of moving products through customs in some countries.
ASEAN has become an increasingly important market for US companies and, as the recent survey makes clear, the region will continue to represent a growing proportion of these companies’ world wide revenues.
Please see here for the full survey.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.
An Introduction to Doing Business in Vietnam 2014 (Second Edition)
An Introduction to Doing Business in Vietnam 2014 (Second Edition) provides readers with an overview of the fundamentals of investing and conducting business in Vietnam. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, annual compliance, taxation, human resources, payroll, and social insurance in the country.