Are you looking for the best way to get a winning business idea in Vietnam? Starting a successful small business in Vietnam is not too challenging if you are looking at the right problems that you can solve.
If you are doing it right with the right business ideas, Vietnam will turn into a very welcoming place for your business investments. However, investing a considerable amount of capital in business fields that you are not familiar with can be very risky.
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According to the World Group Bank, the Trans-Pacific Partnership signed by Vietnam has boosted a 10% increase in GDP and a 30% hike in export value.
This escalation of the economy is expected to continue until 2030. As a result, there are plenty of locals and foreigners racking their brains – coming up with that one business idea that will fulfill their entrepreneurial dream and make their fortune.
But now you do not have to. In this article, Cekindo has listed the five most profitable small business ideas in Vietnam for you, so that you can be your own boss.
1. Textile and Garment
Garment and textile items production is one of the most lucrative businesses in Vietnam. Foreigners or investors are likely to make a profitable gain out of this sector because it is considered one of the active sectors in its exported items.
In addition, thanks to the escalating US-China trade war, the devaluation of the Yuan against the US dollars as well as the competitive price of Vietnamese textile and garment, lead Vietnam’s textile and garment to gain market share from China.
According to the Vietnam International Securities Joint Stock Company, there is a 25% export tax imposed by the U.S. on garments and textiles coming from China – giving Vietnam an enormous advantage to export garment and textile items to the United States.
It is recommended to start a business in this industry by creating an online ready-made clothing store or becoming a cloth merchant. The establishment of garment and textile manufacturing in Vietnam might be too costly for a small business venture, but definitely worth your money.
2. Real Estate and Property
Ever since Vietnam opened up its real estate and property to foreign investors in 2015, the country has experienced rapid growth.
In 2017, the purchase of real estate and property in Vietnam surged 21% as compared to the previous years. Many foreigners from Singapore, South Korea, China, and Hong Kong treat real estate in Vietnam as a highly lucrative business to dive into – especially with the increasing amount of ex-pats and immigrants.
Even though you need a relatively large amount of money to get a head start, this is a business that you will see a bigger return on investments as well.
For instance, you can buy an old property, and then renovate it and resell it. Besides, you can also build your own office buildings or affordable housing for rent – so that you will have a consistent passive income and the property is still yours.
Of course, remember to do your due diligence while searching your perfect locations for these properties, and which types of buildings are suitable to be built in particular areas.
Restrictions of Real Estate and Properties for Foreigners
One of the restrictions foreigners must pay attention to is that foreigners are only permitted to buy a maximum of 30% of condominium units in a building. In addition, they are not allowed to own more than 10% of landed properties in one project, and can only possess 250 houses in a given ward.
The leasehold period of a property is set at 50 years and is renewable. However, if your spouse is Vietnamese, you are allowed to obtain a freehold tenure.
Continue reading Buy Property in Vietnam as a Foreigner: Why and How.
3. Tourism and Hospitality
Another profitable business idea for small businesses in Vietnam is definitely tourism and hospitality – due to the beautiful landscape, amazing nature, exquisite culture, and cuisine of the country. As a result, the tourism and hospitality industry in Vietnam has also created millions of jobs over the years.
According to the Vietnam National Administration of Tourism, the number of international tourists coming to Vietnam grew by 20% in 2018, resulting in more than 15 million international visitors. This growing trend is expected to continue as there was an increase of 8% in international arrivals in the first two months of 2019 as compared to January and February 2018.
As you can see, there is absolutely no shortage of tourists coming to the country every season. Therefore, along with great accommodation deals and meal plans of good quality, you can also start a tourism agency – a fool-proof way to gain a profitable return.
Restrictions for Tourism and Hospitality Businesses
However, if you are to start a hotel and resort business, you need to be aware of the property and real estate restrictions as mentioned earlier as well.
Vietnam exports a lot of things and that is why export is listed as one of the most profitable small business ideas in Vietnam.
Items that are often exported by small businesses include coffee, shoes and garment, accessories, and electronics – which are in high demand in other countries. There are other goods such as manufacturing equipment, mineral fuels and oils, iron, and steel that are in fact on the top positions when considering a total Vietnamese export, however, those are in the majority of cases represented by global companies.
In 2017, Vietnam was ranked the largest ASEAN exporter to the United States – with a total export value of US$48.4 billion.
Other than being an exporter and seller, you can even be a product sourcing consultant. A product sourcing consultant connects potential international customers and sellers in Vietnam together.
Better, you can even match international sellers and Vietnamese customers, and then import items from other countries into Vietnam as well. By combining both import and export, you could also become a freight forwarder.
5. Furniture Making and Remodeling
Furniture making and remodeling, especially wooden furniture, has an outstanding business prospect in Vietnam. It makes a profitable business as many countries source their furniture from Vietnam, particularly those made in rosewood and rare hardwood species – approximately 70% of this furniture is exported to China.
With the increase of the middle-income group in Vietnam, most Vietnamese are keen on improving their living environment at home. Therefore, furniture remodeling or even home design can be a good start for you to get involved in this business, as they require less capital for initial investment.
If the financial situation allows, you are strongly advised to set up your furniture company and be a furniture exporter. Your furniture company does not necessarily have to be a manufacturing company. Instead, you will have to outsource the production to others and market your brand of furniture.
Are you an ex-pat living in Vietnam or an investor considering starting a business in Vietnam? Consult your ideas with our advisors for free. Fill in the form below, and we will get back to you with a quotation on your small business ideas in Vietnam and advise other steps.