Posted 1.04. 2020 by Cekindo / Last update on 7.08. 2020
Traveling to Vietnam is no longer just sightseeing, shopping and relaxing. Vietnam is now a fast-growing country with a burgeoning economy – a factor that is so inviting for many foreign investors to either start a business or inject their investment in this amazing country.
The government of Vietnam has always believed in an open economy and this has helped the country to grow so rapidly in the last decade with the influx of foreign investments.
The growth of the country is due to several factors. Over the past few years, Vietnam has implemented policies to control its public debt to decrease its budget deficit. Not to mention, the government has been working hard to knock down corruption. Besides, improved governance and constantly enhanced infrastructure are the elements allowing private sectors to conduct businesses much easier.
However, when it comes to Vietnamese stocks, no local stocks are currently trading on any of the international stock exchanges.
When it comes to the best way to invest in Vietnam, here we have compiled some viable investment options in Vietnam that foreigners can consider.
Vietnam has slowly shifted the economy from agriculture to more profitable industries in recent years including manufacturing and services, even though agriculture remains a significant industry that contributes to most of the country’s Gross Domestic Product (GDP).
Last year, Vietnam’s GDP grew by approximately 7%, which is twice the world average and was ranked the second-highest in the Asia Pacific.
With the strong inflow of foreign investments, the average GDP is likely to surpass 7% in 2020. Here is why.
Increasing population: Vietnam is estimated to have 105 million population by 2030. Therefore, this allows the country to provide cheaper labor and more skilled employees.
Strategic location: Vietnam is close to many Asian countries especially China, making investors use Vietnam as a hub for doing business. The country is also cost to important export and import shipping routes
Improving infrastructure: the government has injected large capital to develop the country’s infrastructure such as airports, hospitals, highways, and shipping ports
Favourable government policies: the government provides incentives to foreign companies to invest in Vietnam
Advantageous trade agreements: EU-Vietnam Free Trade Agreement and other trade agreements with many Asian countries have helped the country to import and export with lower tariffs.
Exchange-Traded Funds (ETFs)
Investors can buy and sell ETFs like the stock shares. Several ETFs that foreigners can consider include the Premia MSCI Vietnam ETF, X Trackers FTSE Vietnam Swap UCITS ETF, and Market Vectors Vietnam ETF.
Close-ended funds are also good ways to gain broad exposure to the Vietnamese market. Available funds for foreigners include VinaCapital Vietnam Opportunity Fund and Vietnam Enterprise Investments.
The most direct investment access for foreigners is the local Vietnamese broker. Before buying shares from the Vietnamese stock exchanges, investors must go through a certain process for approval.
Investors can buy shares in emerging market mutual funds. These mutual funds invest in Vietnam and other countries’ growing companies. Funds invested in Vietnam’s emerging companies are often less than 3%.
Cekindo provides you a well-timed investment insight, superior market access, and the best way to invest in Vietnam.
There’s a lot to consider when you’re choosing the right investment. So our team of investment experts has developed in-depth investment strategy and options personalised to your investment requirements.
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