Vietnam, a land full of vibrancy startup scene and energy of venture capitalists, reminds people of the Silicon Valley in its earlier stages. The country is now fast becoming an internationally-known tech hub, with attractions including a young, quality and well-educated labour force, generous tax incentives, and open visa programs.
Countless young tech entrepreneurs have flocked into Vietnam to set up their own businesses and companies. Within the first four months of 2017 alone, the startup scene in Vietnam saw over 39,580 new registered startups. In this article, we will provide 10 reasons why Vietnam is poised to become the next Silicon Valley for Southeast Asia, bringing investors that can participate in this flourishing economy.
Why Start a Startup in Vietnam
1, Young Talent Pool
Vietnam has youth on its side. Among the country’s over 96 million people, according to Central Intelligence Agency, the media age is 30.4 years old with 50% of the total population younger than 30 years old. The growing young population coupled with the improving quality of education are continuously producing a huge pool of high-skilled talents.
2. Expanding Market Potential
Known as the 15th most populous country in the world, Vietnam’s high population and young workforce contributes to the consumption potential in the country. Evidently, Vietnam is now ranked 13th in the world and 3rd in ASEAN countries for market potential in any business sectors.
3. GDP Growth
According to KPMG, the annual Gross Domestic Product (GDP) in Vietnam tripled from US$600 per person in 2005 to a favorable US$2,185 in 2016, a massive increase in just a decade.
4. Government’s Resources
The Government of Vietnam has quickly caught wind with the Industry 4.0. The authority and administration has issued an initiative with the title of ‘Vietnam Silicon Valley’. Through this initiative, the government will set aside capitals and resources to support an environment for the growth of the startups. The Vietnamese government aims to offer 2,600 startups with financial and legal support over the next 10 years.
5. Attractive Tax Incentives
Foreign investors are drawn by the attractive tax incentives and exemptions offered in Vietnam. The government even provides location-based incentives, benefiting disadvantaged locations based on the companies’ levels of investment and development. Incentives for prioritized industries are also available.
6. A Booming E-Commerce Industry
Vietnam is experiencing an explosion in its e-commerce sector. In 2017, e-commerce is the most popular sector for foreign investors in Vietnam that received investments of US$83 million, grew by 25% and is forecast to grow further until 2020, according to a report by the Vietnam E-commerce Association.
7. Rising Foreign Investments
Foreign direct investments have also flooded into the tech sector, especially the tech startups. In 2017, Tech in Asia reported that Vietnamese startups conservatively gained US$61.5 million worth of investments. However, according to Topica Founder Institute, the investment in tech sector is much higher, estimated at a whopping US$300 million in 92 different deals.
8. Stable Political Climate
Vietnam’s stable political climate is one of the great advantages of the country. This further helps Vietnam to bridge trade ties with different countries such as the United States and China to increase investments in Vietnam.
9. Low Costs
Comparing with other countries in the ASEAN regions, Vietnam is still a country with competitive labor and operational costs for businesses. These costs are 50% lower compared to its neighbouring country China.
10. Visa Program
Vietnam is currently offering relaxed visa programs to encourage its former citizens and Vietnamese diaspora the ability to regain their Vietnamese citizenship. Leveraging on this, it will help further boost the tech scene with more quality talent source, knowledge, and investments.
VISA UPDATE: Due to irregular changes to immigration laws recently Cekindo is no longer offering immigration visas as one-time services. If you wish to apply for an immigration Visa you also have to opt-in for our company registration services.
How Cekindo can Assist
The trend of investing in Vietnam’s tech startups has gained massive momentum. For entrepreneurs and foreign investors who wish to be part of this prosperous scene, Cekindo offers a comprehensive range of services with legal experts that can help you set up your startup company and expand your business in Vietnam.