Ho Chi Minh City has set its sights on becoming a leading investment destination in Southeast Asia. In order to make that a reality, the municipal People’s Committee has identified several measures aimed at improving the city’s investment and business environment.
Despite its size and the fact it is well known globally, Ho Chi Minh City doesn’t rank in the top five of Vietnam’s Provincial Competitiveness Index (PCI). The index assesses and ranks the performance, capacity and willingness of provincial governments to develop business-friendly regulatory environments for private sector development.
The city wants companies to enjoy easier, more transparent, and fairer processes. This would allow Ho Chi Minh City to be a more attractive investment destination in Southeast Asia.
According to Voice of Vietnam, Ho Chi Minh City is looking to digitize two key processes that many international companies currently find burdensome. The city wants to move business registration requests and investment license processing online in order to make these easier for people and businesses to follow.
Plans also call on the city to improve operational efficiency and speed up administrative reform. Details on how this will be accomplished were not announced by the municipal People’s Committee.
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Can Ho Chi Minh City be a leading investment destination in Southeast Asia?
Overseas manufacturers are no strangers to Vietnam, but overseas firms in other industries have not followed. In Ho Chi Minh City, a lack of transparency and a tough business environment have proven to be roadblocks.
That being said, the city has a number of positives that should help it attract investment. Firstly, Vietnam’s labor rate currently sits at USD3.10 per hour, according to research from IHS Markit Technology found. This means labor costs are not prohibitive.
And for the most part, this is skilled labor. Vietnam has a population of more than 95 million and a median age of 30.5 years old with a generation now having grown up around technology.
“Nothing is like Silicon Valley, with its elements on innovation, first-movers, and world-changing technology,” Hung Q. Nguyen, CEO, President and Co-Founder of software testing company LogiGear, explained in an interview with PC Magazine. “But (Vietnam) is very vibrant, very forward-looking. The workforce itself doesn’t yet know quite what it’s like to do business the way the West does but, from the perspective of a tech hub, Vietnam has a lot of potential.”
