BDO LLP | INTERNATIONAL TECH HUBS SECOND EDITION
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23 INTERNATIONAL TECH HUBS SECOND EDITION | BDO LLP
Vietnam benefits greatly from the ongoing negotiations between the US and China over trade; the “war” that has boosted the Vietnamese economy by nearly 8% year-on-year as of Q1 2019, as companies turn to hardworking Vietnamese labour and free trade agreements instead. Interested investors have followed as a result, tending to come from the wider area. South Korea invested $7.9 billion into Vietnam last year, followed by Hong Kong, which invested $7.8 billion.
THE TALENT POOL The main appeal of Vietnam’s talent is its low salary costs and availability of talent. Vietnam’s large population of 96 million is relatively young; more than 50% are under the age of 35, and many are highly connected with mobile and internet technology. The younger generation, often very educated in STEM areas, are keen to work in the technology sector, and IT work is highly paid in comparison to other work opportunities.
NON-RESIDENTS PAY TAX ON THEIR VIETNAM- SOURCED INCOME ONLY AT A FLAT RATE OF 20%, THE LOWEST IN THE WIDER REGION
THE GOVERNMENT SUPPORT The Vietnamese government is keen to encourage foreign nationals and entrepreneurs to establish their businesses. Non- residents pay tax on their Vietnam-sourced income only at a flat rate of 20%, the lowest in the wider region. Those entering the market should be aware that Vietnam has its own accounting standards (Vietnamese Accounting Standards, or VAS), rather than International Financial Reporting Standards. THE INVESTOR ANGLE The Vietnamese equity market has seen robust growth, given the country’s unique position as an emerging market with a high rate of STEM talent, and its 6.1% GDP growth per annum for the last decade.
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