(Lawyer Pham Duy Khuong answered Vnreview for the article: Vietnam a top destination for expats.) Being listed among the top ten by the HSBC’s latest global Expat Explorer Report has gone some way to prove the significant advances in Vietnam’s investment and living environment.
|Vietnam is one of the most popular expat havens for its easy living and rewarding working conditions|
26 years ago, Tetsu Funayama came to Vietnam for the first time to work as an intern at Mitsubishi Vietnam. At that time, Vietnam was still in the early stages of development and had only a few large foreign direct investment (FDI) projects. Tetsu returned to Vietnam seven years ago and was strongly impressed by the positive changes in the country. Now that he is turning 50, Tetsu is president and general director of Mitsubishi in Vietnam, nurturing ambitious plans to boost investment in the country.
“Vietnam has changed a lot compared to 26 years ago, especially in infrastructure and business environment, thanks to the government’s policies,” Tetsu told VIR.
At the mid-term Vietnam Business Forum in June, many representatives of foreign investors in Vietnam expressed appreciation for the country’s efforts in reforming the Law on Foreign Investment as well as simplifying and cutting administrative and tax procedures.
Vietnam has recently emerged as a hotspot for FDI thanks to the strong development of its economy, with the GDP growth of 6.8 per cent in the first quarter of 2019 after a vibrant 7.08 per cent last year. The country is currently home to more than 80,000 foreign employees, a number which has been continuously rising over the years. Expat communities have been formed such as South Korean groups in Hanoi’s My Dinh area, Japanese groups in Ba Dinh district, and a Western community in Tay Ho district. Similarly, there are expat diasporas in some of Ho Chi Minh City’s most popular areas, such as Phu My Hung in District 7 and Thao Dien in District 2.
The survey, completed by over 18,000 expats across the world, featured 27 questions related to living, aspiration, and little expats.
In the first category (living), expats ranked Vietnam 12th in overall life; sixth in fulfilment; ninth for openness and welcoming communities; and sixth for ease of settling in.
Meanwhile, the country occupied the third spot after Switzerland and Poland in the aspire category. Expats are said to be happy with their disposable income here, placing seventh. The average annual income of foreign employees surveyed in Vietnam was $78,750, higher than the global $75,970. Around two-thirds of respondents agreed that they could save more in Vietnam which provides them with far more spending power to enjoy everything the country has to offer. Expats also named economic stability and work-life balance as the major factors keeping them here.
With such positive work-life balance, it is no surprise that expats find more time to invest in making new friends. Hence, the country ranks fourth in this category, beating even Singapore (13th).
Most expats moving to Vietnam say they quickly adjusted to the local way of life, feeling at home within the first few months of arriving. Many respondents say this is thanks to welcoming Vietnamese communities and the ample chances to get involved with local and cultural events and to form friendships.
The HSBC report concluded that Vietnam makes for a great choice for experienced expats, with 60 per cent of respondents expecting to stay for at least five or 10 years.
According to Pham Duy Khuong, director of ASL Law, Vietnam Business Law Firm, Vietnam’s immigration laws have also seen positive changes, especially after the implementation of the 2014 Law on Entry, Exit, Transit and Residence of Foreigners.
Foreign individuals now can own houses or can buy, rent, donate, or inherit commercial buildings, including common apartments as well as residential and individual houses in projects, with very few exceptions.
The provisions of the law also increased the duration of temporary residence cards from three to five years, depending on the purpose of residence. In accordance with the policy of attracting talented and skilled workers, the law also offers permanent residence to foreign scientists and experts staying in the country temporarily.
The country’s position among the top ten countries for expats has also sparked interest from international investors and experts, which could result in a real estate boom.
The Wealth Report by British independent real estate consultancy Knight Frank shows that the number of ultra-high-net-worth individuals in Vietnam will increase by 170 per cent from 2016 to 2020, which is the fastest growth rate in the world. This brings tremendous opportunities for long-term investment and vast potential for capital appreciation in luxury real estate. Although the country’s property market is not yet on the same level as the likes of Hong Kong or Singapore, it is well on the way to becoming Asia’s next tiger.
“In my experience of promoting Vietnamese properties overseas, the country has become an enticing destination with tremendous economic growth in the last 10 years,” said Nguyen Khanh Duy, director of sales at Savills Vietnam.
According to Duy, foreigners, especially those from Hong Kong, Taiwain, and mainland China, are finally diving into the market.
Despite significant improvements, administrative procedures are still too mechanical and complicated. Additionally, inadequacies in personal income tax policies, work permits, and insurance for foreign employees have been rising issues that the country should focus on, not to mention environmental problems.
There are more and more progessionals like Tetsu, who are finding Vietnam an agreeable place to live and work for the long term. “We are looking at many positive changes in the country’s legal framework, especially considering public-private partnerships (PPP) which will facilitate our future projects,” he added. He elaborated that his company is planning to venture further into healthcare, retail, and hi-tech agriculture.