Pros and Cons of Doing Business in Vietnam: Is It Right for You?

Vietnam offers an attractive proposition for doing business, as one of Southeast Asia’s emerging economic hubs. The country’s GDP has grown year on year since 2013.

With a significant manufacturing base and competitive labor costs, Vietnam is a popular choice for outsourcing and setting up overseas operations.

In this blog post you’ll learn the ins and outs of doing business in Vietnam to help you decide if it makes sense for your US business.

Pros of Doing Business in Vietnam

Vietnam has experienced incremental GDP growth for over a decade, making it an enticing option for doing business overseas. Whether you’re looking to expand your US operations with a base in Asia, or outsource work, there are many reasons to consider Vietnam.

Competitive labor costs

With some of the most competitive labor rates in all of Asia, the annual salary in Vietnam equates to around $8,125 per year in 2025.

Low cost of labor makes Vietnam an attractive option for outsourcing work, especially if you’re in a labor-intensive industry such as textiles or furniture products where you would need to pay for more hours of work.

Growing manufacturing sector

Vietnam’s manufacturing sector has always accounted for a large percentage of the country’s GDP growth. For example, in 2023, manufacturing accounted for 23.88% of Vietnam’s total GDP.

As the backbone of the country’s economy, you can trust that you’ll find reliable support for manufacturing needs. Large companies like Nike and Samsung have made significant investments in the country, as the country can scale manufacturing production while providing good value-for-money.

Some of the biggest manufacturing exports include footwear, electronics, and furniture. Increased investment and support for high-tech manufacturing mean that Vietnam is further positioning itself as a robust destination for support in this industry.

Strategic location for global trade

With a strategic location straddling the borders of both China and Laos, Vietnam offers seamless logistics for global business.

As a member of trade agreements such as the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and the RCEP (Regional Comprehensive Economic Partnership), Vietnam has tariff advantages and grants access to global markets.

The country’s proximity to other ASEAN countries also means that it can be a strategic base for diversifying your supply chains and reducing the need for overreliance on China.

Business-friendly policies and incentives

The Vietnamese government advocates for and promotes foreign direct investment (FDI) in the country.

As such, when you do business with Vietnam, you can expect certain perks such as:

• Tax incentives such as tax holidays up to 4 years and lowered corporate tax rates for 9 years
• Land-use privileges
• Support for industrial park development
• Preferential policies for high-tech and green industries

The Vietnamese Ministry of Planning and Investment has also made it easier to get involved in business dealings with the country by expanding digital access to certain procedures in several major cities.

Cons of Doing Business in Vietnam

Doing business in Vietnam also has some drawbacks, which may influence your decision.

Complex regulatory framework

Vietnam has a complex legal and regulatory environment compared to other countries, which has historically slowed down certain bureaucratic processes.

This means you could face delays when it comes to:

• Getting your business license
• Navigating customs procedures
• Acquiring land or securing construction permits

It may also prove to be the case that laws are applied more loosely in rural parts of the country than they would be in the bigger cities.

Language and cultural differences

While Vietnamese is the country’s official language, English is broadly spoken in business hubs. However, language barriers can still impede communication at times, especially when you’re discussing technical topics during HR processes, supplier communications, and negotiations.

The way that business is done in Vietnam might also differ to what you’re accustomed to, as the country has its own business culture.

Infrastructure and supply chain challenges

Unlike China which has strong infrastructure for international business, Vietnam may appear lacking in some areas and face logistical and infrastructural bottlenecks.

For example, roads and ports can get congested during peak seasons and rural regions might have fewer options for air travel and limited cargo capacity. Issues like these can extend timelines and add delays to your projects.

Strategies for Success in Vietnam

There are several ways to make doing business in Vietnam easier and more successful.

Partnering with local businesses

When you’re dealing with a country whose native language isn’t English, it can pay to partner with local businesses or guides.
A local partner can help you source the right materials, employees, or suppliers, and make communication seamless. They will also have an intimate knowledge of local laws and regulations.

Understanding legal and tax regulations

Getting to grips with local legal and tax regulations is paramount to your success if you do business in Vietnam.

Consult local legal experts or firms to make sure you’re not blindsided by laws or regulations you weren’t aware of.

Investing in workforce training and development

While Vietnam is recognized as a top manufacturing destination, there may be skill gaps in the workforce for certain specialized tasks or industries.

As such, investment in workforce development helps get outsourced partners up to speed on what you need so they can work to the same standards as your in-house employees.

What industries are booming in Vietnam?

Manufacturing is the top industry in Vietnam, which makes it the go-to destination for fabricating everything from semiconductors to sofas.

Here are some of the most sought-after products in Vietnam:

• Electronics
• Textiles
• Furniture
• Wood products
• Food processing
• Agriculture

Aside from manufacturing, the country is also experiencing a surge in demand for renewable energy and clean technology, especially since Vietnam leads Southeast Asia in solar capacity.

Ho Chi Minh City and Da Nang have emerged as international financial hubs in recent times too, offering tax incentives to attract investment and financial technology development.

The Easy Way to Pay Overseas Partners

Whether you’re contracting a sourcing partner to help you find a supplier or dealing directly with suppliers, you’ll need a way to pay without being blindsided by hidden fees. Wise Business helps you do just that, so you can pay overseas partners as if you were local.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to 140+ countries.

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	Editor & Business Expert:
	Panna is an expert in US business finance, covering topics from invoicing to international expansion. She creates guides and reviews to help businesses save time and make informed decisions. You can read more useful business articles on her author profile.