Vietnam has transformed itself from one of the least developed regions in the world into one of Southeast Asia’s most prosperous economies over the past three decades. Ho Chi Minh City (HCMC), a fast-growing, young, and vibrant city in southern Vietnam, wholly represents the country’s dynamic business landscape. Jones Lang LaSalle (JLL), a real estate services and investment management firm, ranked Ho Chi Minh City third among the world’s most dynamic cities in its recent City Momentum Index.
As far as startup culture is concerned, Ho Chi Minh City’s Department of Science and Technology recently announced that the city’s startups attracted venture capital funds worth USD 1.1 billion in 2021.
The government has bolstered local technology and innovation, and the emergence of a young, talented generation has attracted foreign and local investors. Starting a company in Ho Chi Minh City comes with many valuable benefits, as you’ll find below.
1. Strategic Location as Vietnam’s Financial Hub
Ho Chi Minh City is located in the heart of the Southeast Asian (SEA) region and has a market of over 600 million people. Moreover, HCMC, together with Dong Nai, Ba Ria-Vung Tau, and Binh Duong constitutes the Southern Key Economic Zone and makes up half of the nation’s economic capacity.
Distance of HCMC from significant cities
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The city is also in close proximity to other significant markets in Asia-Pacific such as China, India, and ASEAN countries.
2. Impressive Economic Indicators
As of 2021, Ho Chi Minh City ranks number one among provinces and cities in the country with the highest Gross Regional Domestic Product (GRDP) at nearly 1.3 quadrillion VND (~55 million USD). The city’s gross domestic product had registered a rise of 1.88% year-on-year by the end of Q1 2022.
In particular, trade and services earned nearly USD 4.3 billion in June 2022 and almost USD 22 billion in the first half of the year, up 41.1% and 6.2% from last year, respectively.
3. Travel Hotspot
According to the municipal tourism department, in the first half of 2022, 478,000 tourists arrived in Ho Chi Minh City, realizing 13.7% of the year’s goals.
Furthermore, tourism revenues clocked USD 2.1 billion, signifying an increase of 29.9% and exceeding the target by 73.5% in the same period.
Since the beginning of June in the year 2022, nearly 216,000 international visitors have arrived, double the number from the previous year.
4. Infrastructure & industrial parks
Plans for Infrastructure Construction
As a result of land and geographical disputes, a series of transport infrastructure works across the city were temporarily suspended. However, the construction is scheduled to resume in early 2023, as stated by the Ho Chi Minh City Transportation Works Construction Investment Project Management Authority.
Some of the infrastructure projects include:
- Tang Long Bridge
- Luong Dinh Cua Road (Thu Duc city)
- Vam Sat 2 Bridge (Can Gio district)
- Ten Lua Road
- Ong Nhieu Bridge
- Nam Ly Bridge
- Ong Bon Bridge
- Tan Ky-Tan Quy Road (Binh Tan district),
- Hoang Hoa Tham and Cong Hoa Road (Tan Binh district)
Currently, there are 19 Industrial Zones in Ho Chi Minh City, covering over 4000 hectares of land. Businesses in these Industrial Zones are fetching great investment, especially the ones involved in manufacturing and processing.
Moreover, Industrial Zones have bolstered the pace of industrialization and have created employment opportunities for locals.
Following is a list of Industrial Zones in HCMC:
- Dong Nam Industrial Zone
- Linh Trung 1 Industrial Zone
- Hiep Phuoc Industrial Zone
- Tan Thuan Export Processing Zone
- Vinh Loc Industrial Zone
- Tay Bac Cu Chi Industrial Zone
- Ho Chi Minh City Hi-Tech Zone
- Le Minh Xuan Industrial Zone
- Phong Phu Industrial Zone
- Tan Binh Industrial Zone
- Tan Phu Trung Industrial Zone
- Tan Tao Industrial Zone
- Tan Thai Hiep Industrial Zone
- Linh Trung 2 Industrial Zone
- Cat Lai 2 Industrial Zone
- Binh Chieu Industrial Zone
- Quang Trung Software Park
- An Ha Industrial Zone
- Le Minh Xuan 3 Industrial Zone
5. Low operating costs
A TMX report shows that Vietnam has the second cheapest operating costs compared to other Asian countries. A report from VnExpress states that Vietnamese manufacturers spend a minimum of USD 79,280 per month on manufacturing.
While Singapore and Thailand incur a minimum of USD 366,561 and USD 142,344 operating costs, respectively, compared with neighboring commercially viable countries. Due to factors such as low wages, and favorable investment policies, Vietnam is attracting foreign investors to set up companies.
6. Young, talented, and dynamic workforce
Ho Chi Minh City Metropolitan area hosts a population of over 20 million, out of which 16 million reside in urban areas. Ho Chi Minh City itself lies at the center of the metropolitan area and has a population of 8.4 million.
Vietnam’s General Statistics Office (GSO) reports that 51.2 million workers aged 15 and older were employed in the first quarter of 2022, an increase of 200,000 over the same period last year. The service sector makes up 38.7% of all jobs, followed by industry and construction (33.5%) and agroforestry-fishery (27.8%).
7. Exceptional startup portfolio & network
Currently ranked 111 globally, the Startup Ecosystem in Ho Chi Minh City has increased by 68 places since 2021. The city ranks sixth in South East Asia and first in Vietnam. As per the StartupBlink Map, the city is already home to 17 Ecommerce & Retail startups.
Prominent Startups in Ho Chi Minh City
As mentioned in the introduction, Vietnam’s business landscape is one of the most dynamic in Southeast Asia, with much of its startup activities centered around Ho Chi Minh City. Here are some of the most successful ideas that took off in the city.
- Axie Infinity: Started in 2019, this blockchain and video game startup company has almost 50 employees and is worth USD 9 million. The game Axie Infinity involves acquiring, raising, and battling monsters known as Axies.
- Momo: Users can make digital payments and money transfers using Momo, an e-wallet and payments app. Founded in 2007 by Diep Nguyen and Tuong Nguyen, Momo is a name to reckon with in the FinTech industry worth USD 2.33 million.
- Tiki Corporation: It is expected that Tiki.vn will become Vietnam’s largest retailer soon. It was established in 2010 with funding worth USD 1.92 million.
- Propzy: The Propzy platform aims to make renting, selling, and buying a home as safe as possible. Founded in 2014 by John Le, the company provides real estate solutions on social media.
- MASAN Group: MASAN Group ranks among Vietnam’s top private companies, specializing in consumer products and resources industries. The company was founded in 1996 by Nguyen Dang Quang and is worth USD 2.5 million.
- Pharmacity: Pharmacity operates as a retail drug company that sells a broad range of pharmaceutical products. Founded in 2011, this pharmaceutical company is worth more than USD 31 million.
- Jio Health: Jio Health collects patients’ vital signs, administers prescriptions, and maintains contact with physicians and caregivers. Founded in 2016 by Raghu Rai, this healthcare company is worth more than USD 7 million.
8. Diverse span of industries
Some of the most prominent industries in HCMC are:
- Electronics – IT
- Food processing
- Plastics & rubber
To promote economic activities and the development of key industrial products, the municipal authorities are introducing various trade programs. It involves enhancing trade promotion and market development activities at a global level. Moreover, funds will be provided to local industrial enterprises to do market surveys and participate in trade fairs.
As part of this effort, local authorities will also prioritize arranging rubber and plastic project sites in industrial parks.
A center for research, development, and manufacturing will be established to meet both domestic and export demand for molds.
Moreover, a “Made in Vietnam” program will be implemented to support mechanical and automation businesses.
Ready to Launch Your Startup?
In the case of startups, most foreign entrepreneurs are advised to opt for a 100% foreign-owned company. If you intend to establish a 100% foreign-invested enterprise in Vietnam, learn more about whether to establish an LLC or JSC when entering Vietnam.
You can also book a consultation with company registration specialists for more information and advice specific to your business idea. Click our assistant in the bottom right corner or fill in the form below.
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