Between the world-class food, UNESCO World Heritage Sites and laid-back attitude, there are a dozen different reasons why Vietnam is one of the most popular tourist destinations in the world. What many people perhaps don’t realise, however, is the fact that expatriates, returnees and highly skilled Vietnamese also have more than a handful of reasons to live and work in Vietnam.
Vietnam has really come into its own in recent decades. Over the past 30 years, economic and political reforms under Doi Moi, which was launched in 1986, have spurred rapid economic growth and development, thus transforming Vietnam from one of the poorest countries in the world to a real contender in Southeast Asia and beyond.
First, the basics. Vietnam’s economy is booming, judging by the growth it has experienced in recent years. Following a 6.8% GDP growth in 2017, the numbers accelerated further to 7.1% in 2018. And even though the rate of growth is expected to slow to 6.6% in 2019, Vietnam is still far and away one of the fastest growing markets in the region.
Things are sure looking up from the business point of view also. According to the International Monetary Fund, the government’s commitment to private sector-led growth has helped improve the business climate as a whole. Vietnam’s regulatory quality and ease of doing business generally improved over the years, thus reflecting a leveling of the playing field between the private and public sectors. In fact, IMF reports that it is far easier to do business in Vietnam than other emerging and developing economies, as well as ASEAN as a whole. According to the Jakarta Post, foreign direct investment (FDI) and manufacturing continue to remain big drivers of economic growth.
Speaking of FDI, the startup scene in Vietnam is neck-and-neck with some of the biggest players in the region, such as Singapore and Indonesia. According to Tech in Asia, “the total funding amount for all the startups in Vietnam was just US$6 million in 2013. However, five years later in 2018, Vietnam’s startups scored US$193 million, thanks to a number of deals in mature companies”.
However, startup funding is not the only driver of change in Vietnam’s tech scene. The government, too, has a role to play. For example, there’s the €11 million (US$12.5 million) Vietnam-Finland Innovation Partnership Program, which focuses on innovative local companies that are looking to scale and expand internationally. Then there is the National Technology Innovation Fund, a government agency and financial institution under Vietnam’s Ministry of Science and Technology. The fund provides grants and preferential loans for research and development, innovation and technology transfer.
With these conditions in place, here are a few compelling reasons to work in Vietnam, for expatriates, returnees and locals alike.
1. Demand for IT talents
With Vietnam’s burgeoning startup ecosystem comes an increase in demand for talent with strong IT skills and digital literacy. According to Australia’s Commonwealth Scientific and Industrial Research Organisation’s (CSIRO) 2018 report, Vietnam is currently looking to attract more than one million IT workers by 2020, with the demand for IT skills growing by 47% annually.
According to Vietnam Economic Times, hot trends in IT in Vietnam include artificial intelligence (AI), cloud storage, virtual reality (VR) and augmented reality (AR), and blockchain. Other key areas include the Internet of Things (IoT), e-commerce, and business process and IT outsourcing. If technology is a sector you are looking to join, we have some advice for you.
2. US-China Trade War
The trade war between China and the US have cooled a little, but the bickering between the two economic powerhouses have already caused some harm. For example, South China Morning Post reports that the planned increase in tariffs on Chinese exports to the US from 10% to 25% will impact provinces like Guangdong, which is known as a low-cost manufacturing hub. Working in Guangdong’s disfavour is the fact that wages are rising in the province, and there is an increase in environmental regulations coming from the top. These factors have pushed many companies to set up shop in the next logical country: Vietnam.
In the first quarter of 2019, Vietnam saw an 86.2% increase in foreign investment, with Chinese investment accounting for almost half of that. Apple, too, has called on its major suppliers to “consider moving 15% to 30% of iPhone production out of the country”, according to Nikkei Asian Review. In fact, the tech giant has already shifted its production of AirPods to Vietnam as a trial based on the same report. Other big name tech giants making similar moves include the likes of HP, Dell, Google and even Nintendo. The exodus of these foreign companies is driving up hiring demands, especially within the local manufacturing sector.
3. A healthy demand for returnees
In many ways, hiring demand in Vietnam is far outstripping its supply. Instead of relying solely on local talent, companies are increasingly seeking out a new generation of Vietnamese professionals with international experience and mindsets. These professionals are often perceived to have a unique set of insights, as well as the ability to challenge the status quo — both highly sought after quality by local companies.
In fact, according to our Salary Benchmark 2019, a number of them, born either in Vietnam or abroad, are returning home, with competition for talent often so intense that top candidates get multiple job offers from companies in Vietnam. The hiring managers we surveyed also expressed their desire to hire those who are skilled in stakeholder management and are fluent in English. Proficiency in English, in particular, is a skill that is bound to position Vietnam in a favourable position as the country continues to expand its footprint internationally.
4. Low cost of settling down
Vietnam is surrounded by some of the most expensive cities in the world for expats. According to a recent Mercer’s 2019 Global Talent Trends report, eight of the 10 most expensive cities for expats are Asian cities. Closest to Vietnam are Shenzhen (which ranks 10th), Singapore (which ranks third) and Hong Kong (which, unsurprisingly, ranks No. 1).
Vietnam, on the other hand, is more affordable and easier for expats to settle down and find accommodation, according to HSBC’s 2015 Expat Explorer Survey. Even if you are a Vietnamese national who is currently living overseas, and you are thinking of returning to Vietnam to work, your money is going to be worth a lot more upon your return.
Here’s a comparison: the monthly rent for a 85sqm furnished accommodation in a normal area in Ho Chi Minh City is around VND 22.3 million (US$960). Comparatively, the monthly rent for a similarly sized furnished accommodation in a normal area in Singapore is around S$2,511 (US$1,852).
5. Low cost of living
When it comes to salary, the common belief among expats and returnees alike is that you earn a lot less in Vietnam compared to your peers overseas. However, that is not always true.
As mentioned above, digital jobs are now in high demand and low supply, which means that the value of the product is increasing along with the price. The pace of growth, too, is set to increase.
You don’t have to live in Vietnam to know that, despite the rapid developments on the economic front, things remain fairly affordable across the board. In fact, if you are thinking of moving to Asia (or, in the case of returnees, moving back) to work, Vietnam ranks 23rd on the Cost of Living Index in the Asia-Pacific region. As a point of reference, Vietnam’s neighbours like Hong Kong, Singapore, Myanmar and Cambodia rank second, fifth, 13th and 18th respectively.
At the end of the day, when it comes to finding the best place to live and work in Southeast Asia, every country presents a series of pros and cons, both for expats and returnees alike. However, if you are looking for one of the fastest growing economies in the region that also happens to be a tourism paradise, Vietnam is a compelling place to start.
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