Despite the challenges posed by the global pandemic, Vietnam’s economy remains resilient and the market fundamentals strong. As a result, more and more foreign investors consider the Vietnamese market a favorable investment environment for its strategic location, ample workforce as well as competitive operational costs.
For companies looking at Vietnam to either explore or enter the market, it is crucial to really understand the scalability and infrastructure they need to receive a successful reception in the country. In this Vietnam Innovators episode, Stephanie Betant, the country head of Wholesale Banking at HSBC in Vietnam, discussed the key themes driving the economy and how easy it is to do business in the country. Stephanie also talked about why local companies may consider looking internationally for capital.
Driving force of economic growth
Stephanie is originally from Paris, France, but has spent over 20 years living in Asia. She arrived in Vietnam two and a half years ago, just months before the COVID-19 pandemic hit. To her, Vietnamese people know how to appreciate life, which reminds her a lot of home.
Stephanie’s role at HSBC Vietnam focuses on supporting large corporate and state-owned enterprises that need international financing solutions. Part of her responsibility is to develop middle market banking and become the international bank for foreign investments in the country — backing up global investors to do business in Vietnam.
On top of providing banking infrastructure, HSBC Vietnam has partnered with Vietnam’s Ministry of Planning and Investment to attract foreign direct investment into the country. In November last year, nearly 400 international and local investors, as well as business leaders, participated in HSBC’s webinar “Vietnam Day – Open for Opportunities” organized to promote the market to business leaders around the world.
According to Stephanie, HSBC Vietnam holds 20 to 30 webinars a year with countries worldwide to introduce the investment landscape in Vietnam, the opportunities, what it means to set up their business here, how to get started and the partners they’ll need.
When talking to interested investors who want to come to the market, Stephanie said, “there are a few key themes driving the economy. First is the transformation of the middle class – it’s booming in Vietnam, there’s a real domestic market.” Since two-thirds of the population is still unbanked, financial inclusion, as it happens, will create opportunities in the domestic market.
She continued saying, “Second is Vietnam’s geographic location and unique position in the Asia Pacific region. Vietnam’s connectivity to the world is really important, and we see that in the diversification of the global supply chain as companies look to manufacture not just in China but elsewhere. Lastly, it’s the transition of the economy to net-zero — Vietnamese Prime Minister Phạm Minh Chính has pledged to achieve net-zero emissions by 2050, which is hugely significant to investors globally.”
It’s easy to do business in Vietnam
While it might seem complicated to some, “doing business in Vietnam is easier than in Mexico or in Canada thanks to the efforts of the Vietnamese government in signing bilateral agreements that create massive opportunities for the local companies,” according to Stephanie.
It’s worth noting that Vietnam is a center for free trade agreements like the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), EVFTA (EU-Vietnam Free Trade Agreement), and the UKVFTA (UK-Vietnam Free Trade Agreement). Moreover, the Regional Comprehensive Economic Partnership came into effect in January this year.
As the country continues to attract FDIs despite the pandemic, Stephanie sees a promising future for Vietnam as it bounced back from the months of lockdown in 2021.
When asked why Vietnamese companies should look outside for capital, she said that if you’ve got an incredible product, you have to launch it to a new market, to a bigger one at some point. For instance, VinFast launched its global EV brand at the 2021 Los Angeles Auto Show in November, bringing cutting-edge Vietnamese cars to the US.
Another factor Stephanie mentions is “competitiveness” and how thinking internationally can help the local economy and contribute more to the country. She also sees technology as one factor. Considering how global innovation affects the basics of every business, using tech to take advantage of the opportunities out there is essential.
Because of the challenges of the pandemic, the world had to shut down suddenly, but in a way, it opened up too. HSBC Vietnam enables its retail and corporate customers to do business locally and abroad.
“The transformation of digital and e-commerce means that suddenly it’s possible to access the rest of the world from almost anywhere,” Stephanie comments. “But understanding how to go into a new market, what the pitfalls and opportunities are, HSBC’s network covers 64 countries and territories, and we help customers do that, figure out how to go into these markets and prepare for investment.”