Thai businesses gear up for the big time in Vietnam

Thai investors are considering Vietnam one of the most attractive investment destinations in the region. Could you elaborate on this?

Piyapong Jriyasetapong, chairman of the new Thai Chamber of Commerce and Industry in Vietnam

The Vietnamese market has been a hotspot for Thai investors for over a decade. All the top Thai conglomerates have already set up operations in Vietnam with more and more investment in the years to come. This is thanks to growing local consumption from the growing wealth of a young population, while the close proximity to Thailand has made it faster and easier to travel with competitive production costs, owing to abundant agricultural raw materials and Vietnam’s free trade agreements supporting exports. Before the pandemic, we witnessed as many as 4,000-5,000 investors per year visiting Vietnam to explore this market full of potential.

Another very important factor that attracts Thais to Vietnam is that this nation is now entering a golden decade of the economy. We believe Thai people will invest in Vietnam even more in the coming years as the country has started to open its borders and skies again to the wider world. This will help Vietnam attract more foreign investment.

The official debut of the Thai Chamber of Commerce and Industry in Vietnam last week is also one of the big milestones in the Thai funding picture in Vietnam. It will help member companies approach Vietnam’s policies as soon as possible - for example information on state-owned enterprise (SOE) reforms - and protect their legal benefits and rights when doing business in Vietnam.

Vietnam is accelerating the equitisation of Vietnam’s SOEs. What opportunities can Thai investors seek out in this effort?

This is indeed a very good chance for them. SOEs in Vietnam have been playing a crucial role in driving the economy forward, and the equitisation is ushering in opportunities for not only Thai but also other overseas investors to gain a big presence in Vietnam, where the local market still has major room for growth this decade. There are at least two big SOEs that are under the radar of Thai investors now and the additional money poured in could be huge.

What will be the main sectors for investment for Thai enterprises in Vietnam in the time to come and what are they interested in most in the Vietnamese market?

Thai investors are interested in conducting business in a series of sectors in Vietnam, and we believe we are leading these sectors in the country. These sectors include feed and farming, renewable energy, packaging, retail and distribution, petrochemicals, foodstuff processing, plastic products, and energy drinks. The growing local consumption in Vietnam will be one of the key drivers of economic growth, and it is thus attracting Thai investors in these sectors the most.

The Vietnamese government is making great efforts with administrative reforms in favour of enterprises and individual investors. What more could be done further by Vietnam to attract more Thai funding?

Administrative reforms help reduce time and reduce formalities while also increasing efficiency and lowering unnecessary costs for investors to carry out projects here. We see that Vietnam has been making tremendous improvements in administrative reforms over the past years, with all the key provinces and cities laying out the red carpet to welcome investors.

We do hope that the Vietnamese government can set up more events to listen to them and craft action plans to solve similar issues in a timely manner, and this shall help attract more funding. As such, we believe that Thai financiers can climb to Vietnam’s list of top five foreign investors in the country in the near future. As of March 20, Thailand was Vietnam’s ninth-largest foreign investor with 652 valid projects registered at more than $13 billion, which is expected to rise in the near future.

The Vietnamese economy will continue to rebound in 2022 and Thai companies plan to expand their trade and production activities in Vietnam in order to take advantage of opportunities provided by FTAs to which Vietnam is a signatory.