Why has Vietnam become an attractive destination for foreign investors?

Introduction

In recent years, Vietnam has undergone significant changes, allowing it to emerge from a state of isolation for foreign investors. Now, many companies and individuals from various countries, including Russia, Singapore, Japan, and South Korea, have started to pay attention to this promising market. The reasons for such interest are quite diverse.

Changes in legislation

One of the key changes has been the new legislation offering more attractive conditions for foreign investments. Vietnamese authorities plan to introduce a law allowing foreign citizens to purchase real estate as individuals, which was previously impossible or heavily restricted. Previously, foreigners were only allowed to rent one apartment for a period of up to 50 years, and there were many conditions that had to be met.

Now the new rules open up opportunities for foreign investors, allowing them to:

• Buying several real estate properties;
• To have a visa with a minimum validity of three months;
• Follow special conditions, including investments in the country's economy or employment with local companies.

Economic situation

Moreover, the economic situation in the country also plays a significant role in its attractiveness to foreign investors. Over the past twenty years, Vietnam's economy has shown impressive growth, averaging 7.8% per year, which has laid the foundation for a fourfold increase in household incomes.

For example, in 2014, economic growth reached 5.62% in the first three quarters, indicating stability and potential. Regular exports and a decrease in the inflation rate also make doing business in Vietnam more attractive:

• In 2011, the inflation rate reached 18.6%.
• By 2013, it had decreased to 6.7%.

Growing sectors of the economy

Another factor contributing to foreign investments is the active growth of economic sectors such as the oil and gas industry, as well as the mining sector. The country is experiencing a shortage of qualified personnel in extraction and geological exploration, which creates attractive conditions for foreign specialists, including Russians.

To stimulate the influx of specialists, the government is developing special programs that simplify the process of obtaining work visas for foreign workers.

Tourist potential

We should not forget about Vietnam's tourism potential. Numerous tourists who have visited the country note its amazing atmosphere and diverse natural landscapes. Luxurious beaches, tropical forests, and picturesque mountains attract travelers from all over the world.

An interesting history, along with a rich cultural heritage, contributes to the active development of the tourism industry, which attracts both local and foreign guests.

The future of Vietnam

Considering all the factors mentioned above, Vietnam continues to develop and change dynamically. The urban infrastructure is being updated, the middle class is growing, and more than 50% of the population consists of young people under the age of 30. All of this creates unique opportunities for both doing business and enjoying a comfortable life in this rapidly developing country.

Vietnam: A Unique Country with Beautiful Beaches

Vietnam is an amazing country known for its beautiful beaches, among which My Khe Beach in Da Nang stands out. It has been highly rated by Forbes and recognized as one of the most magnificent beaches in the world.

Square and Cultural Heritage

The total area of Vietnam is about 330,000 square kilometers, which is twice the size of Karelia. Additionally, there are eight UNESCO World Heritage sites, 31 national parks, eight biosphere reserves, and nine international airports here.

Development of Tourism

Tourism in this country is considered a relatively new direction. Foreigners were only allowed to travel freely within the country starting in 1997. Today, the quality of infrastructure for tourists is significantly improving each year, attracting more and more foreign travelers.

The tourism sector accounts for about 13% of the country's gross domestic product and continues to develop steadily. The number of foreign tourists visiting Vietnam increased sevenfold from 1995 to 2013, with a particularly noticeable rise in the number of Russians, which varies between 20-30% annually.

Tourist Statistics

According to the Vietnam National Administration of Tourism, over 7.5 million foreign tourists visited the country in 2013, which is an increase of 10.6% compared to the previous year. Research by Hayes & Jarvis shows that Vietnam has become one of the seven most attractive tourist destinations for residents of the United Kingdom, surpassing even the popular Thailand.

The largest number of travelers comes from residents of Asian countries, including China, South Korea, and Japan.

• The number of foreign tourists in Hanoi has increased by 17.1% since the beginning of 2014.
• In 2014, the city welcomed 1.5 million tourists.

Growth of Tourist Numbers by Country

It is noteworthy that the largest increase in the number of tourists occurred among citizens:

• South Korea (+48%)
• United Kingdom (+42%)
• France (+37%)
• United States (+23%)
• Thailand (+21%)

Investment Attractiveness

The increase in the number of travelers naturally creates a heightened interest in resort accommodations, making the real estate market quite attractive to investors. This trend is particularly noticeable in popular tourist regions such as Da Nang, Mui Ne, Nha Trang, and Phu Quoc.

Since the beginning of 2014, when Vietnamese Prime Minister Nguyen Tan Dung made a statement about the need to simplify the process of purchasing real estate for foreigners, interest in property in the country has started to grow.

Financial Indicators

In the first half of 2014, the volume of foreign investments in Vietnamese real estate reached $692.3 million, which is 65% higher than the same figure for the previous year. According to Reuters, the number of real estate transactions in Hanoi doubled in the first seven months of 2014 compared to the previous year, totaling 5,100, while in Ho Chi Minh City, the growth was 30%.

The Popularity of Resort Housing

Foreigners are showing a keen interest in resort properties along the coast, as well as in prestigious condominiums located in the central districts of Hanoi and Ho Chi Minh City. This trend highlights the growing appeal of Vietnam not only as a tourist destination but also as a place for real estate investment.

Vietnam as a center for international investments

Vietnam is emerging as a new important hub for international companies interested in this region. Among these companies, notable firms such as Capitaland, which has already established a strong position among developers in Southeast Asia, and Mapletree Investments stand out. The reasons for this attraction to Vietnam may be linked to both economic factors and the affordable real estate prices, which are significantly lower compared to other countries in the region.

The housing market in Vietnam

Analyzing the housing market in Vietnam, one can see that the cost per square meter of housing in Hanoi and Ho Chi Minh City ranges between 1,600 and 1,800 US dollars.

Current investment projects in Vietnam

Vietnam is actively developing extensive investment projects, one of the key ones being the creation of a luxury hotel and residential resort on the coast of Vung Ro Bay. The total cost of this large-scale project is2.5 billion US dollarsIts implementation is carried out with the support of the company.Rose Rock Grouprelated to the famous Rockefeller family and the oil companyVung Ro PetroleumAs part of this project, it is planned to build:

• 350 yacht berths;
• a hotel with 760 rooms;
• 4300 apartments;
• 100 townhouses;
• several marketplaces.

Project with a casino in Quang Nam

Equally impressive is another initiative launched by a leading investment company in Vietnam.Vinacapital Groupa project that involves the construction of a resort with a casino on the picturesque coastline of the provinceQuang NamThe estimated cost of this initiative is4 billion dollars.

The role of Vingroup in the construction sector

The construction market in Vietnam continues to actively develop thanks to a large company.Vingroupplaying a key role in the creation of residential complexes, resorts, hotels, healthcare institutions, and educational organizations. In July 2013, Vingroup opened the largest shopping center in the country, covering an area of more than200 thousand square metersThe company also manages the system.Vinhomes, which includes more than15 thousand apartmentsand approximately1700 villas.

Project on Hon Che Island

Elena Sokirka, the head of Vingroup's representative office in Russia and Ukraine, shares information about the launch of a project on the island.Hon CheIn Nha Trang. On this island, a segmentation of the area was carried out, on which was built:

• five-star hotelVinpearl Resort Nha Trang;
• amusement parkVinpearl Land;
• golf clubVinpearl Golf Club;
• hotelVinpearl Luxury Nha Trang.

All these facilities form a single complex, and currently, new hotels and villas are being built on the island.

Hotel in Danae

A hotel has also opened in Danae.Vinpearl Luxury Da Nang, next to which there is a complex of villasVinpearl Villas Da NangAll the facilities are integrated into a common infrastructure accessible to the villa residents. A brand was created to manage these projects.Vinhomeswhich provides its clients with services ranging from real estate purchase processing to home maintenance.

Development of the Vinhomes investment program

Project lineupVinhomesincludes hotelsVinpearlIn cities like Da Nang, Nha Trang, Phu Quoc, Hoi An, and Ho Chi Minh City, as well as residential complexes with modern and luxurious apartments in Hanoi. For example, one can mention:

• Vincom Center Bà Triệu;
• Vinhomes Royal City;
• Vinhomes Times City.

In addition, the company is actively developing shopping and entertainment centers, such asVincom Center Dong KhoiandVincom Center Bà Triệuand also an ecological complex of villasVinhomes Riverside.

Vinhomes Investment Program

Investment programVinhomesdeveloped with the understanding that villa owners can receive from60% to 85%from rental income. They will have the opportunity to live in their homes for30 days in a yearAt the same time, significant discounts on rent are being offered:

• 50% in the low season;
• 30% is high.

Moreover, they receive various privileges and discounts on services across the entire network.VingroupThis approach significantly increases the attractiveness of real estate investments. In investment proposalsVingroupImportant aspects such as the project, location, infrastructure, and cost are highlighted.

Conclusion

The conclusion of this article summarizes an extensive analysis of the current state of the real estate market and the economic situation in Vietnam, which was just a few years ago a closed mystery for many foreigners. During this time, the country has demonstrated impressive development dynamics, making it attractive for investments, especially from Russians, Singaporeans, Japanese, and Koreans.

It is difficult to overestimate the significance of the upcoming legislative initiatives that will allow foreigners to purchase real estate in the country. These changes open new horizons for the market, stimulating not only demand for housing but also contributing to economic growth through attracted investments. Particularly interesting is the fact that the government is actively working to simplify the conditions for foreign citizens, which only enhances Vietnam's appeal.

Economic indicators

From a macroeconomic perspective, Russia and other countries are witnessing stable growth in the Vietnamese economy, making it a reliable option for long-term investments. The numbers speak for themselves:

• High average annual growth dynamics.
• A significant decrease in inflation, which indicates a healthy economic environment.

Cultural and tourism development

The cultural and historical diversity that Vietnam offers, combined with its rapidly developing tourism infrastructure, makes the country attractive not only to investors but also to tourists. As a result, in recent years:

• The flow of foreign tourists has sharply increased.
• It has a positive effect on the demand for resort housing.
• Opens up new opportunities for rental investments.

Prospects and new opportunities

It is also important to note that the development of the Vietnamese economy is directly linked to the exploitation of natural resources and the rapid establishment of new industries. This process requires the involvement of qualified specialists, which further opens the doors for migration from other countries.

In general, the real estate market and the economy of Vietnam present a unique opportunity for investors. The country is becoming one of the key players on the international stage and certainly deserves attention from both businesses and tourists.

As the author of this article, I can confidently say that Vietnam is not just an investment destination; it is a place that offers new opportunities.possibilitiesandprospectsfor everyone who is searching for their path in the rapidly changing world of economics and business.