Currently, Vietnam is arguably one of the most vibrant economies in Southeast Asia, as evidenced by factors such as the sustained growth of its Gross Domestic Product (GDP) at a rate of 8.02% in 2022, and the volume of Foreign Direct Investment (FDI) reaching a historical high of around $28 billion in the same year. This is supported by political stability, fiscal incentives, and legal security driven by various laws, such as those regulating the stock market (54/2019/QH14), investments (61/2020/QH14), or public-private partnerships (PPP) (64/2020/QH14). These factors have facilitated the establishment of numerous manufacturing companies in recent years, creating business opportunities in Vietnam, many of which are from China. However, this establishment has also led to inevitable disruptions in the supply chain, particularly in the transportation sector, both land and maritime, causing logistics to reach critical levels.
Adding to this situation, on one hand, is the excessive fragmentation of the sector, with over 3,000 companies according to the Vietnam Logistics Business Association census, and on the other hand, the need to improve infrastructure, facilitate trade, reform customs procedures, simplify inspection processes, and reduce costs. The conclusion is the urgency to adopt measures addressing all these issues, in line with the Trade Facilitation Agreement adopted by the World Trade Organization in 2013 and enforced since 2017. The Vietnamese government has indeed taken steps in this direction through the approval of Decree 163/NQ-CP aimed at strengthening the logistics industry, enhancing its competitiveness, undertaking digital transformation, and ultimately unlocking the immense potential of the Vietnamese logistics sector, creating business opportunities in Vietnam and transforming it into a “thriving logistics hub” or what Alexander Yap of the YCH Group calls a “sweet spot for service providers.”
This ambition to generate business opportunities in Vietnam and transform it into a logistics platform has its primary scenario within the Vietnamese market itself – an area of 330,000 km2 with 104 million inhabitants, three container ports – Ho Chi Minh City, Hai Phong, and Cai Mep – among the top 100 cargo-performing ports globally according to Lloyd’s List, and significant waterways – the Red River to the north and the Mekong to the south. Additionally, there is a second scenario complementing the first, which is the Economic Community of the Association of Southeast Asian Nations as a whole, from Malaysia in the westernmost part to the Philippines in the easternmost part, including key straits like Malacca and Sunda. Furthermore, there is a third scenario involving members of the Regional Comprehensive Economic Partnership (RCEP), comprised of the ten ASEAN countries plus China, Australia, New Zealand, Japan, and South Korea. Since its founding treaty came into effect, it has created “a kind of tariff-free supply web,” as recently mentioned by Aditya Gahlaut of HSBC.
Given this backdrop,… business opportunities in Vietnam and turn it into a “thriving logistics hub.”
Antonio Viñal
Lawyer
AVCO Legal
madrid@avco.legal
